RPA in supply chain management

Shashireddy896

Sample3.pdf

Home >Business & Finance homework help >Operations Management homework help >RPA in supply chain management

AN ASSESSMENT OF THE LEVEL OF INTERNAL STRATEGIC FIT

IN SERVICE OPERATIONS

Alexander Joseph Hill

A thesis submitted for the degree of Doctor of Philosophy

University of Bath School of Management

September 2004

the thesis has been supplied on condition that anyone who consults it is understood to recognise that its copyright rests with its author and that no quotation from the thesis and no information derived from it may be published without the prior written consent of the author.

This thesis may be made available for consultation within the University Library and may be

photocopied or lent to other libraries for the purposes of consultation.

Chapter

Page

1. Introduction

2. Theory development

A. Introduction B. Literature reviewed C. Evolution of the service operations literature D. Service operations strategy E. The concept of strategic fit F. Frameworks for assessing the level of strategic fit G. Visual methods of representing strategic fit H. Summary and conclusions

4 5 5 9 9

17 25 26

3. Research questions

A. Introduction B. Does internal strategic fit exist? C. How is internal strategic fit created? D. What elements are present in a situation of fit or lack of fit? E. How can fit or lack of fit be best presented? F. Summary and conclusions

29 30 30 30 31 32

4. Methodology

A. Introduction B. Philosophical position C. Research philosophy D. Methodologies available E. Methodology chosen F. Data collection methods used G. Methods and process of data analysis H. Ensuring validity, generalisability and reliability I. Summary and conclusions

33 33 35 37 43 49 50 57 61

5. Research design

A. Introduction B. Case studies selected C. Data collection methods used D. Type of data collected E. Summary and conclusions

63 63 70 77 83

6. Findings

A. Introduction B. Does internal strategic fit exist? C. How is internal strategic fit created? D. What business characteristics are present in a situation of fit or lack of fit? E. What elements within the evaluation model are present in a situation of fit

or lack of fit? F. How can fit or lack of fit be best presented? G. Comparison with existing literature H. Summary and conclusions

85 86 97

100 103

106 122 129

7. Conclusion

131

A. Introduction B. Purpose of the research C. Findings from the research D. Contribution to the field of service operations management E. Research limitations and reflections F. Future research G. Summary and conclusions

131 131 133 137 140 140 141

Appendices

143

A1. A2. A3. A4. A5. A6. A7. A8. A9. A10. A11. A12. A13. A14.

Level of internal strategic fit in the importance of competitive criteria Level of internal strategic fit in the operating strategies Level of strategic fit in the service delivery system Overall level of internal strategic fit Areas of strategic fit in the operating strategies Areas of strategic fit in the service delivery system Level of strategic fit between the operating strategy and the important competitive criteria Level of strategic fit between the service delivery system and the important competitive criteria Level of internal strategic fit Characteristics of management in each organisation and the resulting strategic ‘orientation’ and ‘process’ Elements of the evaluation model that are present in a situation of fit or lack of fit Characteristics found within the research Methodology for applying the Heskett (1986) ‘strategic service vision’ Methodology for applying the Hill (1985) order-winner and qualifier technique

143 151 159 167 175 183 191

199

207 209

210

220 228 235

References

237

SUMMARY The research presented here is an assessment of the level of internal strategic fit within eight service businesses. Its purpose is to understand if fit exists, how it is created, the elements that are present in a situation of fit or lack of fit and how the level of fit can be best presented. Two conceptual frameworks are used to underpin and guide the process of data collection: Heskett’s (1986) ‘strategic service vision’ and the Hill (1985) order-winner and qualifier technique. Using these frameworks, the level of fit that exists has been reviewed by assessing executives’ opinion of the importance of different competitive criteria in the firm’s markets, the alternative dimensions of its operating strategy and how it delivers service. The findings show a varying level of fit across all aspects of each company. It would appear to be partly a result of the strategic orientation and process used within the organisation; and also the market characteristics and management style of the firm. Through the process of data collection and analysis, a managerial framework has been developed that can be used profile the different aspects of strategic internal fit. These profiles allow businesses to more clearly see where conflicts exist and start to understand the steps required to improve the level of fit in their organisation. This chapter summarises the findings from the research by positioning them against the existing knowledge in the field of service operations strategy, outlining the aims and objectives of the research, providing an overview of the thesis and summarising the findings and conclusions that have emerged. The research in service operations management to date has predominantly focused on operational rather than strategic issues (Johnston, 1999). There is, therefore, still a strong need to conduct research in the area of service operations strategy. In particular, the concepts and frameworks that have been identified need to be validated and methodologies developed for their use (Gianesi and Correa, 1993; Roth and Menor, 2003; Verma and Thompson, 1999). Within the existing service operations strategy literature, it is commonly agreed that the effectiveness of a business’s operations strategy can be measured by the degree of linkage or consistency between its competitive priorities and the infrastructure of operations (Hayes and Wheelwright, 1984; Adam and Swamidass, 1989; Anderson et al., 1989; Leong et al., 1990; Hill, 1994). This linkage is referred to as ‘strategic fit’ and has two different dimensions (Draaijer, 1993): • External - Consistency between operations processes and infrastructure and the

competitive configuration in the market

• Internal - Consistency between the operations strategy and the overall business strategy

- Consistency with the other functions in the company - Consistency between the constituent elements and processes of the

The aim of this research is to address this gap and conduct an exploratory investigation into the area of internal strategic fit by reviewing three key aspects within a business: • Importance of different competitive criteria in the firm market(s) – Hill’s (1985)

market order-winners and qualifiers technique is used to analyse the markets a company serves by understanding the competitive criteria employees consider important and how these criteria vary in importance for different customers

• Operating strategy – Heskett’s (1986) “strategic service vision” is used to analyse the operating strategies by looking at aspects such as investments, performance measures and employee incentivisation

• Service delivery system – Heskett’s (1986) “strategic service vision” is also used to assess the different steps in the service delivery system, provided by different functions, aligned with each other in terms of the key steps in the delivery system, the role of people, technology, equipment, layout and procedures, how capacity and demand are managed, how quality standards are ensured, how the service is differentiated from the competition and how barriers to entry by competitors are provided

Through the application of the Hill (1985) technique and Heskett (1986) conceptual framework, the purpose of the research is to build theory within the field of service operations strategy. Its objective is to develop concepts in this field and a managerial framework that can be used to help executives assess the level of fit within their business and understand how and where improvements should be made. Four research questions are used to guide the research and ensure it meet these objectives. The first three research questions concern building concepts: Does internal strategic fit exist within service businesses? How is fit created? And what elements are present in a situation of fit or lack of fit? Whereas the fourth question concerns building a managerial framework with which to best show the fit or lack of fit within a business: How can fit or lack of fit be best presented? A multiple case study research design was used as the research questions concern ‘how and why’ as opposed to ‘who, what, where, how many and how much’ (Yin, 1994: 6). They also focus on contemporary events and do not require control over the behavioural proceedings being investigated (Yin, 1994: 6). The theory building nature of the work also means that it concerns identifying key variables, identifying linkages between these variables and identifying ‘why’ these relationships exist (Voss et al., 2002: 198). Eight case studies were investigated. This was felt to be a sufficient number to overcome the problems of observer bias and lack of generalisability of findings, but at the same time not too great a number to significantly reduce the depth of research within each case (Eisenhardt, 1989; Voss et al., 2002). Case studies were selected using replication logic in order to build a database that would enable both the subject of strategic internal fit to be researched and also provide sufficient evidence to answer the four research questions outlined earlier (Eisenhardt, 1989; Voss et al., 2002; Yin, 1994). The cases selected had a range of characteristics in terms of the markets they serve, their organisational size and structure, the style of management within the business, the types of employees, the operating strategies and service delivery systems used. Thus creating the literal and theoretical replication required to build theory. Once it was felt that theoretical saturation had been reached no further case studies were added (Eisenhardt, 1989: 545). Within each case study, data was collected using site visits, documentation, archival information analysis, structured interviews, unstructured interviews and observation. At least two, and often as many as five methods, were used to collect data on the dimensions of fit within each business. During this process, the results were perceptually triangulated to assure that the facts being collected were indeed correct and increase the validity of the theory being developed (Yin, 1994).

The findings from the research revealed that there is significant variance both in the level of fit within each company and across each of the three aspects of importance of competitive criteria, operating strategy and service delivery system. Of the eight businesses researched, three are considered to be ‘high fit’ as they have an average of more than 70% fit across all three measures, and five are considered ‘low fit’ as they have an average of less than 50%. Overall, fit was highest in the service delivery system, second in the operating strategy and lowest in the importance of competitive criteria. In terms of how fit is created in a business, it would appear that the process and orientation to developing strategy have an impact on the level of fit. A ‘market-led’ strategic orientation seems to create high fit on importance of competitive criteria, whereas a ‘resource-based’ focus does not. In fact, the combination of a ‘resource-based’ orientation and an ‘emergent’ process of strategy development seems to create a low level of fit on all aspects. By contrast, it looks as if a ‘prescriptive’ strategy process and ‘resource-based’ orientation creates high fit within the operating strategy and service delivery system, but not on the importance of competitive criteria. Interestingly, the organisation with the highest overall level of fit used a strategy with a ‘market-led’ orientation and ‘emergent’ process. The market and management style characteristics of a business also appear to impact the level of fit. The two key characteristics present in a situation of ‘high fit’ are a simpler market in terms of number of segments and number of services offered and a higher frequency of face-to-face communication between the members of the management team. Within the Heskett (1986) conceptual framework used to evaluate strategic internal fit there is also a particularly high level of fit on the following dimensions in a ‘high fit’ organisation: • Level of market understanding and agreement on important competitive criteria  Performance measures used  Employee incentivisation, reward and development  Where investment are made  Service differentiation from the competition  Competitor barriers to entry The findings outlined so far are concepts that have emerged from the research. As well as these concepts, a managerial framework was developed that allows a business to create a profile of the characteristics of their company looking at the market, operating strategy, service delivery system and overall level of fit in an organisation. Using this framework it is possible to profile the different aspects of strategic internal fit and allow a business to more clearly see where conflicts exist and start to understand the steps that can be taken to rectify them. This is of benefit to both ‘low fit’ and ‘high fit’ companies. For example, in the case of a high fit business such as Company 4, the main order-winners for all customers are design capability and customer service meaning that its key task is to design products and respond to the needs of customers. To meet these criteria Company 4 has created a decentralised, team-based organisation that is orientated around its customers. The performance measures it uses are all customer-specific and orientated to understanding the level of customer support being provided. These customer needs are also reflected in the way employees are incentivised, rewarded and developed in all of the functions of the business. The key task within the service delivery system is managing customers and it does this through flexible staff who meet face-to-face with customers on a regular basis. The highly personalised service, customer relationships that have been built over the years and high level of product customisation all mean that the service it provides is highly differentiated from its competitors and there are strong barriers to entry. If we use the managerial framework to analyse Company 4, we can see that it has a high level of internal strategic fit and how this is created. This is illustrated by the straight line of the profile down the left hand side of the framework shown in Figure 1.

Figure 1 Typical characteristics of the internal strategic fit of Company 4

Aspects Typical characteristics

Order-winning criteria Design capability

Price How are orders won?

Qualifying criteria Delivery reliability, price

Delivery reliability, quality conformance

What does the company sell? Capability Standard

product/service

Product customisation High

Low

Business Responding to customer needs

Cost reduction

Key task Management Product design/

meeting schedules Throughput speed/

efficiency

Order volume Low

High Order nature

Technical similarity Low

High

Layout Decentralised

Centralised

Structure Team based

Functional Organisation

Orientation Customers Processes

Performance measurement orientation Level of customer support

Cost reduction

Employee incentivisation, reward and development orientation

Customer need Internal business need

Key task Managing customers

Processing work

Key resource People Technology/

equipment

Level of flexibility High

Low

Level of automation Low

High

Level High

Low

Service delivery system

Customer interaction

Type Face-to-face

Telephone

Quality management orientation People

Process

Level of service differentiation and competitor barriers to entry

High

Low

Key

Overview across all functions of the business

By contrast, Company 3 is a low fit organisation. Here, the resultant profile shows that the lack of fit is a result of trying to support three distinctly different markets with a single operating strategy and service delivery system. The important competitive criteria vary by each of the three market segments. In Market 1, design capability is the key order-winner and the company is selling this capability through a high level of product customisation. However, Market 3 is at the other extreme. It is very price sensitive and requires a standard product/service. Market 2 is a mix of the two. It requires a higher level of customer service than Market 3 but the company still sells a standard product/service. The different characteristics of these three market segments mean that Company 3 is faced with a variety of business and management tasks. It has to respond to customer needs whilst at the same time reducing costs in the process, and ensure that there is a high level of efficiency whilst designing products/services to meet varying customer schedules. Although it is faced with these differing market characteristics and business and management tasks, it tries to meet them with a single operating strategy and service delivery system. Figure 2 shows the profile of the organisation created using the management framework. The low level of fit in both the operating strategy and the service delivery system is shown by the fact that neither profile is a straight line and is caused by trying to meet all three market requirements through a singe operating strategy and service delivery system. The research presented here has developed a managerial framework for assessing internal strategic fit in an organisation and identified a number of concepts regarding if fit exists, how it appears to be created and the elements that are present in a situation of fit or lack of fit. In doing so, it has made a significant contribution to the literature and has taken the first step to fill the gap in the lack of knowledge in this field. However, further research needs to be conducted to test the concepts and framework developed; and there are also a number of topics that are still to be explored in this area such as how fit is achieved over time (Ginsberg, 1988), its association with quantum change (Hinings and Greenwood, 1988; Miller and Friesen, 1984) or whether it favours incremental change (Quinn, 1980; Weick, 1979).

Figure 2 Typical characteristics of the internal strategic fit of Company 3

Aspects Typical characteristics

Order-winning criteria Design capability

Price How are orders won?

Qualifying criteria Delivery reliability, price

Delivery reliability, quality conformance

What does the company sell? Capability Standard

product/service

Product customisation High

Low

Business Responding to customer needs

Cost reduction

Key task Management Product design/

meeting schedules Throughput speed/

efficiency

Order volume Low

High Order nature

Technical similarity Low

High

Layout Decentralised

Centralised

Structure Team based

Functional Organisation

Orientation Customers

Processes

Performance measurement orientation Level of customer support

Cost reduction

Employee incentivisation, reward and development orientation

Customer need Internal business

need

Key task Managing customers

Processing work

Key resource People Technology/

equipment

Level of flexibility High

Low

Level of automation Low

High

Level High

Low

Service delivery system

Customer interaction

Type Face-to-face

Telephone

Quality management orientation People

Process

Level of service differentiation and competitor barriers to entry

High

Low

Key

Market segment 1 Market segment 2 Market segment 3

Overview across all functions of the business

ACKNOWLEDGEMENTS Having had good business management experience, I made the decision to change career and undertake an academic role in the same field. This journey, although undertaken alone, was made easier by many contributions at different points. I am grateful to my thesis supervisor Professor Steve Brown whose experience and guidance have helped me throughout. His depth and knowledge across the whole of the operations strategy area both in terms of content and methodology has contributed to the quality of my work. Also, the sponsoring companies who gave me both access and funded the research through the initial two years. Especially the executives who opened appropriate doors, gave their time and provided access to information on which the substance of my research was based. Throughout this period, my colleagues at Templeton College (University of Oxford) were exceptionally helpful both in terms of research approach and technical insights. In particular Keith Blois who provided sustained support both in terms of research and personal encouragement.

1. INTRODUCTION The primary focus of research within service operations to date has been on operational rather than strategic issues and there is still a need within the field to validate concepts/frameworks and develop methodologies, particularly within the area of service operations strategy. One gap within the literature concerns the concept of internal strategic fit that this research aims to explore. As such, the research aims to build theory within the field of internal strategic fit by reviewing three key aspects within a business: • The importance of different competitive criteria in the firm market(s) – which competitive

criteria do employees consider to be important? And do these vary in importance between the different markets that the company serves? (Menda and Ditts, 1997; Boyer and McDermott, 1999)

• The operating strategy – are the operating strategies consistent with each other in terms of aspects such as investments, performance measures and employee incentivisation? (Heskett, 1986)

• The service delivery system – are the different steps in the service delivery system aligned with each other? (Heskett, 1986)

Heskett’s (1986) ‘strategic service vision’ and the Hill (1985) order-winner and qualifier techniques have been used as conceptual frameworks to underpin and guide the process of data collection in the research. Using these frameworks, three aspects have been reviewed to determine the level of fit within an organisation: • The importance of different competitive criteria in the firm market(s) – Hill (1985)

order-winner and qualifier technique was used to determine which competitive criteria employees consider to be important and how these vary in importance between the different markets that the company serves

• The operating strategy – Heskett’s (1986) ‘strategic service vision’ is used to assess if all the functional operating strategies are consistent with each other in terms of aspects such as investments, performance measures and employee incentivisation

• The service delivery system – Heskett’s (1986) ‘strategic service vision’ is also used to understand if the different steps in the service delivery system, provided by different functions, are aligned with each other in terms of the key steps in the delivery system, the role of people, technology, equipment, layout and procedures, how capacity and demand are managed, how quality standards are ensured, how the service is differentiated from the competition and how barriers to entry by competitors are provided

Along with these two conceptual models, four research questions have been used to guide the research: Does internal strategic fit exist within service businesses? How is internal strategic fit created? What elements are present in a situation of fit or lack of fit? And how can fit or lack of fit within a business be best presented? The first three questions are concerned with building concepts, whereas the fourth question is concerned with developing a managerial framework with which to best show the fit or lack of fit within a business. Based on the research questions identified and the relative merits and applications of the available research methodologies were reviewed, the decision was made to use a multiple case study design for three specific reasons: • How and why question – the research question is one of ‘how and why’ as opposed to

one of ‘who, what, where, how many and how much’ (Yin, 1994: 6). Hence, either a case study, experiment or history design is appropriate

• Events being researched – the research focuses on contemporary events and does not require control over the behavioural proceedings being investigated (Yin, 1994: 6), which means that neither a history or experiment design are appropriate

• Theory building – the purpose of the research is to build theory in terms of identifying key variables, identifying linkages between these variables and identifying ‘why’ these relationships exist (Voss et al., 2002: 198). Thus, a multiple case study structure is suitable

From a review of the recent theory-building research in operations management (Voss et al., 2002) and within academic literature in general (Eisenhardt, 1989), it is seen that anywhere between 1 and 16 case studies can be used, although 8 case studies is more common. As a result, the decision was made to investigate eight case studies. It was felt that this would be sufficient to overcome the problems of observer bias and lack of generalisability of the findings, but at the same time not too great a number to significantly reduce the depth of research within each case. Each case study was selected using replication logic in order to build a database of cases to enable the subject of strategic internal fit to be research and also provide sufficient evidence to answer the four research questions identified earlier. Qualitative and quantitative data was collected in a systematic way from each of the case studies using four main methods: site visits, archival information analysis, interviews and observation. Formal collection procedures were used to ensure the quality of the data and perceptual triangulation to ensure that the facts being collected were correct. A case study database was developed to facilitate cross- case analysis and explicit links were made between the questions asked, data collected and the conclusions drawn to increase the reliability of the information in each case study. The findings from the research showed significant variance both in the level of fit within each company and across each of the three aspects of strategic internal fit. The strategic orientation and process used within the organisation appears to impact the level of fit achieved, as do the market and management style characteristics of the business. A managerial framework has been developed that can be used profile the different aspects of strategic internal fit and allow a company to more clearly see where conflicts exist and start to understand the steps that can be taken to rectify them. An example of how this framework can be used to illustrate that all aspects of the business are clearly aligned with each other within a ‘high fit’ business is shown in Figure 6.23 for Company 4. Here we can see that the main order-winners for all customers are design capability and customer service meaning that its key task is to design products and respond to the needs of customers. To meet these criteria Company 4 has created a decentralised, team-based organisation that is orientated around its customers. The performance measures it uses are all customer-specific and orientated to understanding the level of customer support it provides. These customer needs are also reflected in the way employees are incentivised, rewarded and developed in all functions of the business. The key task in the service delivery system is managing customers and it does this through flexible staff who meet face-to-face with customers on a regular basis. The highly personalised service, customer relationships that have built over the years and high level of product customisation all mean that the service that it provides is highly differentiated from its competitors and there are high barriers to entry. As a result, Company 4 has a high level of internal strategic fit as illustrated by the straight line of its profile down the left hand side of the managerial framework. As a result of the findings, it can be concluded that the research has contributed significantly to the current service operations management literature by starting to develop concepts about the level of fit that exists, how it is created and the elements present in a situation of ‘high fit’ and ‘low fit’. A methodology for applying the Heskett (1986) ‘strategic service vision’ and Hill’s (1985) ‘order-winner and qualifier’ technique has also been created, and a managerial framework for profiling different aspects of fit within a business proposed.

However, this is simply the first step in addressing the gap in the literature and more research needs to follow. The theories proposed have been built on eight case studies and this sample now needs to be expanded to further test the concepts. Also, the research looked at how the Heskett (1986) and Hill (1985) models can be applied and the insights that they reveal by analysing a service business rather than if they are the correct. It was felt from the work completed that all the dimensions contained within the model were important to assessing internal strategic fit, but that they should be further developed to incorporate other criteria. One example might be the ‘customer relationship management' aspects of the business both in terms of the market requirement and how this is met within the operating strategy and service delivery system. The thesis is split into seven main chapters that each addresses a number of issues. This chapter introduces the thesis by highlighting and summarising the key points from each section of the document. Chapter 2 on theory development identifies the theoretical perspectives informing the research. Given that the objective of the research is to contribute to the field of operations management, then the literature review focuses on this area. Whilst ‘strategic fit’ is a subject within other fields, such as strategic management, these areas have been excluded from the discussion. It was felt that they would reduce the research focus and contribution. Thus the frameworks and concepts discussed in this chapter all originate from the area of operations management, with an emphasis on service operations strategy. Chapter 3 develops and justifies the research questions and conceptual model that guide the research, namely: Does internal strategic fit exist within service businesses? Do firms consciously create internal strategic fit within their business? And how can fit or lack of fit within a business be best presented? Chapter 4 both explores the alternatives available and justifies the methodology adopted within the research. Chapter 5 looks at the multiple case study methodology design for the research undertaken in terms of the number of case studies, type of case studies, data collection methods used and the type of data collected through the research. Chapter 6 examines the findings that have emerged from the research into internal strategic fit within eight service businesses. Finally, Chapter 7 summarises the conclusions from all the chapters looking at the work to date in the field of service operations strategy, the research questions used, the methodology adopted, the multiple case study design employed, the findings from the work undertaken and future research areas. It looks at the purpose of the research, its main findings and the subsequent contribution that has been made to the field of service operations management.

2. THEORY DEVELOPMENT This chapter identifies the theoretical perspectives that inform the research. Given that the purpose of the research is to contribute to the field of operations management, then the literature within this area forms the basis of this discussion. The primary focus of the service operations literature to date has been on operational, rather than strategic issues (Johnson, 1999) and there is still a need within the field to validate concepts/frameworks and develop methodologies, particularly within the area of service operations strategy (Verma and Thompson, 1999). Within the literature, it is commonly agreed that the effectiveness of a company’s operations strategy can be measured by the level of strategic fit that it creates (Hayes and Wheelwright, 1984; Adam and Swamidass, 1989; Anderson et al., 1989; Leong et al., 1990; Hill, 1994, 2004). There is an external and internal dimension to strategic fit. Some research has been conducted into the concept of external strategic fit in service operations (Nayyar, 1992; Smith and Reece, 1999), but not the internal dimension of fit. Hence, there is a gap within the literature that this PhD aims to explore. In doing so, it will validate some of the concepts/frameworks identified within the operations strategy literature to date and develop methodologies for their application. A. INTRODUCTION The focus of the research is to assess the level of ‘internal strategic fit’ within eight service business case studies. In doing so, the contribution that will be made to the literature is to: • Start to develop understanding of why internal strategic fit does or does not exist within

certain service businesses • Develop methodologies for using the frameworks that have been identified to date • Start to identify certain tools and techniques that can be used to assess and represent

the level of internal strategic fit that exists within a service business This chapter outlines the work to date in the field of service operations strategy, with a particular emphasis on strategic fit within a business. It consists of seven main sections: 1. Literature reviewed – the frameworks and concepts discussed in this chapter all

originate from the field of operations management, with a particular focus on service operations strategy

2. Evolution of the service operations literature – this reviews how the service operations literature has evolved over the past twenty years, the different themes and topics that have been addressed during this period and starts to show where certain gaps exist within the field

3. Service operations strategy – comparing the definitions of operations strategy that have been identified within the literature

4. The concept of strategic fit – this section defines the concept of ‘strategic fit’, before identifying the types that exist and the importance of creating it within a service operation

5. Frameworks for assessing the level of strategic fit – there are a number of frameworks available in the literature that can be used to assess the level of strategic fit in a service organisation. These are discussed and the methodology and approach taken in the research outlined

6. Visual methods of representing strategic fit – the merits of four methods typically used within the field of strategic fit are discussed. Based on the type, level and requirements of the data that is obtained through the research an appropriate method for representing the level of internal strategic fit within an organisation will be developed

7. Summary and conclusions – finally, the key points from the chapter are highlighted and summarised

B. LITERATURE REVIEWED The step of reviewing the existing literature within the field of research is an important one. As Croom (1992: 149) states, “Classification of the literature as a means of developing an understanding of the relevance and contribution of a source is a necessary requirement for academic research. Here it is useful to position research in terms of its utilisation of existing theories, and subsequently to identify clearly the contribution of the research to areas of theory by mapping the literature.” Given that the objective of the research is to contribute to the field of operations management, then the literature review focuses on this area. Whilst ‘strategic fit’ is a subject within other fields, such as strategic management, these areas have been excluded from the discussion as it was felt that they would reduce the research focus and contribution. Consequently, the frameworks and concepts discussed in this chapter all originate from the area of operations management, with an emphasis on service operations strategy. C. EVOLUTION OF THE SERVICE OPERATIONS LITERATURE Until the mid 1980s, the focus of operations management literature had been predominantly on manufacturing businesses. The assumption had prevailed that the heterogeneity of services meant that little communication of learning could take place between different service businesses and so service industries were dominated by an operations orientation that insisted each industry was different (Lovelock, 1983). As a result, many services still viewed themselves as unique and consequently did not promote service operations management techniques with the same vigour as in the manufacturing sector (Schmenner, 1986). Despite this lack of development in the literature, it was strongly recognised that services were continuing to increase in importance as the post-industrial economy evolves in the developed nations around the world (Chase, 1978, 1981; Fitzsimmons and Fitzsimmons, 2004; Kellogg and Nie, 1995; Oliveira et al., 2003; Roth and Menor, 2003; Schmenner, 1986; Silvestro et al., 1992; Wemmerlov, 1990). In fact, Sampson (1997) projected that 90 percent of business school graduates will work in service-related settings. Thus, the need for service management techniques is growing.

As Chase (1981: 698) concluded in the early 1980s, “there is probably no area of operations management of greater current interest than services. Some of the reasons for this are: • The rapid growth of service relative to manufacturing in the last decade (1970-80) • The pressure on service operations to become cost efficient in their production

processes; and • The (debatable) point that most of the intriguing operations management problems in

manufacturing have been dealt with so extensively that few new major breakthroughs appear likely, thus services provide a fresh target for applications of operations management concepts”

All of this meant that in the late 1980s, the service management literature “saw a proliferation of papers by service marketing and operations academics who attempted to redress this position by proposing service typologies which, they argued, more appropriately differentiated between management issues and concerns in different types of service” (Silvestro, 1999: 400). As Roth and Menor (2003: 146) conclude, “Deepening concerns about how best to design and manage exemplar services have led to calls for more scholarly research on the subject using a production and operations lens.” As reflected by the Production and Operations Management Society (POMS) recent decision to institute a new POMS College for services to strengthen the focus on services among its academic community membership (see www.poms.org); and POM (Fall 1999), Management Science (Sep 1999 and Nov 1995), and the Journal of Operations Management (Apr 2002) have all published issues devoted to service research. However, despite the desire to focus research on services the operations management literature is still has a strong manufacturing bias. Pannirselvam et al. (1999) examined 1,754 articles in 7 journals that they considered to have a ‘true’ production and operations management focus. The found that of all the topics published from 1992-1997, only 2.71 percent were relevant to services. More surprisingly, the percentage of articles on services actually appeared to diminish over the period from 2.79 percent in 1992-1993 to 1.92 percent in 1996-1997. However, these findings are consistent with those of Nie and Kellogg (1999) who reported that the general research and teaching focus of most production and operations academics is manufacturing-orientated. As Roth and Menor (2003: 146) conclude, “Despite the long-standing general views regarding the importance of service management, the penetration of ‘services’ in production and operations management journals remains surprisingly low, especially relative to manufacturing. While new ideas and concepts in services management have been slowly gaining acceptance, the overall production and operations management literature bas remains sparse and highly fragmented.” Johnston (1999) conducted an extensive review of the service management literature that does exist. He looked at the fields of operations, marketing and human resource management and identified a number of different themes that have featured within the literature, as shown in Figure 2.1. From this it can be seen that a wide range of different themes have been addressed, but that the majority of the research has focused on areas with more of an operational orientation (54 articles), with only a few looking at strategic issues (10 articles).

