Service quality: implications for management development

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International Journal of Quality & Reliability Management

Emerald Article: Service quality: implications for management development

Atul Gupta, Injazz Chen

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To cite this document: Atul Gupta, Injazz Chen, (1995),"Service quality: implications for management development", International

Journal of Quality & Reliability Management, Vol 12 Iss: 7 pp 28 - 35

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Atul Gupta, Injazz Chen, (1995),"Service quality: implications for management development", International Journal of Quality &

Reliability Management, Vol 12 Iss: 7 pp 28 - 35

http://dx.doi.org/10.1108/02656719510093538

Atul Gupta, Injazz Chen, (1995),"Service quality: implications for management development", International Journal of Quality &

Reliability Management, Vol 12 Iss: 7 pp 28 - 35

http://dx.doi.org/10.1108/02656719510093538

Atul Gupta, Injazz Chen, (1995),"Service quality: implications for management development", International Journal of Quality &

Reliability Management, Vol 12 Iss: 7 pp 28 - 35

http://dx.doi.org/10.1108/02656719510093538

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Service quality: implications for management development

Atul Gupta and Injazz Chen

Department of Quantitative Business Analysis, Cleveland State

University, Cleveland, Ohio, USA

Introduction

Service quality is one of the major issues facing operations managers Some of the reasons for the importance of service quality are:

● The economy of the USA and other western nations has become a service economy For example, in the USA service accounts for approximately three-quarters of the gross national product and nine of the ten jobs the economy creates

● In the first two years during which the much renowned Malcolm Baldrige National Quality Awards were granted to US companies, not a single service company met the minimum quality standards established However, recently Federal Express, a service company, was given the Malcolm Baldrige National Quality Award

This article attempts to define perceived service quality, relate the concepts of perceived service quality and its five dimensions in service operations, and provide the implications of the relation between service quality and its dimensions on management development

To the authors’ knowledge no one has yet attempted to assess the implications of the relationship between service quality and its five dimensions for management development This analysis will not only provide managers with the information about the dynamics of service organizations but also suggest some solutions in terms of management development and training

Perceived service quality

There are differences between services and goods in terms of how they are produced, consumed, and evaluated Table I, which is similar to that of Zemke[1], points to the characteristics that distinguish a service from a product Services are performances, rather than objects Chase and Tansik[2] classified services based on consumer contact The extent of consumer contact with the service organizations was used as a means of differentiating types of service systems Three types of services identified are:

(1) Pure service Organizations in which the customer must be present for

service production (e.g fast-food restaurant, nursing home)

(2) Mixed service Organizations in which there is both face-to-face as well as

back office contact with the customer (e.g commercial airline)

International Journal of Quality

& Reliability Management,

Vol 12 No 7, 1995, pp 28-35,

© MCB University Press,

Service quality

29

(3) Quasi-manufacturing service Organizations in which there is no

face-to-face contact with the customer (e.g credit card, long distance telephone

company)

Most of the literature on quality is predominantly goods oriented, but a few

articles have focused on service quality[3,4] Moreover, the three characteristics

of services – intangibility, heterogeneity and inseparability – are also well

documented[5] As pointed out by Zeithaml et al.[6], the following three themes

emerge from these studies:

(1) Customers do not evaluate service solely on the outcome of a service;

they also consider the process of service delivery

(2) It is more difficult for the customer to evaluate service quality than goods

quality Zemke[1] points out that it is harder to create service

measurements that are effective With a physical product, it is possible to

measure quality in terms of specifications using engineering

measurement tools and techniques The common standard for service

quality is customer perception It is harder to measure customer

perception because each customer has his/her own specification in mind

for each service experience Moreover, because of service intangibility,

firms may find it more difficult to understand how consumers perceive

service quality

(3) The criteria consumers use for evaluating service quality are based on

the comparison of consumer expectations with the actual service

performance Thus the perceived service quality is based on consumers’

judgement about a service’s overall excellence or superiority Perceived

service quality is different from the actual goods quality because it

involves a higher level of abstraction rather than a specific attribute of a

Table I.

Some differences between a product and

a service

Product Service

The customer owns the object The customer owns the memory with experiences

which cannot be sold or passed on The goal is to produce uniformity in The goal of service is uniqueness

product

A product can be put into inventory A service cannot be stockpiled

The customer is an end user who is not The customer is a co-producer who is a partner in

involved in the production process creating the service

One conducts quality control by Customers conduct quality control by comparing

comparing output to specifications expectations to experience

A defective product can be recalled or A bad or defective service cannot be recalled

rejected

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product, and a judgement is usually made within a consumer’s evoked set

In a study of four consumer service industries, Parasuraman et al.[7] identify

five quality dimensions which link specific service characteristics to consumer expectations of quality These five basic dimensions are:

(1) Tangibles Physical facilities, equipment, and appearance of personnel (2) Reliability Ability to perform the promised service dependably and

accurately

(3) Responsiveness Willingness to help customers and provide prompt

service

(4) Assurance Knowledge and courtesy of employees and their ability to

convey trust and confidence

(5) Empathy Caring, individualized attention provided to customers.

