1. Pulling the Pieces Together: World Class Service Culture
Chapter 15
Pulling the Pieces Together: World Class Service Culture

2. Chapter Objectives
Compare and contrast the concept of seamlessness to departmentalization and functionalism.
Describe how a service firm’s internal logics impacts its service culture.
Understand the fundamental difference between tow philosophical approaches embraced by many service firms – the industrial management approach vs the market-focused management approach.
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3. Chapter Objectives
Explain the concept of organizational culture and describe observational and indirect questioning approaches for assessing the organization’s current culture.
Explain the basic components of a service audit.
Discuss four fundamental strategies that facilitate cultural change.
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4. Opening Vignette: Google’s Google – Y Culture
Google-y employees are described as flexible, adaptable, not focused on job titles and hierarchy, and able to get stuff done.
The company has spent a lot of effort on developing programs and activities centered around employee career development and growth.
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5. Seamless Service
Service that occur without interruption, confusion, or hassle to the customer.
Ritz-Carlton’s Gold Standards clearly articulate the dedication not only to its guests, but also to its own personnel.
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6. Obstacles to World Class Service: Internal Logics
Operations logic
stresses cost containment and reduction through mass production
Marketing logic
stresses providing customers with options that better enable the service offering to meet individual needs
Human resources logic
stresses recruiting personnel and developing training to enhance the performance of existing personnel
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7. Figure 15.2: Three-Cornered Fight for Control
Marketing Operations Human Resources
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8. Business Philosophies
Industrial Management Model
Verses
Market-Focused Management Model
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9. Figure 15.3: Services Triangle
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10. Developing a Service Culture
Culture: the shared values and beliefs that drive an organization’s overall service philosophy
Assessing the Current Culture:
Observation and Indirect Questioning
Service Audit
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11. Observational Techniques
Observe the current culture as an impartial observer
Gauge employee emotions
Observe objects and artifacts
Observe what is missing
Go for a culture walk
Conduct culture interviews and surveys
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12. Service Audit: Profit and Growth Component
1. How does the firm define customer loyalty? 2. Does the firm measure profits from referrals? 3. What proportion of the firm’s development funds are spent on retaining customers as opposed to attracting new ones? 4. When customers do not return, do we know why?
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13. Service Audit: Customer Satisfaction Component
5. Is customer satisfaction data collected in a systematic manner? 6. What methods are utilized to obtain customer feedback? 7. How is customer satisfaction data used?
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14. Service Audit: External Service Value Component
8. How does the firm measure value?
9. How is information on customer perceptions of the firm’s value shared within the company?
10. Does the firm actively measure the gap between customer expectations and perceptions of services delivered?
11. Is service recovery an active strategy discussed among management and employees?
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15. Service Audit: Employee Productivity Component
12. How does the firm measure employee productivity?
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16. Service Audit: Employee Loyalty Component
13. Does the firm actively pursue strategies to promote employee loyalty?
14. Does the firm set employee retention goals?
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17. Service Audit: Employee Satisfaction Component
15. Are employee satisfaction measures linked to customer satisfaction measures? 16. Are customer and organizational needs considered when hiring? 17. Are employee reward programs tied to customer satisfaction, customer loyalty, and quality of employee performance?
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18. Service Audit: Internal Service Quality Component
18. Are employees aware of internal and external customers? 19. Do employees have the support necessary to do their jobs?
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19. Service Audit: Firm’s Leadership Component
20. Does the firm’s leadership help or hinder the service delivery process?
21. Is the firm’s leadership creating a corporate culture that helps employees as they interact with customers?
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20. Service Audit: Measurement Relationship Component
22. How do the preceding measures of service performance in the service audit relate to the firm’s overall profitability?
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21. Figure 15.5: Cultural Framework
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22. Strategies that Facilitate Cultural Change
Changing Culture through Structure
utilizing the marketing department as change agents
restructuring around the customer experience
real danger associated with this approach
Changing Culture through Systems
Reward structures
Marketing planning
Certainly useful to start with
Can become a “mind-numbing exercise”
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23. Strategies that Facilitate Cultural Change
Changing Culture through People
Bringing in a Champion
Changing Culture Directly
Mixed groups are Cross-sectional
Family groups are Departmental
Low empowerment is the ability to change individual behavior
High empowerment is the ability to change the organization
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24. Figure 15.6: Categorizing Culture Change Initiatives
EMPOWERMENT
GROUP
MIXED
FAMILY
Low
“Putting the customer first”
“Orientation Change”
High
“Change the way you work”
“Change the way we work”
Source: John E. G. Bateson, Managing Services Marketing: Text and Readings, 3rd ed. (Fort Worth, TX: The Dryden Press. 1995).
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25. Copyright © 2011 Cengage Learning.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright © 2011 Cengage Learning. 
©2011 Cengage Learning. All rights reserved.