Academic journal article E+M Ekonomie a Management

Standardization in Services: Assessing the Impact on Customer Satisfaction

Academic journal article E+M Ekonomie a Management

Standardization in Services: Assessing the Impact on Customer Satisfaction

Article excerpt

Introduction

The service organizations develop complex service offerings and procedures to cater to the changing customers' requirements. The increased complexity of the service processes halts effectiveness of the operations and may lead to the lower firm competitiveness over time (Schafermeyer, Rosenkranz, & Holten, 2012). The complexity of service operations induces long waiting times for customers and high non-value added costs for the companies (George, 2003), and the diversity of the service offerings challenges effectiveness of the processes (Carlborg, Kindstrom, & Kowalkowski, 2013; Silvestro & Lustrato, 2015). Due to the direct customer participation in the service production, customer has power to significantly impact and distort service operations (Zomerdijk & de Vries, 2007). Thus, to tackle the issue of redundancy and improve performance, companies make determined efforts to standardize their operations.

The standardization boosts enterprise performance through cost, time reduction and quality improvement (Davenport, 2005; Munstermann, Eckhardt, & Weitzel, 2010). The unification of the business processes leads to the improved control and collaboration between departments (Wuellenweber, Koenig, Beimborn, & Weitzel, 2009). The drive for continuous improvement is now prominent in the services segment, and the process standardization is critical to ensure effectiveness of improvement efforts (Anderson, Rungtusanatham, Schroeder, & Devaraj, 1995; Berger, 1997). The goal of standardization and continuous improvement is to achieve higher customer satisfaction in the light of the changing customer preferences, while delivering performance benefits (Anderson, Fornell, & Rust, 1997; Deming, 1993; Imai, 1986; Liker & Morgan, 2006). However, excessive standardization may have negative impact on customer satisfaction, since standard operations may not tailor to the needs of the varied customer base (Babbar, 1992; Hsiao, Chen, Chang, & Chiu, 2016; Lillrank, Shani, & Lindberg, 2001). Thus, in the face of the growing customization trend, companies face the conflicting trade-off to meet customer demands and deliver performance improvements (Silvestro & Lustrato, 2015).

Our analysis of the literature reveals the scarcity of studies on the impact of standardization on customer satisfaction, yet less in services. The study of Munstermann, von Stetten, Laumer and Eckhardt (2010) on standardization of human resource processes provides for a rare exception. The present study contributes to the scant field of knowledge of standardization application in services, since the previous research has mainly focused on healthcare, telecommunication and manufacturing industries. The majority of the studies on standardization assesses the saving gains, often overlooking the importance of customer satisfaction, even though customer satisfaction is linked to a higher customer retention and improved revenue (Rust & Chung, 2006; Tyagi & Gupta, 2013). The existing accounts also fail to consider standardization within the wider organizational improvement process that often takes place simultaneously.

Standardization of the operations involves significant costs due to the investment in the design of the new processes and employee training (Wang, Wang, Ma, & Qiu, 2010). At the initial stage of standardization, the required investment may outweigh the benefits associated with the higher process reliability and a minimal customer satisfaction improvement. However, effective implementation of the standardized processes will eventually bring in economies of scale and tremendous improvement of the service quality (Wang et al., 2010).

Despite the importance of standardization for modern businesses, the conditions fostering effectiveness of standardization remain largely understudied. The previous research has focused on identifying what level of process variety as opposed to standardization should be kept, in order to meet customer requirements (Afflerbach, Bolsinger, & Roglinger, 2016). …

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