SERVQUAL, an instrument for measuring service quality was developed on the basis of the above five dimensions SERVQUAL has been gaining acceptance as

a platform for work in service quality

Methodology

The five service dimensions of service quality were measured with an instrument known as SERVQUAL[7] SERVQUAL is a seven-point Likert scale which measures consumer expectations and perceptions of the service quality Service quality is determined using gap analysis (i.e the difference between expectations and perceptions of quality) (see Figure 1) The SERVQUAL score for each statement pair, for each customer, is computed as follows:

SERVQUAL score = perception score – expectation score

The SERVQUAL score along each dimension is obtained by adding the SERVQUAL scores on the statements pertaining to the dimension and then dividing the sum by the number of statements making up the dimension SERVQUAL was used to collect data for all the three types of services: a fast-food restaurant for pure service, an airline for mixed service, and a long-distance telephone company for quasi-manufacturing service A SERVQUAL questionnaire was given to 110 consumers for each of the three services Of the

110 questionnaires distributed, the response rate was as follows:

Perception of service experience

* * * * What customers perceive service provider actually offered

Expectation of service experience

* * * * What customers believe the service provider should offer

Service quality

Figure 1.

Measurement of

SERVQUAL service

quality

Service quality

31

● long-distance telephone company: 78 (71 per cent);

● fast-food restaurant: 65 (59 per cent);

● airline: 69 (63 per cent)

In addition to the 22 items on SERVQUAL, the respondents were asked to rate

the overall quality of service operations on a seven-point Likert scale We used

a seven-point Likert scale instead of a four-point one as used by Parasuraman

et al.[7] because it will give a better normal spread of observations The reason

for having a separate question for measuring the overall quality is that using

the average of measured gaps (SERVQUAL) will result in multi-collinearity The

result from the separate question on overall quality measurement was used for

the regression purposes

Data for each of the three services were then analysed by regressing the

scores of the perceived quality of service by the consumer on five dimensions of

service quality as defined by Parasuraman et al.[5] on a seven-point Likert

scale

Further, an exploratory study was undertaken with two groups of human

resource managers from the three types of services under study The

participants were specifically screened to make sure that each participant had

at least two years of association with the organizations in question One of the

members of the research team served as a moderator for each focus group Our

findings were then shared with the members of the focus groups Focus group

participants were then asked about their input in regard to the implications of

our findings for training and management development

Results

The results of the analysis are presented in Table II The adjusted R2values are

statistically significant in all the three types of services Out of the three types

of services, the pure service (long-distance telephone) has the highest R2,

implying that this model accounts for more of the variance in service quality

than the other two models

A striking result in terms of service quality dimensions is the statistically

significant relationship between perceived service quality and reliability for all

the three types of services Reliability is the most important dimension in

determining service quality for all the three types of services For example, in

the case of an airline, the consumer may have higher satisfaction if the airline

provides dependability of flight arrivals and departures

Tangibles is the other important critical variable for the mixed service

Empathy is critical variable for the quasi-manufacturing services, implying

that caring and individualized attention affect the customer’s perceived

satisfaction The results of the statistical analysis were then shared with the

members of two focus groups The focus group members in turn shared their

views in regard to what could be done in terms of training and management

development for the three types of services

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It was found that this analysis is quite common to all the types of services because there was almost a consensus among the participants Therefore the summary of their discussion does not pinpoint a particular service type

Implications for management development

Most of the participants agreed that training is a means of more competitive performance and an end in itself In a fast-food restaurant, for example, managers regularly talk to the entry level employees about time management These discussions contribute to the company’s ability to provide good service because they emphasize how crucial it is for everyone to avoid wastage of time They also add to the fast-food workers’ stock of knowledge as well as to their pride in themselves and the importance of their work

The participants agreed that, before commencing the training sessions, it is essential to have certain service standards irrespective of service type These standards should be based mainly on customer satisfaction The training programme must be used to develop awareness about customer expectation among the employees These training programmes will prevent wasteful emphasis on management expectations rather than customer expectations Reward systems should also be based on customers’ satisfaction rather than management’s satisfaction Participants also agreed that it is important to

Table II.

Relationship of five

dimensions with

perceived quality

Standardized slope Significance Adjusted coefficient level slope R2

Pure service (fast food)

Tangibles 0.1934 0.129 Reliability 0.2891 0.020 Responsiveness 0.1757 0.1861 0.3824 Assurance 0.2191 0.1272

Empathy 0.0498 0.6614

Mixed service (airlines)

Tangibles 0.2827 0.03 Reliability 0.3049 0.04 Responsiveness 0.0400 0.730 0.4557 Assurance 0.1356 0.2623

Empathy 0.1628 0.2192

Quasi-manufacturing service (long-distance telephone)

Tangibles 0.0114 0.899 Reliability 0.5452 0.0001 Responsiveness 0.0829 0.486 0.4924 Assurance 0.1039 0.3305

