Organizational Development: A Manual for Managers and ... - FPDL

of a set of interrelated activities which transform inputs into outputs’. Any result is always multifaceted,
as is the mission itself. Still, it is common to consider a product as an intended output of
the main technological process that is designated for consumption outside the organization.
Products may exist in the form of goods, material articles, and services. Service provision has
been defined as an economic activity that does not result in ownership, and this is what
differentiates it from providing physical goods. Services can be described in terms of their main
attributes (www.en.wikipedia.com):
• Intangibility - They cannot be seen, handled, smelled, etc. There is no need for storage.
This attribute makes it difficult to evaluate or compare services prior to experiencing the
service.
• Perishability - Unsold service time is ‘lost’, that is, it cannot be regained. It is a lost
economic opportunity. For example, a doctor that is booked for only two hours a day cannot
later work those hours — she has lost her economic opportunity. Other service examples
are airplane seats (once the plane departs, those empty seats cannot be sold), and theatre
seats (sales end at a certain point).
• Lack of transportability - Services must be consumed at the point of ‘production’.
• Lack of homogeneity - Services are typically modified for each client or each new situation
(customised). Mass production of services is very difficult. This can be seen as a problem
of inconsistent quality. Both inputs and outputs to the processes involved in providing
services are highly variable, as are the relationships between these processes, making it
difficult to maintain consistent quality.
• Labour intensity - Services usually involve considerable human activity, rather than
precisely determined processes. The human factor is often the key success factor in
service industries. It is difficult to achieve economies of scale or gain dominant market
share.
• Demand fluctuations - It is very difficult to plan the production of services. They are
provided by request. Demand can vary by season, time of day, whatever else or without
any reason.
• Buyer involvement - Most service provision requires a high degree of interaction between
client and service provider.
The current trend is to view any product as a service, considering goods as part of a service to the
consumer. For example – instead of selling a car to anybody who wants to buy it as it is, a dealer
provides service that consists of consulting, proposal of a suitable model, specification of all
features, ordering a specific car from the producer, delivering it, preparing it for use, providing
follow-up technical service, etc. – everything is to be done for each particular client.
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