Service Principles, Design, and Strategies

Introduction

The purpose of this chapter is to explain the concepts and principles of service science, management and engineering, and the basic constructs of innovative service strategies. It will highlight why service is increasingly being conceptualized as a process rather than a unit of production output, an intangible good. Consequently, it will explain (consistent with the knowledge-based theory of the firm in chapter 1) why the unique knowledge, skills, and competencies, or organizational capabilities (described in chapter 3), of a firm, which are collectively categorized as “operant resources” (which have the capacity to act on other resources including operant resources to produce a beneficial effect), are the foundation, and competitive advantage, of a service firm.

The study of service science, management, and engineering is an emerging field of research. Service conceptual models and theories have evolved, over more than two decades, from a series of seminal work from disparate disciplines. However, they remain emergent with different perspectives and emphases being advanced by different leading scholars. Therefore, the chapter will first describe the evolving service perspectives and their associated characteristics and principles. It will explain the difference between product and service, and the emerging process models of a service. It will then describe the emerging, and increasingly popular, process-oriented Service-Dominant Logic (S-DL)—an all-encompassing logic that can be consistently applied to the conceptualization of both products and services. The underlying constructs of the S-DL—adaptive value networks, service systems, operant resources, customer value co-creation—are then explained in detail. It will highlight the power of S-DL in embracing the conceptual “liquefaction” of information from the physical value networks prevalent in nearly all business models of the so-called knowledge economy of our modern society.

The chapter will then address the service “implementation” aspects and describe the definitions and interrelationships of service concept, design, and strategies to create differentiating customer experience; and how they may be dependent on or related to information technologies.