Verma and Thompson (1999: 892) add to this when they note that two streams of service research have emerged in recent years: • Validate concepts/frameworks and develop methodologies – the first stream echoes

Johnston’s (1999) findings by stating that a number of articles have argued that service research has moved beyond the primary classification stage and therefore now it is necessary to validate the generally accepted concepts/frameworks and develop specific methodologies for service design and process improvement (Chase, 1996; Flynn et al., 1990; Meredith et al., 1989; Swamidass, 1991).

• Develop a coherent operations strategy – the second theme comes from a series of

recent articles, which argue that in order to effectively compete in a competitive marketplace, service companies must develop a coherent operations strategy (Vickery et al, 1993). As Johnston’s (1999) literature review revealed, to date this area of research has received less attention than some of the more operational issues of service management.

Roth and Menor (2003) support this view. After conducting an extensive review of the Service Operations Management literature they proposed a research agenda to further develop the field. They identified five critical themes that would benefit from further research: • Broadening service operations strategy • Redefining operations resources • Focus on customer ‘experiences’ • Expanding service operations boundaries • Issues in implementing service technology and e-services In terms of broadening service operations strategy Roth and Menor (2003: 156) conclude, “much of the descriptive and explanatory work behind existing service classification required rigorous testing… Focusing specifically on service operations strategy, a number of prescriptive and competing service operations management frameworks are especially deserving of ongoing research. These include the service/value profit chain (Heskett et al., 1994, 2003) and Schmenner’s (1995), Boyer et al.’s (2002) and Roth et al.’s (1997) service management models.” The purpose of the research is to address the issues highlighted by Verma and Thompson (1999) and also Roth and Menor (2003). It will concentrate on the requirement for broadening the service operations strategy field. The following sections of this chapter look in more detail at the concepts/frameworks that have been identified as ways for services to develop coherent operations strategies. Based on this review, a methodology was then chosen as a basis for researching the level of internal strategic fit within service businesses.

Figure 2.1 Some operations management research issues (1985-1998)

Selected references Orientation Topic

Detail Number

Failure prevention in services

Chase and Stewart (1994); Kelley et al. (1993); Stauss (1993)

Internal services Gremler et al. (1994); Mattsson (1992); Vandermerwe and Gilbert (1991) 3

JIT in service Duclos et al. (1995) 1

Managing the customer Bowen (1986); Johnston (1989); Mills and Morris (1986)

Performance measurement Brignall et al. (1992); Fitzgerald et al. (1991) 2

Process control Haynes and DuVall (1992) 1

Quality measurement Babakus and Boller (1992); Cronin and Taylor (1992, 1994); Finn and Lamb (1991); Parasuraman et al. (1988)

Service capacity Armistead and Clark (1994a); Lovelock (1992) 2

Service design Behara and Chase (1993); Fitzsimmons and Maurer (1991); Gouillart and Sturdivant (1994); Katz et al. (1991); Shapiro et al. (1992)

Service encounter Bitner et al. (1990); Bowen and Schneider (1985); Czepiel et al. (1985); Lewis and Entwistle (1990)

Service environment Bitner (1992); Wakefield and Blodgett (1994) 2

Service guarantees Hart (1988, 1990, 1995) 3

Service process Collier (1991); Johnston (1995b); Kingman-Brundage (1989) 3

Service productivity Armistead et al. (1988) 1

Service quality Andersson (1991); Rust and Oliver (1994); Zeithmal et al. (1990)

Service recovery Armistead and Clark (1994b); Bell and Zemke (1987); Edvardsson (1992); Hart et al. (1990); Johnston (1995c); Kelly and Davis (1994)

Service technology Collier (1985); Faulhaber et al. (1986) 2

TQM in services Davidow and Uttal (1989b); Desler and Farrow (1990) 2 Yield management Kimes (1989) 1

Operational

Zero defections Reichheld (1996); Reichheld and Sasser (1990) 2

Customer relationships Storbacka (1995); Storbacka et al. (1994) 2

Satisfying the customer Anderson and Fornell (1994); Bitner and Hubbert (1994); Danaher and Mattsson (1994); Johnston (1995a)

Service focus Davidow and Uttal (1989a); Kimes and Johnston (1990); Van Dierdonck and Brandt (1988) 3

Strategic

Service operations strategy Armistead (1990) 1

Note: Based on Johnston (1999: 111)

D. SERVICE OPERATIONS STRATEGY After an extensive literature review of operations strategy, Anderson et al. (1989: 135) concluded that whilst the literature enthusiastically endorses the idea that operations should be managed from a strategic point of view and used as a competitive force in the business, it “does not provide a clear or consistent definition of operations strategy. Rather, many terms are used loosely and sometimes in conflicting ways”. Although the review conducted by Anderson et al. (1989) was primarily manufacturing based, their conclusions hold true for services. Figure 2.2 shows examples of the differing definitions provided in the literature. From this it can be seen that it is “generally agreed that strategy refers to a long-range thrust or direction for an organisation designed to give competitive advantage. An operations strategy is then a strategy for the operations function of an organisation, which is part of the business strategy or strongly integrated with the business and corporate strategies” (Anderson et al., 1989: 137). Hayes and Wheelwright, 1984a: 83) define this link more explicitly when they state that operations strategy specifies two different aspects: • How the operations function will support the desired competitive advantage of the

business; and • How it will complement the other functional strategies of the business These two aspects have also been described as the external and internal element of creating strategic fit within an operations function that is now discussed in the next section of this chapter. E. THE CONCEPT OF STRATEGIC FIT This section looks at strategic fit in relation to the operations function by understanding how it is defined, the types that exist and the importance of creating fit between operations and the other aspects of the organisation. i) DEFINITION Within the literature, it is commonly agreed that the effectiveness of a company’s operations strategy can be measured by assessing degree of linkage or consistency between the competitive priorities which are emphasised and the corresponding decisions regarding the structure and infrastructure of operations (Hayes and Wheelwright, 1984; Adam and Swamidass, 1989; Anderson et al., 1989; Leong et al., 1990; Hill, 1994, 2004). This linkage is referred to in several different ways in both the operations strategy and strategic management literature, some of the terms used are: • ‘Strategic fit’ – e.g. Miller (1981); Venkatraman (1989); Staughton and Williams (1994);

Smith and Reece (1999); • ‘Strategic alignment’ – e.g. Papke-Shields and Malhotra (2001); Joshi et al. (2003);

Silvestro and Silvestro (2003) • ‘Strategic consensus’ – e.g. Robinson and Stern (1998); Boyer and McDermott (1999) • ‘Strategic focus’ – e.g. Skinner (1969, 1974); Van Dierdonck and Brandt (1988); Davidow

and Uttal (1989a); Kimes and Johnston (1990); Nayyar (1992); Stonebraker and Leong (1994); Hill (2000, 2004)

Figure 2.2 Exampled of definitions of operations strategy within the literature

Author Definition

Skinner (1978)

• Defines operations strategy by what he calls the operations task, an explicit concept of what operations must accomplish.

• The operations task is a statement of operations philosophy in the sense that ‘philosophy’ relates ends and means and links them together conceptually with a total plan and its rationale

Booz Allen and Hamilton (1982)

• Define operations strategy by the concept of the ‘operations mission’ • The operations mission is the way a product should be sourced, produced and

distributed

Mayer and Moore (1983)

• Define operations strategy as a plan that describes the way to produce and distribute the product. Operations strategies define the choice of process technology, degree of vertical integration, the number and location of facilities, operational focus and the operations infrastructure

Hayes and Wheelwright (1984)

• Define operations strategy as consistent decision making across eight major decision categories

• They explain that it cannot be overemphasised that it s the pattern of decisions actually made, and the degree to which that pattern supports the business strategy, that constitutes a function’s strategy, not what is said or written in annual reports or planning documents

Schroeder et al. (1986)

• Describe operations strategy as a long-range plan or vision for the operations function

• This plan must be integrated with the business strategy and implemented throughout operations

• It consists of four interrelated elements: mission. Objectives, policies and distinctive competence

• The resulting strategy guides tactical decision making in operations

Hill (1989)

• Provides an approach to operations strategy that emphasises the essential requirement of linking the marketing and operations perspectives in order to determine the best strategy for the business as a whole

• This approach to operations strategy serves to link the corporate objectives, marketing strategies and operations process and infrastructure through the assessment of how different products (both existing and planned) win, qualify for, or lose orders in the market place

Note: Based on Anderson et al. (1989: 136-137) This variation in terminology can cause difficulties when researching the subject, as Venkatraman (1989: 423) observes, “A major problem is the lack of corresponding schemes by which fit has been tested. Although it is common for theorists to postulate relationships using phrases and words such as matched with, fit, congruence and coalignment, precise guidelines for translating these verbal statements to the analytical level are seldom provided.” He then goes on to identify six perspectives of fit that exist within the literature: fit as moderation, fit as mediation, fit as matching, fit as gestalts, fit as profile deviation, and fit as covariation (see Figure 2.3).

Figure 2.3 Six alternative perspectives of strategic fit

Perspective of strategic fit Definition

Moderation

“According to the moderation perspective, the impact that a predictor variable has on a criterion variable is dependent on the level of a third variable, termed here as the moderator. The fit between the predictor and the moderator is the primary determinant of the criterion variable. Researchers invoke this perspective when the underlying theory specifies that the impact of the predictor (e.g. strategy) varies across the different levels of moderator (e.g. environments)” (Venatraman, 1989: 424)

Mediation

“The mediation perspective specifies the existence of a significant intervening mechanism (e.g. organisational structure) between an antecedent variable (e.g. strategy) and the consequent variable (e.g. performance). Thus, while moderation specifies varying effects of an independent variable on a dependent variable as a function of the moderating variable, this perspective specifies the existence of intervening (indirect) effects between antecedent variable and its consequent variable” (Venatraman, 1989: 428)

Matching

“This perspective is invoked for strategy concepts in which fit is a theoretically defined match between two related variables… A measure of fit between two variables is developed independent of any performance anchor, which is unlike the previous two perspectives” (Venatraman, 1989: 430)

Gestalts

“When fit is conceptualised and specified using two variables, it is possible for investigators to invoke alternative perspectives that have precise functional forms, but when many variables are used, the degree of precision must be relaxed. One such multivariate perspective is the identification of gestalts, which is defined in terms of the degree of internal coherence among a set of theoretical attributes” (Venatraman, 1989: 432)

Deviation

In the profile-deviation perspective, fit is the degree of adherence to an externally specified profile. For example, “if an ideal strategy profile (e.g. the level of resource deployments along a set of strategy dimensions) is specified for a particular environment, a business unit’s degree of adherence to such a multidimensional profile will be positively related to performance if it has a high level of environment-strategy coalignment” (Venatraman, 1989: 433)

Covariation

“According to this perspective, fit is a pattern of covariation or internal consistency among a set of underlying theoretically related variables, and it can best be described as an illustration. If a business strategy in a particular context is best described as the pattern of consistent, concurrent resource allocation to the areas of research and development, design, manufacturing, and marketing, any one area is insufficient for an effective strategy, which requires consistent attention to all areas. For a theoretical position, fit must be specified among the four dimensions, and it is most appropriately captured as the pattern of covariation” (Venatraman, 1989: 435)

Note: Based on Venkatraman (1989)

This research uses the definition of fit as matching, “in which fit is theoretically defined as the match between two related variables. This is a major departure from the previous two perspectives (moderation and mediation) because fit is specified without reference to a criterion variable, although, subsequently, its effect on a set of criterion variables could be examined. Stated differently, a measure of fit between two variables is developed independent of any performance anchor” (Venkatraman (1989: 430). Thus an assessment is made of the different variables within the organisations researched to determine whether or not they match each other, rather than taking the view that they must be a certain way. ii) TYPES The level of ‘strategic fit’ of an operation has two different dimensions (Draaijer, 1993:14): • External - Are operations processes and infrastructure consistent with the

competitive configuration in the market

• Internal - Consistency between the operations strategy and the overall business strategy

- Consistency with the other functions in the company - Consistency between the constituent elements and processes of the

operations system As Bayer and McDermott (1999: 289) commented, “For a strategy to be effective it must not only be appropriate (i.e. be well-fitted to its competitive environment) but it also must be communicated and widely understood throughout the organisation.” This view was further supported when Smith and Reece (1999: 146) concluded, “Although less advanced than the field of general strategy, researchers in operations strategy have also noted the distinction between external and internal fit.” Figure 2.4 shows a summary of the research to date in both of the dimensions of strategic fit in operations. All of these tend to stem primarily from the work of Skinner, who introduced the concept of external fit in 1969, and then looked at the idea of internal fit in his focused factory article in 1974. From this work, two key points have emerged regarding knowing when strategic fit exists: • External strategic fit – exists when the actions and interests of all company employees

are focused on a company’s key goals (Robinson and Stern, 1998) • Internal strategic fit – exists when employees from different levels and functions within

an organisation agree on what is most important for the organisation to succeed. Specifically, the level of agreement within an organisation on the relative importance of competitive criteria (Boyer and McDermott, 1999)

However, a glance at Figure 2.4 shows that the research undertaken to date has been predominantly associated with manufacturing businesses. The only two sets of authors who have researched the concept of strategic fit in service organisations are Nayyar (1992) and Smith and Reece (1999). Both of these concerned themselves with the relationship between fit and performance within the external aspect of fit. Thus, there is a gap within the literature in terms of research into the dimension of internal strategic fit within services businesses, a gap that the research will start to fill.

Figure 2.4 Summary of research conducted on ‘strategic fit’ in operations and the type of operation researched (1980 – 2001)

Research conducted (1980 – 2001) Type of operation researched Dimension

of ‘strategic

fit’ Topic Author (date) Manufacturing Service

Presence or absence of external fit

Schroeder et al. (1986) Swamidass, (1986)

 

Alignment-performance relationships

Nayyar (1992) Smith and Reece (1999) Yondt et al. (1996)



 

External fit

Factors that lead to alignment Papke-Shields and Malhorta (2001) 

Fit between operations task and planning and control systems

Van Dierdack and Miller (1980) 

Fit between operations task and production systems

Miller (1981) Kim and Lee (1993)

 

Fit between operations task and product strategy

Stobaugh and Telesio (1983) 

Fit between operations task and process choice Safizadeh et al. (1996) 

Fit between different functional managers’ view of market order- winners and qualifiers and the overall business strategy

Menda and Ditts (1997) 

Strategic consensus between plant operators and managers

Boyer and McDermott (1999)



Internal fit

Fit between operations priorities and workforce management practices used by managers

Kathuria and Davis (2001) 

iii) IMPORTANCE OF CREATING FIT Since the initial introduction of the idea of external and internal strategic fit in operations (Skinner, 1969; 1974), a variety of authors have claimed that achieving this is an important component in the success of an organisation. This view was initially extolled for goods- producing firms (e.g. Buffa, 1984; Wheelwright, 1984; Fine and Hax, 1985; Schroeder et al., 1986; Kotha and Orne, 1989; McDougall et al., 1992; Miller and Roth, 1994). However in recent years, it has also been proposed for service firms (e.g. Carman and Langeard, 1980; Cowell, 1984; Norman, 1984; Armistead, 1985; Heskett, 1986, 1987; Davidow and Uttal, 1989; Silvestro and Silvestro, 2003), and this has, in turn, lead to research into this field (e.g. Nayyar, 1992; Smith and Reece, 1999). Figure 2.5 shows examples of statements from authors about the importance of creating strategic fit in service operations. From this, there are a couple of points of note: • ‘Focus or falter’ – a lack of focus makes providing good service impossible. Hence, a

service business without focus will falter (Davidow and Uttal, 1989; Nayyar, 1992) • Three different methods of creating strategic fit – it has been suggested that service

firms should focus on: distinctive internal capabilities, customer segments, or geographical regions (Heskett, 1987)

• ‘Customer segments’ is the preferred method of creating strategic fit – whilst service businesses that create strategic fit are seen to be more successful than those who do not, the highest level of performance was associated with those who focus on selected customer segments or homogenous sets of customers (Nayyar, 1992)

These three points were specifically evident in the research conducted by Nayyar (1992) into 187 service firms to examine the affects of the three different methods of creating strategic fit. He identified that a number of advantages were associated with each of the approaches (see Figure 2.6), and that there were even certain disadvantages with focusing by geographical region (see Figure 2.7). iv) LEVELS OF STRATEGIC FIT Porter (1996) builds further on the last section when he reflects on the importance of fit among functional policies and strategies in his article “What is strategy?” He concludes that the level of fit is important because discrete activities often affect one another, and although some fit among activities is generic and applies to many companies, the most valuable fit is strategy-specific because it enhances a position’s uniqueness and amplifies trade-offs. He then goes onto identify three types of strategic fit, although they are not mutually exclusive: 1. Simple consistency – where there is fit between each activity (function) and the overall

strategy 2. Activity reinforcement – this level of fit goes beyond simple consistency and occurs

when each activity (function) reinforces the capability of another activity 3. Optimisation of effort – coordination and information exchange across activities to

eliminate redundancy and minimise wasted effort are the most basic types of effort optimisation. But there are higher levels as well. For example, product design choices can eliminate the need for after-sale service or make it possible for customers to perform service activities themselves.

“In all three types of fit, the whole matters more than any individual part. Competitive advantage grows out of the entire system of activities” (Porter, 1996: 72). Thus, when assessing the level of strategic fit within an organisation, it is important to understand how the operations functions aligns with all of the other functions that are involved in supporting the market(s) in which the company operates.

Figure 2.5 Examples of authors extolling the advantages of creating strategic fit in service operations

Author Statement

Carman and Langeard (1980: 7)

• Urged firms not to “serve the needs of too many socio-demographic segments”

Norman (1984: 98)

• Noted the dangers of offering multiple services, writing that “it is difficult to mix service management systems, which represent delicate formulas for poised success, without destroying something valuable in the process… Even mixing images can lead to great confusion”

Heskett (1986) • Urged firms to focus on distinctive internal capabilities, customer segments,

or geographic regions because doing so would lead to certain competitive advantage

Davidow and Uttal (1989)

• Proposed the advantages of focusing on a customer segment, of homogenous set of customers as: - Promotes good customer service by allowing firms to meet customer

needs closely - Leads to a better match of supply with demand, because it helps

businesses to forecast demand more accurately, to alter demand, and to expand the role of customers in producing service

• However, a lack of focus makes providing good service impossible

Nayyar (1992: 985)

• Studied 198 service firms to develop systematic evidence on the performance effects of three different types of foci. He found that: - A focus on selected customer segments was associated with higher

performance, but - A focus on either internal capabilities or geographic regions was

associated with lower performance

Smith and Reece (1999: 158)

• From extensive research into 30 branches of a service organisation, they found that the fit of the operational elements with the business strategy has a significant and direct impact on business performance, and is of greater importance than the particular choice of strategy

Figure 2.6 Benefits of focusing service operations on ‘customer segments’, ‘internal capabilities’ and ‘geographic regions’

Type of focus Benefits

Tailored service offering

Encourages business to segment their general market carefully and tailor their service offering to selected customer segments

Customer research

Segmentation allows research into the needs of each set of customers

Service design The customer research enables firms to serve homogenous sets of customers well by designing different core services for each set

Identify strategic operations

The focus on customer segments facilitates the identification of service operations that are of strategic importance

Concentrates resources

The firm can concentrate its efforts, investments and controls on those operations activities that are of strategic importance (Davidow and Uttal, 1989; Heskett, 1986)

Streamlined operations

The identification of strategic operations means that other ‘non- value adding’ operations can be eliminated (Heskett, 1986)

Reduced employee confusion

A focus on customer segments prevents employee confusion that may arise from conflicts among the behaviours required to satisfy customers with differing needs (Normann, 1984)

Increased customer satisfaction

Clarity in the behaviours required from service employees promotes good service, resulting in satisfied customers

Reduced employee turnover

The (explicit or implicit) positive feedback from the satisfied customers to the service providers lowers employee turnover and raises employee morale (Schneider and Bowen, 1985)

Focus on customer segments

Increased customer retention

The increased customer satisfaction will lead to increased customer retention

Focus on internal capabilities

Economies of scope

Sharing factors of production, or ‘leveraging’ internal capabilities, across several products might result in economies of scope that arise when the joint cost of producing two or more outputs is less than the sum of the costs of producing each output by itself (Rumelt, 1982; Teece, 1980)

Close to customers

Operating within a limited geographical region allows firms to remain close to its customers and intensively meet their needs

Respond to changes in customer needs

By remaining close to its customers firms are able to respond quickly and effectively to any changes in their needs

Focus on geographical regions

Maintain high level of service in a region

A high market share in a limited geographical region might permit a service firm to maintain a network of sites at which it can provide service to its customers

Note: Based on Nayyar (1992: 987-991)

Figure 2.7 Potential problems of focusing service operations on ‘geographic regions’

Type of focus Potential problems

Firms facing smaller customer densities would be at a cost disadvantage if they attempted to duplicate the network of the market share leader in a given market region (Heskett, 1986) Cost

disadvantage A broad scope of operations also increases cost. Institutional and cultural factors erect formidable barriers (Kogut, 1985).

Risk

Service firms face substantially more risk than goods producing firms when expanding into out-of-country markets because they cannot simply enter foreign markets by first exporting to them and then investing in them. Instead, service firms must at the onset invest in the foreign markets to serve customers face-to-face (Carman and Langeard, 1980)

Focus on geographical regions

Reduced tailoring of service offering

Geographically diverse operations may prevent a firm from tailoring its activities to serve a particular geographic area better than focused competitors meeting the needs of limited areas (Porter, 1985)

Note: Based on Nayyar (1992: 990-991)

F. FRAMEWORKS FOR ASSESSING THE LEVEL OF STRATEGIC

FIT This section outlines the frameworks available in the literature for assessing the level of strategic fit within an organisation, and those that were subsequently used in the research. i) FRAMEWORKS AVAILABLE IN THE LITERATURE The previous section in this chapter clearly showed the wide recognition within the literature on the value of creating strategic fit within a service operation. However, “if fit is to be managed it should first be defined, identified and understood, though this is not a straightforward task” (Staughton and Williams, 1994: 76). The inherent complexity of service operations is compounded by the previously outlined characteristics of services in terms of their heterogeneity, inseparability, intangibility and perishability. Maybe it is for this very reason, therefore, that “the ability to analyse a service operation and identify how well it matches the needs of the market it serve would give management a powerful tool to help it focus on those parts of the operation where fit is inadequate. Equally, the power to predict the effect on fit in the event of changes to the market, the operation or both would provide management with a significant strategic capability” (Staughton and Williams, 1994: 76). Edgett and Parkinson (1993) would appear to support this view with their call for the development of further frameworks to assist managers in formulating strategy in service organisations. Spence and Lewardowsky (1990) added to this when after reviewing frameworks as a general management tool, they suggested that they would be more powerful if presented in a simple, visual form. With these two points in mind, Staughton and Williams (1994) set about determining a simple, visual method for representing the level of

strategic fit within a service organisation. The outcome was the “service template” (see Figures 2.8 and 2.9), however, this was preceded by an extensive evaluation of existing frameworks in the literature. Figure 2.8 Example of a service template for ‘Domestic Appliance Showroom, Appliance Purchase’ Distinctive characteristics of service package

Extremes of each characteristic

Location Central Suburb Showroom appearance Looks Modern Old Lighting Bright Dim Theme setting Yes No Atmosphere Good Bad Window display Appealing Depressing Appliances Range Complete Partial Cookers: Features Many Few Looks Modern Traditional Type Built-in Free-standing Fires: Efficiency concerns Low High Looks Modern Traditional Type Real flame Radiant Luxury items Likely Unlikely Staff Professionalism High Low Appearance Smart Scruffy Price sensitivity Low High

Key: Characteristics sought by A, B, C1 segment Characteristics displayed by showroom as perceived by A, B, C1 segment The position of the symbols represents the significance of the characteristic to the segment Note: Taken from Staughton and Williams (1994:78)

Figure 2.9 The process of developing a service template Figure 2.10 shows a summary of the evaluation of the six frameworks reviewed by Staughton and Williams (1994), highlighting the advantages and disadvantages they identified of each. From this, there are several aspects with particular note in the context of the research conducted in this thesis: • Hill “Product/service profiling” – Hill (1985) proposed this framework as a method for

organisations to check the level of strategic fit within their operations. An example of a product/service profile is shown in Figure 2.11. “It offers an organisation the opportunity to test the current or anticipated degree of fit between the characteristics of its market(s) and the characteristics of its existing or proposed process and infrastructure investments. The principal purpose of this assessment is to provide a method to evaluate and, where necessary, improve the degree of fit between the way in which a company qualifies and wins orders in its markets and operations’ ability to support these criteria” (Hill, 1985: 24). Of the frameworks reviewed by Staughton and Williams (1994), this was considered to be the most simple and visual, in fact it provided the basis from which the ‘service template’ was developed. Thus, it would be considered a significant advantage if a framework for assessing internal strategic fit within a service firm incorporated the ‘profiling’ technique

• Heskett “Model of strategic service vision” – this model has several potentially attractive

features. However, it requires further development to create an effective management tool (Gianesi and Correa, 1993). It would thus be beneficial to reflect some of the elements of this framework in a model for assessing internal strategic fit. In particular, the elements such as the “service concept” and its links with “operating strategy” and “service delivery systems”

• Platts-Gregory “Strategy audit” – the main disadvantages of this model is that the data on

which it is based are all manufacturing-focused and internally derived. However, if it could be adapted to a service setting, it could provide some advantages in terms of the depth of analysis combined with the simple and visual representation of fit. The fact that the data is internally derived is less of an issue when analysing the level of internal strategic fit within an organisation

These three frameworks, and the identified advantages and disadvantages provide the basis for the methodology and approach taken in the research as detailed in the next section of this chapter.

Staughton and Williams (1994: 79) identify 7 key steps in developing a service template: 1. Define the service operation (whole or part) for which a service template is to be

constructed 2. Identify the market(s) (actual or potential) to be used to illustrate fit 3. Specify the characteristics of the service package necessary to satisfy the market

segments. Describe them using terminology specific to the market served 4. Specify the “extremes” of each characteristic 5. Locate each segment on the continuum for each characteristic 6. Link up the symbols fro each segment 7. Examine the fit between the ties

Figure 2.10 Examples of frameworks in the literature to be used to analyse the level of fit between a service operation and the market it was set up to serve

Author Framework Advantages Disadvantages

Chase and Aquilano (1981)

Audit of policy and operations to compare current and required policies Method is based on a checklist of questions and answers, which are recorded on a 3- point scale.

