Productivity and Effectiveness in Service Firms

Abstract

Service firms are facing pressures which are leading them to seek increases in productivity. While attempts to increase productivity in goods-producing organisations seldom affect customers, such attempts in service firms are very likely to impinge upon customers' perceptions of the service. The need for service firms' marketing personnel to be involved in the assessment of the impact of attempts to raise productivity is thus clear. Furthermore, the need to assess the impact of increases in productivity on the firm's effectiveness rather than in traditional efficiency terms is emphasised.