Tourism Management

Describe the main functions and departments of a service related business, outlining the duties and responsibilities of key executives and departmental managers. How do you envisage these departments in the future and what future competencies will the service manager of the future need to fill these roles?

CONTENTS

Introduction

2. Structure of a service related business

2.1 Basic parts and dimensions

2.2 Departments of a service related business

2.3 Case study

Key executives and departmental managers.

4. Lean Management- a management style of the future?

4.1 Introduction

4.2 The System

4.3 A management style of the future?

5. Possible changes in the future

6. Future competencies

References

1 Introduction

A definition of Services

'Services are economic activities that create value and provide benefits for customers at specific times and places, as a result of bringing about desired change in-or in behalf of-the recipient of the services.'

There are several main differences between manufacturing and service organisations:

Manufacturing businesses are organisations that transform goods into identifiable tangible goods while service orientated businesses transform inputs like work, special training etc. into intangible outputs such as serving a customer at a check- in- counter at an airport.

Another main difference is that service outcomes cannot be stored or corrected after their production but are being consumed the moment they are produced, therefore they require special consideration before being offered to the customers.

Process technology is transforming the inputs into services, therefore facilities are physical assets that directly affect an organisation's capacity to deliver goods and services

Another main aspect is that service businesses operate in geographically dispersed locations and that they have less control when their operations take place.

There is always a link between front and back office operators, while in manufacturing businesses it is quite usual to separate production and product delivery.

A front office employee of a service organisation is part of the service product, but a sales clerk in a shop does not change the quality of the product he sells.

Quality in terms of service means satisfying customer needs, which may be very difficult to recognise and to fulfil.

2. Structure of a service related business

2.1 Basic parts and dimensions

Five basic parts of a service related business are top management, technical support, middle management, administrative support and the technical support. They operate on different levels, but their actions are dependant on each other. This becomes obvious when looking at the structures of departments of service related organisations.

-The Top Management function is represented by the General Manager and his Personal Assistant.

-The Technical Support function in this case is the Sales and Marketing department.

-The Middle Management is represented by the Operations Manager.

-Administrative Support is given by the Accounts and Finance department.

-The Human Resources function fills the role of the Technical Support.

2.2 Departments of a Service Related Business and their Functions

l        General Manager:

-Leading, organising, planning for and controlling the subordinate departments

l        Operations:

-Creating and delivering the service product

-Obtaining necessary resources

-Maintaining operating equipment and facilities

-Managing capacity

-Transform inputs into services

-Increasingly important role in managing the firms IT infrastructure

l        Sales & Marketing:

-Yield Management

-Select the market segment

-Research customer needs in each segment

-Design the product to meet the needs of the chosen market segment

-Develop communication strategies to transmit messages to potential customer

-Awareness and evaluation of competitive offers and their quality

l        Human Resources:

-Is ensuring that the right number of people and mix of competencies are available.

-Recruitment and training of employees

-Introduction of new models such as Flexi- time, job sharing and others.

-Designing of new programs to increase loyalty and to reward employees

Accounts & Finance:

-Determining the financial status of a company

-Recording of data based on the observable reality, then analyse and diagnose information

2.3 Case study: 'Technology solves a skills shortage'

'In the early 1990s, Singapore Airlines (SIA) was having trouble recruiting and retaining check-in agents for its home base at Changi Airport. It was getting harder to recruit people with the necessary skills at the wages SIA was willing to offer. And once they were on the job, many agents found it rather unchallenging. The predictable outcome: relatively high turnover and constant repetition of the expensive recruitment and training process. As part of a major program to update its departure control systems, SIA computer specialists created new software for check-in procedures, featuring screen formats with pull-down windows, menu-driven commands and other innovations on the video terminal displays- all designed to speed and simplify usage. The net result is that SIA has been able to lower the educational criteria for the check-in position. The job is now open to people who would not previously have qualified and who view the work and the wages as being fairly attractive. Employee satisfaction has increased, and turnover is down. Because the new system is so much easier to use, only one week's training is needed- resulting in significant savings for SIA. Finally, agents are able to process passengers faster, which has increased both productivity and customer satisfaction.'

In my opinion, this case study shows not only the benefits of new technologies for the service sector but also an example of a good interaction of different departments.

Most possibly, the Human Resources function which saw the most obvious indicators of the problem- the high turnover and the low employee satisfaction- introduced the problem, maybe in an interdepartmental meeting. Then the other sectors such as Technical support, here represented by SIA's computer specialists, and maybe their Marketing department worked on solving this task.

3. Duties and responsibilities of key executives and departmental managers

-To build up and strengthen the company's ability to survive and to develop

-To guarantee the organisation's success and a long- term ability to compete

-To set up, improve and maintain standards

-To ensure a maximum of quality and successful performance out of a minimum input

-To create a satisfying system of teamwork and interdepartmental relations

-To collect and evaluate information required for forecasting and planning

Today, the challenges of Service Management are high, there is a lot of competition, but also potential in this sector- our society is becoming a 'service society'. Despite the growing problems some other markets face, the service sector is among the few that are given positive prognoses by the world's economists.