The technique allows the identification of the “alignment percentage” between current policies and those thought to be correct under a series of headings: “product”, “technology of transformation”, “operating control system” and “workforce” The framework is applicable to both manufacturing and services

The framework omits any mention of the market (or its needs) and does not enable a true assessment of fit to be made

Heskett (1986)

Model of a strategic service vision Presents a comprehensive checklist of questions to assist in strategy formulation

The model has several potentially attractive features: Fit is implied in the “service concept” element of the model and its links with “operating strategy” and “service delivery systems” The “positioning” integrative element poses the question: “What efforts are required to bring customer expectations and service capabilities into alignment?”, thus recognising the possible existence of gaps

The model doesn’t provide the service manager with any means of identifying where the gaps may be The framework requires further development to create an effective management tool (Gianesi and Correa, 1993)

Shostack (1984a, 1984b, 1987)

Service positioning strategy

Provides a visual display of the configuration of those parts of the service system important to a particular market

It is a complex model both in terms of preparation and presentation

Muffatto and Panizzola (1993)

Use of Quality Functional Deployment model in a service situation

The model ensures that the customer’s voice guides service development activities Makes it possible to guarantee consistency between the customer’s requirements and the measurable characteristics of the service

The multi-phased nature of the model means that it is complex

Hill (1983) Product profiling A simple pictorial device which illustrates the marketing- manufacturing interface

It has a simple, robust set of mechanics It is easily constructed and understood It enables a broader business perspective to be taken on operational issues

None stated

Gregory and Platts (1990)

An audit-based technique to assist in manufacturing strategy formulation Developed from the works of Hill (1983) and New (1989)

The frameworks used produce profiles which demonstrate any mismatch between market requirements and achieved performance Resulting mismatches indicate performance criteria which do not correspond with market needs The presentation of the information is simple, visual and easily understood

The data on which it is based are all manufacturing-focused and internally derived

Note: Based on Staughton and Williams (1994: 80-82)

Figure 2.11 The Hill product/service profiling technique: An example of a profile analysis for two operations of a company illustrating the mismatch between one plant and its market induced by applying the same operations strategy to both operations

Typical characteristics of process choice Some relevant aspects for this company Jobbing Batch Line

Type special

standard Product

Range wide narrow

Customer order size small large

Level of product change required

high low

Rate of new product introductions high low

Products and markets

Order-winner delivery speed/ unique capability

price

Technology general-purpose dedicated Process

Flexibility high low

Operations volumes low high Operations

Operations’ key strategic task

meet specification/ delivery speed

low cost operations

Investment Level of capital investment low high

Position of Operation A on each side of the chosen dimensions and the resulting profile Position of Operation A on each side of the chosen dimensions and the resulting profile

This figure reflects the consistency of products and processes for Operation A, and the inconsistencies for Operation B reflected by a straight line and dog-leg shape, respectively Note: Taken from Hill (2000: 129) ii) METHODOLOGY AND APPROACH TAKEN An assessment of the level of internal strategic fit within a service operation can be made by reviewing the level of agreement across various functions and levels of employees and processes within an organisation (Boyer and McDermott, 1999). The functions to be reviewed are those that assist operations in supporting the market(s) that the business serves, such as marketing, sales and customer service. In doing this, three key aspects need to be reviewed when assessing the degree of fit: • The importance of different competitive criteria in the firm market(s) – which competitive

criteria do employees consider to be important? Do these vary in importance between the different markets that the company serves? (Menda and Ditts, 1997; Boyer and McDermott, 1999)

• The operating strategy – are the operating strategies of each of the functions consistent with each other in terms of aspects such as investments, performance measures and employee incentivisation? (Heskett, 1986)

• The service delivery system – are the different steps in the service delivery system, provided by different functions, aligned with each other? (Heskett, 1986)

Figure 2.12 gives more detail on the dimensions involved in assessing each of the criteria highlighted above, and some indication of the literature supporting these views. Only once all three aspects are known can an assessment of the level of internal strategic fit within the organisation be made. Figure 2.12 Three key aspects involved in assessing internal strategic fit and the corresponding dimensions analysed

Aspect Dimension analysed with supporting evidence in the literature

Assessing the importance of different competitive criteria

• By interviewing managers in key business functions, it is possible to use ‘market order-winners and qualifiers’ as a technique to capture similarities or differences on how they view the importance of different competitive criteria in the firm’s market(s) (Menda and Ditts, 1997)

Assessing the operating strategy

• The operating strategy can be assessed by analysing (Heskett, 1986): - What are the important elements of the strategy - Where investments are made - How the performance of the business is measured - How employees are incentivised, rewarded and developed

Assessing the service delivery system

• The service delivery system can be assessed by analysing (Heskett, 1986): - The key steps in the delivery system - The role of people, technology, equipment, layout and procedures - How capacity and demand are managed - How quality standards are ensured - How the service is differentiated from the competition - How barriers to entry by competitors are provided

In order to research the level of each of the three aspects outlined above, a number of concepts and frameworks proposed in the literature were used. Whilst it was recognised that some of these may not be perfectly suited to the task at hand, it was felt that they were most appropriate given the alternatives available (see previous section). In fact, given that one of the objectives of the research is to start identifying certain tools and techniques that can be used to assess and represent the level of internal strategic fit that exists within a service business, the view was taken that the models being used at the outset would be fine tuned and adapted during the course of the research. The concepts and frameworks used varied depending on the aspect of internal strategic fit being assessed. Figure 2.13 shows a summary of the models used and for which aspect. From this it can be seen that they were used in the following areas: • The importance of different competitive criteria in the firm market(s) – the market order-

winners and qualifiers technique developed by Hill (1985) was used as a framework for determining the importance of different competitive criteria

• The operating strategy – the techniques and dimensions used to analyse the operating strategy were form a combination of sources: Heskett (1986) “strategic service vision”, Platts and Gregory (1990) “strategic audit” and Hill (1985) “operations strategy framework”

• The service delivery system – was analysed using a combination of two different techniques: Heskett (1986) “strategic service vision” and Hill (1985) “product/service profiling”

Figure 2.13 The frameworks used from the literature to assess the three key aspects of internal strategic fit

Aspect Dimension analysed with supporting evidence in the literature

Importance of different competitive criteria

• The concept of market order-winners and qualifiers in the Hill (1985) “operations strategy framework”

Operating strategy

• The Heskett (1986) assessment of operating strategy in his “strategic service vision”

• Worksheet 6 of the Platts-Gregory (1990) “strategic audit” on “Assessing the current operations practices”

• Steps 4 and 5 on process choice and infrastructure in the Hill (1985) “operations strategy framework”

Service delivery system • The Heskett (1986) assessment of service delivery system in his

“strategic service vision” • The Hill (1985) “product profiling” technique

It is worth noting at this point, that the market order-winners and qualifiers technique developed by Hill (1985) has its origin in a manufacturing, rather than a service environment. However, it was felt to be the most appropriate method of evaluating the importance of different competitive criteria in the firm market(s) for four main reasons: • Able to test fit at a number of different levels – using this methodology, we are able to

test fit at five different levels: − Agreement on market segments − Agreement on important competitive criteria − Agreement on weighting of competitive criteria as an order-winner or a qualifier − Agreement on weighting of order-winners out of 100 − Agreement on weighting of qualifiers as either Q (normal) or QQ (order-losing

sensitive) • Wide acceptance in the operations management literature – the concept has been

widely adopted in the operations management literature (e.g. Adam and Swamidass, 1989; Anderson et al., 1989; Macbeth, 1989; Slack, 1991; Harrison, 1993; Johnston et al., 1993) and has been to inform UK government publications on operations strategy practice (DTI, 1988; Platts and Gregory, 1990)

• Wide acceptance in other literature – the order-winner and qualifier weighting process

is paralleled by authors within other business fields such as operations strategy, motivation, competitive strategy and service management (see Figure 2.14)

Figure 2.14 Parallels to Hill’s (1985) order winner and qualifier concept within the operations strategy, motivation, competitive strategy and service management literature

Field Reference Order winners – order qualifiers Contingent? Managerial

implications/comments

Hill (1993) Order winner/ order qualifier

Yes – OW in one case (e.g. price) may be irrelevant in others

Identify those manufacturing can affect and give OW priority Clear distinction of followed through to prescription. No limit on candidates

Slack (1991) Order winner/ order qualifier

Yes – OW in one case (e.g. price) may be irrelevant in others

Distinction defines target for performance measurement and prioritises improvements Some distinction in prescription but still only ranking for improvement

New (1992) Competitive edge/ market hygiene factors

Yes – case specific. Limited to quality, delivery, flexibility and price

A manufacturing mix will help in delivering competitive edge factors Distinction is made in identification but not in prescription

Operations strategy

Meredith et al. (1994)

Critical or primary/ supporting

No – claims that some (e.g. delivery reliability) are always supporting, other are always primary (e.g. responsiveness)

Primary are bases for deciding where to “redirect attention” Conclusion is that “value” is function only of primary criteria

Motivation Hertzberg (1968)

Motivating/ hygiene factors

No – some factors (e.g. pay) always hygiene, others always motivating

Managers must provide both. Case made for job enrichment Widely replicated

Competitive strategy

Varadarajan (1985)

Success producer/ failure preventer

No – some seen as always failure preventers, others as success producers

Disagrees with Meredith et al. (1994) as to which. Basis for allocating resources dependent on relative position on variables. Admittedly tentative. Seems tautological; warns of interactive effects as well (see Meredith et al., 1994)

Parasuraman et al. (1985)

Satisfier/ dissatisfier

Not clear – some dimensions can “transcend service types”

Apparently intended to direct quality improvement priorities and a basis for segmentation

Service management

Silvestro and Johnston (1990)

Enhancing/ hygiene factors

No – but some factors can be of both types

Provides basis for evaluating performance not based solely on complaints. Distinction used as basis for devising performance measurement. Unlimited number of factors, i.e. no trade-off in evidence

Note: Based on Spring and Boaden (1997:769)

• Need to start to merge manufacturing and service operations management techniques – as Slack et al. (2004: 384) conclude after their review of operations management research, “Ironically, it might be that a sector-neutral approach, if achievable, would lead to a more representative and applicable set of topic areas and that this might also encourage greater migration of service-driven concepts into manufacturing.” Nieto et al (1999: 349) also concluded from a study of 84 operations management textbooks published between 1960 and 1998 that “owing to the importance that the services sector is acquiring in most economies, the new and existing manufacturing techniques are being adapted”. For both of these reasons, it was felt that applying the order-winner and qualifier technique in a service environment was appropriate

G. VISUAL METHODS OF REPRESENTING STRATEGIC FIT In establishing the level of strategic fit within an organisation, as well as the frameworks used in the assessment process, it is also important to consider how the findings from this assessment are presented. As Mills et al. (1998: 1083) conclude, “It is clear that visual methods of gathering and structuring data are of value to researchers working in organisations. The resulting picture and the rich discussion it provokes may be equally useful to managers and researchers”. Meyer (1991) supported this view by proposing the use of visual approaches for collecting and representing the “fuzzy multi-dimensional constructs when analysing organisations”, and strategic fit is certainly one such construct. Within the field of service operations strategy, a variety of different methods have been used to create a visual representation of data. Four such approaches are now discussed in more detail: • Graph – “graphs, whether presentational (i.e. to convey data in some pictorial manner)

or mathematical (i.e. one from which data may be interpolated) are used to facilitate understanding and analysis of the collected data, investigate relationships between factors, attract attention, indicate trends and make the data memorable. There is a wide choice of graphical methods available (i.e. line graphs, bar charts, pie charts, Gantt chart, radar charts, band charts) for different types of application” (Dale, 1994: 389).

• 2x2 matrix – probably the most commonly used method within strategy is the 2x2

business strategy matrix that was originally developed and proposed by the Boston Consulting Group (1972) and subsequently developed by Porter (1980). It has been used extensively as a method for showing the strategic position of an organisation.

• Product/service profiling – this is a “simple pictorial device that illustrates the

marketing-manufacturing interface (within a firm). Its power lies in its simplicity of presentation and its facility to express a complex business situation in a single visual image, drawing attention to the points at which fit is inadequate” (Staughton and Williams, 1994: 81). Hill (1985) developed this method and presents it as being applicable to both services and manufacturing, although no service specific examples are offered. Staughton and Williams (1994) started to address this by offering alternative service based dimensions, although the structure of the analysis and the method of presenting the data was the same as Hill (1985).

• Fitness landscape – McCarthy (2004) proposes the use of fitness landscape theory for investigating and presenting the strategic fit within the operations strategy of a business. However, this approach has also been used to assess organisational development and change (Beinhocker, 1999; McKelvey, 1999; Reuf, 1997), the evolution of organisational structures (Levinthal, 1996), innovation networks (Frenken, 2000) and technology selection (McCarthy and Tan, 2000; McCarthy, 2003). Essentially, the method “involves identifying the elements of strategy and recognising that the connectivity between the elements and the coupledness between competing strategies will influence the typology of the fitness landscape” (McCarthy, 2004: 143). The result is the production of a three- dimensional landscape that can be used to determine a firm’s current position on the landscape, where they should be and how they will get there.

Each method employs different characteristics in terms of the type of data that they can be used to present, the simplicity of this representation, the ease of compiling information and completing the analysis, the level and variety of data that they can be used to compare and how the data can be interpreted and understood. Figure 2.15 summarises the characteristics of each of the four methods. Based on the type, level and requirements of the data that is obtained through the research, an appropriate method for representing the level of internal strategic fit within an organisation will be developed. The visual method will be based on one of those above, but the information contained within the method will be a result of the findings from the research. H. SUMMARY AND CONCLUSIONS Given that the purpose of the research is to contribute to the field of operations management, then the literature within this area forms the basis of this discussion. The service operations management literature has developed significantly since the mid 1980s. However, the orientation of the research issues addressed has been predominantly operational and not strategic (Johnston, 1999). Thus, there is still a strong need to conduct research in the area of developing a coherent and effective service operations strategy. This is particularly important in terms of validating the concepts that have been identified and develop methodologies for using these frameworks (Gianesi and Correa, 1993; Verma and Thompson, 1999). Within the literature, it is commonly agreed that the effectiveness of a company’s operations strategy can be measured by the degree of linkage or consistency between the competitive priorities which are emphasised and the corresponding decisions regarding the structure and infrastructure of operations (Hayes and Wheelwright, 1984; Adam and Swamidass, 1989; Anderson et al., 1989; Leong et al., 1990; Hill, 1994). This linkage is referred to as ‘strategic fit’ and has two different dimensions (Draaijer, 1993): • External - Are operations processes and infrastructure consistent with the

competitive configuration in the market

• Internal - Consistency between the operations strategy and the overall business strategy

- Consistency with the other functions in the company - Consistency between the constituent elements and processes of the

operations system The research conducted to date in both of the dimensions of strategic fit has been predominantly associated with manufacturing businesses. The only two sets of authors who have researched the concept of strategic fit in service organisations are Nayyar (1992) and

Smith and Reece (1999). Both of these concerned themselves with the relationship between fit and performance within the external aspect of fit. Thus, there is a gap within the literature in terms of research into the dimension of internal strategic fit within services businesses. Figure 2.15 Comparison of some characteristics of different methods of representing data

Method of representing data

Characteristic Graph 2x2 matrix

Service profiling

Service landscape

Type of data

Quantitative Qualitative



 



Visual representation of data

Simple Complex



Process of compiling information and completing analysis

Easy Difficult



Different variables at once (# variables)

2 3 4 or more



Different positions at once (# positions)

1 2 or more



Compare

Alternative positions on these variables

Easy Difficult



What position wish to achieve

Easy Difficult



Action required to improve position

Easy Difficult



 Understand

When achieved desirable position

Easy Difficult



The purpose of the PhD is to conduct exploratory research in service organisations into the area of internal strategic fit. This consists of reviewing three key aspects within a business: • The importance of different competitive criteria in the firm market(s) – which competitive

criteria do employees consider to be important? Do these vary in importance between the different markets that the company serves? (Menda and Ditts, 1997; Boyer and McDermott, 1999)

• The service delivery system – are the different steps in the service delivery system, provided by different functions, aligned with each other? (Heskett, 1986)

In doing so, a number of elements of the concepts and frameworks proposed within the literature will be used to review each of the three dimensions of internal strategic fit: • The importance of different competitive criteria in the firm market(s) – the market order-

winners and qualifiers technique developed by Hill (1985) was used as a framework for determining the importance of different competitive criteria

• The service delivery system – was analysed using a combination of two different techniques: Heskett (1986) “strategic service vision” and Hill (1985) “product/service profiling”

Once the level of strategic fit has been determined within each of the organisations researched, then a decision will be made as to which is the most appropriate method to use to represent it. As a result, it can be concluded that the research will be developing the existing service operations management literature by developing new ideas and concepts within the field of service operations strategy, starting to identify and develop methodologies for some of the frameworks that have been proposed to date and building a conceptual framework with which to best show the fit or lack of fit within a business.

3. RESEARCH QUESTIONS This chapter develops the questions that guided the exploratory research into internal strategic fit in service organisations. Given that the purpose of the research is to validate some of the concepts/frameworks identified within the service operations strategy literature to date and develop methodologies for their application, then the questions will focus on four main aspects concerning the existence of internal strategic fit exist within service businesses, whether they consciously create internal strategic fit within their business, the elements that are present in a situation of internal strategic fit or lack of fit and how fit or lack of fit within a business be best presented. A. INTRODUCTION Chapter 5 on Research Design breaks down the three aspects of strategic internal fit into detailed questions that can be used to assess the level of internal strategic fit within a service organisation. However, as well as these detailed questions, there are some broader more conceptual questions that the research is aiming to answer in building theory within this field. This chapter looks at these broader questions that guided the exploratory research conducted. Voss et al. (2002: 198) describe the purpose of theory building research as identifying/describing key variables, identifying linkages between these variable and understanding ‘why’ these relationships exist. As such, the research questions should address the following issues: • What are the key variables? • What are the patterns or linkages between variables? • Why should these relationships exist? Eisenhardt (1989: 536) added to this when she noted that “the rationale for defining the research question is the same as it is in hypothesis-testing research. Without a research focus, it is easy to become overwhelmed by the volume of data”. However, “although early identification of the research question and possible constructs is helpful, it is equally important to recognise that both are tentative in this type of research. No construct is guaranteed a place in the resultant theory, no matter how well it is measured. Also, the research question may shift during the research.” Thus, it is important to realise that whilst the research questions aim to guide the activities undertaken, they did not confine the areas being studied. With this in mind, the research aims to address four main questions: • Does internal strategic fit exist within service businesses? • How is internal strategic fit created? • What elements are present in a situation of fit or lack of fit? • How can fit or lack of fit within a business be best presented? Each question is now examined in more detail in the following sections of this chapter.

B. DOES INTERNAL STRATEGIC FIT EXIST? It has been widely claimed within the literature that creating internal strategic fit is an important component of the success of a service organisation (e.g. Carmen and Langeard, 1980; Cowell, 1984; Norman, 1984; Armistead, 1985; Heskett, 1986, 1987; Davidow and Uttal, 1989), and this view has been supported by research in this field (e.g. Nayyar, 1992; Smith and Reece, 1999). However, although its importance is extensively recognised, does it actually exist within organisations? Thus, one of the broad research questions is to understand if internal strategic fit exists within service businesses and, if so, at what level? C. HOW IS INTERNAL STRATEGIC FIT CREATED? After establishing the level of fit within an organisation, the next question is to understand the process with which the fit was created. In doing so, a review will be made to determine how this relates to the different perspectives such as the process of developing an operations strategy identified by Slack and Lewis (2001):  Prescriptive – is the fit created through a top-down approach, where it is planned and

then implemented?  Emergent – is it a bottom-up activity where activities and improvements at a lower level

within the organisation cumulatively build to create strategic fit? Also, there is the question of what elements of the business is the strategic fit built around:  Market-led – does the process of creating fit involve translating market requirements into

operating strategies and decisions?  Resource-based – does the process of creating fit stem from the capabilities of the

service operation itself? D. WHAT ELEMENTS ARE PRESENT IN A SITUATION OF FIT OR

LACK OF FIT? In assessing the level of internal strategic fit within each business researched, an evaluation will also be made of business characteristics and aspects of the evaluation model that are present in a situation of fit or lack of fit. The purpose of this is to understand some of the reasons why strategic internal fit or lack of fit might occur in an organisation. A list of elements was developed based on the Heskett (1986) “strategic service vision” model being applied and some generic characteristics of a business concerning such as its market, organisational size and structure as shown in the following two sections. It is important to recognise that this is not an exhaustive list of criteria. Thus if, during the course of the research, it is felt that the level of fit has been caused by other elements within the business being reviewed, then the list of variables being considered will be extended and re- examined within each case study.

i) BUSINESS CHARACTERISTICS The business characteristics that will be explored concern the following areas: • Market characteristics – industry sector, # customers, # market segments, strength of

relationships with customers, # services offered to customers, geographical diversity, typical competitive criteria demanded, nature of market (e.g. homogenous, diverse), market stability, typical profit margins

• Organisational size – # employees, # sites, # functions, # services offered to customers, annual sales revenue, annual sales volume

• Organisational structure – # functions, types of functions, # hierarchical levels within the business

• Management style – cross-functional teams, functional teams, types of functions, type of leadership (e.g. strong Managing Director, functional bias), types of meeting (e.g. frequency, attendees, format)

• Employee characteristics – skill level, in-house or external • Operating strategies – types of payment and reward systems, types and orientation of

training and development activities, measures of performance • Service delivery system – # steps, # sites involved in delivering service, # functions

involved, types of functions involved, # employees involved, types of employees involved • Specific event – change in management/ownership, restructure of the customer market,

restructure of the employment market, restructure of the organisation, new service launched

ii) ASPECTS OF THE EVALUATION MODEL The aspects of the evaluation model that will be reviewed concern all of the dimensions outlined in the literature on each aspect of internal strategic fit:  Importance of competitive criteria – market segments identified, competitive criteria

identified within each segment, weighting of competitive criteria into order-winners and qualifiers; and, finally, the weighting of each order-winner and qualifier itself.

 Operating strategy – the important elements of the strategy within each function, where investments are made, how the performance of the business is measured; and how employees are incentivised, rewarded and developed

 Service delivery system – the key steps in the service delivery system, the role of people, technology, equipment, layout and procedures, how capacity and demand are managed, how quality standards are ensured, how the service is differentiated from the competition; and competitor barriers to entry

E. HOW CAN FIT OR LACK OF FIT BE BEST PRESENTED? As already stated in the last chapter, the process of analysing internal strategic fit will involve the use of four different frameworks identified in the literature: • The importance of different competitive criteria – the “order-winners and qualifiers”

technique developed by Hill (1985) • The operating strategy – a combination of three sources: Heskett (1986) “strategic

service vision”, Platts and Gregory (1990) “strategic audit” and Hill (1985) “operations strategy framework”

• The service delivery system – using two techniques: Heskett (1986) “strategic service vision” and Hill (1985) “product/service profiling”

In applying the concepts presented in the above techniques and frameworks, an assessment will be made of their usefulness in the analysis of internal strategic fit within a service business. Also, the data that is gathered through each of the different frameworks will be reviewed and compared against the alternative visual methods of representing strategic fit outlined in the last chapter. A decision will be made on the method to use and the criteria that should be represented within this model to give the best presentation of the level of fit within an organisation. F. SUMMARY AND CONCLUSIONS As Eisenhardt (1989: 545) concluded, “the final product of building theory from case studies may be concepts (e.g. the Mintzberg and Waters (1982) deliberate and emergent strategies), a conceptual framework (e.g. Harris and Sutton’s (1986) framework of bankruptcy), or propositions or possibly midrange theory (e.g. Eisenhardt and Bourgeois’s (1988) midrange theory of politics in high velocity environments). The research questions within this research reflect Eisenhardt’s comments and guide the outputs of the work towards two of these three potential outcomes. The first three questions are concerned with building concepts: Does internal strategic fit exist within service businesses? Do firms consciously create internal strategic fit within their business? And what elements cause internal strategic fit or lack of fit? Whereas the fourth question is concerned with building a managerial framework with which to best show the fit or lack of fit within a business. Based on the questions outlined within this Chapter, a research design was then developed in terms of the process adopted, methodology chosen, case studied selected and the data collection methods used. The approach taken and the reasons for the choice made are now discussed in the following two chapters on Methodology and Research Design.

4. METHODOLOGY This chapter both explores the alternatives available and justifies the methodology adopted within the research. Given that the purpose of the research is to build theory, it was felt that the most appropriate method was a multiple case study design. To conduct the research within each of these case studies, data was collected through a variety of methods to understand as fully as possible the phenomenon being studied. The principal data collection methods used were site visits, documentation, archival information analysis, structured interviews, unstructured interviews an observation. A. INTRODUCTION The purpose of this research is to explore the concept of internal strategic fit within service organisations. It aims validate some of the concepts/frameworks identified to date within the service operations strategy literature and develop methodologies for their application by exploring the four main questions highlighted in the last chapter: • Does internal strategic fit exist within service businesses? • Do firms consciously create internal strategic fit within their business? • What elements are present in a situation of fit or lack of fit? • How can fit or lack of fit within a business be best presented? Given this, this chapter explores the alternative research methodologies available and justifies the approach taken. It consists of four main sections: 1. Philosophical position – the first step concerns the philosophical position to be taken

within the research and, in doing so, creates an understanding of the role of theory within the research method to be adopted

2. Research philosophy – next, the research philosophy, or paradigm, is established 3. Methodologies available – then a review is made of the advantages and disadvantages

of the methodologies available depending on the research question being answered 4. Methodology chosen – after having debated the alternative approached available, the

research method chosen is then looked at in more detail 5. Data collection methods used – given the methodology chosen, the data collection

methods available are compared before highlighting the ones used within the research 6. Methods and process of data analysis – once the data had been collected it was then

analysed using a series of methods 7. Ensuring validity, generalisability and reliability – the tactic used within the research

to ensure the findings are valid, generalisable and reliable are discussed 8. Summary and conclusions – finally, the key points of the chapter are highlighted and

summarised B. PHILOSOPHICAL POSITION The first step within the methodology is to understand the philosophical position to be taken within the research and, in doing so, create an understanding of the role of theory within the

research method to be adopted. In order to do this, it is important to first establish the learning process that occurs within a research programme from a philosophical perspective. Kolb et al. (1979: 38) describe this learning process as an “experiential learning cycle”, as shown in Figure 4.1. They identify that learning might start with the experience of an event or stimulus, which the individual then reflects upon in trying to make sense of it. This might lead to the generation of explanations of how or why something happened the way it did, and these explanations can then be extrapolated (or generalised) to new events and stimuli of a similar type already experienced. This sequence is represented in the right hand side of the learning cycle. Alternatively, learning can take place in the left hand side of the cycle, by starting at the point where such a rule is merely received from others, along with a web of explanations and expectations, and is subsequently applied by that learner and thereby tested out. Figure 4.1 Kolb’s experiential learning cycle Note: Taken from Kolb et al. (1979: 38). As Kolb et al reflect, “in either case, whether the rule is received or generated out of the prior experience and reflection, its testing in new situations creates new experiences which enable consequent reflection, observation and ultimately new rules” (Kolb et al., 1979: 39). These two alternative processes of learning have, in turn, led to two major schools of thought in terms of the role of theory within research methods: • Deductive: theory-then-research programme – “a deductive research method entails

the development of a conceptual and theoretical structure prior to its testing through empirical observation. Deduction in this sense corresponds to the left hand side of Kolb’s experiential learning cycle (see Figure 4.1) since it begins with abstract conceptualisation and then moves on to testing through the application of theory so as to create new experiences or observations” (Gill and Johnson, 1997: 28). In this instance, the function of the research process is to test rather than invent theories, as Popper (1961: 16) notes, “wherever we try to propose a solution to a problem, we ought to try as hard as we can to overthrow our solution rather than defend it”.

• Inductive: research-then-theory programme – “the logical ordering of induction is the

reverse of deduction as it involves moving from the ‘plane’ of observation of the empirical world to the empirical world of the construction of explanations and theories about what has been observed. In this sense, induction relates to the right-hand side of Kolb’s

Concrete experiences

Observations and reflections

Testing implications of concepts in new situations

Formulation of abstract concepts and generalisation

learning cycle (see Figure 4.1), i.e. learning by reflecting upon particular past experiences and through the formulation of abstract concepts, theories and generalisations that explain past, and predict future, experience” (Gill and Johnson, 1997: 33). As Merton (1957: 103) agues, “it is my central thesis that empirical research goes far beyond the passive role of verifying and testing theory; it does more than confirm or refute hypotheses. Research plays an active role: it performs at least four major functions, which help shape the development of theory. It initiates, it reformulates, it deflects and it clarifies theory”.

