Management Functions, Service Processes and Related Conversions.

As global economies progress, the dynamics of markets and emerging demands require the adoption of unique and standardized management principles and functions to deliver competitive and high-quality products and services. With the advent of innovative research and development concepts, aligned with a systematic approach to fulfilling customer requirements, it becomes essential to establish structures and procedures that facilitate the achievement of organizational goals and objectives. As a result, it becomes critical to acknowledge that management should be considered as interdependent processes. According to Pride, Hughes, and Kapoor (2015)^[1], these processes are characterized as simultaneous functions that flow to achieve successful outcomes:

Planning: A comprehensive framework of organizational objectives and strategic choices is essential for their attainment. The significance of planning directly influences the organization’s mission statement and multiple management functions. Consequently, it encompasses strategic planning processes aimed at defining goals and objectives; a SWOT analysis that assesses the internal and external strengths, weaknesses, opportunities, and threats of the organization; and several planning types, categorized into tactical, operational, and contingency plans. All of these factors, broadly support the efficient and effective organization, use and control of resources.

Organizing the enterprise: Refers to all resources and activities that contribute to the achievement of an organization’s objectives and goals. These resources may include human, financial, material, and informational assets.

Leading and motivating: The success of all companies fundamentally relies on human resources. These individuals oversee the management, operations, marketing, finance, and administrative functions of the organization. Consequently, it is essential to inspire individuals to collaborate towards shared goals and business values. Furthermore, motivation encompasses ongoing inspiration and enthusiasm to act in the organization’s best interest, influenced by different factors such as income, opportunities for advancement, or personal aspirations. Both, leadership and motivation lead to directing processes that improve productivity and optimal performances.

Controlling ongoing activities: It refers to the supervision and evaluation of activities related to the established goals and objectives. This function is essential as it enables continuous improvement and the recognition of elements that may either support or jeopardize the goals and strategic choices made during the planning phase. Utilizing an indicator-based approach is beneficial for evaluating results, and three key steps are important: the setting of standards for comparisons; measuring actual performance against with the standard; and taking corrective actions when necessary. 

The conversion of these management functions into a flowing process can be observed one by one because each may respond and bring support to the company mission statement and therefore its organizational expectations. These functions are interdependently organized to create a cohesive strategic business framework.

The Service Process and its Importance

The design and quality of services are essential for a business’s success and are considered a key value for its growth, as noted by Julaeha (2022)^[2]. Research and development play a crucial role in transforming consumer needs and preferences into innovative concepts that can surpass those of competitors. In line with this approach, Pride, Hughes, and Kapoor (2015) characterize the service economy as entities that concentrate their efforts on service production. Nevertheless, it can be argued that this process mirrors that of product development:

Design and planning: The primary focus is on transforming a conceived idea into a service. A key aspect of this process is the integration of technology, along with the identification of necessary capacities and service lines. The term “service lines” refers to services that share similar characteristics; for example, an educational institution that offers a variety of programs differing only in their subjects or content. While a greater number of service lines provides consumers with more options, it can pose challenges for service managers, as it requires additional resources and effort for development. Embedded within each service line is the concept of service design, which involves the creation of unique elements that distinguish one service from another.

Service design, conversely, relates to the capacity or quantity of services that an organization can deliver within a specified timeframe and with available resources. It is essential that these services are organized efficiently and optimally to prevent issues of overproduction or shortages, which could negatively impact productivity and revenues.

The use of technology is another key element to produce a service. It may be categorized by labor-intensive technology or capital-intensive technology. Both will depend on the nature of the services provided. To exemplify, a marketing firm might employ capital-intensive technologies to generate comprehensive customer data analyses and utilize second-party cookies, thereby enhancing sales and profitability.

Site selection and facilities planning:  The term refers to the location where the production of services occurs, involving suppliers and customers in their respective activities. The management of this area holds multiple factors that must be taken into account, including locations, labor costs, working conditions, tax laws, environmental regulations, energy resources, among others. The effective management of these factors demands the involvement of human resources, specifically through the engagement of skilled personnel.

Moreover, a plant layout holds significant importance as it involves the arrangement of equipment, machinery, and the workforce essential for service production. For instance, in a laboratory that delivers research outcomes as a service, three types of plant layouts can be used: a process layout, which includes interdependent activities to facilitate the research service; a service layout, where distinct research stations yield specific results; and a fixed position layout, which requires stationary research locations for security and safety reasons, allowing only personnel and equipment to be relocated.

Operational planning: It contemplates the total services that each facility or location is expected to deliver within a specified timeframe. It entails four key steps: first, the planning horizon, typically set at one year for assessment and decision-making purposes; second, estimating market demand, which is closely linked to the planning horizon and relies on market forecasts; third, comparisons between market demand and capacity, achieving an optimal outcome when these two factors align; if they do not, necessary adjustments must be made; and fourth, adjustments of service capacity to meet demand, determining the most effective approach to address current demand in relation to available capacities or vice versa.

In sum, all elements associated with the service process are designed to meet customer needs while also considering the competitive landscape. As previously noted, both current and future competition necessitate the implementation and optimization of strategies to maintain or enhance demand in relation to similar competitors (Julaeha, 2022)^[3]. Effective planning and management of production are crucial, as are the design, logistics, and operations, all of which significantly impact business development, ongoing growth, and overall success.

^[1] Pride, W. M., Hughes, R. J., & Kapoor, J. R. “Foundations of business”. (Boston: Cengage Learning), 2015, 47-63.

^[2] Julaeha, Lia Siti. “Design of Goods and Services in Developing Business.” EKONOMIKA45: Jurnal Ilmiah Manajemen, Ekonomi Bisnis, Kewirausahaan 10 No. 1 (2022): 135-142.

^[3] Julaeha, Lia Siti. “Design of Goods and Services in Developing Business.” EKONOMIKA45: Jurnal Ilmiah Manajemen, Ekonomi Bisnis, Kewirausahaan 10 No. 1 (2022): 135-142.

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