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It may seem like the topic of service management has been exhausted. Legions of scholars and practitioners have applied queuing theory to bank lines, measured response times to the millisecond, and created cults around "delighting the customer." But practitioners haven't carefully considered the underlying psychology of service encounters--the feelings that customers experience during these encounters, feelings often so subtle they probably couldn't be put into words. Fortunately, behavioral science offers new insights into better service management. In this article, the authors translate findings from behavioral-science research into five operating principles: 1) finish strong; 2) get the bad experiences out of the way early; 3) segment the pleasure, combine the pain; 4) build commitment through choice; and 5) give people rituals and stick to them. Ultimately, only one thing really matters in a service encounter--the customer's perception of what occurred. This article will help you engineer your service encounters to enhance your customers' experiences during the process as well as their recollections of the process after it is completed.

Creating and sustaining a third-world-based technology company to compete globally (i.e. in the first-world) poses many challenges. Such challenges are examined through the genesis and progression of Infosys Technologies Ltd. Key decisions made by Chairman N.R. Narayana Murthy are particularly highlighted.

Describes the evolution of Amazon.com from its inception in 1996 as an online bookseller to its position in 2001 as a globally recognized e-commerce brand. Reviews the evolution of the company's business model through an interview with the founder and CEO, Jeff Bezos. At its founding, Amazon.com mostly brokered book purchases through its Web site. After five years of phenomenal growth, the company expanded into international markets and added many categories, partners, and physical infrastructure. Examines Amazon's growth, fueled by the Internet bubble, and looks at how the company coped with increased scrutiny on profitability.

Spreadsheet supplement for case 601-163.

In just seven days, the Ritz-Carlton transforms newly hired employees into "Ladies and Gentlemen Serving Ladies and Gentlemen." The case details a new hotel launch, focusing on the unique blend of leadership, quality processes, and values of self-respect and dignity, to create award-winning service.

&Samhoud, a small service management consulting firm in the Netherlands, grapples with the dilemma of firing its largest client while introducing Heskett's theory of the service profit chain.

Describes the power of word-of-mouth referral for service organizations. Illustrates a process to help students and/or managers calculate the value of word-of-mouth and develop ways to influence (i.e. increase) it.

Discusses the value of service recovery to service organizations working to enhance customer loyalty. Also provides practical advice to managers and examines strategies proven helpful to service organizations in their recovery objectives.

This note illustrates and illuminates key concepts in service excellence. It summarizes and highlights key thinking and action in the service industry. It is designed to be used with "Manor" (UVA-OM-0751).

Describes the work environment, systems, and processes that allow International Profit Associates (IPA) to follow a systematic four-step approach to providing advisory service to small business owners.

JetBlue Airways shows how an entrepreneurial venture is able to use human resource management, specifically a values-centered approach to managing people, as a source of competitive advantage. The major challenge faced by Ann Rhoades is to grow this people-centered organization at a rapid rate, while retaining high standards for employee selection and maintaining a small company culture.

At the end of 1998, Amazon.com founder and CEO Jeff Bezos ponders the next moves for his company. Having secured the leadership position as the leading online book seller in the United States, Amazon.com has now moved into the product categories of CDs and videos by year's end. Having expanded into the United Kingdom and Germany and having 6.2 million members, what new product categories should Amazon.com expand into during 1999? Consumer electronics? Travel? Toys? Software? The possibilities are endless, but Bezos knows the company needs to focus on choosing a few categories and performing well in those picked.

At the end of 1999, Amazon.com founder and CEO Jeff Bezos--just named Time Magazine's Man of the Year--ponders the next moves for his company. Having expanded into numerous categories in 1999, ranging from Z-shops to Auctions to E-cards as well as increasing the number of distribution sites to seven, Amazon.com is quickly transforming itself as an electronic retailer. But does Amazon.com's strategy make sense? Critics worry that Bezos may be stretching the Amazon.com brand too far instead of focusing on a few retail categories. Bezos sees the opportunity to dominate various retail categories online--leveraging off its base of 16.9 million customers--before the brick-and-mortar retailers do.

At the end of 1998, Jonathan Bulkeley, the newly-named CEO of barnesandnoble.com, is faced with a challenge. As the second leading online bookseller behind Amazon.com, barnesandnoble.com must build its market share. With Forrester Research predicting that the online bookselling market would grow to $3 billion in 2003, how could barnesandnoble.com attract more of the "newbies" coming onto the web to its site and become the leading online bookseller--as it was in the bricks-and-mortar world--over the long run?

At the end of 1999, Steve Riggio, the vice chairman and acting CEO of barnesandnoble.com, wonders what his company should do next against Amazon.com, the online retailer who is the leading online book seller in the United States. While barnesandnoble.com has been careful to expand into new categories related to media--such as magazines, CDs, and posters--Amazon.com has expanded into a variety of seemingly unrelated categories--such as Z-shops, auctions, and power tools. While some see this expansion as a weakness in Amazon.com's branding strategy, how could Riggio and barnesandnoble.com best exploit this so that they become the leading online bookseller over the long run in terms of market share and mind share?

Supplements the case.

Facing dwindling membership and looking to increase its revenue, the American Medical Association (AMA) signed an endorsement deal with Sunbeam Corp., a leader in the small home appliance industry, in August 1997. In the deal, the AMA would receive significant royalties from Sunbeam in exchange for the use of its seal on Sunbeam's home health-care products. Critics protested that this deal posed a conflict of interest before the AMA. Supporters argued, however, that the deal was a good way for the AMA to ease the association's financial troubles. Furthermore, the deal would be beneficial to patients because it encouraged people to monitor their own health.

Supplements the (A) case.

Describes the evolution of Wit Capital from its origins as a small brewery to an online investment bank advising both small technology-based companies seeking to raise capital and large companies seeking to acquire Internet companies, as well as offering retail brokerage services to individual investors seeking access to initial public offerings. Discusses Wit's continuing evolution in 2000, when it sold its retail brokerage unit and refocused on traditional corporate clients. Provides details of Wit's value propositions to its target clientele and some data regarding the value provided and service quality delivered. Written for a second-year MBA course in Service Management. Can also be used in courses focusing on the Internet, General Management, Entrepreneurship, Service Management, and Service Operations.

The American health care system is undergoing a market and organizational transformation analogous to the deregulation of the transportation, communication, utility, and finance industries, with price competition replacing rate controls, new entrants displacing organizational incumbents, innovation disrupting stability, and individual choice supplanting governmental oversight. These turbulent changes are generating uncertainty, hostility, and a backlash towards re-regulation. This article compares the evolution of the health care sector with the experiences of other deregulated industries, highlighting four effects that cut across all sectors. Deregulation and the role of price competition has led everywhere to: lower costs, due to better capacity utilization and improved productivity; increased differentiation of prices and products, moving away from the one-size-fits-all patterns characteristic of regulated industries; dynamic changes in both market and organizational structures, culminating in consolidation into multi-product, geographically diversified firms; and political backlash, fueled by uncertainty, organized producer groups, and selected groups of consumers who do not benefit from the overall cost and product improvements.