As Nachimas and Nachimas (1976:12) conclude, “it is our position that a firm commitment to either of the two programs is not essential in the conduct of research. Science has progressed in spite of this controversy, and scientific research is being pursued under both programs. The aims of science do not preclude either the research-then-theory program or the theory-then research program”. However, when determining the methodology to be undertaken within a research program, understanding the philosophical position to be taken is a key prerequisite to subsequent choice of the research design and data collection methods employed. This PhD concerns hypothesis generation, as this is a process of induction then a research- then-theory programme was adopted. In fact, in the research procedure outlined by Eisenhardt (1989), the second to last step that literature is enfolded (see Figure 4.2). At this point, the hypotheses that have been induced from the research are compared with both conflicting and similar literature to build the internal validity of the constructs identified, sharpen their generalisability, raise their theoretical level and sharpen their definition. C. RESEARCH PHILOSOPHY Having established that the research concerns hypothesis generation, the next aspect within the methodology taken concerns the research philosophy, or paradigm, adopted. As Guba and Lincoln (1994: 116) conclude, “paradigm issues are crucial; no inquirer, we maintain, ought to go about the business of inquiry without being clear about just what paradigm informs and guides his or her research.” They define a paradigm as “a set of basic beliefs (or metaphysics) that deals with ultimates or first. It represents a worldview that defines, for its holder, the nature of the “world,” the individual’s place in it, and the range of possible relationships to that world and its parts, as, for example, cosomologies and theologies do” (Guba and Lincoln, 1994: 107). Guba and Lincoln (1994:107-8) identify four such research paradigms: positivist, postpositivist, critical theory and related ideological positions, and constructivism. Each paradigm varies in its basic belief regarding three questions that form the foci on which they analyse each paradigm, as shown in Figure 4.3: • The ontological question – what is the form and nature of reality and, therefore, what is

there that can be known about it? • The epistemological question – what is the nature of the relationship between the knower

or would-be knower and what can be known? • The methodological question – how can the inquirer (would-be knower) go about finding

out whatever he or she believes can be known?

Figure 4.2 Process of building theory from case study research

Step Activity Reason

Neither theory nor hypotheses Retains theoretical flexibility

Specified population Constrains extraneous variation and sharpens external validity Selecting cases

Theoretical, not random, sampling Focuses efforts on theoretically useful cases – i.e. those that replicate or extend theory by filling conceptual categories

Multiple data collection methods Strengthens grounding of theory by triangulation of evidence

Crafting instruments and protocols Qualitative and quantitative data combined Synergistic view of evidence

Overlap data collection and analysis, including field notes

Speeds analyses and reveals helpful adjustments to data collection

Entering the field Flexible and opportunistic data collection methods

Allows investigators to take advantage of emergent themes and unique case features

Within-case analysis Gains familiarity with data and preliminary theory generation

Analysing the data Cross-case pattern search using divergent techniques

Forces investigators to look beyond initial impressions and see evidence through multiple lenses

Iterative tabulation of evidence for each construct

Sharpens construct definition, validity, and measurability

Replication, not sampling, logic across cases Confirms, extends, and sharpens theory

Shaping hypotheses

Search evidence for “why” behind relationships Builds internal validity

Comparison with conflicting literature Builds internal validity, raises theoretical level, and sharpens construct definitions

Enfolding literature

Comparison with similar literature Sharpens generalisability, improves construct definition, and raises theoretical level

Reaching closure Theoretical saturation when possible Ends process when marginal improvement becomes small

Note: Taken from Eisenhardt (1989: 533).

Figure 4.3 Basic beliefs (metaphysics) of alternative inquiry paradigms

Item Positivism Postpositivism Critical theory et al Constructivism

Ontology

Naïve realism – “real” reality but apprehendable

Critical realism – “real” reality but only imperfectly and probabilistically apprehendable

Historical realism – virtual reality shaped by social, political, cultural, economic, ethnic, and gender values; crystallised over time

Relativism – local and specific constructed realities

Epistemology

Dualist/objectivist; findings are true

Modified dualist/objectivist; critical tradition/community; findings probably true

Transactional/ subjectivist; value- mediated findings

Transactional/ subjectivist; created findings

Methodology

Experimental/ manipulative; verification of hypotheses; chiefly quantitative methods

Modified experimental/ manipulative; critical multiplism; falsification of hypotheses; may include qualitiative methods

Dialogic/ dialectical

Hermeneutical/ dialectical

Note: Taken from Guba and Lincoln (1994: 112). As previously stated, the research presented here concerns building theory, inductively, from case study data. “This approach (perspective and method) is in the realm of postpositivism” (Wilson and Vlosky, 1997: 59). It important to understand why a postpositivist, rather than a positivist philosophy has been adopted. Guba (1990: 22) presents a simple distinction between the two. “In the positivist version it is contended that there is a reality out there to be studied, captured and understood, whereas postpositivists argue that reality can never be fully apprehended, only approximated.” While a postpositive perspective does not assume an objective reality, “emphasis is placed on the discovery and verification of theories. Traditional evaluation criteria, such as internal and external validity, are stressed, as is the use of qualitative procedures that lend themselves to structured (sometimes statistical) analyses” (Denzin and Lincoln, 1994: 5).

D. METHODOLOGIES AVAILABLE Before detailing the research method adopted in the research, it is important to understand the alternatives available and discuss their relative merits and applications. Within the literature, seven main research designs have been identified (Goodman and Kruger, 1988; Yin, 1994; Gill and Johnson, 1997; Bell, 1999): • Experiments • Surveys • Case studies • Histories • Action research • Ethnographic • Narrative inquiry Figure 4.4 gives a brief description of each design and some of the key steps involved in their application. Essentially, each strategy can be viewed as having peculiar advantages and disadvantages depending on three conditions (Yin, 1994:4): • The type of research question posed – who, what, where, how and why • The extent of control an investigator has over actual behavioural events; and • The degree of focus on contemporary as opposed to historical events Figure 4.5 displays these three conditions and shows exactly how they relate to each of the major research strategies. From this is can be seen that there are predominantly two types of research question: • Who, what, where, how many and how much – these types of research questions are

often about prevalence. They tend to fit survey strategies, as they are “advantageous when the research goal is to describe the incidence or prevalence of a phenomenon or when it is to be predictive about certain outcomes” (Yin, 1994: 6)

• How and why – by contrast, these questions are more explanatory and likely to lead to

the use of case studies, histories and experiments as research strategies. Experiments are done when an investigator can manipulate behaviour directly, precisely and systematically, which reflects the fact that they tend to occur in a laboratory or in a field setting as a social experiment. Whereas case study and history designs are more suitable when the researcher is unable to control behavioural events. Of these two, the case study is preferred in examining contemporary events. It “relies on the same techniques as a history, but it adds two sources of evidence not usually included in the historian’s repertoire: direct observation and systematic interviewing” (Yin, 1994:8)

Figure 4.4 Brief descriptions of the alternative research designs identified within the literature

Research design Brief description

Experiments

The design of experimental research is at the deductive end of the continuum highlighted earlier. It “attempts to provide a blueprint that enables the researcher to structure a research problem in such a way that the outcome is the production of valid, objective and replicable answers” (Gill and Johnson, 1997: 39) and consists of four basic steps: a. Delineate the research question or problem b. Identify factors that explain or cause variation in the dependent variable c. Operationalise the dependent and independent variables d. Neutralise the effects upon the dependent variable.

Surveys

In general, a survey involves the collection of information from individuals (through mailed questionnaires, telephone calls, personal interviews, etc) about themselves of about the social units to which they belong (Rossi et al., 1983). Once this information has been collected, it can be analysed, patterns extracted and comparisons made across the individuals within the sample group (Bell, 1999: 13). In most cases, the sample group selected will be a representative selection of the population, with the idea being that the findings obtained will therefore be representative of the population as a whole.

Case studies

Case study research design can be described as “an umbrella term for a family of research methods having in common the decision to focus an inquiry around an instance” (Adelmann et al., 1977). It is a research strategy that “focuses on understanding the dynamics present within single settings” (Eisenhardt, 1989: 534) and can involve either single or multiple cases, and numerous levels of analysis (Yin, 1984).

Histories

As a research process, historiography is difficult to define and explicate. Although it is easy to describe the steps that the historian follows, it is significantly harder to understand the process that he or she follows. Its research method can be defined as having three broad stages (Goodman and Kruger, 1988: 315): a. Formulate research question b. Examine evidence c. Compare evidence and research question

Action research

“Action research is an approach to research that aims both at taking action and creating knowledge or theory about that action” (Coughlan and Coghlan, 2002: 200). Cohen and Manion (1994: 192) describe it as “essentially an on-the-spot procedure designed to deal with a concrete problem located in an inadequate situation. This means that ideally, the step-by-step process is consequently monitored over varying periods of time and by a variety of mechanisms (questionnaires, diaries, interview and case studies, for example) so that the ensuing feedback may be translated into modifications, adjustments, directional changes, redefinitions, as necessary so as to bring about lasting benefit to the ongoing process itself rather than to some future occasion”.

Ethnographic

“The ethnographic style of fieldwork research was developed originally by anthropologists who wished to study a society or some aspect or a society, culture or group in depth” (Bell, 1999: 12). As a research approach it depends heavily on observation and, in some cases, complete or partial integration into the society being studied ”enabling researchers, as far as possible, to share the same experiences as the subjects, to understand better why they acted in the way they did and to see things as those involved see things” (Denscombe, 1998: 69).

Narrative inquiry

Narrative inquiry involves the collection and development of stories, either as a form of data collection or as a means of structuring a research project. Informants often speak in a story form during the interviews, as the researcher, listens and attempts to understand, their ‘stories’. The researcher allows the storyteller to structure the conversations, and then asks follow-up questions to confirm and check information collected. The stories used can involve various types including reflective autobiography, life story, or the inclusion of excerpts from participants’ stories to illustrate a theme developed by the researcher (Gray, 1998: 1).

Figure 4.5 Relevant situations for different research strategies

Strategy Form of research question Requires control over behavioural

events?

Focuses on contemporary

events?

Experiment How, why Yes Yes

Survey Who, what, where, how many, how much No Yes

Archival analysis Who, what, where, how many, how much No Yes/No

History How, why No No

Case study How, why No Yes

Note: Taken from Yin (1994: 6). Voss et al. (2002: 198) expanded on this when they proposed that methods are more suited to certain research purposes (see Figure 4.6). They identified four broad types of purpose for conducting research as: • Exploration1 – uncover areas for research and theory development • Theory building – identify/describe key variables, identify linkages between variables and

identify ‘why’ these relationships exist • Theory testing – test the theories developed in the previous stages and predict future

outcomes • Theory extension/refinement – to better structure the theories in light of the observed

results

1 Yin (1994) described this research purpose as “descriptive”. In order to overcome confusion caused by the difference in terminology used by alternative authors, Yin’s has been used throughout this chapter and is the one shown in Figure 4.6.

Figure 4.6 Matching research purpose with methodology

Research purpose Research question Research structure

Descriptive Uncover areas for research and theory development

Is there something interesting enough to justify research?

In-depth case studies Unfocused, longitudinal field study

Theory building Identify/describe key variables Identify linkages between variables Identify ‘why’ these relationships exist

What are the key variables? What are the patterns or linkages between variables? Why should these relationships exist?

Few focused case studies In-depth field studies Multi-site case studies Best-in-class case studies

Theory testing Test the theories developed in the previous stages Predict future outcomes

Are the theories we have generated able to survive the test of empirical data? Did we get the behaviour that was predicted by the theory or did we observe another unanticipated behaviour?

Experiment Quasi-experiment Multiple case studies Large-scale sample of population

Theory extension/refinement To better structure the theories in light of the observed results

How generalisable is the theory? Where does the theory apply?

Experiment Quasi-experiment Case studies Large scale sample of population

Notes: 1. Based on Voss et al. (2002: 198). 2. The terminology used for ‘Research purpose’ is based on Yin (1994). He used ‘Descriptive’ instead of ‘exploration’. Despite

the differences in terminology, the meaning of the purpose is the same. The question within this research concerns ‘how and why’, with the aim to build theory through the analysis of the concept of strategic internal fit within service operations. Given the statements above by both Yin (1994) and Voss et al. (2002), it can be seen that this is an area where case studies design is particularly strong. This is further emphasised by Meredith (1998) when he cites the three outstanding strengths of case study research put forward by Bebensat et al (1987): • The phenomenon can be studied in its natural setting and meaningful, relevant theory

generated from the understanding gained through observing actual practice • The case method allows the questions of why and how to be answered with a relatively

full understanding of the nature and complexity of the complete phenomenon • The case method lends itself to early, exploratory investigations where the variables are

still unknown and the phenomenon not at all understood When looking specifically at the field of operations management, Hill et al. (1999) built on the first point by Babensat at al. (1987) when suggested that two key variables distinguish the different types of empirical research: proximity to (or directness of involvement with) the phenomenon being studied, and the length of calendar time over which the research is

conducted (see Figure 4.7). Here, they show that case study and action research are designs more suited to research conducted within the situation being observed. This view is also supported by Bonoma (1985: 202) who stated that many issues of interest cannot be studied outside the context in which they naturally occur”. Thus, even carefully designed surveys or situations might not accurately portray the true nature of the interactions being researched. Figure 4.7 Spectrum of empirical research in Operations Management Note: Taken from Hill et al. (1999: 146). If we now look carefully at the research question being answered in this PhD has the following key characteristics that all have implications for deciding on the most appropriate methodology to use: • How and why question – the research question is one of ‘how and why’ as opposed to

one of ‘who, what, where, how many and how much’ (Yin, 1994: 6) • Events being researched – the second characteristic of note is that the research

focuses on contemporary events and does not require control over the behavioural proceedings being investigated (Yin, 1994: 6)

• Theory building – the third and final point concerns the purpose of the research. In this instance, it is one of theory building in terms of identifying key variables, identifying linkages between these variables and identifying ‘why’ these relationships exist (Voss et al., 2002: 198). This purpose has also been described as hypothesis generation (McCutcheon and Meredith, 1993: 242).

Given these three aspects and the advantages and disadvantages of the methodologies available, it was decided that a case study design was the most appropriate method for researching the questions highlighted in the last chapter concerning: • Does internal strategic fit exist within service businesses? • Do firms consciously create internal strategic fit within their business? • What elements are present in a situation of fit or lack of fit? • How can fit or lack of fit within a business be best presented?

Decreasing number of sites covered Increasing closeness to research situation Increasing time to complete projects

Postal questionnaire no follow-up

Postal questionnaire + follow-up interviews

Use of plant-based data from secondary sources (e.g. case studies)

DISTANT

Plant-based, academic observation, single viewpoint

Plant-based, academic observation, multiple viewpoints

Plant-based, action research

Plant-based, participant observation

In fact, the decision was made to use a multiple case study research design, with a few focused, in-depth case studies chosen to provide theoretical replication (Voss et al., 2002: 203). The next section of this chapter describes this in more detail, discussing the advantages and disadvantages of case study design that must be considered in its application. E. METHODOLOGY CHOSEN As already stated in the previous section, a case study approach was adopted in the research. This research design can be described as “an umbrella term for a family of research methods having in common the decision to focus an inquiry around an instance” (Adelmann et al., 1977). It is a research strategy that “focuses on understanding the dynamics present within single settings” (Eisenhardt, 1989: 534) and can involve either single or multiple cases, and numerous levels of analysis (Yin, 1984). Recent examples of case study research showing examples of how this strategy can be applied are shown in Figure 4.8, with Figure 4.9 highlighting specific instances within the field of operations management showing the research questions, number of cases studied, whether any other research methods were used (for example, surveys) and the overall purpose of the research. Figure 4.8 Recent examples of inductive case study research

Study Description of cases Research problem Data sources Investigators Output

Burgelman (1983)

6 internal corporate ventures in 1 major corporation

Management of new ventures

Archives Interviews Some observation

Single investigator

Process model linking multiple organisational levels

Mintzberg & McHugh (1985)

1 National Film Board of Canada, 1939-1975, with 6 periods

Formulation of strategy in an adhocracy

Archives Some interviews Research team

Strategy-making themes, ‘grass roots’ model of strategy formulation

Harris & Sutton (1986)

8 diverse organisations

Parting ceremonies during organisational death

Interviews Archives Research team

Conceptual framework about the functions of parting ceremonies for displaced members

Eisenhardt & Bourgeois (1988)

8 microcomputer firms

Strategic decision making in high velocity environments

Interviews Questionnaires Archives Some observation

Research team Tandem interviews

Mid-range theory linking power, politics and firm performance

Gersick (1988) 8 project groups with deadlines

Group development in project teams

Observation Some interviews Single investigator

Punctuated equilibrium model of group development

Leonard-Barton (1988)

10 technical innovations

Internal technology transfer

Interviews Experiment Observation

Single investigator Process model

Pettigrew (1988)

1 high performing & 1 low performing firm in each of 4 industries

Strategic change & competitiveness

Interviews Archives Some observation

Research teams In progress

Note: Source of data is Eisenhardt (1989: 535).

Figure 4.9 Recent examples of case-based research in operations management

Study Research questions # cases Other

methods Purpose

Narasimhan & Jayaram (1998)

What are the unique aspects of service operations that lead to differences in the way a reengineering project should be carried out in a service context?

1 - Theory building

Lamming et al. (2000)

How are different types of supply networks created and operated? 16 Survey

Theory building

Pagell and Krause (1999)

1. Is there a relationship between the firm’s external environment and its internal level of operational flexibility?

2. Do firms that align their level of operational flexibility with the level of uncertainty in the external environment Figure 4.superior performance compared to firms that do not have alignment?

30 Survey Theory testing

Boyer and McDermott (1999)

Is there strategic consensus in operations strategy across different organisational levels?

7 Survey Theory testing

McLachlin (1997)

Which management initiatives are necessary for JIT implementation? 6

Survey, interviews, direct observation

Theory testing

Meredith and Vineyard (1993)

How can we better understand the role of manufacturing technology in the firm’s business strategy?

3 - Theory refinement

Hyer et al. (1999)

1. What are the significant elements in a comprehensive cell design process and how are they related?

2. How will the application of STS principles influence and enhance a cell system design?

3. Of the elements in the comprehensive cell system design, which ones appear to be the most significant determinants of sustainable success?

1 - Theory refinement

Ahlstrom et al. (1998)

Why is diagnostic benchmarking used? How is diagnostic benchmarking used or not used by companies to improve manufacturing performance?

Longitudinal study. Two case visits 18 months apart Survey

Theory extension

Note: Taken from Voss et al. (2002: 200).

As in all research, evidence is collected systematically, the relationships between variables are studied and the study is methodically planned. “Though observation and interviews are most frequently used in case study, no method is excluded. Methods of collecting information are selected which are most appropriate for the task” (Bell, 1999: 10). As Eisenhardt (1989: 534) commented, “case studies typically combine data collection methods such as archives, interviews, questionnaires and observations. The evidence may be qualitative (e.g. words), quantitative (e.g. numbers) or both”. For example: • Sutton and Callaghan (1987) rely exclusively on qualitative data in their study of

bankruptcy in Silicon Valley. • Mintzberg and McHugh (1985) use qualitative data supplemented by frequency counts in

their work on the National Film Board of Canada. • Eisenhardt and Bourgeois (1988) combine quantitative data from questionnaires with

qualitative evidence from interviews and observations. When selecting cases to study, the researcher needs to be aware of the various advantages and disadvantages associated with the choice of number and type of cases selected (see Figure 4.10). The traditional way of sampling, as in surveys, is to identify a population and then to select a random or stratified sample from that population. However, in case research a sample of cases is often built by selecting cases according to different criteria (Eisenhardt, 1989; Yin, 1994) and should reflect the aim of the research being undertaken in terms of whether it is exploratory, theory building, theory testing or theory extension. Figure 4.10 Choice of number and type of cases

Choice Advantages Disadvantages

Single cases

Greater depth

Limits on the generalisability of conclusions drawn. Biases such as misjudging the representatives of a single event and exaggerating easily available data

Multiple cases

Augment external validity, help guard against observer bias

More resource needed, less depth per case

Retrospective cases

Allow collection of data on historical events

May be difficult to determine cause and effect, participants may not recall important events

Longitudinal cases

Overcome the problems of retrospective cases

Have long elapsed time and thus may be difficult to do

Note: Taken from Voss et al. (2002: 203).

Figure 4.11 and Figure 4.12 show the theory requirements, potential outputs and research structure (or sites used) for each purpose. From this it can be seen that when building theory through case study design, it is preferable to use multiple case studies that may be maximally different to highlight the commonalities and differences within the observed phenomena. There may be a priori theory that is used to select case sites and the constructs to be examined, or they should reflect the research questions to be answered in terms of the key variables, patterns or linkages between variables and the relationships that may exist. Voss et al. (2002: 203) add to this by stating that when building theory from case studies, case selection using replication logic rather than sampling logic should be used. Each case should be selected so that it is either: • A literal replication – predicts similar results to the other case studies; or • A theoretical replication – produces contrary results to the other case studies but for

predictable reasons So far in this section we have discussed the relative merits and applications of case study design depending on the purpose of the research being conducted. However, it is also important to be aware of the potential difficulties in its application. As Yin (1994: 9) concluded, “Although the case study is a distinctive form of empirical inquiry, many research investigators nevertheless have disdain for the strategy. In order words, as a research endeavour, case studies have been viewed as a less desirable form of inquiry than either experiments or surveys” (Yin, 1994: 9). The reasons for this tend to fall into two broad areas: • Lack of rigour – where the “case study investigator has been sloppy and has allowed

equivocal evidence or biased views to influence the direction of the findings and conclusions” (Yin, 1994: 9)

• Little basis for scientific generalisation – critics claim that generalisation is not always possible and question the value of the study of single events

However, others disagree, for example: • Bassey (1981: 86) claims that if case studies “are carried out systematically and critically,

if they are aimed at the improvement of an organisation, if they are relatable, and if by publication of the findings they extend the boundaries of existing knowledge, then they are valid forms of organisational research”.

• Denscombe (1998: 36-37) states, “The extent to which findings from the case study can be generalised to other examples in the class depends on how far the case study example is similar to others of its type. This means the researcher must obtain data on the significant features in general, and then demonstrate where the case study example fits in relation to the overall picture”.

As Nisbet and Watt (1980: 5) conclude, case study is concerned principally with the interaction of factors and events and “sometimes it is only by taking a practical instance that we can obtain a full picture of this interaction”. Its great strength as a research design is that it “allows the researcher to concentrate on a specific instance or situation and to identify, or attempt to identify, the various interactive processes at work. These processes may remain hidden in a large-scale survey but may be crucial to the success or failure of systems or organisations” (Bell, 1999: 10), and this is one of its major strengths when conducting theory building research.

Figure 4.11 Case study research design considerations in terms of theory requirements, potential output and number of sites used

Research purpose Theory requirements Potential output Sites used

Descriptive

May be no a priori theory when events are examined; important constructs are not likely to be defined

Description of events and outcomes to allow other researchers to understand the processes and environment. May indicate the relative importance of some factors

Exemplar cases (with extreme or unique circumstances) or revelatory cases (first examination of the phenomenon for scientific purposes (Yin, 1989)

Theory building

May have some a priori theory that is used to select case sites and the constructs to be examined

Propositions developed, based on the observations at one or more sites. Operational constructs may be refined or developed; however, some of the measured constructs may not prove useful in the evolving (Eisenhardt, 1989)

Multiple cases that may be maximally different to highlight the commonalities and differences in the observed phenomena

Theory testing

Theory and perhaps operational measures of constructs are defined to allow hypotheses to be proposed prior to conducting site visits

Single or multiple cases that allow ‘pattern matching’ (Yin, 1989), where the pattern of actual values of dependent variables vs independent variables are compared to those predicted through theory; replication by investigating other sites where theory

- Confirmation -

Indication of theory’s validity; may involve assessment of reliability and validity of measures

One or more cases selected to apply existing theories to situations where their applicability has not been tested

Critical case (Yin, 1989) that provides clear-cut evidence that a theory is inapplicable or incorrect

Theory extension/ refinement

- Disconfirmation -

Evidence that disconfirms one or more theories designed to explain events and outcomes in the case situations

For comparing competing theories, one or more cases with conditions that allow theories to be compared for their explanatory ability (Lee, 1989)

Notes 1. Adapted from McCutcheon and Meredith (1993: 242). 2. The terminology used for ‘Research purpose’ is based on Yin (1994). He used ‘Descriptive’ instead of ‘exploration’,

‘exploratory’ instead of ‘hypothesis generation’ and ‘explanatory’ instead of ‘hypothesis testing’. Despite the differences in terminology, the meaning of the purpose is the same.

3. The research purpose is a combination of that used within Voss et al. (2002) and Benbasat et al. (1987).

Figure 4.12 Six methods of data collection for case study research: strengths and weaknesses

Source of evidence Strengths Weaknesses

Documentation

• Stable – can be reviewed repeatedly • Unobtrusive – not created as a

result of the case study • Exact – contains exact names,

references, and details of an event • Broad coverage – long span of time,

many events, and many settings

• Retrievability – can be low • Biased selectivity, if collection is

incomplete • Reporting bias – reflects (unknown)

bias of author • Access – may be deliberately

blocked

Archival records

• Stable – can be reviewed repeatedly • Unobtrusive – not created as a

result of the case study • Exact – contains exact names,

references, and details of an event • Broad coverage – long span of time,

many events, and many settings • Precise and quantitative

• Retrievability – can be low • Biased selectivity, if collection is

incomplete • Reporting bias – reflects (unknown)

bias of author • Access – may be deliberately

blocked • Accessibility due to privacy reasons

Interviews

• Targeted – focuses directly on case study topic

• Insightful – provides perceived causal inferences

• Bias due to poorly constructed questions

• Response bias • Inaccuracies due to poor recall • Reflexivity – interviewee gives what

interviewer wants to hear

Direct observations • Reality – covers events in real time • Contextual – covers context of event

• Time-consuming • Selectivity – unless broad coverage • Reflexivity – event may proceed

differently because it is being observed

• Cost – hours needed by human observers

Participant observations

• Reality – covers events in real time • Contextual – covers context of event • Insightful into interpersonal

behaviour and motives

• Time-consuming • Selectivity – unless broad coverage • Reflexivity – event may proceed

differently because it is being observed

• Cost – hours needed by human observers

• Bias due to investigator’s manipulation of events

Physical artefacts • Insightful into cultural features • Insightful into technical operations

• Selectivity • Availability

Note: Taken from Yin (1994: 80).

F. DATA COLLECTION METHODS USED Given that a multiple case study design was chosen, this section now looks at the methods used to collect data within each of the case studies being researched. There are several data collection methods that may be used (Gill and Johnson, 1997; Lewis, 1998; Meredith, 1998; Bell, 1999; Voss et al, 2002). Five of the main methods are now looked at in more detail: • Self-administered questionnaires – this method requires participants to complete a

collection of questions on their own and without the opportunity to discuss or clarify any aspects embodied in the questionnaire

• Unstructured interviews – interviews are undertaken in an informal style in that respondents are allowed considerable latitude in the aspects addressed in the discussion. There may even not be a pre-determined set of questions or aspects to be systematically discussed during an interview

• Structured interviews – unlike the last method, structured interviews comprise specific and precisely formulated questions around which discussion is built

• Observation – the researcher observes relevant activities within an organisation in either a structured or unstructured format

• Archival information analysis – this method concerns the systematic analysis of existing materials. Typically, this constitutes prime data that are records of transactions and activities together with contemporary and historical controls and measures of performance per se or derived from source data

Some research designs are associated with certain data collection methods, while others (such as case studies) typically use two or more approaches as part of the research investigation. As Bell (1999: 7) commented, “different styles, traditions or approaches use different methods of collecting data, but no approach prescribes nor automatically rejects any particular method. Quantitative researchers collect facts and study the relationship of one set of facts to another. They use techniques that are likely to produce quantified and, if possible, generalisable conclusions. Researchers adopting a qualitative perspective are more concerned to understand individuals’ perceptions of the world. They seek insight rather than statistical analysis, yet there are occasions when qualitative researchers draw on quantitative techniques, and vice versa.” Yin (1994) developed this further when looking at data collection for case study research. He identified six primary sources of evidence and outlined the various strengths and weaknesses of each source. The methods he discussed are: documents, archival records, interviews, direct observation, participant observation, and physical artefacts. From the analysis shown in Figure 4.12, it can be seen that “no single source has a complete advantage over all the others. In fact, the various sources are highly complementary, and a good case study will therefore want to use as many sources as possible” (Yin, 1994: 80). He adds to this by stating, “the benefits from these six sources of evidence can be maximised if you follow three principles” (Yin, 1994: 90): • Multiple sources of evidence – evidence from two or more sources, but converging on

the same set of facts or findings. This allows triangulation to occur • A case study database – a formal assembly of evidence distinct from the final case

study report. This serves to facilitate subsequent cross-case analysis • A chain of evidence – explicit links between the questions asked, the data collected,

and the conclusions drawn, which increases the reliability of the information within each case study

As he concludes, “the data collection process for case studies is more complex than the processes used in other research strategies. The case study investigator must have a methodological versatility not necessarily required for using other strategies and must follow certain formal procedures to ensure quality control during the data collection process” (Yin, 1994:100). Various different data collection methods were used within this PhD. They were of both a structured and unstructured nature and the results were triangulated to further increase the validity of the theory being developed (Voss et al., 2002: 196). The main methods employed were: • Site visits – the research was conducted close to the situation observed. It was site-

based, involving academic observation and the collection of multiple viewpoints, as shown in Figure 4.7 (Hill et al., 1999: 146). The rationale behind the number of sites visited, the types of sites and the range of people interviewed is detailed in the following chapter on Research Design

• Archival information analysis – where appropriate, archival records were reviewed. Typically, this concerned records of transactions and activities together with contemporary and historical controls and measures of performance (Yin, 1994: 80)

• Interviews – relevant personnel within each case study were interviewed face-to-face and on-site in both a structured and unstructured manner to probe and understand new dimensions (Mintzberg, 1973: 229; and Yin, 1994: 80). The rationale behind the people interviewed, and the structured questions used in the interviews are detailed in the next chapter on Research Design

• Observation – all the interviews were conducted face-to-face and on-site. This allowed other observations to be made, again in both a structured and unstructured manner, to probe and understand new dimensions (Mintzberg, 1973: 229; and Yin, 1994: 80)

These methods were used in a variety of ways to collect data on the aspects of internal strategic fit being analysed within the case studies. The next chapter discusses this in more detail, giving examples of the data collected by each method. G. METHODS AND PROCESS OF DATA ANALYSIS Once the data had been collected it was then analysed using a series of methods. When conducting this step in case study research, Yin (1994: 25) proposed two components to be considered: • Logic linking the data to the propositions – the idea of pattern matching where several

pieces of information from the same case may be related to some theoretical proposition. For example, describing two potential patterns and then showing that the matches one better than the other

• Criteria for interpreting a study’s findings – one pattern may match one situation better than the other, but how close does a match have to be to be considered a match? “Currently, there is no precise way of setting the criteria for interpreting these types of findings. One hopes that the different patterns are sufficiently contrasting that the findings can be interpreted in terms of comparing at least two rival positions” (Yin, 1994: 26).

