The Service Quality of a Hospitality Organization - Essay Example

Topic: “To Study the Service Quality of a Hospitality Organization”. (MGT 306) Managing in the Service Environment Services sector comprises a significant proportion of the GDP of developed and developing countries in the world. And the importance of services sector in the world economy continues to grow. Example: India’s services sector growth rate is substantially higher than the growth rate of manufacturing sector. With the development of new technologies service producing is not limited to the local markets. Nowadays exporting of services is an expanding business. India is currently recognized as the largest services exporter in the world. Services sector comprises 70% proportion of the total output in the world but only 20percentage proportion of the same is incorporated in world’s international trade. Thus exporting of services is an under developed industry. India’s experience reveals that development of economies is not necessarily lead by the industrialization. Services sector driven economic development is also possible. India moved from being an agriculture based economy to services based economy without involving industrialization (The Nation). Therefore identifying the issues relating the companies in the services sector has become rather important to the development of countries. It has been revealed that the service quality in British banks is substantially low. Customers are increasingly dissatisfied by the banking experiences in England (Johnston, 1997). Such issues and increasingly identifying economic significance has called for challenging research studies relating the service quality. 1. Introduction of Customer Service Customer service plays an important role in building the brand loyalty. “Loyal and an involved customer” is an asset to a company. Developing such a customer base is recognized as the aim of “customer service” by most of the modern day businesses. Strong customer relations are also a vital part of the business growth. In the services sector, customer service can be identified as the backbone. It is an important element in the tangible sphere of the service quality. Customer service can influence the customer’s perception regarding firm’s performances. Part of the contemporary businesses’ everyday mission is to cultivate consumer relationships by strengthening emotional connection with the customer. Listening to customers through rigorous consumer research and strong consumer orientation by keeping the products relevant and appealing are important elements in customer service. 2. Introduction of Service Quality Service quality is defined as "the extent of discrepancy between customers' expectations or desires and their perception of what is delivered" (Zeithaml et. al., 1990). According to the SERVQUAL approach the spheres of service quality can be described in terms of (1) Tangibles: “Appearance of physical facilities, equipment, personnel and communication materials"(2) Reliability: "Ability of the organization to perform the promised service dependably and accurately. (3) Responsiveness: "Willingness of organization’s staff to help customers and provide them with prompt service"(4) Assurance: "Knowledge, competence and courtesy of employees and their ability to convey trust and confidence in the customer towards the service firm" and (5) Empathy: "Caring, individualized attention the firm provided its customers" (Manjunatha and Shivalingaiah, 2004). Thus it can be seen that customers’ expectations from a services based company includes attributes of physical environment as well as the human resources. Physical capital of the company has to be appealing and convenient to the consumer. Contemporary businesses use this concept as a marketing strategy and invest substantial amounts of resources to build the physical environment of their companies. Example: modern stores are carefully designed to reflect the image of the company brand. The showcases and environment of these stores are specifically designed by the professionals to attract and comfort the consumers. These sophisticated, sleek, modern and inviting organizations enhance the purchasing experience of the customers by providing a high service quality. High standards of visual presentation, merchandising and customer service are crucial components in modern Direct-to-customer marketing. Furthermore online service providers design the websites in such a way that consumers obtain new pleasant experiences while purchasing the services. Developing a customer oriented organization culture is crucial for business growth. Customer is considered as the king in the hospitality industry. Modern-day companies are very particular about thecustomer oriented attitude in employees. Parasuraman et al. in 1988 reported a statistically significant and a positive correlation between communication, competence, courtesy, credibility and security. These components were integrated into broad category assurance in the SERVQUAL. Similarly the correlation between access and understanding were combined as empathy. 