Managing Service Operations - Harvard Business School MBA Program

Managing Service Operations

Course Number 2120

Assistant Professor Ryan Buell
Winter; Q3Q4; 3 credits
28 Sessions

Managing Service Operations (MSO) focuses on how firms can deliver excellent service while achieving business success. This involves a deep understanding of customers, competitors, and the firm's internal mechanisms.

Career Focus

Managing Service Operations investigates how to design and manage firms to achieve sustainable service excellence. Service excellence is sustained when value is created for owners, employees, and customers. This course is appropriate for those planning to work in service firms and for those working in companies that analyze or provide support to service businesses, such as consulting or venture capital firms. The course has a strong emphasis on consumer services, with only modest attention to business services.

Educational Objectives

The course explores how managers can influence customers, employees, and service designs to create and capture value. Through exposure to a wide range of industries (e.g., financial services, government, health care, hospitality, and retail) students will gain tangible lessons from each class that they can use in a broader context.

Course Content and Organization

Current practice reveals a lack of widespread understanding of effective service management. Consider, for example, that in virtually every industry customer service costs tend to increase even as customer satisfaction decreases. This course takes the position that there is enormous potential to improve services and has as a goal to equip students with the concepts and tools to do so.

  1. Designing Service Models: This module addresses the challenge of designing sustainable service models: services that simultaneously produce value for customers, employees, and investors. Principles of effective service design will be developed through a series of successful and unsuccessful case examples. Students will learn an integrated framework for analyzing and improving existing services, assessing whether new services "fit" with existing services, and designing new services.
  2. Managing Customers: In many service models - particularly those oriented around customer "self-service" - customers have an operating role. That is, customers perform tasks that traditionally were performed by employees. This module explores this aspect of services and the attendant challenges it imposes on service operations. Hence, understanding and learning how to influence customer operating behavior is essential to service operations and a central theme in this module.
  3. Managing Employees: Service models across a variety of contexts are heavily dependent on employees for service delivery. This module will focus on designing appropriate performance management systems - encompassing employee selection, performance measurement, incentives, and job design - for ensuring effective service delivery. Particular attention will be paid to designing performance management systems to leverage the rewards - while mitigating the risks - of empowering service-delivery employees to be responsive to customers.
  4. Managing Service Transformation: Many organizations which have not traditionally competed on service are facing increasing pressure to do so as service competitors enter their industries and markets. This module focuses on the integration and application of the lessons from the course to the problem of transforming such organizations to compete effectively on service.
  5. Service Operations in the Context of Investors: Service improvement efforts are often characterized by immediate cost outlays with long-term uncertain returns. In this module, we will explore the tensions this dynamic creates when service organizations face investors with demands for tangible returns on capital. This module will focus both on understanding service operations from the perspective of the investor and on using this understanding to develop managerial strategies for sustaining service in the context of capital market pressures.

Grades will be based on class participation plus individual and group exercises.