Einsenhardt (1989: 533) developed this further. When looking at the process of building theory from case study research she identified two steps in analysing the data: within-case analysis and cross-case pattern search. The first is used to gain familiarity with the data and preliminary theory generation; whereas the second uses divergent techniques to force the investigator to look beyond the initial impressions and see the evidence through multiple

lenses. The methods used within the research to conduct both of these steps are now outlined in more detail. i) ANALYSING WITHIN-CASE DATA The importance of within-case analysis is driven by the staggering volume of data within case study research (Eisenhardt, 1989) and the ever-present danger of ‘death by data asphyxiation’ (Pettigrew, 1988). Central to analysing within-case data is typically a detailed case study write-up that is often simply a pure description, but is vital to the generation of insight (Pettigrew,1988 and Gersick, 1988). This is then combined with other analyses such as prepared transcripts of team meetings (Gerswick, 1988), tabular displays and graphs of information (Leonard-Barton, 1988) and sequence analysis to organise longitudinal data (Abbott, 1988). As Eisenhardt (1989: 540) concludes “there are probably as many approaches as researchers. However, the overall idea is to become intimately familiar with each case as a stand-alone entity. This process allows the unique patterns of each case to emerge before investigators push to generalise patterns across cases. In addition, it gives investigators a rich familiarity with each case which, in turn, accelerates cross-case comparison.” 1. Detailed case study write-up – was completed for each of the eight cases. The format

of this write-up was the same for each case and is shown in Figure 4.13. It comprises eight different sections and looks at the company background, each aspect of internal fit, the overall of level of fit and the summary/conclusions that emerged from the analysis

2. Tabular display of data – as well as the write-up, six different tables were used to display the data for each case as shown in Figure 4.14. These tables organised and categorised the data from the case study write-up so that it could be analysed to show the level of fit within each case. Four tables were used to assess the fit on the aspects of the importance of competitive criteria, operating strategies, service delivery systems and overall level of fit. The resulting analyses are shown in Appendices 1, 2, 3 and 4.

3. Analysis of data in tabular display – each of the four tables were then analysed to show where fit occurred. A  was used to indicate fit, and from this a % level of fit was calculated both within and across the functions within each case study. Figure 4.15 summarises these analyses and the assessment for each case are shown in Appendices 5, 6, 7 and 8

Figure 4.13 Format used for detailed case study write-up

CONTENTS

1. Executive summary

2. Introduction

3. Company background A. Organisational structure B. Management activities 4. Importance of different competitive criteria

A. Market research B. Customer surveys C. Customer behaviour

D. Executives’ opinion of customer demands E. Summary and conclusions 5. Operating strategy

A. What are the important elements of the strategy within each function? B. Where are investments made? C. How is the performance of the business measured?

D. How are employees incentivised, rewarded and developed? E. Summary and conclusions 6. Service delivery system

A. What are the key steps in the service delivery system?

B. What is the role of people, technology, equipment, layout and procedures? C. How are capacity and demand managed? D. How are quality standards ensured?

E. How is the service differentiated from the competition? E. Summary and conclusions 7. Level of internal strategic fit A. Competitive criteria identified by executives B. How operating strategy matches competitive criteria C. Service delivery system matches competitive criteria E. Summary and conclusions 8. Conclusions and recommendations

Figure 4.14 Tabular displays of data to show level of strategic fit within each case study

Tabular display of data to show level of fit in each case study

Analysis in appendix

Importance of competitive criteria in, and between functions 1

Operating strategies in, and between, functions 2

Service delivery systems in, and between, functions 3

Overall level (operating strategies and service delivery systems with competitive criteria groups identified by executives) 4

Figure 4.15 Analysis of data in tabular displays of data to show level of strategic fit within each case study

Analysis of data in tabular display of data

to show level of fit in each case study

Analysis in appendix

Operating strategies in, and between, functions 5

Service delivery systems in, and between, functions 6

Between operating strategy and important competitive criteria 7

Between service delivery system and important competitive criteria 8

Although the process is described as consisting of three separate stages, they actually occurred simultaneous, with each analyses and assessment informing the other. ii) SEARCHING FOR CROSS-CASE PATTERNS Once the data had been analysed within each case, the findings from the research were then reviewed for cross-case patterns. The methods for doing this are driven by the reality that people are notoriously poor processors of information (Einsenhardt, 1989), they leap to conclusions based on limited data (Kahneman and Tversky, 1973), they are overly influenced by the vividness (Nisbett and Ross, 1980) or by more elite respondents (Miles and Huberman, 1984), they ignore basic statistical properties (Kahneman and Tversky, 1973) or they sometimes inadvertently drop disconforming evidence (Nisbett and Ross, 1980). Eisenhardt (1989: 540-1) suggested three different tactics to deal with these issues: • Select categories or dimensions, and then look for within-group similarities coupled with

intergroup differences. Dimensions can be suggested by the research problem or by existing literature, or the researcher can simply choose some dimensions

• Select pairs of cases and then list the similarities and differences between each pair • Divide the data by source

“Overall, the idea behind these cross-case searching tactics is to force investigators to go beyond initial impressions, especially through the use of structured and diverse lenses on the data. These tactics improve the likelihood of accurate and reliable theory, that is, a theory with a close fit with the data” Eisenhardt (1989: 541). Miles and Huberman (1984) added to this by suggesting various analytical techniques to use when analysing the data: • Putting information into different arrays • Making a matrix of categories and placing the evidence within such categories • Creating data displays – flowcharts and other devices – for examining the data • Tabulating the frequency of different events • Examining the complexity of such tabulations and their relationships by calculating

second-order numbers such as means and variances • Putting information in chronological order or using some other temporal scheme Within the research four different techniques were used to compare evidence across the eight case studies researched: • Matrices to show level of fit – the first step was to use five matrices to compare the

findings from each case. Figure 4.16 shows the matrices used to assess each aspect and the overall level of fit. The results of these analyses are shown in Figures, 6.1, 6.2, 6.3, 6.4 and 6.5; and they clearly show that there were three ‘high fit’ and five ‘low fit’ organisations. This answered the first research question: Does internal strategic fit exist?

• Visual representation of level of fit – in combination with these five matrices, four 2x2

matrices were used to show the level fit within each function and between functions for each case study. Each case study was plotted onto a 2x2 matrix to visually show the level of fit for each aspect: importance of competitive criteria, operating strategy, service delivery system and overall. The matrices used are shown in Figure 4.17 and the resulting analyses in Figures 6.1, 6.2, 6.3 and 6.4. They helped to show and compare the level of fit that exists in each case study

• Matrices to answer other four research questions – once it had been established that

there were organisations that had both high and low fit, 18 other matrices were used to compare the evidence across the cases to answer the other research questions of how fit is created, business characteristics and elements of the evaluation model that are present in a situation of fit or lack of fit, and how can fit or lack of fit be best presented? Figure 4.18 shows the matrices used and where the resulting analyses can be found

• Colour coding of data – within certain matrices, colour coding was also used to indicate

the value within each section. Red indicates a score of less than 50, yellow from 51 to 70 and green greater than 70. This enabled the cross-case patterns to be more clearly seen. Examples of this are shown in Figure 6.6, 6.10 to 6.20.

Figure 4.16 Matrices used to compare the case studies and determine if internal strategic fit exists

Matrices to determine if level of fit exists in each case study

Figure

Level of agreement in, and between, functions on their market segments 6.1

Level of strategic fit of operating strategies in, and between, functions 6.3

Level of strategic fit of service delivery systems in, and between, functions 6.4

Overall level of strategic fit of operating strategies and service delivery systems with competitive criteria categories identified by executives 6.5

Summary of level internal strategic fit in each organisation showing ‘importance of competitive criteria’, ‘operating strategy’, ‘service delivery system’ and ‘overall level’ 6.6

Figure 4.17 Visual representation of level of fit across the eight case studies researched to determine if internal strategic fit exists

Visual representation of level of fit

Figure

Agreement in, and between, functions on their market segments 6.1

Operating strategies in, and between, functions in each case study 6.3

Service delivery systems in, and between, functions in each case study 6.4

Operating strategies and service delivery systems with competitive criteria groups identified by executives in each case study 6.5

Figure 4.18 Matrices used to compare evidence across the eight case studies researched to determine how fit is created, the business characteristics and elements of the evaluation model that are present in a situation of fit or lack of fit, and how can fit or lack of fit be best presented?

Research question Matrix to compare evidence Figure

The characteristics of management in each organisation and the resulting ‘orientation’ and ‘process’

6.7 How is internal strategic fit created? Level of ‘within function’, ‘across all the functions’ and ‘overall level’ of internal

strategic fit in each organisation and process by which it was created 6.8

Some key differences between market characteristics of organisations with ‘high’ and ‘low’ internal strategic fit 6.10

What business characteristics are present in a situation of fit or lack of fit?

Some key differences between management style characteristics of organisations with ‘high’ and ‘low’ internal strategic fit 6.11

Level of fit within functions in each dimension of importance of competitive criteria for organisations with ‘high’ and ‘low’ overall internal strategic fit

6.12

Level of fit across functions in each dimension of importance of competitive criteria for organisations with ‘high’ and ‘low’ overall internal strategic fit 6.13

Level of fit within functions in each dimension of operating strategy for organisations with ‘high’ and ‘low’ overall internal strategic fit 6.14

Level of fit across functions in each dimension of operating strategy for organisations with ‘high’ and ‘low’ overall internal strategic fit 6.15

Level of fit within functions in each dimension of service delivery system for organisations with ‘high’ and ‘low’ overall internal strategic fit

6.16

Level of fit across functions in each dimension of service delivery system for organisations with ‘high’ and ‘low’ overall internal strategic fit

6.17

Level of fit within each operating strategy dimension in fit between operating strategy and important competitive criteria for organisations with ‘high’ and ‘low’ overall internal strategic fit

6.18

Level of fit within each competitive criteria group in fit between operating strategy and important competitive criteria for organisations with ‘high’ and ‘low’ overall internal strategic fit

6.19

Level of fit within each service delivery dimension in fit between service delivery system and important competitive criteria for organisations with ‘high’ and ‘low’ overall internal strategic fit

6.20

What elements within the evaluation model are present in a situation of fit or lack of fit?

Level of fit within each competitive criteria group in fit between service delivery system and important competitive criteria for organisations with ‘high’ and ‘low’ overall internal strategic fit

6.21

Competitive criteria found within the companies researched 6.22

Characteristics of the market found within the companies researched 6.23 Characteristics of ‘operating strategy’ found within the companies researched 6.24

How can fit or lack of fit be best presented?

Characteristics of ‘service delivery system’ found within the companies researched 6.25

H. ENSURING VALIDITY, GENERALISABILITY AND RELIABILITY Within the literature, four tests are commonly used to establish the quality of any empirical research. Kidder and Judd (1986: 26-29) summarise these as: • Construct validity – establishing correct operational measures for the concepts being

studied • Internal validity – establishing a causal relationship, whereby certain conditions are

shown to lead to other conditions. This is an issue for explanatory or causal case studies only, and not for descriptive or exploratory case studies

• Generalisability (or External validity) – establishing the domain to which a study’s findings can be generalised

• Reliability – demonstrating that the operations of a study such as the data collection procedures can be repeated

Based on these four design tests, Yin (1994: 33) recommends a number of case study tactics to be used to ensure that they are met and the phase of the research in which the tactic occurs. This is shown in Figure 4.19. Figure 4.19 Case study tactics for four design tests and the phase of the research in which they occur

Tests Case study tactic Phase of research in which tactic occurs

• Use multiple sources of evidence Data collection

• Establish chain of evidence Data collection Construct validity

• Have key informants review draft case study report Composition

• Do pattern-matching Data analysis

• Do explanation-building Data analysis Internal validity

• Do time-series analysis Data analysis

Generalisability (or External validity)

• Use replication logic in multiple- case studies Research design

• Use case study protocol Data collection Reliability

• Develop case study database Data collection Note: Based on Yin (1994: 33). Given that the purpose of the research presented in this PhD is to conduct exploratory research into the field of service operations strategy, then the ‘internal validity’ design test is not an issue. “Internal validity is only a concern only for casual (or explanatory) case studies, in which the investigator is trying to determine whether event x led to event y” (Yin, 1994: 35). However, the other three tests are important concerns within this research and the tactics used to ensure that they are met are now discussed.

i) VALIDITY As already stated, this research is not causal and hence the test to be met is one of construct validity, not internal validity. To meet this test, Yin (1994: 34) states, “an investigator must be sure to cover two steps: • Select the specific types of changes that are to be studied (in relation to the original

objective of the study) and • Demonstrate that the selected measures of these changes do indeed reflect the specific

types of change that have been selected” Yin (1994: 34) notes that this test “is especially problematic in case study research. People who have been critical of case studies often point to the fact that a case study investigator fails to develop a sufficiently operational set of measures and that “subjective” judgements are used to collect the data.” To overcome this, the three different tactics outlined in Figure 4.20 were employed in the research. Firstly, multiple sources of evidence were used when collecting data. For example, within a case study between 9 and 30 executives were interviewed from a range of functions and hierarchical levels, between 21 and 40 documents were reviewed and between 24 and 45 archival records were analysed. The section on “type of data collected” in the next chapter looks at this in more detail and the different sources of evidence are shown in Figures 5.17 to 5.22. Secondly, a chain of evidence was established that allows an external observer “to follow the derivation of any evidence from the initial research questions to ultimate case study conclusions” (Yin, 1994: 98). • Documents, interviews and observations categorised and sorted into sections for each

research question in a folder for each case study • Case reports were developed from this data (see Figure 4.13). Within these, the analysis

clearly shows the source of evidence upon which the findings and conclusions were made. For example, the document, interview or archival record from which it originates

• Each case study report then forms the basis of the tables used to analyse the within-case data (see Figures 4.14 and 4.15)

• The within-case data analysis tables then form the basis of the cross-case analysis described earlier in the chapter

• The cross-case analysis then forms the basis of the findings and conclusions from the research

Throughout all these analyses, there is clear cross-referencing to methodological procedures and the resulting evidence. This means that at any point, an individual is able to move from one section of a case study to another and trace a finding or conclusion back to the original source of evidence. Finally, there was a review process before completing the final version of each case study write-up. This involved presentation and discussion of the findings and conclusions to fellow academics and participants and informants in the case. The purpose of this was not simply one of professional courtesy, but a way of corroborating the essential facts and evidence presented in the case report. It ensured that there was agreement over the actual facts of the case and provided an opportunity for participants and informants to remember any new information they may have forgotten during the initial data collection period.

ii) GENERALISABILITY The second test is that the research findings are generalisable beyond the immediate cases studied, and is often referred to in the literature as external validity. Hedrick et al. (1993: 40) define generalisability as the “extent to which it is possible to generalise from the data and context of the research study to broader populations and settings”. Bonoma (1985: 200) refers to this as ‘currency’, which he defines as “the characteristics of research that affect the contextual relevance of findings, across measures, methods, persons, settings, and time.” Critics of the case study methodology often claim that the findings from the research are not generalisable. However, as Yin (1994: 36) notes, “such critics are implicitly contrasting the situation to survey research, in which a “sample” (if selected correctly) readily generalises to a larger universe. This analogy to samples and universes is incorrect when dealing with case studies. This is because survey research relies on statistical generalisation, whereas case studies (as with experiments) rely on analytical generalisation. In analytical generalisation, the investigator is striving to generalise a particular set of results to some broader theory.” As Lipset et al. (1956: 419-420) describe in their case study research, the goal is to do a “generalising” and not a “particularising” analysis. The tactic for meeting this test within the research was to use replication logic to select the case studies investigated. Eight organisations were studied that have a range of characteristics in terms of the market they serve, their organisational size and structure, the style of management within the business, the types of employees, the operating strategies and service delivery systems used. Figures 5.2 to 5.8 show how these cases vary on the different aspects. This is explained in more detail in the section on “case studies selected” in the next chapter on research design. iii) RELIABILITY The third and final test is that of reliability. Here the objective is “to be sure that, if a later investigator followed exactly the same procedures as described by an earlier investigator and conducted the same case study all over again, the later investigator should arrive at the same findings and conclusions. (Note that the emphasis is on doing the same case over again, not on “replicating” the results of doing one case by doing another case study.) The goal of reliability is to minimise the errors and biases in a study” (Yin, 1994: 36). Two tactics have been used to ensure that the methodology is reliable. Firstly, a case study protocol was developed. This is essential given that a multiple-case study design is used. The protocol outlines the instrument used for data collection and also contains the procedures and general rules that should be followed in using the instrument. As Yin (1994: 63-65) explains, “the protocol should have the following sections: • An overview of the case study project – project objectives and auspices, case study

issues, and relevant readings about the topics being investigated • Field procedures – credentials and access to the case study site, general sources of

information, and procedural reminders • Case study questions – the specific questions that the investigator must keep in mind in

collecting data, “Table shells” for specific arrays of data, and potential sources of information for answering each question

• A guide to the case study report – outline, format for the narrative, and specification of any bibliographical information and any other documentation”

Essentially, it is used to remind the investigator what the case is about and forces them to anticipate problems, such as how the case study report will be completed. The case study

protocol that was used is summarised in Figure 4.20. The next chapter discusses this in more detail, giving examples of the data collected by each method Figure 4.20 The case study protocol used within the research

CONTENTS

1. Purpose of the research

2. Key features of the case study method

3. Organisation of this protocol

4. Procedures

A. Initial scheduling of field visit I Review of preliminary information ii Verification of access procedures iii. Special documents iv. Confidentiality agreements

B. Determination of executives to be interviewed and other sources of data I Operations functions ii Sales and Marketing functions iii. Support functions

iv. Other functions 5. Case study protocol and questions

A. Company background i. Organisational structure ii. Management activities B. Importance of competitive criteria

i. Market research ii. Customer surveys iii. Customer behaviour

iv. Executives’ opinion of customer demands v. Summary and conclusions C. Operating strategy i. What are the important elements of the strategy within each function?

ii. Where are investments made? iii. How is the performance of the business measured? iv. How are employees incentivised, rewarded and developed?

v. Summary and conclusions D. Service delivery system i. What are the key steps in the service delivery system?

ii. What is the role of people, technology, equipment, layout and procedures? iii. How are capacity and demand managed? iv. How are quality standards ensured?

v. How is the service differentiated from the competition? vi. Summary and conclusions 7. Data analysis and case study reports

A. Within-case analysis i. Importance of competitive criteria

ii. Operating strategies iii. Service delivery systems

iv. Operating strategies and service delivery systems with important competitive criteria

v. Between operating strategy and important competitive criteria

vi. Between service delivery system and important competitive criteria vii. Case study report

viii. Summary and conclusions A. Cross-case analysis i. Does internal strategic fit exist?

ii. How is internal strategic fit created? iii. What business characteristics are present in a situation of fit or lack of fit?

iv. What elements within the evaluation model are present in a situation of fit or lack of fit? v. How can fit or lack of fit be best presented?

vi. Cross-case report vii. Summary and conclusions

Notes: 1. The data collection methods and interview questions used in the Case study protocol and questions are explained in more

detail in the Data collection methods used section in the next chapter on research design 2. Tabular displays of data to show level of strategic fit within each case study for the within-case analysis are shown in

Figure 4.x 3. Visual representations of level of fit across the eight case studies researched to determine if internal strategic fit exists for

the cross-case analysis are shown in Figure 4.x 4. The matrices used to compare evidence across the eight case studies researched for the cross-case analysis are shown in

Figure 4.x The second tactic employed was to develop a case study database during the data collection phase of the research. As Yin (1994: 95) explains, “the main point here is that every case study project should strive to develop a formal, presentable database, so that, in principle, other investigators can review the evidence directly and not be limited to the written reports. In this manner, a case study database markedly increases the reliability of the entire case study.” The data collected was placed into a folder for each case study and organised by the four case study protocol and question sections shown in Figure 4.20. These were company background, importance of competitive criteria, operating strategy and service delivery system. The databases comprise four main elements categorised into each section: • Case study notes – handwritten and dated notes from interviews, observations and

document analysis • Case study documents – such as functional strategies, market research, customer

surveys or administrative documents • Tabular materials – quantitative data collected such as customer behaviour,

performance records, organisational records and historical levels of investment • Narratives – answers to the open-ended questions used in the unstructured interviews As well as the case study protocol and the case study database, a chain of evidence was maintained in the research to ensure that it was reliable. Each case study report clearly shows the source of different data and information, such as the relevant document or interview; and the circumstances under which the evidence was collected, such as the time and place of the interview. I. SUMMARY AND CONCLUSIONS

Based on the research questions identified in Chapter 3, this chapter reviewed the relative merits and applications of the available research methodologies. The decision was made to use a multiple case study design for three specific reasons: • How and why question – the research question is one of ‘how and why’ as opposed to

one of ‘who, what, where, how many and how much’ (Yin, 1994: 6). Hence, either a case study, experiment or history design is appropriate

Within this design, replication logic rather than sampling logic was used to select each of the case studies so that it either predicted similar results to the other case studies (literal replication) or produced contrary results to the other case studies but for predictable reasons (theoretical replication). Qualitative and quantitative data was collected in a systematic way from each of the case studies using four main methods: site visits, archival information analysis, interviews and observation. Formal collection procedures were used to ensure the quality of the data, perceptual triangulation was used to assure that the fact being collected were indeed correct, a case study database was developed to facilitate cross-case analysis and explicit links were made between the questions asked, data collected and the conclusions drawn to increase the reliability of the information in each case study. The next chapter looks at this in more detail, by discussing the application of the case study strategy to the research conducted in terms of research process undertaken, the cases that were selected and the data collection methods employed.

5. RESEARCH DESIGN This chapter looks at the multiple case study methodology design for the research undertaken in terms of the number of case studies, type of case studies, data collection methods used and the type of data collected through the research. Eight case studies were researched with a range of characteristics that enabled the subject of internal strategic fit to be researched and also provide sufficient evidence to answer the research questions identified earlier in Chapter 3. Within each case study, data was collected using six main methods from to allow the results to be triangulated to assure that the facts being collected were indeed correct and increase the validity of the theory being developed. A. INTRODUCTION The chapter consists of four sections that outline the design of the research: 1. Case studies selected – the number and types of case studies researched, showing the

rationale behind their selection and the resultant database that has been built up 2. Data collection methods used – the data collection methods used to research the three

dimensions of internal strategic fit within each case study 3. Type of data collected – the executives interviewed, documents reviewed and archival

records analysed within each of the case studies 4. Summary and conclusions – finally, the key points in the chapter are highlighted and

summarised B. CASE STUDIES SELECTED This section outlines the number and types of case studies researched showing the rationale behind their selection and the resultant database that has been built up. i) NUMBER OF CASES Eisenhardt (1989: 535) summarised some examples of inductive case study research that has been conducted, as shown in the last chapter in Figure 4.7. From this, it can be seen that the number of cases reviewed within each project is: • 6 case studies in 2 projects (Burgelman, 1983 and Mintzberg and McHugh, 1985) • 8 case studies in 4 projects (Harris and Sutton, 1986; Eisenhardt and Bourgeois, 1988;

Gersick, 1988 and Pettigrew, 1988) • 10 case studies in 1 project (Leonard-Barton, 1988) Voss et al. (2002: 203) added to this when they identified two examples of theory-building case-based research in operations management (see Figure 4.8 in the last chapter). Within these, the number of cases reviewed was: • 1 case study in 1 project (Narasimhan and Jayaram, 1988) • 16 case studies in 1 project (Lamming et al., 2000)

From this, it can be concluded that theory-building research should use anywhere between 1 and 16 case studies, although 8 case studies is the most common. As Eisenhardt (1989: 545) states, “While there is no ideal number of cases, a number between 4 and 10 cases usually works well. With fewer than 4 cases, it is difficult to generate theory with much complexity, and its empirical grounding is less likely to be unconvincing… With more than 10 cases, it quickly becomes difficult to cope with the complexity and volume of data”. Voss et al. (2002: 203) drew the same conclusions when looked at case study research specifically in the field of operations management. They suggest that while there are advantages in studying a single case in terms of the depth of research that can be conducted, it does limit the generalisability of the conclusions drawn and biases can occur such as misjudging the representatives of a single event and exaggerating easily available data. The use of multiple cases overcomes these problems by augmenting external validity and helping to guard against observer bias. However, this design also has disadvantages in that more resource is needed and, as a result, there is less depth of research per case (Voss et al., 2002: 203). Based on examples of theory-building research conducted to date, and the relevant advantages and disadvantages of multiple case designs identified, the decision was made to investigate eight case studies. It was felt that this would be sufficient to overcome the problems of observer bias and lack of generalisability of the findings, but at the same time not too great a number to significantly reduce the depth of research within each case. Also, it was felt that after having researched these eight case studies, a point of theoretical saturation had been reached. In other words, it was felt that the incremental learning from researching further case studies would be minimal as they would be unlikely to reveal phenomena that have been seen before (Glaser and Strauss, 1967). The next section within this chapter looks at the characteristics of each case study reviewed in more detail, showing why they were chosen and how they provide a suitable database to start answering the research questions identified earlier in Chapter 3. i) TYPES OF CASE STUDIES SELECTED The traditional way of sampling, as in surveys, is to identify a population and then to select a random or stratified sample from that population. However, in case research a sample of cases is often is often built by selecting cases according to different criteria (Eisenhardt, 1989; Yin, 1994). When building theory from case studies, case selection using replication logic rather than sampling logic should be used (Voss et al., 2002). Each case should be selected so that it is either: • A literal replication – predicts similar results to the other case studies; or • A theoretical replication – produces contrary results to the other case studies but for

predictable reasons In the research contained within this paper, the eight case studies studied were selected for both the above reasons depending on how the research was developing. For example, Companies 5 and 6 were chosen as they were expected to produce a high level of fit (literal replication). By contrast, Company 3 was selected as it was expected to produce a low level of fit (theoretical replication). The purpose of this was to build a database of cases with varying levels of fit and also varying business characteristics. By using both literal and theoretical replication, the richness and robustness of the database is increased, and ensures that it could then be used to both research the subject of strategic internal fit and also provide sufficient evidence to answer the research questions identified earlier in Chapter 3. In terms of enabling the subject of internal fit to be researched, there are a number of basic criteria that the case studies must meet:

• To evaluate the relative importance of competitive criteria across the different aspects of the business, there must be more than one function, more than one market segment and more than one employee within the business

• To compare the operating strategies of the functions within the business, there must be more than one function

• To review the alignment across the different steps of the service delivery system, it must have more than one step

Figure 5.1 shows that each of the case studies meets the basic criteria outlined above. However, what is more important is ensuring that the collection of case studies together have an adequate set of characteristics to answer the research questions outlined in Chapter 3: • Does internal strategic fit exist? • How is it created? • What elements are present in a situation of fit or lack of fit? • How can fit or misfit be best presented? Figure 5.1 Characteristics of case studies required enabling the subject of strategic internal fit to be researched

Case study Characteristics

SD SS FC SB TE TM SM SL

# market segments 7 4 4 2 4 4 7 6

# functions 5 4 5 5 4 4 3 5

# employees 1,200 950 650 30 1,400 1,200 300 750

# key steps in the service delivery system

5 5 11 6 6 5 5 6

In order to achieve this, there must be a range of characteristics across the case studies in terms of the market they serve, their organisational size and structure, the style of management within the business, the types of employees, the operating strategies and service delivery systems used. Figures 5.2 to 5.8 show how the eight case studies researched vary in terms of these different aspects. It is this variance that creates the literal and theoretical replication required to build theory through multiple case study research. As previously stated in the last section of this chapter, once it was felt that theoretical saturation had been reached no further case studies were added (Eisenhardt, 1989: 545).