Empathy 0.2968 0.0132

Service quality

33

communicate these service standards as widely as possible to employees Some

actions which will facilitate the development of communication channels are:

● planned group and team meetings;

● increased customer awareness seminars to understand customer needs

better;

● desk signs;

● posters

Participants suggested that it is essential to obtain feedback from the

employees regarding the company’s service standards This feedback should be

incorporated in the future service standard updates

Participants agreed that the training seminars, in addition to educating the

employees, should provide the context in which employees commit themselves

to the company and its service expectations That is, training seminars should

provide an atmosphere in which employees can identify and improve their

attitudes towards service and customers For example, they should watch

videos on the importance of body language, and engage in role playing to build

their enthusiasm for the company Throughout, the emphasis of training

seminars should be to help employees think and act like customers instead of

teaching them technical skills such as repairing the telephones or using the

registers

Participants suggested that the training programmes should be for everyone,

not just for the new employees They also felt that top management should also

be included in these training programmes Most participants agreed that top

managers cannot limit themselves to go/no-go decisions based simply on

quantifiable operational advantages assessed by means of a set of questionable

justification methods Instead, as suggested by participants, it is top

management’s responsibility to decide the following:

● the role that the combination of management and employees are to play;

● how to resource the innovation and implementation of customer

satisfaction techniques;

● how to break down the boundaries between functional departments

One major outcome of the above responsibilities is the need for increased

knowledge about the customer on the part of top management

Training programmes for top managers should include managers from

different departments, and the training should be given to them prior to that of

other employees A top management training programme should begin with the

assessment of the organizational issues critical to the improvement of service

quality This assessment is designed to identify the gap between the

organization’s current state and its desired state This analysis could help

managers develop a vision statement and an implementation plan in the

beginning

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At the end of training, everyone should have the same definition of customer satisfaction and everyone should have a common language This eliminates normal language barriers and misunderstandings which can cause delays and problems It is crucial for the success of service quality improvement efforts that everyone’s vision and goals be the same It is essential that managers spend about 50 per cent of their time on the front line The advantages of “hands-on” training by managers as identified by the participants are that it:

● provides managers with the opportunity to model quality service to the front-line workers;

● provides managers with the first-hand feedback from the customers on the quality of their operations;

● opens lines of communication between them and other employees – it will also give top managers a chance to discuss their philosophies and goals with their subordinates in a relaxed setting, which will be atypical

in corporations where the most common form of communication is via memos

Participants also agreed that teamwork is essential for delivering quality service The demanding and idiosyncratic behaviour of customers is often demoralizing for the front-line employees In such situations, peer support could be the only solution Training seminars should encourage employees to share successes and frustrations with their colleagues Working as a mutually reinforcing team creates an environment where customer satisfaction can be increased and employee motivation sustained

Participants also pointed out that at present in the service industry, the customer plays the role of quality control supervisor Therefore, the training efforts should be focused on zero defect approach to service That is, focusing

on doing it right first time rather than fixing it later Even if a problem occurs, the importance should be placed on resolving the problem quickly and effectively

Limitations and future research

The limitations of our study must also be considered in practice and future research Our study may lack generalizability because we considered only one type of service setting for each service type Second, our study was cross-sectional and therefore the time dependent constructs of expectation and perceived service outcome may be confounded But the low correlation between expectation and perception indicates that the cross-sectional nature may not be

a problem

While this exploratory study is limited because it uses only one example for each type of service, the findings do indicate that further research along these lines is warranted It would be interesting to compare two service operations for the same service type in terms of perceived service quality and its dimensions

or management development requirements If these findings can be supported

Service quality

35

by future research, service operations management will gain important

knowledge about what factors are important to quality determination in

varying service type

References

1 Zemke, R., “The emerging art of service management”, Training, January 1992, pp 37-42.

2 Chase, R.B and Tansik, D.A., “The customer contact model for organization design”,

Management Science, Vo1 29 No 9, 1983, pp 1037-50.

3 Gronroos, C., “A service-oriented approach to marketing of services”, European Journal of

Marketing, Vol 12 No 8, 1978, pp 588-601.

4 Lewis, R.C and Booms, B.H., “The marketing aspects of service quality”, in Berry, L.,

Shostack, G and Upah, G (Eds), Emerging Perspectives on Services Marketing, American

Marketing, Chicago, IL, 1983, pp 99-107.

5 Parasuraman, A., Zeithaml, V.A and Berry, L.L., “A conceptual model of service quality

and its implications for future research”, Journal of Marketing, Vol 49, Autumn 1985,

pp 41-50.

6 Zeithaml, V.A., Parasuraman, A and Berry, L.L., Delivering Quality Service: Balancing

Customer Perceptions and Expectations, The Free Press, New York, NY, 1990.

7 Parasuraman, A., Zeithaml, V.A and Berry, L.L., “SERVQUAL: a multiple-item scale for

measuring consumer perceptions of service quality”, Journal of Retailing, Vol 64 No 1,

Spring 1988, pp 12-40.