Characteristics of Service Organizations

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Services lie at the hub of economic activity in the United States. Service jobs account for almost 80 percent of total U.S. employment. As such, we say that the U.S. has a service economy. Within this service economy, the term service has several meanings when paired with other words. For example, a service firm is defined as one that derives more than 50 percent of its sales from providing services. RCA's service revenues now exceed its revenues from electronic manufacturing. A service package is a bundle of explicit and implicit benefits performed with a supporting facility and using facilitated goods. When you eat at a fast food restaurant (supporting facility), you may purchase a hamburger (facilitating good) that someone else cooked for you (service). The service concept is the perception and expectations of the service itself in the minds of the customers, employers, shareholders, and lenders. The service system is the equipment, layout, and procedures used to provide the service and maintain quality and delivery standards. The service revolution relates to the shift in the United States to a service economy and the proliferation of service automation. A service operation is an open transformation process of converting inputs (consumers) to desired outputs (satisfied consumers) through the appropriate application of resources (family, material, labor, information, and the consumer as well). More simply, services are economic activities that produce time, place, form, or psychological utility. A meal in a fast food restaurant saves time. A meal with a date in an elegant restaurant with superior service provides a psychological boost. Wal-Mart attracts millions of customers because they can find department store merchandise, groceries, gasoline, auto service, dry cleaning, movie rental, hair styling, eyeglasses and optical services, and nursery items all in one place. The U.S. economy consists of sectors producing goods and services. The goods-producing sector consists of manufacturing, construction, and extractive industries such as agriculture, mining, forestry, and fishing. Different types of services include business services such as consulting, banking and financial services; trade services such as retailing, maintenance and repair; social/personal services such as restaurants and healthcare; public services such as government and education; and infrastructure services such as transportation and communication. SERVICES IN THE UNITED STATES

Services are not peripheral activities, but are an integral part of society. Except for basic subsistence living, services are an absolute necessity for a functional economy and enhancement of the quality of life. While an industrial society defines the standard of living by the quantity of goods, a service society sees the standard of living through quality of life as measured by health, education, and recreation. The central figure in this society is the professional who can provide information rather than energy or physical strength. In addition, infrastructure services (communication and transportation) are seen as essential links between sectors of the economy. These infrastructure services are prerequisites for the industrialization of an economy, so no advanced society can be without them. The United States, like most societies, began as an agricultural economy. As manufacturing became dominant, the economy became centered around industry. In the early part of the twentieth century, only 30 percent of those employed in the United States were working in services, with the rest in industry or agriculture. However, by 1950, half of the workforce was employed in services. In 1956, for the first time in the history of our industrial society, the number of white-collar workers exceeded the number of blue-collar workers. The United States can no longer be characterized as an industrial society, but rather as a postindustrial or service society. Services now account for...
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