a) Illustrate the distinctive characteristics of a service firm in an economy
b) Critically discuss the evolution of an economy from an agrarian society to a service society
An economy has been described as a complex adaptive system which is constantly changing as the environment around it changes.
With the development of science and technology, the human search for newer and better ways of doing things accelerated.
The society has greatly transformed itself from the earlier ways of life to the current digital and virtual society brought about by the progressions in information technology.
A new service society has evolved as a consequence of these environmental changes and it has its own unique characteristics which distinguishes it from the earlier industrial and agrarian societies.
Definition of Key terms
This is a business that makes its facilities available for others to use for a fee (Lowendahl, B 2005)
This a process of transformation in the way how societies produce and utilize their wealth (Beinhocker 2006)
a) By its very nature a service firm is a type of business that makes its faculties available to others for a fee while achieving economies of scale. This type of business ha distinct characteristics which makes it different from other firm in the manufacturing industry where the end product is tangible and can be stored in the warehouse for future use.
The service firms in general vary in scope from those that offer a tangible but highly perishable service like hotel accommodation, road, sea, rail or air travel. Once any opportunity to make use of the service has passed it would not be possible to re-coup thee losses in whatever means.
Suppose a hotel room is not taken up on a particular day it means that the firm would only hope to have better luck the next day when all the rooms could be taken up otherwise the service that was available... [continues]
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