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At a large advertising agency, a campaign for a major account develops problems at the last minute, and the campaign must be redone. The management supervisor must determine what went wrong, who was to blame, and what to do about it.

The walk-in clinic for general outpatient care at a major university experiences complaints about excessive waiting times. The system is changed to provide for initial screening of arriving patients in order to route them to appropriate health care providers. The administrator of the clinic must appraise the new system and decide what further changes to make.

Spreadsheet supplement for case 681-061.

The management of Boston's historic Parker House, owned by Dunfey Hotels, has received a request from a tour wholesaler to book a large number of rooms at the hotel during summer and fall 1980. This booking is tied to bookings at two other Dunfey hotels that need this business. Parker House management would prefer to cultivate more lucrative individual and corporate business, which they see as more in tune with the hotel's carefully developed market position. What should they do? Dunfey's detailed segmentation strategy is central to discussion of this case. Five pages of exhibits include financial data on the Parker House and details of requested reservations and space availability.

Contains four sections: 1) measuring the performance of queuing systems; 2) types of queuing systems; 3) the behavior of simple systems (elementary queuing theory); and 4) the management of queues (including a discussion of their psychology).

Citibank overhauled its service areas with a minicomputer and processing models copied from the manufacturing industry. However, this system was insufficient to provide personalized customer services. By decentralizing their system and reorganizing along market segments, the bank created National, World, and Industrial groups. The reorganization provides opportunities for advancement, better accountability of individual performance, and greater efficiency which markedly improves morale.

Service systems with high customer contact operate at a lower degree of efficiency than those with limited customer contact. Managers should separate high-contact and low-contact elements of a service system; separate groups of people should perform high- and low-contact activities. Implementation of these concepts will enhance the development of two contrasting classes of worker skills and orientations. It requires, however, answering questions concerning the company's operating system, procedures and potential.

Understanding the basic differences between service businesses and manufacturing businesses is essential to the strategic management of a service business. Most managers of service businesses continue to think of strategy in product-oriented terms, despite the fact that much of this approach is actually irrelevant to their companies. Six suggested questions focus on topics these managers should consider about strategic management.

The talent for making good use of professional advisors ranks as one of the most necessary skills for an executive. Certain types of client attitude and behavior lead to success while other behaviors lead to failure. Twenty-five rules for the successful use of professional consultants and advisors examine the problems of hiring and fees, and the common grievances of consultants and clients. Advisors and clients both commit a set of "seven deadly sins" which need to be eliminated as soon as they occur.

Good planning is the key to the creative management of supply and demand in service industries. The two extreme strategies for matching demand for services with capacity to supply them are "chase demand" and "level capacity." Service managers alter demand with the following demand-leveling options: pricing, developing nonpeak demand, developing complementary services, and creating reservation systems. They adjust capacity to fluctuating demand by using part-time employees, maximizing efficiency, increasing consumer participation, sharing capacity, and investing in expansion. The challenge to the service manager is to find the best fit between demand and capacity.

The introduction of hard, soft, or hybrid technologies into service areas is the beginning of the industrialization of service. The key point is to increase the volume of service to a magnitude sufficient to achieve efficiency and to employ systems and technologies which produce reliable, rapid, and low-cost service results. Various cases illustrate problems of paperwork, service repairs, selling, and specialization, when implementing this management rationality. Service industrialization requires a set of processes and management that is much different from that used in the functional production of goods.

In a service organization, quality control of employee attitudes and performance is comparable to product quality control in manufacturing. The Marriott Corp. pursues an elaborate 'rescue' operation to keep good management people after recruitment and training. This rescue operation which provides employees with challenge, satisfaction and growth in their jobs, consists of eight programs including: Individual Development; Management Training; Manpower Planning; and Career Progression. Other programs include: annual Opinion Surveys; Fair Treatment; and Profit Sharing.

The student is required to develop a strategy for a tennis club of a large resort area. The tennis director must decide how many courts he needs to build within the next three years, what surface they should have, and how much he should charge for their use. Illustrates the problems of capacity planning in a service organization.

Spreadsheet supplement for case 673-057.

Discusses the development of a chain of "theme" restaurants. The student is asked to evaluate the current operating strategy and suggest a long-term expansion strategy.

All industries are, effectively, service industries. Some industries merely have greater service components than others. Many so-called service industries such as fast food, mutual funds, and credit cards have applied manufacturing solutions to people-intensive service problems. To gain benefits, managers should consider the problems and desired output; how to redesign the process and install new tools that automate the job; and how to control people's behavior and channel their choices. The primary objective is to serve the customer's needs efficiently and effectively, and to make customer service an integral part of what the customer buys. McKinsey Award Winner.

The management and trustees of nonprofit service organizations satisfy supporters' demands for better expenditure controls of their contributions by means of cost accounting procedures. The cost accounting of professional services pinpoints sources and uses of funds and facilitates decisions on money allocation. In the described example, management and trustees observe the establishment of a planning and accounting system at a once-drifting mental health clinic employing about 100 professionals.

Three key concepts are fundamental to professional services, and serve as a guide to the buying or selling of these services. First, a professional service must make a direct contribution to the reduction of the uncertainties involved in managing a business. Second, a professional service must address a specific, substantive problem of the business purchasing the service. Third, a professional service can only be purchased meaningfully from someone who is capable of rendering the service.