Chapter 4.11, Problem 1.1RQ

THE CHALLENGES OF MANAGING SERVICES

Services can pose a variety of managerial challenges for managers-challenges that in manufacturing are either much less or nonexistent. And because services represent an increasing share of the economy, this paces added importance on understanding and dealing with challenges or managing services. Here are some of the main factors:

1. Jobs in service environments are often less structured than in manufacturing environments.

2. Customer contact is usually much higher in services.

3. In many services, worker skill levels are low compared to those of manufacturing workers.

4. Services area adding many new workers in low-skill entry-level positions

5. Employee turnover is often higher, especially in the low-skill jobs.

6. Input variability tends to be higher in many service environments than in manufacturing.

7. Service performance can be adversely affected by workers’ emotions, distractions, customers’ attitudes and other factors, many of which are beyond managers’ control

Because of these factors, quality and costs are more difficult to control, productivity tends to be lower, the risk of customer dissatisfaction is greater, and employee motivation is more difficult.

What managerial challenges do services present that manufacturing does not?