Figure 5.2 Market characteristics of case studies researched

Case study Overall market characteristics

SD SS FC SB TE TM SM SL

Industry sector(s)

Construction Distribution Emergency Financial Repair



Types of customer

B2C B2B



 



 

# customers 4,310k 240k 55k 20 1,400k 1,100k 100k 650k

# market segments 7 4 4 2 4 4 7 6

# services offered 5 5 5 8 2 2 5 10

Geographical location of customers UK UK UK UK UK UK UK UK

Market stability Low Med Low High Med Med Med Med

Notes: 1. ‘k’ indicates 000s of customer. For example: 4,310k is 4,310,000 customers 2. Other market characteristics such as ‘customer relationships’ or ‘competitive criteria demanded’ are specific to individual

segments within each market 3. Market stability is a reflection of how stable the market is in terms of customers staying with a service provider 4. For case studies 1, 2, 3, 4, 5 and 7, the annual sales volume is the same as the number of customers served

Figure 5.3 Organisational characteristics case studies researched

Case study Organisational characteristics

SD SS FC SB TE TM SM SL

Annual sales revenue (£M) 1,010 4,220 210 540 180 120 3,710 6,020

Annual sales volume (000s) 4,314 240 185 390 1,400 1,100 100 650

# sites 5 5 6 3 12 12 4 1

# employees 1,200 950 650 30 1,400 1,200 300 750

# functions 5 4 5 5 4 4 3 8

# services offered 5 5 5 12 2 2 5 10

Note: For case studies 1, 2, 4, 5 and 7, the annual sales volume is the same as the number of customers served

Figure 5.4 Operating characteristics of case studies researched

Case study Operating characteristics

SD SS FC SB TE TM SM SL

Structure Functional Cross-functional



 



 



 



Customer service         Distribution       Operations  

O pe

ra tio

Sales      Marketing      Customer relations  Commercial   S

al es

M ar

ke tin

Retail  Technical   Corporate  Legal

T yp

es o

f f un

ct io

O th

# functions 5 4 6 5 3 3 3 5

Typical # hierarchical levels 7 5 7 3 7 7 6 5

Part of a group of companies Yes Yes Yes Yes Yes Yes Yes No

Note: For all case studies, support functions such as Finance, HR and IT were managed by a central function outside of the

business being researched

Figure 5.5 Management style of case studies researched

Case study Management style characteristics

SD SS FC SB TE TM SM SL

Weekly   

Monthly      Face-to- face

Quarterly       F or

m al

Telephone Weekly 

Face-to- face

Weekly 

Daily   

Weekly     In fo

rm al

Telephone

Monthly   

R eg

ul ar

c om

m un

ic at

io n

w ith

o th

er m

em be

of th

ei r

m an

ag em

en t t

ea m

Total # types 2 2 1 5 5 5 2 3

Functional        Overall management style Cross-functional  

Figure 5.6 Employee characteristics of case studies researched

Case study Employee characteristics

SD SS FC SB TE TM SM SL

High        

Medium         Skill level

Low        

Operations       

Sales and Marketing       

Support 

Other    

In-house resource

Total 3 2 3 2 2 2 2 3

Operations       

Sales and Marketing  

Support 

External resource

Total 2 2 1 1 1 1 1 1

Figure 5.7 Operating strategy characteristics of case studies researched

Case study Operating strategy characteristics

SD SS FC SB TE TM SM SL

Basic salary         Payment and reward systems Bonus        

Hard         Type

Soft  

Structured    Format

Unstructured     

Internal        

Measures of performance

Orientation External        

Formal   Format

Informal        

Technical        

Training and development

Orientation Business   

Figure 5.8 Service delivery system characteristics of case studies researched

Case study Service delivery system characteristics

SD SS FC SB TE TM SM SL

# key steps in the delivery system 5 5 11 6 6 5 5 6

Customer service         Distribution       Operations   

O pe

ra tio

Sales       Retail  Technical   Legal

O th

F un

ct io

ns in

vo lv

in th

e de

liv er

y sy

st em

Total # functions 4 3 3 4 3 3 3 3

Typical # sites involved in delivering a service to a customer

5 2 4 2 3 3 1 1

Typical # employees involved in delivering service to a customer 5 2 11 4 3 3 2 4

C. DATA COLLECTION METHODS USED As stated in the previous chapter on Methodology, six main data collection methods were used in the research: site visits, documentation, archival information analysis, structured interviews, unstructured interviews and observation. Figures 5.9 to 5.11 shows how the different methods were used to collect data on the three various dimensions of each of the aspects of strategic internal fit within the service organisations reviewed, with a summary given in Figure 5.12. From this it can be seen that at least 2 and often as many as 5 methods were used to collected data on each of the dimensions analysed. Figure 5.9 Data collection methods and examples used to analyse the ‘importance of competitive criteria’ aspect of internal strategic fit

Aspect being reviewed

Data collection method Examples

Documentation

• Analysis of formal studies or evaluations of the same markets being studied – for example, industry reports or reports commissioned by the business being reviewed Market research

Archival records • Review of data showing results from historical market research – for example market growth opportunities

Documentation

• Analysis of formal studies or evaluations of the same markets being studied – for example, industry reports or reports commissioned by the business being reviewed

Customer surveys

Archival records • Review of data showing results from historical

customer surveys – for example competitive criteria of customers surveyed on a given date

Archival records • Review of data showing historical customer behaviour

– for example orders placed with the business being reviewed in a representative period Customer

behaviour

Observation • Direct observation of customer behaviour

Structured interviews

• Focused interviews with key representatives in each ‘customer-facing’ function (see Figure 5.17), following a structured set of questions (see Figure 5.13) Executives’ opinion

of customer demands

Unstructured interviews

• Open-ended interviews with key representatives (see Figure 5.17) to ensure that all aspects are covered by the structured set of questions in Figure 5.13

Figure 5.10 Data collection methods and examples used to analyse the ‘operating strategy’ aspect of internal strategic fit

Aspect being reviewed

Data collection method Examples

Documentation

• Analysis of formal studies or evaluations of the operating strategy of the business being studied – for example, industry reports or reports commissioned by the business itself

• Review of administrative documents – for example, strategic plans or roll reviews

Archival records

• Review of performance records – for example, against strategic plans to see if emergent strategy differs from planned strategy

• Review of organisational records – for example, organisational charts to see if management structures have changed over time

Structured interviews

• Focused interviews with key representatives in the business to determine functional strategies adopted (see Figure 5.18), following a structured set of questions (see Figure 5.15)

What are the important elements of the strategy within each function?

Unstructured interviews

• Open-ended interviews with key representatives (see Figure 5.18) to ensure that all aspects are covered by the structured set of questions in Figure 5.15

Documentation • Review of administrative documents – for example, investment proposals

Archival records • Review of data showing historical levels of investment – for example, budgets and training records

Structured interviews

• Focused interviews with key representatives in the business to determine levels of investment within different functions (see Figure 5.18), following a structured set of questions (see Figure 5.15)

Unstructured interviews

• Open-ended interviews with key representatives (see Figure 5.18) to ensure that all aspects are covered by the structured set of questions in Figure 5.15

Where are investments made?

Observation • Direct observation of investments made in the business

Documentation • Review of administrative documents – for example, minutes of management meetings and other internal documents

Archival records • Review of data showing historical management reports – for example, monthly performance packs and annual reports

Structured interviews

• Focused interviews with key representatives in the business to determine key measures of performance used to manage different functions (see Figure 5.18), following a structured set of questions (see Figure 5.15)

How is the performance of the business measured?

Unstructured interviews

• Open-ended interviews with key representatives (see Figure 5.18) to ensure that all aspects are covered by the structured set of questions in Figure 5.15

Documentation • Review of administrative documents – for example,

employment contracts, incentive schemes or personal development plans

Archival records

• Review of data showing historical rewards given to individuals – for example, budgets showing salaries and bonuses paid or budgets made available for rewarding individuals

• Review of data showing historical training and development – for example, time spend in training by individuals

Structured interviews

• Focused interviews with key representatives in the business to determine how employees are incentivised, rewarded and developed (see Figure 5.18), following a structured set of questions (see Figure 5.15)

How are employees incentivised, rewarded and developed?

Unstructured interviews

• Open-ended interviews with key representatives (see Figure 5.18) to ensure that all aspects are covered by the structured set of questions in Figure 5.15

Note: Investments are measured in both time and money

Figure 5.11 Data collection methods and examples used to analyse the ‘service delivery system’ aspect of internal strategic fit

Aspect being reviewed

Data collection method Detail

Documentation • Review of administrative documents – for example, working procedures

Structured interviews

• Focused interviews with key representatives in the business to determine the key steps in the service delivery system (see Figure 5.19), following a structured set of questions (see Figure 5.16)

Unstructured interviews

• Open-ended interviews with key representatives (see Figure 5.19) to ensure that all aspects are covered by the structured set of questions in Figure 5.16

What are the key steps in the service delivery system?

Observation • Direct observation of working practices to determine the key steps in the service delivery system

Documentation • Review of administrative documents – for example, working procedures, office layouts or proposals for equipment

Archival records • Review of data showing historical evidence – for example, historical office layouts

Structured interviews

• Focused interviews with key representatives in the business to determine the role of people, technology, equipment, layout and procedures (see Figure 5.19), following a structured set of questions (see Figure 5.16)

Unstructured interviews

• Open-ended interviews with key representatives (see Figure 5.19) to ensure that all aspects are covered by the structured set of questions in Figure 5.16

What is the role of people, technology, equipment, layout and procedures?

Observation • Direct observation of the role of people, technology, equipment, layout and procedures within the service delivery system

Documentation • Review of administrative documents – for example, minutes of meetings

Archival records • Review of data showing historical evidence – for example, management reports

Structured interviews

• Focused interviews with key representatives in the business to determine how capacity and demand are managed (see Figure 5.19), following a structured set of questions (see Figure 5.16)

Unstructured interviews

• Open-ended interviews with key representatives (see Figure 5.19) to ensure that all aspects are covered by the structured set of questions in Figure 5.16

How are capacity and demand managed?

Observation • Direct observation of how capacity and demand are managed Documentation • Review of administrative documents – for example, working practices

Archival records • Review of data showing historical evidence – for example, management reports

Structured interviews

• Focused interviews with key representatives in the business to determine how quality standards are ensured (see Figure 5.19), following a structured set of questions (see Figure 5.16)

Unstructured interviews

• Open-ended interviews with key representatives (see Figure 5.19) to ensure that all aspects are covered by the structured set of questions in Figure 5.16

How are quality standards ensured?

Observation • Direct observation of how quality standards are ensured

Documentation • Review of administrative documents – for example, working practices, customer surveys or industry reports

Archival records • Review of data showing historical evidence – for example, service levels provided to customers

Structured interviews

• Focused interviews with key representatives in the business to determine how the service is differentiated from the competition (see Figure 5.19), following a structured set of questions (see Figure 5.16)

Unstructured interviews

• Open-ended interviews with key representatives (see Figure 5.19) to ensure that all aspects are covered by the structured set of questions in Figure 5.16

How is the service differentiated from the competition?

Observation • Direct observation of the service level offered by the business • Direct observation of the service level offered by competitors

Aspect being reviewed

Data collection method Detail

Documentation • Review of administrative documents – for example, working practices, minutes of meetings

Archival records • Review of data showing historical evidence – for example, evidence showing that barriers have been provided

Structured interviews

• Focused interviews with key representatives in the business to determine how barriers to entry are provided (see Figure 5.19), following a structured set of questions (see Figure 5.16)

Unstructured interviews

• Open-ended interviews with key representatives (see Figure 5.19) to ensure that all aspects are covered by the structured set of questions in Figure 5.16

How are barriers to entry by competitors provided?

Observation • Direct observation of barriers to entry provided

Figure 5.12 Summary of data collection methods to analyse the aspects of internal strategic fit within each case study

Data collection methods used

Aspect of internal

strategic fit Element being reviewed

D oc

um en

ta tio

A rc

hi va

l r ec

or ds

S tr

uc tu

re d

in te

rv ie

U ns

tr uc

tu re

d in

te rv

ie w

O bs

er va

tio n

Market research  

Customer surveys  

Customer behaviour  

Importance of different competitive criteria

Executives’ opinion of customer demands  

What are the important elements of the strategy within each function?

   

Where are investments made?     

How is the performance of the business measured?    

Operating strategy

How are employees incentivised, rewarded and developed?    

What are the key steps in the service delivery system?     

What is the role of people, technology, equipment, layout and procedures?

    

How are capacity and demand managed?     

How are quality standards ensured?     

Service delivery system

How is the service differentiated from the competition?

    

Within each of the methods used, certain formal procedures were followed to control the quality of the data collection process (Yin, 1994: 100). This was particularly important for the structured interviews conducted with executives. Figures 5.13 to 5.16 show the questions that were used to review the various dimensions of internal strategic fit. However, in order to create a degree of methodological versatility within the research, these structured interviews were also combined with unstructured interviews of the same executives to ensure that all of the relevant aspects had been covered in the structured interview. Figure 5.13 Structured set of questions asked within focused interviews used to analyse the executive’s opinion of the importance of different competitive criteria in the markets they serve

Element being reviewed Structured set of questions

1. Segment the market

A. How many markets does your business compete in? B. What ‘name’ would you give to each of these segments? C. What is the size (£k) of each of these market segments?

2. Identify customer groups

Take each market segment, and ask further questions: A. What products or services do you either sell or provide to customers within this segment? B. What types of customers do you sell or provide products or services to within this segment? C. Is it possible to group together any of these customers in terms of the way in which they

behave? In terms of the needs and demands that they place on the business. D. Could you give me some examples of representative customers within each of these groups? E. Are all of these customers representative of this customer group? (Check for each customer

group). Or are there further customer groups in this segment?

3. Identify order- winners and qualifiers

Take each customer group and ask further questions: A. How do you win business with each customer group? B. What dimensions are important within each customer group? For example: price, delivery

reliability or design capability. Take each dimension and ask further questions: A. Is this dimension an order-winner or a qualifier? Explain the distinction between these 2

dimensions. B. Is this the same for all customers within this group? If not, does this group actually split into

more than one group?

4. Weight order- winners and qualifiers

Take each qualifier and ask further questions: A. Would the failure to meet this qualifier affect future business with this customer group? B. If so, how quickly would the impact on future business be? C. How do you feel the importance of each qualifier will vary over the next 5 years within this

customer group? D. Would the answer to the previous 3 questions be the same for all customers within this

group? If not, does this group actually split into more than one group? Take each order-winner and ask further questions: A. How would you rate each of these order-winners in terms of their relative important to this

customer group? Allocate 100 points across all the order-winners in each customer group to show their importance in terms of winning business with this customer group.

B. Would these weightings be the same for all customers within this group? ? If not, does this group actually split into more than one group?

Figure 5.14 Structured set of questions asked within focused interviews used to establish general background information on the company

Element being reviewed Structured set of questions

Organisational structure

• What is the organisational structure of the function? • What are the key activities and roles within the function? • What are staff levels within each of the key activities and roles?

Management activities

• Are there any regular meetings? Within function and with other functions? • Are there any regular reports? • Have there been any major developments/projects within the last year?

Figure 5.15 Structured set of questions asked within focused interviews used to analyse the executive’s opinion of the operating strategy within their business function

Element being reviewed Structured set of questions

Elements of strategy • What are the important elements of the strategy within your function?

Investments

• Where are investments made? • What have been the investment priorities in the last 5 years? • What are the projected investment priorities for the next 5 years?

Performance measures

• How is the performance of the business measured? • What performance targets exist? • What are the recent performance trends or achievements? • Are these measures consistent within the different business functions? • Is the level of importance of these measures consistent throughout the

organisation? • Are there soft measures as well as hard measures? • Do the measures vary in level of importance? • Which is the most useful to you? Which does your manager consider to be

most useful? • Do these measures reflect the importance of different competitive criteria

identified in the previous section? • How is customer satisfaction measured?

Employee incentivisation, reward and development

• How are employees incentivised, rewarded and developed? • How is customer satisfaction linked into the payment and reward system? • What types of training exist? • What is the extent, type and orientation of training within the different

business functions?

Figure 5.16 Structured set of questions asked within focused interviews used to analyse the executive’s opinion of the elements of the service delivery system conducted within their business function

Element being reviewed Structured set of questions

Key steps in the service delivery system

• What are the key steps in the service delivery system? • Which business functions provide each of these steps? • How is the co-ordination of each of these steps managed? • When was the current service delivery system developed?

Role of people, technology, equipment, layout and procedures

• What is the role of people, technology, equipment, layout and procedures

within the service delivery system? • How does this vary by the different steps within the delivery system?

Demand management

• How is demand managed within the different steps of the service delivery

system? • What is the profile of demand by capacity skill type? • What is the profile of demand by channel (e.g. telephone or letter)? • What are the annual trends of demand? • What are the monthly trends of demand? • How is demand translated from quantity into hours? • How is demand forecasted? How does this reflect trends and special events?

(E.g. advertising and promotions) • How often is demand forecasted? Hourly, daily or weekly basis?

Capacity management

• How is capacity managed within the different steps of the service delivery

system? • How many staff are there? • What percentage of the staff is temporary/permanent? • Are staff categorised into different skill levels? • How is the level of skill measured? • What is the typical training/development time between each skill level? • What is the number of staff by skill level? • How is capacity planned? • How are the different skill levels reflected in the capacity planning process?

Quality management

• How is the quality of the service determined and managed? • How does this feed into corrective action/training? • What types of customer feedback exists? • How frequent is this feedback? • How is this feedback communicated within the organisation? • Does this feedback link into the payment and reward system?

Service differentiation • How is the service differentiated from the competition?

Barriers to entry • How are barriers to entry provided?

D. TYPE OF DATA COLLECTED The last section looked at which data collection methods were used to analyse the dimensions of internal strategic fit. How and where these were used to collect data is now described in terms of the executives interviewed, the documents reviewed and the archival records analysed within each of the case studies researched. i) EXECUTIVES INTERVIEWED An import aspect of the design of the research is the selection of executives that were interviewed within each of the case studies. Again, as with the use of data collection methods, different executives were interviewed to analyse the three aspects of strategic internal fit. Figures 5.17 to 5.20 show the function and hierarchical level of the executives that were interviewed to analyse the importance of competitive criteria, the operating strategy of their function and the service delivery system used within each case study. From this is can be seen that anywhere between 9 and 30 executives within a case study were interviewed about an aspect of strategic fit. The number interviewed varies by both case study and the dimension being reviewed for a number of reasons: • Case study being reviewed – the variance in number of executives interviewed in each

case study reflects its organisational size and structure. The higher the number of sites, employees and functions within the business, the more executives were interviewed to gain a representative perspective from each function regarding the various aspects and dimensions of internal fit

• Aspect of internal strategic fit being analysed – less executives tended to be interviewed to analyse this characteristic of importance of competitive criteria than the number interviewed for the other aspects of fit. This was because it was found that only executives of a relatively senior position had been sufficiently exposed to customers as to have an opinion of the competitive criteria within their markets. Although other executives were asked about this aspect, they stated that they did not have an opinion. For the aspects of operating strategy and service delivery system, it was important to collect data showing the varying perspectives that exist within the different levels of a function

As stated in the previous section on the data collection methods used in the research, it is this procedure of compiling information from differing sources that enables the process of perceptual triangulation to occur that increases the validity of the theory being developed.

Figure 5.17 Number and type of executives interviewed in each case study to analyse their opinion of the importance of different competitive criteria in the markets they serve

Type of executive # executives interviewed in each case study

Function # levels beneath the Managing Director 1 2 3 4 5 6 7 8

Customer service

1 2 3

1 5 2

1 1 4

1 1 -

1 2 -

1 3 -

1 4 -

Distribution 1 1 - - 1 - - 1 -

O pe

ra tio

Operations 1 - - 3 - 4 4 - -

Sales 1 2 3

1 3 -

1 1 4

- 1 1 -

- - 1 5 -

1 - -

Marketing 1 2

1 4

1 1

- - - 1 1

Customer relations 1 - - 1 - - - - -

S al

es &

M ar

ke tin

Commercial 1 2 - - - - 1 1

1 1 - -

Human resource

1 - - - - - - - 1

IT 1 - - - - - - - 1

S up

po rt

Finance 1 - - - - 1 1 - 1

Retail 1 1 - - - - - - -

Technical 1 - - 1 1 - - - -

Corporate 1 - - - - - - - 1 O th

Legal 1 - - - - - - - -

Total 19 14 9 9 11 11 11 12

Figure 5.18 Number and type of executives interviewed in each case study to analyse their opinion of the operating strategy within their business function

Type of executive # executives interviewed in each case study

Function # levels beneath the Managing Director 1 2 3 4 5 6 7 8

Customer service

1 2 3

1 4 4

1 2 3

1 1 -

1 3 3

1 4 4

1 4 5

Distribution 1 2

1 2

- - 1 3

- - 1 -

O pe

ra tio

Operations 1 2 - - 1 4 -

4 4

4 4 - -

Sales 1 2 3

1 3 -

1 1 3

- 1 2 -

- - 1 5 -

1 1 -

Marketing 1 2

1 2

1 1

1 -

- - - 1 -

Customer relations 1 - - 1 - - - - -

S al

es &

M ar

ke tin

Commercial 1 2 - - - - 1 1

1 1 - -

HR 1 - - - - - - - 1

IT 1 - - 1 - - - - 1

S up

po rt

Finance 1 - - - - - - - 1

Retail 1 1 - - - - - - -

Technical 1 - - 1 1 - - - -

Corporate 1 - - - - - - - 1 O th

Legal 1 - - - - - - - -

Total 20 13 12 11 17 17 16 17

Figure 5.19 Number and type of executives interviewed in each case study to analyse their opinion of the elements of the service delivery system conducted within their business function

Type of executive # executives interviewed in each case study

Function # levels beneath the Managing Director 1 2 3 4 5 6 7 8

Customer service

1 2 3

1 4 18

1 2 8

1 1 -

1 3 15

1 3 4

1 4 5

Distribution 1 2

1 2

- - 1 3

- - 1 -

O pe

ra tio

Operations 1 2 3

- - 1 4 11

- 3 3 -

3 3 -

- -

Sales 1 2 3

1 2 -

1 1 6

- 1 2 -

- - 1 5 5

1 1 -

Marketing 1 2 - 1 1 -

1 - - - -

1 -

Customer relations 1 - - 1 - - - - -

S al

es &

M ar

ke tin

Commercial 1 2 - - - - 1 1

1 1 - -

HR 1 - - - - - - - -

IT 1 - - - - - - - -

S up

po rt

Finance 1 - - - - - - - -

Retail 1 1 - - - - - - -

Technical 1 - - 1 1 - - - -

Corporate 1 - - - - - - - - O th

Legal 1 - - - - - - - -

Total 30 21 20 11 27 27 20 13

Figure 5.20 Summary of number and type of executives interviewed in each case study to analyse their opinion of the three elements of internal strategic fit

# executives interviewed in each case study Element of internal strategic

fit Type of executive

1 2 3 4 5 6 7 8

Operations 9 6 5 4 8 8 5 5

Sales and Marketing 9 8 3 4 2 2 6 2

Support - - - - 1 1 - 1

Other 1 - 1 1 - - - 1

Function

Total 19 14 9 9 11 11 11 11

Importance of competitive criteria

# levels beneath the Managing Director

1 2 3

5 12 2

3 3 8

7 2 -

5 4 -

7 4 -

3 8 -

7 5 -

Operations 12 6 7 6 15 15 10 10

Sales and Marketing

7 7 3 4 2 2 6 3

Support - - 1 - - - - 3

Other 1 - 1 1 - - - 1

Function

Total 20 13 12 11 17 17 16 17

Operating strategy

# levels beneath the Managing Director

1 2 3

5 11 4

3 4 6

6 6 -

5 6 -

6 8 3

3 9 4

7 5 5

Operations 26 11 7 6 25 25 9 10

Sales and Marketing 3 10 1 4 2 2 11 3

Support - - - - - - - -

Other 1 - 1 1 - - - -

Function

Total 30 21 20 11 27 27 20 13

Service delivery system

# levels beneath the Managing Director

1 2 3

4 8 18

3 4 14

4 5 11

5 6 -

5 7 15

3 8 9

3 5 5

ii) DOCUMENTS REVIEWED A number of documents were reviewed to analyse the level of internal strategic fit within each case study. Figure 5.21 shows that although the number varies by element of internal strategic fit, between 21 and 40 documents were reviewed within each business. The purpose of these reviews was to check and confirm the statements made by executives

when they were interviewed and also to provide further background information about the make up of each company and its markets. These documents were obtained during the site visits made to each organisation. Figure 5.21 Summary of number and type of documents reviewed in each case study to analyse their opinion of the three elements of internal strategic fit

# documents reviewed in each case study Element of internal strategic

fit Type of document

1 2 3 4 5 6 7 8

Market research 8 6 7 12 4 4 1 4

Customer surveys 3 4 1 - 7 7 - -

Importance of competitive criteria

Total 11 10 8 12 11 11 1 4

What are the important elements of the strategy within each function?

5 2 4 4 4 4 4 4

Where are investments made? 4 3 4 4 2 2 2 3

How is the performance of the business measured?

5 5 6 2 4 4 4 4

How are employees incentivised, rewarded and developed? 4 2 1 1 3 3 1 1

Operating strategy

Total 18 12 15 13 13 13 11 12

What are the key steps in the service delivery system?

4 4 5 3 3 3 2 3

What is the role of people, technology, equipment, layout and procedures? 2 3 5 2 2 2 2 2

How are capacity and demand managed? 2 2 1 1 2 2 2 2

How are quality standards ensured? 2 2 1 1 2 2 2 2

How is the service differentiated from the competition? 1 1 2 1 1 1 1 1

Service delivery system

Total 11 12 14 8 10 10 9 10

Total 40 34 37 23 34 34 21 26

iii) ARCHIVAL RECORDS ANALYSED As well as reviewing documents, archival records were also analysed to provide further triangulation of the data collected through the interviews with executives. In total, between 24 and 45 archival records were reviewed in each case study (see Figure 5.22). As with the documents identified in the previous section, these records were obtained during the site visits made to each of the businesses researched.

Figure 5.22 Summary of number and type of archival records reviewed in each case study to analyse their opinion of the three elements of internal strategic fit

# archival records reviewed in each case study Element of internal strategic

fit Type of archival records

1 2 3 4 5 6 7 8

Customer surveys 3 4 1 - 7 7 - -

Customer behaviour 3 4 1 12 5 5 1 1

Importance of competitive criteria Total 6 8 2 12 12 12 1 1

What are the important elements of the strategy within each function? 5 2 4 4 2 2 4 4

Where are investments made? 4 3 6 4 2 2 2 2

How is the performance of the business measured? 7 8 9 2 7 7 4 4

How are employees incentivised, rewarded and developed? 4 2 1 1 2 2 1 1

Operating strategy

Total 20 15 20 11 13 13 11 10

What are the key steps in the service delivery system? 6 5 10 3 3 3 5 5

What is the role of people, technology, equipment, layout and procedures? 4 4 5 2 2 2 2 3

How are capacity and demand managed? 2 2 4 1 2 2 2 2

How are quality standards ensured? 3 2 2 1 2 2 2 2

How is the service differentiated from the competition?