3. Research Methodology SERVQUAL approach was developed by Parasuraman et al. in 1988. In the existing literature SERVQUAL approach is widely identified as a reliable instrument of measuring the service quality in hospitality industry. It has been applied in a wide range of organizations such as libraries, restaurants, banks and tourism. Existing gap between the customers’ expectation to the performance is used as the evaluation criteria in SERVQUAL method. In the services industry customer is considered as the “king.” thus customers’ perception about the company’s services is a significant determinant of its quality. SERVQUAL scale is a parsimonious, psychometric scale. It can also be used to compare the service quality across different industries. Thus it is identified as the best measurement of service quality in the research literature. However the SERVQUAL scale includes certain limitation. Example: inconvenient data collection task. The questionnaires adopted in SERVQUAL approach are rather lengthy. It involves collecting of data relating to the expectations of consumer and the actual performances of the company relating to each attribute of the quality scale. Furthermore perception is a variable depending on the individual. There is no absoluteness in perception. It can depend on other factors such as individual’s socio economic characteristics as well as the emotions they are feeling at a given moment. Thus measuring service quality based on the perception can be erroneous. In this approach focused group conversations or interviews are used to collect the data relating to the service quality of a given company. Extent to which the service performance of the company complies with the level of performance that consumers expected from the company is measured using a scale. If the level of performance matches with the level of customer expectations it is considered as a high quality service. If the performance was below the expectations the service quality is rated as low quality alternatively i.e. as the performance of service provider increase compared to the customer expectation, the quality increases. As the performance of a service provider decreases compared to the customer expectation, the quality is decreased (Parasuraman et al. 1988). This study attempts to answer the following research questions relating to service quality in Banks. 1. What are the most important quality factors as perceived by the customers? 2. What are the factors which increase customer satisfaction and what are the factors which increase the customer dissatisfaction? Empirical study involved 100 respondents who were customers of four different banks. The respondents were between ages 20 to 56, males and females. The respondents were instructed to rate 22 attributes relating to the service quality using 1 to 5 scale (1-strongly disagree 7- strongly agree). 4. Analysis of data The table one depicts the percentage proportion of the respondents in each category. Table 1 Percentage Proportion of the Respondents Relative effect on satisfaction/dissatisfaction Responses (%) 1 2 3 4 5 6 7 Tangibles have modern-looking equipment The physical facilities are modern looking and appealing. Employees are neat in appearance. Materials associated with the service are visually appealing Reliability keeps the promise to do something by certain time Shows sincere interest in solving the customer’s problems. Do the service correctly at the first time. Provides the services at the time they promise to do so. Insists on error-free records. Responsiveness Employees are telling the Customers exactly when service will be performed. Employees are giving prompt service to Customers. Employees are always willing to help Customers. Employees respond to Customers requests even if they are busy. Assurance Employees instil confidence in their Customers. Customers of feel safe in their transactions. Employees consistently courteous with the Customers. Employees have the knowledge to answer the customer’s questions. Empathy Customers get individual attention when dealing with departments. The timing of services provided by convenient to all Customers. The employees are willing to provide personal attention to each Customer. The employees are willing to understand the specific needs of their Customers 5. Findings of The Study The main factors which are satisfying the studied Banking customers include commitment, attentiveness, friendliness, care and courtesy. The main factors which dissatisfied the customers include cleanliness, aesthetics, integrity, functionality, reliability and security (Johnston, 1997). 6. Recommendations for the Improvement The above results can be used to manage the service environment in banks as follows. The factors that satisfy customers are mostly intangibles and involve emotional connection with the customer. Such factors need to cultivate in organizational culture. They can influence customer perception positively. The factors which dissatisfy the customers include both tangible and intangible components. Example: Responsiveness, functionality of machines, the reliability of transactions, the integrity of the staff and the confidentiality of the service. In these components Banks requires having a high level of accuracy as customers are dissatisfied otherwise. 7. References Manjunatha, K. and Shivalingaiah, D. “Customer's Perception of Service Quality In Libraries.” Annals of Library and Information Studies 51.4 (2004): 145-151 Parasuraman, A., Zeithaml, V.A. and Berry, L.L. “SERVQUAL: a multi-item scale for measuring consumer perceptions of the service quality.” Journal of Retailing 64.1 (1988);12-40. The Nation. “Services lead economic growth: how stable and sustainable” (n.a.). Retrieved from http://www.ips.lk/staff/ed/latest_essays/downloads/ Zeithaml, V.A. Parasuraman, A. and Berry, L.L. Delivering quality service: Balancing customers' perceptions and expectations. The Free Press; New York.1990. print. Read More