The challenges a manager in a service organisation has to face are very different from those of manufacturing managers.

Although services often include products such as food or cleaning, the service itself is intangible, it cannot be touched and therefore may differ in quality, or in the customers' perception of quality. For example, one customer might consider a meal as not tasty while another client likes it a lot. This leads to an essential problem for the manager who has to create the service product and, in order to sell it successfully, to reduce the customers' purchase risk. The Marketing functions of many large organisations such as the Hampton Inn- Hotels offer their guests a 100% Satisfaction guarantee or another guarantee that protects the customers' rights.

Another challenge service managers face is the fact that in their working field, production and consumption are closely connected and often act parallel. This means that adjustments can only be done before the service delivery and that problems regarding the service have to be tracked down and eliminated before bothering the customers.

Forecasting and planning ahead are extremely important to service managers because they are hardly able to store their products, especially in the F&B sector, and therefore need to know more about their customers' habits. An example for this is a restaurant which cannot simply warm up frozen food but neither waste expensive ingredients like steaks or, more abstract, cannot store the act of serving itself

As the person responsible for eventually occurring problems, a service manager has to select his employees, especially front- office agents, carefully and they have to be well- trained. The human aspect might be the most important 'variable' of all, and the way of leadership that employees face is often linked, maybe even reflected, in the way they treat customers and in their loyalty. This leads to the concept of 'The moment of truth', which says that the competencies and structure of the company's service become obvious when the customer meets the employee who delivers this service.

4. Lean Management- A management style of the future?

4.1 Introduction

Lean Management(LM) is a concept of leadership developed in post- war Japan in times of depression. It is the logical and consequent extension of all modern and practicable western management and marketing methods. The expression refers to the term 'lean production', a manufacturing concept consisting of several methods to produce small amounts of high quality- products without wasting precious resources.

The LM- concept has proved to be superior in terms of speed, productivity, quality and flexibility. This is considered to be an effect of the special relationship of managers to employees- the company is seen as a large family working together to improve results. Lean Management has an emotional aspect that contrasts the scientific approach of most western management methods.

4.2 The System

The company is a system closed in itself and the employee is the centre of it.

4.2.1 Elements:

T    Well- founded, spiritual guidelines

T    Working principles with new organisational thoughts

T    Integrating strategies to solve the company's central tasks

T    Scientifically-engineering methods

T    Pragmatic media for employees

T    Avoids waste and invests in natural intelligence resources of the employees

4.2.2 Lean Management- 6 main strategies

4.2.3 Organisation and some main thoughts

Flat leadership pyramid

Miniature working units and strong emphasis on teamwork, the individual fights for the company, not for himself

Significant importance is given to each individual, no higher or lower value of employees

High responsibility of all employees leads to better motivation

Kaizen- the process of constant improvement

Conflicts are expensive, are to be avoided by real trust, trust society instead of mistrust society

Involve company actively in social and industrial environment

Total use of all resources such as employees, customers, intermediaries and investors

Loyal customers are the most precious- excess loyalty by involvement into company

4.4 A management style of the future?

Though Lean Management has proved to be an effective method in Japan, we have to consider the main cultural differences between the western and the eastern cultures to have an idea of the applicability of this concept

T    Japanese people- generally said- still think in classical patriarchal terms- European LM would have to be based on the modern European family concept.

T    The Japanese are culturally predestinated to adapt the idea of teamwork, while individuality and innovative power are typical western skills. Those shouldn't be eliminated but should be made more convenient for teamwork

T    I think Japan can be described as a culture of hard workers while the western societies are rather leisure- cultures. The Japanese often spend their little free time on events organised by their companies, e.g. Karaoke, in order to make a good impression and show loyalty to their employers.

T    Due to the high competition in terms of employment in Japan, many employees are FORCED to accept conditions, the European market still offers more convenience to the employees.

T    Total Quality Management(TQM) includes some of the aspects of LM without having its 'totalitarian' attitude.

T    With the necessary changes of LM in order to make it successful in the Western world, the result would be quite close to TQM and therefore to an already existing management concept.

5. Possible changes in the future

I would like to give a short overview of the most possible changes in the close future, therefore I am not able to evaluate topics that would require major changes in human rights policy and law such as the possibility of cloning humans etc.

Decentralisation of back- office operations

It is useful for big companies that need large office facilities to relocate those departments that don't require direct customer contact to cost- saving office buildings in suburbs. Only the absolutely necessary front- office facilities in expensive areas should be maintained.

More work from home

It has proved to be quite useful for several large companies to employ a certain amount of people working from home. This is more and more possible due to the new media that allow us to communicate nearly as if we were having a real conference in the office. An example for this is my father who works for Quintiles and is one of several out of office- employees. Of course he has to travel on several occasions, but his 'home base' is the office he has in our house. Work from home is especially convenient to women with children who prefer to schedule their days according to the children's needs and to work when they're at school, or also in the evenings when they sleep.