1 1 2 1 1 1 1 1

Service delivery system

Total 16 14 23 8 10 10 12 13

Total 42 37 45 31 35 35 24 24

E. SUMMARY AND CONCLUSIONS From a review of the recent theory-building research in operations management (Voss et al., 2002) and within academic literature in general (Eisenhardt, 1989), it can be concluded that anywhere between 1 and 16 case studies can be used, although 8 case studies is more common. As a result, the decision was made to investigate eight case studies. It was felt that this would be sufficient to overcome the problems of observer bias and lack of generalisability of the findings, but at the same time not too great a number to significantly reduce the depth of research within each case.

Each case study was selected using replication logic in order to build a database of cases that would both enable the subject of strategic internal fit to be research and also provide sufficient evidence to answer the research questions identified earlier in Chapter 3. To achieve this, there needed to be a sufficient range of characteristics across the case studies in terms of the markets they serve, their organisational size and structure, the style of management within the business, the types of employees, the operating strategies and service delivery systems used; and so creating the literal and theoretical replication required to build theory through case study research. Within each of the case studies, data was collected using site visits, documentation, archival information analysis, structured interviews, unstructured interviews and observation. At least two and often as many as five methods were used to collect data on a dimension of internal strategic fit within each business researched. During this process, the results were perceptually triangulated to assure that the facts being collected were indeed correct and increase the validity of the theory being developed.

6. FINDINGS The research has assessed the level of ‘internal strategic fit’ within eight service businesses. In doing so, it has contributed to the literature by starting to develop an understanding of why internal strategic fit does or does not exist within certain service businesses, developing methodologies for using the Heskett (1986) and Hill (1985) frameworks and starting to develop a framework used to represent and assess the level of fit within a business. There was a significant variance both in the level of fit within each company and across each of the three aspects of internal strategic fit. The strategic process used had an impact on the level of fit, as did its market and management characteristics. Within the evaluation model there was also a particularly high level of fit on certain dimensions in a ‘high fit’ organisation. Based on the data collected through the research a framework was developed that enables a business to profile the different aspects of strategic internal fit. Profiles can be created showing the characteristics of a business in terms of its market, operating strategy, service delivery system and overall level of fit. This is shown to be useful for both a ‘low fit’ and ‘high fit’ organisation as it allows them to see more clearly why conflicts do or do not exist and start to understand the steps that can be taken to rectify a low level or reinforce a high level of fit. A. INTRODUCTION As described earlier in Chapter 3, the questions that have been used to guide the research are: • Does internal strategic fit exist within service businesses? • How is internal strategic fit created? • What elements are present in a situation of fit or lack of fit? • How can fit or lack of fit within a business be best presented? This chapter now looks at the findings from the investigation of these questions. It consists of seven main sections: 1. Level of internal strategic fit – the first section of the chapter looks at the level of

internal strategic fit within each of the eight service organisations researched in terms of the importance of competitive criteria, operating strategy, service delivery system and an overall level of internal strategic fit. It shows that the level varies depending on the organisation and the aspect of fit. Overall, three of the companies are ‘high fit’ and five are ‘low fit’

2. Process of creating internal strategic fit – given that there is a variation in the level of fit across the different companies studied, the next section then looks at how the level of fit is created in terms of the process used and the elements of the business that it is built around. In other words, is it ‘prescriptive’ or ‘emergent’ and ‘market-led’ or ‘resource- based’

3. Business characteristics that are present in a situation of fit or lack of fit – this section investigates whether certain business characteristics were common to those companies with ‘high fit’ or ‘low fit’. The different characteristics reviewed are market characteristics, organisational size, organisational structure, management style, employee characteristics, operating strategies, service deliveries and specific events

4. Elements within the evaluation model that are present in a situation of fit or lack of fit – the last section looked at what business characteristics are present within a situation

of fit or lack of fit. This section now reviews in more detail the elements within the evaluation model that are present in ‘high fit’ and ‘low fit’ organisations. It looks at the importance of competitive criteria, operating strategy, service delivery system, fit between operating strategy and important competitive criteria; and fit between service delivery system and important competitive criteria

5. Presentation of fit or lack of fit within a business – how the level of fit within an organisation can best be presented in a visual format. Its purpose is to help understand why the current level of fit exists in an organisation and how it can be improved or maintained. Based on the data gathered through the research, four different frameworks are developed for assessing the characteristics of the market, operating strategy, service delivery system and overall level of fit within a business. These frameworks are then used to profile a ‘low fit’ and ‘high fit’ organisation to show how they can be used to present and provide insight into the level of fit that exists

6. Comparison with existing literature – in this section, the findings are linked back to the literature to highlight consistencies and inconsistencies with existing work in the field

7. Summary and conclusions – finally, the key points from the chapter are highlighted and summarised

B. DOES INTERNAL STRATEGIC FIT EXIST? This section looks at the level of internal strategic fit that exists within each of the eight service organisations researched in terms of the following aspects: 1. Importance of competitive criteria – the overall findings from analysing the importance

of competitive criteria 2. Operating strategy – the operating strategies within each case study 3. Service delivery system – the service delivery systems within each case study 4. Overall level of internal strategic fit – an assessment of the overall level of internal fit

within each case study by comparing both the operating strategy and service delivery system with the competitive criteria identified as being important by executives

5. Summary and conclusions – finally, the key points of the section are highlighted and summarised

It was found that the level of fit within each organisation varied significantly. It was highest within service delivery systems, then operating strategies and lowest within importance of competitive criteria. Three businesses were considered ‘high fit’ as they had an average of more than 70% across all of the measures of fit, and five businesses were ‘low fit’ as they had an average of less than 50%. i) IMPORTANCE OF DIFFERENT COMPETITIVE CRITERIA Level of agreement can occur at four levels: 5. Market segments identified – the first level of agreement between executives is on the

number and type of segments in the markets that they serve 6. Competitive criteria identified within each segment – if there is agreement on the

market segments served, then the next level of agreement is on the number and type of competitive criteria within each of the segments identified

7. Weighting of competitive criteria – the third level of agreement concerns the weighting of each competitive driver in terms of whether it is an order-winner or qualifier in each market segment

8. Weighting of order-winners and qualifiers – finally, the fourth level of agreement concerns the weighting of each order-winner and qualifier to show their level of

importance within each market segment. This weighting is out of 100 points for order- winners and Q or QQ for qualifiers, where QQ indicates that it is order-losing sensitive

As described earlier in Section D on ‘Type of data collected’ in Chapter 5 on research design, the executives within each case study were interviewed to determine their understanding of markets and the relevant importance of different competitive criteria. The data collected was then formatted to show the findings for each case study and analyse the level of fit, as shown in Appendix 1. Colour coding is used to show the level of fit that exists within each competitive criteria group and across each function within the business, Red is low, yellow is medium and green is high fit. The findings are then summarised across all of the case studies in Figure A9.1 in Appendix 9 and visually represented in Figure 6.1. This process is outlined in more detail in the section on methods and process of data analysis in Chapter 4 on methodology. Overall, there was found to be a marked and disturbing lack of understanding and agreements about markets both within, and especially between, the different functional departments in the companies researched. In most cases, there was no consistency between executives even at the first level of agreement shown above. In Company 2, for instance, the marketing department staff saw their market as comprising one single market segment, sales staff ten segments and customer service staff eleven segments. Furthermore, within its customer service department only 40% of staff was in agreement on the segmentation of their market. But this company was by no means exceptional. As Figure 6.1 shows, there was wide disagreement across all of the companies studied regarding the number and type of market segments in which the business competes. This is particularly worrying, because if companies do not know or agree the markets that they compete in then, by definition, they cannot agree on the competitive criteria in those segments, or the weighting of those criteria. Companies 3 and 4 were the only situations where there was a high level of agreement both within functions and across functions. In fact, in the case of Company 4, there was 100% agreement of executives both within each function and across all of the functions within the business. However, if we now look at the level of agreement on the competitive criteria we can see that in both cases there was no agreement on the order-winners within each segment and very little agreement on the qualifiers within any of the market segments identified (see Figure 6.2).

Figure 6.1 Level of agreement in, and between, functions on their market segments Figure 6.2 Level of agreement of competitive criteria within each of Company 3 and Company 4’s market segments

Level of agreement on competitive criteria and weightings (% total) Company Market

Number of segments identified Order-winners Qualifiers

B 1 0 50 C 3 0 50

100

B 2 0 50 4 C

Le ve

l o f s

tr at

eg ic

fi t b

et w

ee n

fu nc

tio ns

(% )

Level of strategic fit within each function (%) 0 50 100

100

5 7 2 6

ii) OPERATING STRATEGY The operating strategy within each case study comprises four dimensions: • The important elements of the strategy within each function – such as, cost

reduction or increasing sales revenue • Where investments are made – the orientation of recent investment in each function on

aspects such as people, technology or equipment • How the performance of the business is measured – both in terms of the measures to

meet an internal-business need (such as, cost or work management) and a customer need (such as customer service or price)

• How employees are incentivised, rewarded and developed – this then split down further into three areas in terms of the type of incentivisation, reward and development used within the business and its orientation (for example, bonus payments based on sales revenue)

A number of methods were used to collect data on each of the above dimensions including structured interviews, unstructured interviews, documentation, archival records and observation. The findings were then triangulated to test their validity before an assessment was then made of this to determine the level of fit between each of the four dimensions of operating strategy both within a function and across all of the functions within each case study. As with the analysis of the level of fit on importance of competitive criteria, the data that had been collected was then formatted for each case study. This is shown in Appendix 2. It allowed the data to be reviewed and the level of fit determined across each dimension of the operating strategy and within each function in the business. Colour coding is again used to show if there is high, medium or low fit and the findings across all of the case studies are summarised in Figure A9.2 in Appendix 9. A visual representation of this summary is shown below in Figure 6.3. Figure 6.3 Level of strategic fit of operating strategies in, and between, functions in each case study

Le ve

l o f s

tr at

eg ic

fi t b

et w

ee n

fu nc

tio ns

(% )

Level of strategic fit within each function (%) 0 50 100

100

50 2

4 5

From this, it can be seen that of the eight case studies researched: • 43% case studies have ‘high fit’ – three of the companies reviewed have greater than

70% fit in their operating strategies both within each function and between functions within the business

• Same within function and between functions – the level of fit tended to be of a similar level both within each function and between functions

Company 5 is an example of a high fit business. The findings from the analysis of fit within its operating strategy are shown in Figure A2.5 in Appendix 2. Here we can see there is a high level of fit within all the four functions of the business. For instance, in Customer Service the whole focus of the operating strategy is to reduce cost and customer complaints. Its investments in technology mean that work can be processed more efficiently. The performance measures it uses are predominantly geared to managing and reducing cost as well ensuring that work is completed on time and customer complaints are kept to a minimum. A structured appraisal system is used to incentivise, reward and develop employees. Overall, all the elements of the operating strategy fit with each other because they are orientated to reducing costs and customer complaints. Within Company 5’s operating strategy there is a high level of fit across all dimensions apart from the important elements of strategy where there is a medium level of fit. For instance, the performance measures used to manage all four functions are all focused on reducing cost and the same structured appraisal system is used throughout the business. The medium level of fit across the important elements of strategy is a result of the commercial function being focused on managing contracts with customers and suppliers, whereas the operations function is more focused on reducing cost and delivering on time. Another instance of a high fit organisation is Company 4. Figure A2.4 in Appendix 2 shows the findings from analysing this business’s operating strategy. The important elements of the strategy are consistent across all five functions of the business and the main focus on identifying new market opportunities and managing relationships with existing customers. To ensure that this happens, a key account management system is in place. It is managed by sales and pulls together the customer visit and the marketing and technical plans used in the other functions. These plans also form the basis of how performance is measured and managed. There are strong customer relationships and a high level of customer contact throughout the business. This helps to incentivise employees who are able to quickly see the impact of their actions. Another source of motivation is the bonus scheme used across all aspects of the business. It is based on performance targets that are linked to the important elements of strategy in each function. Employee development is also consistent across the organisation and is structured around specific customer requirements. The one function that has a medium level of fit is customer service; this is because no formal performance measures are in place to ensure that customer relationships are managed and their requirements are effectively processed. Together Companies 4 and 5 show two alternative approaches to creating a high level of fit within an organisation’s operating strategy. Due to the high volume and standard service nature of Company 5, fit is created by using formal and structured methods that focus on its business processes. Company 4 uses an alternative approach; here the customer is the focus and the service offered and the ways of working are tailored to customer needs. The other high fit business within the research is Company 6. As with Company 5, it adopted a processed based approach. Figure A2.6 summarises the findings from the review of this organisation. Again, the level of fit is high within all four functions and across all dimensions of the operating strategy apart from the ‘important elements of the strategy’. The variance results from distribution and operations being focused on reducing costs, delivering on-time and reducing customer complaints; customer service not having a delivery focus; and

commercial that concentrate solely on managing contracts with customers and suppliers. However, there is high fit within each function in terms of where investments are made, how performance is measured and the way in which employees are incentivised, rewarded and developed. For instance, in the customer service function all dimensions of the operating strategy are orientated to reducing cost, such as the investment in a computer system to link activities and the performance measures used to manage and run the business. The low fit companies reveal a very different picture. Figure A2.3 in Appendix 2 shows the findings from Company 3. Here there is only high fit in terms of how employees are rewarded across all five functions of the business. On the other operating strategy dimensions, the level of fit is low. For instance, while there has been investment in a computer system to reduce the number of sites required for operations and customer service, there has been no investment in the other business functions. Equally, only two of the five functions use performance measures to manage activities and there is no employee incentivisation anywhere in the business. Not only is fit low across all the functions, but it is also low within each function. For example, in marketing, the important elements of strategy are to understand the dynamics of an unstable market, increase market share and develop new markets. However, there has been no investment to help achieve this, no employee incentivisation to encourage it to occur and no performance measures to see if it has happened. The analysis of Company 2 tells a similar story as shown in Figure A2.2 in Appendix 2. There was found to be low fit within the customer service, distribution and marketing functions. For example, the important element of the marketing strategy is to increase sales revenue, but this is not reflected in any of the other dimensions of its operating strategy. Instead, investments have been made to reduce the number of sites and hence reduce cost. Performance measures are not used and employees are not incentivised or developed. iii) SERVICE DELIVERY SYSTEM The service delivery system in each case study was reviewed by assessing six dimensions: • The key steps in the service delivery system – initially, the key steps in the service

delivery system that are managed by each function within the business were identified • The role of people, technology, equipment, layout and procedures – within each of

the steps in the service delivery system and each of the business functions in general • How capacity and demand are managed – in terms of aspects such as functional or

cross-functional teams and the use of different forecasting methods • How quality standards are ensured – the methods used to ensure the quality of the

service such as recording all customer contact (such as telephone and mail) and analysing a sample on a period basis

• How the service is differentiated from the competition – how the service provided is differentiated from that provided by the competition in terms of aspects such as the level of personalisation or customisation to meet different customer needs

• Competitors barriers to entry – the barriers that have been developed to prevent competitors entering the market such as the relationships developed with customers or the investments in people and technology that have been made

Five different collection methods were used to collate data on each of the six aspects shown above and then triangulated to test validity. As with the analysis of the previous two aspects of fit, data was then formatted so it could be reviewed for each case. Appendix 3 shows this analysis and the level of fit across each dimension of the service delivery system and within each function in the business. Again, colour coding is used to show if there is high, medium or low fit. A summary of the findings across all the case studies is outlined in Figure A10.2 in Appendix 10 and a visual representation of this summary is shown in Figure 6.4.

Figure 6.4 Level of strategic fit of service delivery systems in, and between, functions in each case study From looking at this, two main points emerge: • Higher fit than operating strategy or competitive criteria – overall the level fit within

the businesses studied, the level of fit within the service delivery system was the highest of the three dimensions of strategic internal fit. In fact, 5 (71%) of the companies had greater than 50% fit both within each function and across functions, 3 (43%) greater than 70% and 2 (29%) with 100%.

• Same within function and between functions – as with the level of fit in the operating strategies of the companies studied, the fit of the service delivery system tended to be of a similar level both within each function and between functions

Company 6 is an example of a high fit organisation, as shown in Figure A3.6 in Appendix 3. There is a high level of fit across all the dimension of the service delivery system and all the functions within the business. For instance, the customer interacts with a single individual during the delivery of the service. The customer service function interacts with the customer to establish job details and enters them into the computer system. Once the job has been set up, the distribution function travels to the site, completes the job and then updates the system. A single, simple integrated computer system links together the processes across all the functions and all the sites of the business. Work is allocated to individuals based in on their availability using an automated process. There are three customer service sites and four distribution sites. Each site handles a geographic region of customers and processes all the steps in the delivery system for those customers. Demand is forecast around these customer groups and each step in the

Le ve

l o f s

tr at

eg ic

fi t b

et w

ee n

fu nc

tio ns

(% )

Level of strategic fit within each function (%) 0 50 100

100

5 6

computer system. If any site becomes overloaded then work is automatically overflowed into the other sites. Formal procedures in the computer system are used with customer complaints and satisfaction surveys to ensure the service delivered meets a high quality standard. The speed at which it is able to deliver the service differentiates it from the competition and the fully integrated computer system, UK wide coverage and the high employee skill level all create barriers to entry for this market. The role of people, technology, equipment, layout and procedures is consistent across all the functions and sites of the business. As is the way capacity, demand and quality are managed, the service is differentiated from the competition and barriers to entry are created. Equally, within each site all the dimensions of the service delivery system are aligned with each other. As a result this is a high fit business. Company 4 is another example of an organisation displaying high level of fit and Figure A3.4 in Appendix 3 illustrates this within all functions. The role of people in delivering the service is high throughout, but it does vary by function. In customer service and distribution there is a small team that processes all customers, whereas in the sales and technical functions there is an account manager for each client. This account manager regular meets with the customers face-to-face and is responsible for monitoring and managing all contact between them and the business. The role of technology is less, with a simple computer system used in customer service and distribution, spreadsheets in sales and modelling software in the technical function. As with the analysis of the level of fit in the operating strategy, the findings from Companies 4 and 5 show that there are again two alternative approaches to creating a high level of fit. Company 5 emphasises the role of technology in delivering service reflecting its operating strategy of reducing cost. The high volume and standard nature of the business allows the use of automation in serving customers, ensure the required level of quality is met and that capacity and demand are managed. A similar approach is used in Company 6, which also has a high level of fit. By contract, Company 4 has a people-based method. Here, the focus is on managing customers by building and maintaining relationships with them. Account managers are used to delivering service to clients and get feedback from them. This ensures that the service delivered is of the appropriate quality and can be redesigned as and when required. The level of fit within the other five businesses was not as high. Figure A3.7 shows the findings for Company 7, the organisation with the lowest level of fit. Here we can see that whilst there is high fit within the three customer service sites, there is only a medium level of fit within distribution and the three sales sites. If we look at sales, we see that in house staff work in cross-functional teams to manage customer relationships and process transactions. These cross-functional teams are organised around customer groups within each of the three sites and use formal procedures and a simple computer system to process work. The high level of flexibility within each group means that they are able to manage capacity, but there is no demand forecasting and large queues of customers waiting to be served often build up. There is also no service differentiation from the competition or barriers to entry. Thus there is a lack of fit between these last three dimensions with the other aspects within the sales sites. In fact, there are no service differentiation or competitor barriers to entry within any of the functions in the business. The role of technology also varies – in customer service there is a complex integrated computer system that links all of the processes together, but distribution and sales just use simple spreadsheets that do not talk to the rest of the business. It was also found that customer service was the only function that forecasted demand and managed quality.

iv) OVERALL LEVEL OF STRATEGIC FIT The assessment of the overall level of internal strategic fit consists of three steps: 1. Categorise competitive criteria identified by executives – firstly, the competitive

criteria identified by the executives interviewed in each company were put into categories. For example in Company 7, ‘one stop shop’, ‘accurate and timely bills’, ‘account manager’ and ‘previous service experience’ were grouped as ‘customer service’.

2. Summarise dimensions of operating strategy and service delivery system – then, each of the dimensions of operating strategy and service delivery system were summarised to give a cross-functional perspective for the whole of the business

3. Compare operating strategy and service delivery system with categories of competitive criteria – finally, each summary of operating strategy and service delivery system was compared with the categories of competitive criteria identified by executives. In other words, did the operating strategy align with the competitive criteria and did the service delivery system align with the competitive criteria

All of this data was then placed into a table for each organisation, as shown in Appendix 4. The tables allow the data to be reviewed and the level of fit determined between the operating strategy and the category of competitive criteria; and also between the service delivery system and the categories of competitive criteria. Colour coding is again used to show if there is high, medium or low fit and the findings across all of the case studies are summarised in Figure A9.4 in Appendix 9. A visual representation of this summary is shown in Figure 6.5. Figure 6.5 Level of strategic fit of operating strategies and service delivery systems with competitive criteria groups identified by executives in each case study

S tr

at eg

ic fi

t w ith

o pe

ra tin

g st

ra te

gy (%

)

Strategic fit with service delivery system (%) 0 50 100

100

5 6

The results clearly show a wide range of overall internal strategic fit in the companies reviewed. At one extreme, Company 4 is significantly aligned across the three dimensions of internal strategic fit reflecting the fact that both its operating strategy and service delivery system is aligned with the competitive criteria identified as being important by executives. However, others such as Company 5 and Company 6 have highly aligned operating strategies and service delivery systems, but these are not orientated to the needs of their markets. For example, in both cases Brand Image was seen to be a highly significant order- winner in several market segments yet was not supported in anyway by the operating strategy or service delivery system. By contrast, the other four companies all had less than 50% level of fit. In the case of Company 1 there was virtually no fit between the competitive criteria and the operating strategy (12%) and service delivery system (11%). In fact, of the seven categories identified by executives only two (price and customer service) had any level of fit, and this was only 35% and 47% respectively. Lets now look in more detail at the analysis of Company 4 shown in Figure A4.4 in Appendix 4. This illustrates that there is high fit across all of the groups of competitive criteria. One such criterion is product design. Here we see that designing new products is an important element of its operating strategy with a technical plan in place for each customer and the objectives set out by this feed into employee incentivisation, reward and development. An account manager works with a client to identify opportunities for developing new products and ensure that existing products are designed to the appropriate standard. It is also important that products are delivered on time. This is reflected in the measures used to manage the business and the investments made in a computer system to link all the operations functions. At any point, customers are able to contact their account manager to rearrange delivery times or ascertain why problems may have occurred to ensure that they are not repeated in the future. Company 5 is another illustration of a high fit organisation. Here there is a high level of fit with some, but not all the competitive criteria. As Figure A4.5 in Appendix 4 shows, the operating strategy and service delivery system clearly support the criteria of customer service, price, safety and data integrity, but not brand image or technical capability. For example, price and the resultant need to reduce cost is supported by the investment in a computer system that links the operations functions and automates the majority of the business processes. Performance measures focus on reducing cost and the targets set are linked into a structured appraisal system that incentivises, rewards and develops employees. Employee bonuses are based on meeting these performance targets. However, price is not the only competitive criteria with which the business is aligned. For instance, there is also an equal level of fit with the customer service. Customer complaints and satisfaction surveys are used across the business to identify areas of poor quality and highlight opportunities for improvement. The computer system also ensures the service is delivered quickly and in line with customer requirements. As previously discussed in the sections on operating strategy and service delivery system, the approaches of Companies 4 and 5 highlight the alternative methods for achieving fit. Company 4 is more people based and focused on the customer, whereas Company 5 uses technology to deliver the service and focuses more on the process it uses to deliver this. The alternative approaches reflect the differing nature of the business and the markets in which they work. Company 5 operates in a high volume, price sensitive market while Company 4 is more concerned with developing new markets and managing relationships with existing customers. As with its operating strategy and service delivery system, Company 6 again uses a similar approach to Company 5 and achieves a comparable level of fit. The use of technology and the focus on the processes within the business is apparent in the findings from Company 6 in Figure A4.6 in Appendix 4. For example, customer service is an important element of its

operating strategy and is reflected in the performance measures it uses that are, in turn, linked into the structured appraisal system that it uses to incentivise, reward and develop its employees. In its delivery system, a single person using highly formalised procedures contained within the computer system serves each customer. The highly formalised procedures ensure the service is of the appropriate standard and the customer complaints and satisfaction surveys identify where the service level needs to be improved. By automating processes, the business has ensured that the cost of providing the service has been reduced, the service is provided as safely as possible and there is a high level of data integrity. For this reason, fit is high with all three criteria of price, safety and data integrity. However, there is only a medium level of fit for technical capability and low fit for brand image. The importance of these two competitive criteria is not reflected in either its operating strategy or service delivery system. So, within Company 4, we find high fit across all seven of its competitive criteria, whereas in companies 5 and 6, there is six criteria and we find only high fit on four, medium fit on one and low fit on one. These were the three organisations found to have the highest overall level of fit. The other five businesses researched show a different picture. Company 1 has the lowest fit of all the businesses researched, As shown in Figure A4.1 in Appendix 4, there is low fit across all of the seven important competitive criteria groups identified by executives, and no fit with five of them. For instance, the low fit on price results from investments to reduce the number of sites and the performance measures used. However, the need to reduce cost is not reflected in the way employees are incentivised, rewarded or developed. Equally, a few processes have been automated and capacity is tightly managed in some areas, while other parts of the organisation have piles of paperwork and excess staff levels. There is a similar level of support for the customer service competitive criteria. Reducing customer complaints is an important element of the operating strategy, is supported by the performance measures used, how quality is managed and the role of people, procedures and technology in delivering service. However, the importance of customer service is not reflected in any of the other dimensions of the operating strategy or service delivery system. For example, the lack of demand forecasting means customers typically have to wait for long periods before they are served. This lack of fit between the operating strategy and service delivery systems of an organisation and the important competitive criteria within the market it serves is also present within companies 2, 3, 7 and 8. In Company 2, for example, price and customer service are the only competitive criteria with which there is fit, but only at a medium and low level. In both instances, these criteria were identified as important elements of the operating strategy, investment has been made to support them and they are a focus of the performance measures used. But neither criterion was reflected in employee incentivisation, reward or development. In the service delivery system, we find a similar picture to Company 1. Not all processes are automated and capacity and demand are managed in some functions. As a result, there is only medium fit with price. The same is true for customer service. Company 3 has a slightly higher fit between its competitive criteria and operating strategy, but not its service delivery system. Price is supported by its investment to reduce the number of sites it operates, computer system to link the remaining sites and the performance measures used. But, again there is little support for any of the other competitive criteria. This is also the case in Company 7 and Company 8. v) SUMMARY OF LEVEL OF STRATEGIC FIT Based on the findings in the previous four sections, Figure 6.6 summarises the different levels of strategic fit within each of the eight organisations researched. It shows that three businesses can be considered ‘high fit’ as they have an average of more than 70% across all

eight measures of fit, and five businesses that are ‘low fit’ as they have an average of less than 50%. The businesses are split in the following way:  High fit – Company 4, Company 5 and Company 6  Low fit – Company 1, Company 2, Company 3, Company 7 and Company 8 Figure 6.6 Summary of level internal strategic fit in each organisation showing ‘importance of competitive criteria’, ‘operating strategy’, ‘service delivery system’ and ‘overall level’

Level of internal strategic fit (%)

Importance of competitive criteria Operating strategy

Service delivery system Overall level Company

Within function

Between functions

Within function

Between functions

Within function

Between functions

Operating strategy

Service delivery system

Average

4 100 100 86 80 83 78 94 84 88

TE 80 12 96 82 100 100 59 73 75 TM 40 9 96 82 100 100 59 73 70

3 100 77 23 34 37 42 29 10 44

SL 33 23 43 54 80 57 18 36 43 SM 25 14 43 48 63 63 29 40 41 SS 36 13 39 46 65 65 17 18 37 SD 35 10 43 54 62 58 12 11 36

Key

Indicates a score of less than 50 Indicates a score of 51 to 70 Indicates a score of greater then 70

This categorisation of ‘high fit’ and ‘low fit’ forms the basis for the analysis of the following research questions looking at how internal strategic fit is created, what business characteristics are present in a situation of fit or lack of fit and what elements within the evaluation model are present in a situation of fit or lack of fit. C. HOW IS INTERNAL STRATEGIC FIT CREATED? The findings from the last section showed the variance in internal strategic fit within the eight organisations researched. The next question is to understand the process with which the fit was created. To do this, each organisation was reviewed to determine the strategy process used based on the alternatives proposed by Slack and Lewis (2001):  Prescriptive – is the fit created through a top-down approach, was it is planned and then

implemented?  Emergent – is it a bottom-up activity where activities and improvements at a lower level

within the organisation cumulatively built to create the fit? And what elements of the business is the strategy built around:  Market-led – does the process of creating fit involve translating market requirements into

operating strategies and decisions?

