SERVICE MANAGEMENT

UNDERSTANDING SERVICE MANAGEMENT IN PUBLIC SECTOR

DEFINITION OF PUBLIC SERVICE SIZE & ROLE OF SERVICE SECTOR IMPORTANCE OF PUBLIC SERVICE SECTOR UNIQUE CHARACTERISTICS OF SERVICE AND ITS IMPLICATION TO PUBLIC SERVICE MANAGEMENT INTEGRATED APPROACH TO SERVICE MANAGEMENT TRINITY APPROACH TO SERVICE MANAGEMENT

Lesson Outcomes
Describe the concept of public service

Explain the size & role of service sector

Write the Importance of public service management Discuss unique characteristic of service and its implication to

public service management Explain why service businesses need to integrate the marketing, the operation and human resource function: The Trinity Approach

PUBLIC SERVICE
Employment within a

governmental system, especially within the civil service. A service performed for the benefit of the public, especially by a nonprofit organization. The business of supplying an essential commodity, such as water or electricity, or a service, such as communications or transportation, to the public.
(American Heritage Dictionary,2011)

Continue..
Public services is a term usually

used to mean services provided by government to its citizens, either directly (through the public sector) or by financing private provision of services
(www.wordiq.com)
3 important Public services to citizens:

i.
ii. iii.

Welfare Healthcare Education

SIZE & ROLE OF SERVICE SECTOR

Government Service Construction Engineering Architecture Education Franchise ICT Industry Oil & Gas Industry Healthcare Green Technology Banking Lodging Restaurants, catering, insurance, news & entertainment Transportation (Public Bank Review, 2008)

Measures and Incentives to Foster The Growth of Service Sector

1) Administrative Measures Empowerng the Ministry of International Trade and Industry (MITI) Streghthening the role of Malaysia External Trade Development Corporation (MATRADE) Establishment of National Professional Service Export Council (NASPEC) and Professional Service Development Centre (PSDC). Establishment of Small and Medium Industries Development Corporation (SMIDEC) Liberalisation of service sector

Cont
2) Financial Measures: Provide fiscal and tax incentives (eg: tax exemption, investment allowanace, infrastructure allowance, industrial building allowance, etc) R&D grants Intellectual Property protection Competitive telecommunication tariffs.

WHY MANAGING PUBLIC SERVICE IS IMPORTANT?

What is the scenario of todays

economy? What is the direction of the government in the development of the country?

10th

SCENARIO 1: MSIAN PLAN & NEW ECONOMIC MODEL

The 10th Malaysia Plan (RMK 10)

outline that GDP share of services in 2015 is 61% with annual growth of 7.2%

The services sector targets under the

Industrial Master Plan (IMP3) (20062020) are : Non government services to grow at an average annual rate of 7.5% Construction services at 5.7%, and Total investment requirement of RM687.7 billion or RM45.8 billion per annum

SCENARIO 2: VISION 2020

IMPORTANCE OF PUBLIC SERVICE

Quality of life of the Malaysian citizen is the ultimate

aim of government service Government service is mediator to facilitate the engine of economic growth (private sector)

UNIQUE CHARACTERISTICS OF SERVICE

In a review of 46 publications by 33 authors from 1975-83,

Zeithaml, Parasuraman, and Berry (1985) determined the most frequently cited characteristics were:

Intangibility (mentioned by all) Heterogeneity or nonstandardization (noted by about

70%)

Inseparability of production and consumption or

simultaneity (cited by the great majority) Perishability or inability to inventory (cited by just over half)

FOUR UNIQUE CHARACTERISTICS

Inseparability

Intangibility

Heterogeneity

Perishibality

Intangibility
A

distinguishing characteristics of services that makes them unable to be touched or sensed in the same manner as physical goods

(Hoffman & Bateson, 2006)

Product qualities affect ease of evaluation

Good Service

Furniture

Restaurant meals

Computer repair Legal services

Medical surgery

Clothing

Motor vehicle

Vacation

Easy to evaluate

Difficult to evaluate
Consultancy project

High in search qualities

High in experience qualities

High in credence qualities

Inseparability
A distinguishing characteristics of services that reflects the interconnections among the service provider, the customer, and other customers sharing the same experience (Hoffman & Bateson, 2006)

Heterogeneity
A distinguishing characteristic of services that reflects the variation in consistency from one service transaction to the next

(Hoffman & Bateson, 2006)

Perishability
A distinguishing characteristics of services in that they cannot be saved, their unused capacity cannot be reserved, and they cannot be inventoried.

