Service as a strategy, a service-economy claim, and why improvement is hard to see

Firms that have succeeded by using service as a management strategy, the notes say, manage their service quality almost obsessively. The share of the service industry in Korea’s industry is said to be very high, so that much of daily life is tightly tied to service, and the writer says it can no longer be denied that we live in a service-economy era. Service quality is also treated as a matter tied to the country’s own future as globalization and internationalization proceed. The United States and other advanced countries in Europe are said to be pressing harder for the opening of service markets; the United States, having failed to seize a worldwide advantage in manufacturing, is said to want to right the balance through service exports. No year or official share is attached in the unique body, and none is invented here.

Firms that succeed through service quality, in this telling, use service itself as part of a differentiation strategy, as a means of raising productivity, as a way to win customer loyalty, and as a way to seed positive word-of-mouth marketing. By raising that quality they are said to step back from a low-price competition that would otherwise drag the parties toward mutual ruin. As the importance of service quality has risen, firms have recently shown interest in it. Whether improvement has actually reached a level customers would be satisfied with is, the writer says, still uncertain.

Service has features that manufacturing, which can be turned into numbers and quantities, does not: it is intangible, produced in interaction between producer and customer, changeable over time, consumed as it is produced, and made with the customer taking part in the production process. For those reasons it is hard to manage, and hard for a firm itself to tell whether improvement is really under way. A second reason improvement often fails, they write, lies in the organization that provides the service and decides its quality. Interest in service quality is high, but the structural problems of the organization that determine how service is performed are not being considered. That organizational structure is the base on which provision rests, so if it is at fault, improvement is hard. Where members’ patterns of behavior become service quality directly, organization management for the sake of service is said to be essential.

What corporate culture is said to be, and a bank-service study that put teamwork first

A study of organizational factors related to service performance, centered on bank services, is said to have found teamwork the most influential factor. How far all staff can work together toward a common goal is what decides an organization’s service level. The organization’s service, they write, is decided by whether all members share values, and whether they can move toward a common goal on that basis — and that can be explained as a matter of organizational-culture values. This piece, the notes say, therefore turns to how the culture of the firm as an organization affects the service offered to the customer. No author or year is attached to that study in the unique body, and none is invented here.

Before that influence is explained, they set out what corporate culture itself is. Organizational culture is said to include the philosophy, values, beliefs, and expectations shared inside the organization, and the norms that correspond to them. By attending to informal force inside the organization, it is said to exert a greater influence on members than formal, visible policies and guidelines, and to lead on to members’ behavior and productivity. In other words, the atmosphere and environment surrounding the firm — which shape employees’ behavior and affect relationships and decision-making inside the firm — can be called corporate culture.

That culture, they add, tends to be influenced mainly by managers’ behavior or values, and the traditions and customs that exist inside a firm may also stand as its core values. Today corporate culture is recognized as an important element of a firm’s competitiveness, and is used as one measure of how effective its management is. Various studies of service marketing and of corporate culture, the notes say, hold that a fitting corporate culture is needed for successful service marketing. Culture has become an essential element in every kind of service industry, in manufacturing, and even inside the firm itself.

Process versus result, ordinary and exceptional service, and word of mouth

Organizational culture is said to be treated as still more important in the service industry, because there the nature and quality of what employees produce act as a decisive factor in the interaction between customer and employee. That interaction happens before and after provision, and during it as well. Through all of those stages, the features of service quality — intangibility, simultaneity, and heterogeneity — are said to be inherent. Service can be talked about from two sides, the process of provision and the result; if one must choose the more important, they write, it is the process, because it is strongly influenced by the culture of the service firm.

Service sometimes has a visible result, as with hairstyling or nail art. In other kinds — medical services, repair services, consulting services — the consumer may find it hard to grasp what the result actually is, or to compare it with another service. For that reason, they write, it is the process of delivery, the interaction between customer and service, rather than the result, that decides the customer’s evaluation. A patient who has received the medical service of surgery may not know what was done to the body, what good result followed, or whether that result is better or worse than other patients’; but the process of service the physician offered through diagnosis, surgery, and recovery is something the patient can judge.

The notes also distinguish ordinary services, which a firm provides every day and whose provision is itself the firm’s purpose, from exceptional services, needed when the firm must take responsibility for a customer complaint or a loss, or when an unusual case arises. Exceptional service does not, of course, occur as often as ordinary service; if the two occurred at similar frequency, the firm would be said to have a problem. Even so, exceptional service can affect the firm’s image as much as ordinary service, or more. If the firm’s culture is sound, they write, it may not only score well in that evaluation but also raise its reputation through what is commonly called word of mouth. In such a situation, Korean firms must offer high service quality even in order to survive, the writer says. Service quality has become not merely something that decides a firm’s image and whether a business succeeds, but a social problem. Those claims stay as the notes give them, without invented years. The same Korean report, at fuller length, is on CampusDown.

Sources

1. Notes on service quality as a management strategy and as a hard-to-measure practice, including a claim that Korea already lives in a service-economy era, with no official share or year attached.
2. A study of organizational factors in service performance, centered on bank services, that is said to have put teamwork first, and a definition of corporate culture as shared values plus informal force.
3. The argument that the delivery process, more than the result, decides the customer’s evaluation; ordinary versus exceptional service; and word of mouth, as the unique body spells them out.

Last updated: 14 November 2026