Job sharing

This term means that two persons share one job, often couples make use of this program. It is already frequently used, even though it is not as easy as it may seem. It requires a high level of co-operation from the job sharers because one may have to finish tasks the other one started to work on.

Rationalisation and Mechanisation

Due to increasing labour and production- costs, many organisations have to minimise their expenses. It is very convenient to service businesses to introduce self- service. It also implies that the supervising function- the middle manager's one- becomes unnecessary. This means that the hierarchy pyramid shrinks- some levels might even disappear- and that managers with multiple skills and the best possible education have better chances to be hired.

Flexi- time

Flexi- time is the oldest and most popular of all those models, most possibly because it's easily applicable to different kinds of organisations. A new kind of reducing work hours is Flexi- time light, a model that makes it possible to work only one day less a week.

Flexible schedules

More flexible working hours are of significant importance to employees, therefore many companies offer various schedules instead of the classical 9 to 5- day.

Holidays as a bonus

It also seems to become increasingly popular to offer more holidays instead of Flexi- time or as a bonus for working on public holidays. BMW in Munich makes it possible to a friend of mine to spend a 4- month paid holiday in Greece each year, for this he works the rest of the year without taking any days off and is available on public holidays as well as on 5 weekends each year.

Time workers

To meet the Ups and Downs in manufacturing as well as in service businesses, many companies prefer hiring people for a short time instead of 'really' employing them. This helps to reduce labour costs and to meet the changing market demands without. In my opinion, those agencies are another part of the service industry that will grow in the next years due to increasing labour costs- I think it is a logical step for a manager rather to have few permanent employees and to make use of time workers in times of high demand instead of wasting the company's money on employees that aren't needed most time of the year.

Future competencies

'Leaders are everywhere, disseminated throughout the teams. They are found especially in the customer facing and interfacing jobs in order that decision- making will lead to long- lasting relationships with customersleaders are customer and project champions who energise the group by virtue of their enthusiasm, interest, and know- how.'

All the ideas above indicate that significant changes are going to take place. Those changes require new abilities from service managers, maybe even an 'update' of their education. One of the most important abilities a manager requires are leadership skills, but the idea of what those skills are is changing as rapidly as the environment they are developed for. While emotional skills weren't an important part of a manager's education until recently, they are considered essential in our times. An example for this are classes like Personal development and Business Communication at our school as well as numerous manager seminaries that deal with related topics.

Some of the qualities that are often described as essential are vision, flexibility, loyalty, knowledge, charisma, high standards, the ability to motivate, empathy and persuasiveness. I think that tolerance, the knowledge of foreign languages and etiquette as well as enthusiasm for the job are also important traits. It is very interesting to see that most of them are character skills and do not necessarily depend on one's education.

Also new technology leads to significant changes, a knowledge of this sector is therefore very important to managers well knowing that competition, especially due to the Internet, is constantly growing.

I would like to finish my essay with one of the conclusions I drew from working on this essay. I think that no matter how well- organised a company may be, if the co-operation and relationships between managers and employees are not good, then the organisation will face some significant problems. Therefore I think that a basic tool of successful management are good relationships in-between the people the company consists of- the board, the general manager, the middle management, but also and especially every single employee, no matter what position he has.

'Take care of the employees and customers,' my father emphasisedMy father knew that if he had happy employees, he would have happy customers, and then that would result in a good bottom line.

References

1. Introduction

A definition of services

Lovelock, C./Wright, L. 1999. Service Marketing and Management. Prentice Hall

Structure of a service related business

Basic parts and dimensions

Departments of a service related business

Graphic used with the permission of Oliver Tamm, AM

Case study

Lovelock, C./Wright, L. 1999 Service Marketing and Management. Prentice Hall

Key executives and departmental managers

Lovelock, C./Wright, L. 1999 Service Marketing and Management. Prentice Hall

Lean Management

Introduction

Bösenberg, D./ Metzen, H. 1993 Lean Management- Vorsprung durch schlanke Konzepte

The System

Elements

Müller, U.R. 1995 Schlanke Führungsorganisation WRS Verlag

Lean Management-6 main strategies

Organisation and some main thoughts

Müller, U.R. 1995 Schlanke Führungsorganisation WRS Verlag

A management style of the future?

Possible changes in the future

Future competencies

Citation 1: Vandermerwe, S. From Tin Soldiers to Russian Dolls

Adapted from Lovelock, C./Wright, L. 1999 Service Marketing and Management. Prentice Hall

Citation 2: Sheridan, M. 1987 'J.W. Marriot. Jr. Chairman and President, Marriot Corporation', Sky Magazine

Adapted from Lovelock, C./Wright, L. 1999 Service Marketing and Management. Prentice Hall