(Hoffman & Bateson, 2006)

Management Problems & Solutions

Service Characteristics Intangibility Management Problem Management Solution Lack of ability to be stored Lack of protection by patents Difficulty in displaying or communication services Difficulty in pricing services Use of tangible cues evidence such as furniture, quality of paper Use of personal sources of information word of mouth advertising Creation of a strong organizational image well-known, respected corporate image

Management Problems & Solutions

Service Characteristics Inseparability Management Problem Management Solution Physical connection to service provider Involvement of customer in the service production process involvement of other customer in the service production process Special challenges in mass production of services Emphasis on selecting and training public contact personnel Consumer management Use of multi site location

Management Problems & Solutions

Service Characteristics Heterogeneity Management Problem Management Solution Service standardization Quality control Customization Standardization

Management Problems & Solutions

Service Characteristics Management Problem Management Solution

Perishability

Higher demand than maximum available supply Higher demand than optimal supply level Lower demand than optimal supply level Demand and supply at optimal level

Demand strategy: creative pricing Demand strategy: reservation systems Demand strategy: development of complimentary services Demand strategy: development of non-peak demand Supply strategy: part-time employee utilization Supply strategy: capacity sharing Supply strategy: advance preparation for expansion Supply strategy: increase in customer participation Supply strategy: utilization of third party Supply strategy: increase in customer participation

IMPLICATIONS ON PUBLIC SERVICE MANAGEMENT: A CASE OF HEALTHCARE SERVICE IN PUBLIC HOSPITAL

Service Characteristics Intangibility Management Problem Harder to evaluate the service, customer perceive greater risk and uncertainty, Harder to control and manage the presence of customers, customers waiting time Management Solution Client Charter, tangible cues to help tangibilize the service, strong organizational image User-friendly environment, use of physical evidence that can help socialize customers with service location & facilities, good trainings to employees Set quality standard, simplify service process, institute good service recovery Simplify service process, educate customers, reduce burden of waiting

Inseparability

Heterogeneity

Harder to maintain consistency

Perishability

Waiting time of customers

INTEGRATED APPROACH TO SERVICE MANAGEMENT

Product elements Place, cyberspace, and time Process Productivity and quality

People
Promotion and education Physical evidence

Price and other user outlays

8Ps of SERVICE MAANGEMENT (Lovelock et.al,2009)

Service Variables Product Place, cyberspace, time Process Productivity & Quality People Promotion & Education Physical evidence Price & other user outlays Description The core output produced by the firm Location and time for service distribution A particular methods of operations, or series of actions, typically involving steps in a defined sequence How efficiently service inputs are transformed into outputs that add value for customers A individual as well as group that may be part of the service experience Form of communication that provide information and advice to encourage customers to take action Tangible cues that provide evidence of service quality Expenditure of money, time & effort that customers incur in purchasing and consuming service

SERVICE MANAGEMENT TRINITY

Operations Management

Marketing Management

Customer

Human Resource Management

Three important management functions:

Marketing Operations Human Resources Management functions play a central and

Mutually Dependent

interrelated role in marketing, operations and human resources.

Marketing Functions
Evaluate and select market

segments Research customer needs and preferences in each segment Monitor competitors, identifying their strengths and weaknesses, quality levels and strategies Design the core product, tailoring its characteristics to the needs of the chosen market segments Set prices that reflect costs, competitive strategies and consumer sensitivity to different price levels

 Tailor location and the

scheduling of service availability to customers needs and preferences. Develop communications strategies, using appropriate media to transmit messages Develop performance standards Create programs for rewarding and reinforcing customer loyalty.

Operation Function
Dominant function in most

service organization This function creates and delivers the service product Responsible for operating equipment and backstage procedures and other customers facilities Direct the work of large numbers of employees Take primary responsibility for the technological infrastructure do research and development to design and introduce innovative delivery systems

Human Resources Function

Involves all managerial

decisions and actions that affect the nature of the relationship between the organization and its employees its human resources (Lovelock, C et al, 2004) In many service organization, both the quality and commitment of the labor force have become a major source of competitive advantage. A strong commitment by top management to human resource management is a feature of many successful service firm.

Human Resources Function

Ensure that the right number of people and mix

of competencies are available to meet the firms long term strategic requirements recruitment, training, career development & promotion Its tasks associated with arranging people, facilities, and technology to create/support services produced by organization. Create and maintain desired attitudes and behavior of employees through reward systems Empowerment of service employees employee influence through pay rate, working conditions, career progression, employment security and the design & implementation of work tasks.

Interdependence of Three Management Functions

Marketing, operations

and human resources management - these are all interrelated in planning and implementing marketing strategies.
service organizations depends on the procedure, personnel and facilities managed by the operations function.

Marketing function in

 Operations managers

acknowledge that marketing specialist can provide useful inputs to service design. operational tasks, for performing variety marketing tasks and for administrative support.

People are needed for

Skills and training should be

provided, desired attitude and behavior must be created, understanding of organization goals must be ensured.

 If employees understand and support the goals of

their organization, have the skills and competent to succeed in their job and recognize the importance of creating and maintaining customer satisfaction, the marketing and operational functions will be substantially easier to manage.

SUMMARY
Concept of public service Size & role of service sector Importance of public service management

Unique characteristic of service and its implication to

public service management 8Ps of integrated service management Integration the marketing, the operation and human resource function: The Trinity Approach