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What are the distinguishing features of service organizations? Discuss using examples from retail, professional services and a mass service organization. Essay

4CHARACTERISTICS OF SERVICE ORGANIZATIONS

Characteristics of Service Organizations

Characteristics of Service Organizations

According to the products offered, organizations can be classified broadly into service and manufacturing organizations. These organizations have various features that make them distinguishable from each other. According to Langfield-Smith, Thorne, and Hilton (2009), the main distinguishing characteristics of service firms include intangibility, simultaneous production and utilization, inconsistency, and perishability.

Intangibility remains the most fundamental feature of that explicitly distinguishes these firms from manufacturing firms. Unlike manufacturing organizations that provide tangible goods, service firms provide intangible products that consumers cannot feel, taste, see, or smell unless they use them. For example, many consumers of architectural drawings cannot feel or hear what the architectural organizations do and in many occasions, they cannot evaluate work done.

Another important feature is that delivery of the services and use of the services are inseparable. For the production of the services, the consumer must be present to use or receive the service. For example, consumers must be present to obtain services from consultancy firms, health care institutions, legal firms, and academic institutions. The inseparability introduces another feature of variability of service performance in the organizations. Service quality varies according to the time and means of service provision, as well as the kind of the attributes of the provider. For instance, a car repair workshop can offer fast, efficient, and effective service, while a nearby one can provide slow, inefficient, and poor service (Langfield-Smith et al., 2009).

The firms also offer products that have no shelf-life, implying that they deal with perishable products. For example, university admission opportunities not filled or unsold airline seats cannot be regained. This is to imply excess demand cannot be met and excess supply leads to loss in value or returns of the service. Moreover, even though not common in all service organizations, some services compel the organizations to use some tangible products to help the consumer picture services before consumption. For example, hotels and restaurants give consumers menu, while universities and schools give brochures of their programs.

In conclusion, all service organizations share four main characteristic features: intangibility, variability, perishability, and inseparability.

Reference

Langfield-Smith, K., Thorne, H., & Hilton, R.W. (2009). Management accounting: Information for managing and creating value. (5th ed.). Macquarie Park: McGraw-Hill Australia Pty Ltd.