 Resource-based – does the process of creating fit stem from the capabilities of the service operation itself?

Appendix 10 shows the characteristics of management in each organisation and orientation and process used to develop and implement strategy. Based on this analysis, a comparison is made of the different approaches with the resulting levels of internal strategic fit in each organisation, as shown below in Figure 6.8. Figure 6.8 Level of ‘within function’, ‘across all the functions’ and ‘overall level’ of internal strategic fit in each organisation and process by which it was created

Management in organisation Level of internal strategic fit (%)

Orientation Process Importance of competitive

criteria Operating strategy

Service delivery system

Overall level

Company

M ar

ke t-

le d

R es

ou rc

e- ba

se d

P re

sc ri

pt iv

E m

er ge

W ith

fu nc

tio n

B et

w ee

n fu

nc tio

W ith

fu nc

tio n

B et

w ee

n fu

nc tio

W ith

fu nc

tio n

B et

w ee

n fu

nc tio

W ith

fu nc

tio n

B et

w ee

n fu

nc tio

A ve

ra ge

4   100 100 86 80 83 78 94 84 88 5   80 12 96 82 100 100 59 73 75 6   40 9 96 82 100 100 59 73 70

3   100 77 23 34 37 42 29 10 44 8   33 23 43 54 80 57 18 36 43 7   25 14 43 48 63 63 29 40 41 2   36 13 39 46 65 65 17 18 37 1   35 10 43 54 62 58 12 11 36

Key

Indicates a score of less than 50 Indicates a score of 50 to 69 Indicates a score of greater then 70

It is again important to note that this research has started the exploration into the subject of internal strategic fit in service organisations. As such, its findings are not fully conclusive, but they do point to a number of issues:  Prescriptive and resource-based created high fit within ‘operating strategy’ and

‘service delivery system’ – a prescriptive and resource-based approach was used within Company 5 and Company 6. In both cases, this consisted of a business control framework that was developed and implemented as a way of creating internal strategic fit within each organisation, as outlined in Figure 6.9. This framework was used to link the overall strategic intent of the business to performance contracts of individuals and also provide an auditing process to ensure that action plans could be developed to eliminate any gaps identified. The framework focused on developing a number of key capabilities in the business that senior management felt were important to its success both now and in the future. This prescriptive and resource-based approach appeared to play a significant part in creating high fit within the operating strategy and service delivery system of each organisation.

Figure 6.9 Business control framework used in Company 5 and Company 6  Resource-based created low fit of ‘importance of competitive criteria’ – the

resource-based approached is used in Company 1, Company 2, Company 5, Company 6, Company 7 and Company 8. It seemed to create low fit on ‘importance of competitive criteria’ in all instances apart from ‘within function’ fit in Company 5. It was felt a reason for this is that senior management did not spend time debating and clarifying how the market segments into different customer groups, the needs of their customers or how orders were won against their competitors. Instead, their time concentrated more on the day-to-day running of the organisation and ensuring that the capabilities of the business were developed in line with what they thought was important, rather than reflecting the needs of the market. In all instances, this tended to be done in a reactive rather than a planned manner and, as such, an emergent approach to strategy development was used.

 Market-led created high fit of ‘importance of competitive criteria’ – a market-led

approach was used in Company 3 and Company 4 and seemed to be a factor in creating high fit on the ‘importance of competitive criteria’. Both businesses use a key account management process to work closely with customers and ensure their needs are identified and understood. In Company 4, customer needs then formed the basis for the development of the ‘operating strategy’ and ‘service delivery system’ contributing to a high ‘overall level’ fit. However, in Company 3, the business itself seemed too fragmented and disjointed for there to be high fit anywhere other than on ‘importance of competitive criteria’. Hence, there is low fit on all of the other dimensions. Why was this the case? It was felt that one of the key differences between these two firms was that Company 3 was operating in an emerging market, whereas Company 4’s market was very stable and established. Whilst Company 3 understood the ‘important competitive criteria’ in its markets; it had not yet developed the capability to meet these needs or the organisational flexibility to ensure that the changing demands of an emerging market are supported by

Strategic Intent

Performance Contracts

L i n k e d O b j e c t i v e s

Develop Action Plans

Compliance

Daily, Weekly, Monthly Review Cycle

(Exception Reporting)

Audit Process

Risk Register Gap Analysis

C O M M U N I C A T I O N

M A N A G E M E N T I N F O

Corporate Strategic Intent

• Performance, Reputation, Growth • Business Goals • Business Objectives

• Performance framework • Weekly exception reports • Daily performance updates • Individual performance • Review and challenge • Winter plans

100

its business. As such it was trying to meet distinctly different needs of three markets with a single operating strategy and service delivery system that in fact did not fit with any of the markets.

 Emergent and resource-based created low fit within ‘importance of competitive

criteria’, ‘operating strategy’, ‘service delivery system’ and ‘overall level’ – the emergent and resource-based approaches used within Company 1, Company 2, Company 7 and Company 8 led to low fit within all aspects of the business, apart from the ‘service delivery system’ where there was a medium level of fit. In these organisations, management tended to focus on the day-to-day operation of the business and only addressed the more strategic aspects as and when they became an issue. For this reason, the needs of markets were not debated or understood and operating strategy decisions did not fit with one another. The only element where there was some degree of fit was in the ‘service delivery system’ as this is where the day-to-day issues arise. However, although there was fit within the ‘service delivery system’ itself, it did not fit with the ‘important competitive criteria’ in the market.

 Emergent and market-led created high fit on all aspects – the emergent and market-

led approach was only used within one organisation, Company 4. However, in this it created a high level of fit on all of the different aspects.

This section has highlighted how alternative orientation and process of management appear to create differing levels of fit in the organisations researched. The next two sections look at this in more detail by understanding the business characteristics and the elements within the evaluation model that are present in a situation of fit or lack of fit. D. WHAT BUSINESS CHARACTERISTICS ARE PRESENT IN A

SITUATION OF FIT OR LACK OF FIT? In assessing the level of internal strategic fit within each organisation, an evaluation was also made of the characteristics of each business. This was done for three reasons: to build a database of cases that would both enable the subject of strategic internal fit to be researched; provide sufficient evidence to answer the research questions identified earlier in Chapter 3 and finally to determine if there were any certain business characteristics that were present in a situation of fit or lack of fit. The aspects that were reviewed in each case study concern the following: • Market characteristics – industry sector, # customers, # market segments, strength of

• Organisational size – # employees, # sites, # functions, # services offered to customers, annual sales revenue, annual sales volume

• Organisational structure – # functions, types of functions, # hierarchical levels within the business

• Employee characteristics – skill level, in-house or external • Operating strategies – types of payment and reward systems, types and orientation of

training and development activities, measures of performance

101

• Service delivery system – # steps, # sites involved in delivering service, # functions involved, types of functions involved, # employees involved, types of employees involved

• Specific event – change in management/ownership, restructure of the customer market, restructure of the employment market, restructure of the organisation, new service launched

As stated above, the purpose of this review was to understand some of the reasons why strategic internal fit or lack of fit might occur in an organisation. By looking at the characteristics of ‘high fit’ and ‘low fit’ organisations, three main points emerge:  Market characteristics of a business seem to have an impact on the level of internal

strategic fit within that organisation as shown in Figure 6.10  Management style used within an organisation also appears to impact the level of fit  All other characteristics of the business were not seen to have an impact on the level of

fit, such as organisational size, organisational structure, employee characteristics, operating strategies, service delivery system or a specific event

Figure 6.10 Some key differences between market characteristics of organisations with ‘high’ and ‘low’ internal strategic fit

Market characteristics Level of internal strategic fit (%)

Importance of competitive

criteria Operating strategy

Service delivery system

Overall level

Company

# m

ar ke

t s eg

m en

# se

rv ic

es o

ffe re

T ot

(s er

vi ce

s x

se gm

en ts

)

W ith

fu nc

tio n

B et

w ee

n fu

nc tio

W ith

fu nc

tio n

B et

w ee

n fu

nc tio

W ith

fu nc

tio n

B et

w ee

n fu

nc tio

W ith

fu nc

tio n

B et

w ee

n fu

nc tio

A ve

ra ge

4 2 8 16 100 100 86 80 83 78 94 84 88 5 4 2 8 80 12 96 82 100 100 59 73 75 6 4 2 8 40 9 96 82 100 100 59 73 70

3 4 5 20 100 77 23 34 37 42 29 10 44 8 6 10 60 33 23 43 54 80 57 18 36 43 7 7 5 35 25 14 43 48 63 63 29 40 41 2 4 5 20 36 13 39 46 65 65 17 18 37 1 7 5 35 35 10 43 54 62 58 12 11 36

Key

Indicates a score of less than 50 Indicates a score of 50 to 69 Indicates a score of greater then 70

The first two findings are now looked at in more detail. i) MARKET CHARACTERISTICS One of the key differences identified for ‘high fit’ businesses is that they have a low value of ‘number of market segments’ multiplied by ‘number of services’. Although neither the number of market segments or the number of service offered had an impact on the level of fit, the multiplication of these two variables did appear to result in a lower figure for companies with ‘high fit’ rather than those with ‘low fit’ as shown in Figure 6.10.

102

It was felt that these two variables indicate the nature of the market in terms of its complexity and service offering of the business. As such, it could be concluded that the less complex the market, the higher the level of fit within that business, particularly in terms of the ‘operating strategy’, ‘service delivery system’ and ‘overall level’. Intuitively, this would also seem to make sense as the simpler the market, the easier it is to understand and design a business to fit it. ii) MANAGEMENT STYLE CHARACTERISTICS As well as the market characteristics having an impact on the level of fit, another important dimension of the business seemed to be the management style used. This refers to the type and frequency of communication between the different members of the management team in each organisation. Figure 6.11 shows the management style used in ‘high fit’ and ‘low fit’ businesses. Figure 6.11 Some key differences between management style characteristics of organisations with ‘high’ and ‘low’ internal strategic fit

Organisation by internal level of fit

High Low Management style characteristics

4 5 6 3 8 7 2 1

Weekly   

Monthly      Face-to-face

Quarterly      

Telephone Weekly 

F or

m al

Total 3 3 3 1 2 1 1 1

Face-to-face Weekly 

Daily   

Weekly     Telephone

Monthly   

In fo

rm al

Total 2 2 2 - 1 1 1 1 R eg

ul ar

c om

m un

ic at

io n

w ith

o th

er m

em be

of th

ei r

m an

ag em

en t t

ea m

Total # types 3 3 5 1 3 2 2 2

Key

Not present Present

This analysis highlights three main points:  Formal weekly, monthly and quarterly face-to-face communication – within all three

‘high fit’ organisations there were formal weekly, monthly and quarterly communication between the different members of the management team

103

 Informal daily and weekly telephone communication – were present in all three ‘high fit’ companies. In ‘low fit’ companies it was not

 Informal weekly face-to-face communication – in the organisation with the highest level of overall internal fit, as well as the daily and weekly informal telephone communication between members of the management team there was also weekly informal communication due to the fact that all of the managers worked together in the same location and interacted together with each other as a team

Thus, it looks as if high fit results from high frequency of internal management communication that is face-to-face rather than over the telephone in style. In fact, the management teams of both Company 5 and Company 6 felt this to be the single most important aspect in the creation of internal strategic fit within their businesses. Through regular, face-to-face communication they are able to ensure that all the different dimensions and functions fit with each other and point in the same direction. E. WHAT ELEMENTS WITHIN THE EVALUATION MODEL ARE

PRESENT IN A SITUATION OF FIT OR LACK OF FIT? The last section looked at the business characteristics present within a situation of fit or lack of fit. This section now reviews the elements within the evaluation model that present in these situations:  Importance of competitive criteria – the number of market segments identified in high

fit or low fit businesses, competitive criteria identified within each segment, separating competitive criteria into order-winners and qualifiers; and, finally, the weighting of each order-winner and qualifier itself.

 Operating strategy – what were the important elements of the strategy within each function for high fit or low fit organisations, where are investments made, how the performance of the business is measured; and how employees are incentivised, rewarded and developed

 Service delivery system – the key steps in the service delivery system in a situation of fit or lack of fit, the role of people, technology, equipment, layout and procedures, how capacity and demand are managed, how quality standards are ensured, how the service is differentiated from the competition; and competitor barriers to entry

 Fit between the operating strategy and the important competitive criteria – a review of operating strategy dimensions to understand if they support the important competitive criteria identified by executives within a situation of fit or lack of fit

 Fit between the service delivery system and the important competitive criteria – a review of service delivery system dimensions to understand if they support the important competitive criteria identified by executives in high and low fit businesses

The findings regarding each of these aspects are summarised in Appendix 11 and the key points are now discussed. i) IMPORTANCE OF COMPETITIVE CRITERIA Figures A11.1 in Appendix 11 shows the level of fit both within the different functions of high and low fit businesses. Two main findings emerge from this analysis:  Customer Service function has highest within function fit – the highest level of within

function fit in is in the Customer Service function; there was also high fit within Sales. It was felt that this was because they are both customer-facing functions, with a high level

104

of customer contact and a key responsibility in meeting customer needs. Thus the requirement of understanding and agreeing customer needs is highest in this function.

 Distribution function lowest within function fit – by contrast, the distribution function is not customer facing and is often simply carrying out tasks that have been predetermined by other parts of the business, such as Customer Service or Sales. This may be the reason for it having the lowest level of fit

In terms of the level of agreement on different competitive criteria across the functions within each business, four key points emerge from the analysis in Figure A11.2 in Appendix 11:  Price competitive criteria has 100% agreement – within all the organisations

researched, price was identified as an important competitive criteria group in each company’s market, and there was 100% agreement across all functions that price was important

 ‘Traditional’ competitive criteria have high agreement – as well as price, the other competitive criteria groups traditionally identified in the operations strategy (for example delivery speed, delivery reliability and quality conformance) all had a high level of agreement.

 ‘Non-traditional’ competitive criteria have little or no agreement – across the ‘non- traditional’ competitive criteria groups such as ‘brand name/image’ and ‘account management/sales service’ there was little or no agreement across executives in different functions as to there importance in the company’s market(s)

As well as the aspects raised above regarding the general patterns that emerged from the findings across the different business there are also two key findings regarding the nature of ‘high fit’ organisations: • High number of ‘traditional’ competitive criteria – the competitive criteria identified as

being important tend to be those that are traditionally identified in the literature such as price, delivery speed, delivery reliability and quality conformance

• Higher level of market understanding – by comparison, in ‘low fit’ organisations the only agreement was on price as an important competitive criterion. The significance of the other order-winners and qualifiers within the market is not clearly understood

ii) OPERATING STRATEGY The findings regarding the level fit on operating strategy within each function are shown in Figure A11.3 in Appendix 11. From this, there seem to be two key features of ‘high fit’ organisations:  Performance measures have high fit within functions – there tends to be ‘high fit’

within performance measures both of an ‘internal business need’ and a ‘customer need’ nature. This is particularly so in the case of Company 5 and Company 6 where there is 100% fit.

 Employee dimensions have high fit within functions – as well as performance measures, there is also a high level of fit across all the employee dimensions of ‘incentivisation’, ‘reward’ and ‘development’. It was noticeable that, by contrast, there was a little or no fit on any of these dimensions within the ‘low fit’ organisations

Figure A11.4 in Appendix 11 shows the findings regarding the level of fit of the operating strategies across functions within the different organisations. From this, two main issues emerge:  Employee reward strategies have high fit within all organisations – the employee

reward strategies tended to have a high level of fit across functions, but in the case of the

105

‘low fit’ organisations were not in line with the other dimensions of operating strategy within each function

 Employee development had a low fit within the ‘low fit’ organisations – in fact, in four of the five cases there was no fit at all

iii) SERVICE DELIVERY SYSTEM The findings of the level of fit within and across functions on each dimension of the service delivery system are shown in Figures A11.6 and A11.7 in Appendix 11. From this it can be seen that there appear to be two key aspects of ‘low fit’ organisations:  No fit within service differentiation from the competition both within and across

functions – in all of the ‘low fit’ organisations there is no fit on this dimension, By contrast, there is 100% fit within the ‘high fit’ businesses

 No fit within competitor barriers to entry both within and across functions – for this dimension there is also no fit either within or across functions. And again, by contrast there is 100% fit within the ‘high fit’ businesses

iv) FIT BETWEEN OPERATING STRATEGY AND IMPORTANT COMPETITIVE

CRITERIA The fit between the operating strategy and the important competitive criteria can be assessed in two ways: the level of fit within each dimension of the operating strategy and the level of fit within each important competitive criterion. The first of these analyses is shown in Figure A11.8. Two main findings emerge from this review:  Employee incentivisation, reward and development are key in creating high fit – the

employee aspects of incentivisation, reward and development seem to be key in creating a high level of overall internal strategic fit in an organisation. There was a high level of fit across all of these for ‘high fit’ organisations, apart from employee incentivisation within Company 5 and Company 6. By contrast, in all of the ‘low fit’ organisations there was little or no fit in each of the employee dimensions

 Where investment are made is key in creating high fit – as well as the employee dimensions of operating strategy, where investments are made is also a key aspect of a ‘high fit’ organisation. In all three of the ‘high fit’ businesses, there was a high level of fit on this dimension

The second aspect of fit concerns that within each of the important competitive criteria identified by executives. The findings from this are shown in Figure A11.9 and lead to three main conclusions:  Price has highest level of fit in ‘low fit’ organisations – the competitive criteria with

which there was the highest level of fit was price, although this was still less than the 100% fit within the ‘high fit’ organisations

 In all other criteria there was little or no fit for ‘low fit’ organisations – of all the criteria other than price there was little or not fit, apart from the customer service competitive criteria for Company 2

 Brand name/image little or no fit – the competitive criteria of brand name/image had little or no fit both within ‘high fit’ and ‘low fit’ organisations

v) FIT BETWEEN SERVICE DELIVERY SYSTEM AND IMPORTANT COMPETITIVE

CRITERIA Figure A11.10 shows the findings regarding the level of fit within each service delivery system dimension and highlights four points:

106

 High level of fit across all dimensions for ‘high fit’ organisations – there is generally

a high level of fit across all dimensions for ‘high fit’ organisations  Low level of fit across all dimensions for ‘low fit’ organisations - there is generally a

low level of fit across all dimensions for ‘low fit’ organisations  No fit across the ‘service differentiation from the competition’ for ‘low fit’

organisations – there was 0% fit in all of the ‘low fit’ organisations. By contrast, there was a high level of fit for all of the ‘high fit’ organisations

 No fit across the ‘competitor barriers’ for ‘low fit’ organisations – as with the dimension of service differentiation from the competition, there was 0% fit within all of the ‘low fit’ organisation, In terms of the ‘high fit’ businesses, it was also low for Company 4, but high for Company 5 and Company 6

The findings regarding the level fit within each of the important competitive criteria identified by executives are shown in Figure A11.11. Three key points come from this:  High level of fit across all dimensions for ‘high fit’ organisations – there is generally

a high level of fit across all dimensions for ‘high fit’ organisations  Low level of fit across all dimensions for ‘low fit’ organisations - there is generally a

low level of fit across all dimensions for ‘low fit’ organisations  Brand name/image has no fit within any organisation – the competitive criteria of

brand name/image has 0% fit in all the six organisations in which executives felt it was important. This comprised two ‘high fit’ and four ‘low fit’ companies

F. HOW CAN FIT OR LACK OF FIT BE BEST PRESENTED? The previous sections in the chapter have outlined the concepts developed through the research. This section now looks at how the level of fit within an organisation can best be presented in a visual format. Its purpose is to build a management framework that can be used to help understand why the current level of fit exists in an organisation and how it can be improved or maintained. Based on the data gathered through the research, four different frameworks are developed for assessing the characteristics of the market, operating strategy and service delivery system within a business. These frameworks are then used to profile a ‘low fit’ and ‘high fit’ organisation to show how they can present and provide insight into the level of fit that exists. i) FRAMEWORKS TO PRESENT FIT A wide amount of data was gathered through the research to assess the level of fit on importance of competitive criteria, operating strategy and service delivery system within a business. This has been grouped to show the typical characteristics of each dimension within the companies studied and is shown in Appendix 12. The data has a number of different features: • Qualitative – the information is of a qualitative nature. For example, in terms of

assessing the demand management in a business a typical finding is that demand is ‘forecasted around customer groups and steps in the computer system’. This is qualitative, rather than quantitative data

• Multiple variable – there are multiple variables within the data in terms of both the different dimensions of each aspect of fit and also the different characteristics within each dimension. As Figure 6.26 shows there are 17 dimensions and 73 typical characteristics in total across the three aspects of fit

107

• Multiple position – as well as the data having multiple variables, there are also multiple positions to be represented. Figure 6.27 shows that on average 4 to 5 different positions need to be represented for each company researched on each aspect of internal fit

For these three reasons the decision was made to use the ‘service profiling’ method to represent the level of internal strategic fit within a business. The other benefits of this method are that it is a simple visual representation of data, it is easy to compile information and complete the analysis and it is easy to understand (see Figure 2.14). However, although the method of representation was appropriate, the dimensions contained within the frameworks outlined by Hill (1985) and/or Staughton and Williams (1994) were not. Instead, the dimensions and characteristics identified in the figures in Appendix 12 were used as a basis for producing the frameworks to be used to profile the characteristics of the market, operating strategy and service delivery system of a business. These are now discussed in more detail. a) Market characteristics The first, and most important characteristic of the market of an organisation is the competitive criteria that must be supported. Figure A12.1 in Appendix 12 summarises those found in the companies researched and groups them into the categories of price, design capability, customer service, delivery speed, delivery reliability and quality conformance. These are the different types of order-winners and qualifiers that characterised the markets of the businesses investigated. However, there were also other market dimensions that are important in understanding the level of fit within an organisation, as shown in Figure A12.2 in Appendix 12. These different characteristics are now discussed in more detail: • How orders are won? – typically the order-winners and qualifiers concerned the

following aspects: − Order-winning criteria – these tended to fall into two major groups. At one extreme

there was price, at the other the main order-winner was either design capability, delivery speed or customer service

− Qualifying criteria – delivery reliability and quality conformance tend to be common qualifiers in all markets. However price tends to be a qualifier when design capability, customer service or delivery speed is an order-winner and customer service tends to be a qualifier when price is an order-winner

• What does the company sell? – the companies either sell a ‘capability’ where design capability, customer service or delivery speed is the main order-winner; or they sell a ‘standard product/service’ where price is the main order-winning criteria

• Key task – the key task of the company concerns: − Business – ‘cost reduction’ in price sensitive markets or ‘responding to customer

needs’ in the case of design capability, customer service or delivery speed − Management – either achieving a high ‘throughput speed/efficiency’ or ‘managing the

product design/meeting customer schedules’ for less price sensitive markets • Order nature – the final characteristic of the market concerns the nature of the customer

orders themselves: − Order volume – is ‘high’ for price sensitive markets or ‘low’ for design capability,

customer service and delivery speed − Technical similarity – is ‘high’ for price, but ‘low’ for the others − Content – the work content involved in producing the product/service also varies in

terms of the amount of time involved in design, technical or the total work in satisfying the customer order

The different dimensions and typical characteristics of the market(s) of the companies researched have been placed into a framework shown in Figure 6.12.

108

Figure 6.12 Typical characteristics for each dimension of an organisation’s market(s)

Dimension of market Typical characteristics

Order-winning criteria Design capability, customer service,

delivery speed

Price

How are orders won?

Qualifying criteria Delivery reliability,

quality conformance, price

Delivery reliability,

quality conformance, customer service

What does the company sell? Capability Standard

product/service

Product/service customisation High

Low

Business Responding to customer needs

Cost reduction

Key task Management Product design/ meeting schedules

Throughput speed/ efficiency

Order volume Low

High

Technical similarity Low

High

Design High

Low

Technical High

Low

Order nature

Content

Work High

Low

Note: Based on the data in Figure A12.2 in Appendix 12. This can be used to profile the nature of a business’s market(s) and give an understanding of the markets impact on the level of fit. The examples of ‘high fit’ in Company 4 and ‘low fit’ in Company 3 later in this section show this in more detail. b) Operating strategy characteristics The findings from different operating strategies within the functions of the companies investigated have been summarised in Figure A12.3 in Appendix 12 and the resultant framework for profiling the operating strategy of the business in Figure 6.13. This shows that there are a number of typical characteristics of each dimension of the operating strategy:  Important elements of strategy – the important elements of the strategy are:

− Key business task – either ‘cost reduction’ or ‘responding to customer needs’, which includes meeting the market development, design capability and legal requirements of customers

− Key management task – managing the ‘throughput speed/efficiency’ of the function for price sensitive market(s) or ‘product design/meeting schedules’ for design capability, customer service and delivery speed

109

Figure 6.13 Typical characteristics for each dimension of an organisation’s operating strategy

Dimension of operating strategy Typical characteristics

Key business task Responding to customer needs

Cost reduction None Important elements of strategy

Key management task Product design/

Meeting customer requirements

Throughput

speed/ Efficiency

None

Service delivery system People

Technology/ Equipment None

Organisational structure Customer based teams

Centralised None Where investments are made

Advertising and promotion

Customer specific initiatives

Brand

development None

Internal-business need Level of customer support

Cost reduction None How performance is measured

Customer need Level of customer support

Cost reduction None

Incentivisation Customer need

Internal

business need None

Reward Customer need

Internal

business need None Employee

Development Customer need

Internal

business need None

Note: Based on the data in Figure A12.3 in Appendix 12.  Where investments are made – investments are made in three areas:

− Service delivery system – either in ‘technology/equipment’, ‘people’ or ‘no investment’ − Organisational structure – in ‘customer based teams’, a ‘centralised’ facility or ‘no

investment’ − Advertising and promotion – in ‘customer specific initiatives’, ‘brand development’ or

‘no investment’  How performance is measured – performance measures are orientated to:

− Internal-business need – ‘cost reduction/business financial performance or level of ‘customer support/people development’

− Customer-need – ‘cost reduction’ or ‘level of customer support’  Employee – employee characteristics concern:

110

− Incentivisation – around ‘internal-business needs’, ‘customer needs’ or ‘no incentivisation’

− Reward – based on ‘internal-business needs’, ‘customer needs’ or ‘no reward’ − Development – for ‘internal-business needs’, ‘customer needs’ or ‘no development’

c) Service delivery system characteristics The findings of the research in terms of the service delivery system characteristics of the companies studied are summarised in Figure A12.4 in Appendix 12 and form the basis of the framework in Figure 6.14. Each dimension has a number of different characteristics as now discussed:  Role of people – the role of people varies on three main criteria:

− Task – their main task in the business is to either ‘process work’ or ‘manage customers’

− Level of customer interaction – with the staff in the service delivery system is ‘high’ or ‘low’

− Organisational structure – people are organised in a ‘functional’ or ‘team’ structure − Resource – the people resource is ‘in house’ or ‘outsourced’

 Role of technology – technology characteristics concerns − Nature – the technology used in the delivery system is ‘complex’ or ‘simple’ − Level of flexibility – it is ‘dedicated’ to a certain number of product’s/services or it

‘flexible’ across many  Role of equipment – the level of automation is ‘high’ or ‘low’  Role of layout – layout varies on two dimensions:

− Number of sites – ‘single’ or ‘multiple’ sites in the delivery system − Structure – the delivery system has a ‘functional’ or a ‘team’ structure

 Role of procedures – the level of flexibility of the procedures used is ‘high’ or ‘low’  Capacity management – managing capacity involves:

− Number of sites – management of capacity across ‘single’ or ‘multiple’ sites − Structure – of a ‘team’ or ‘functional’ structure − Level of flexibility – with a ‘high’ or ‘low’ level of flexibility

 Demand management – managing demand concerns: − Forecasting – demand is forecasted around ‘people’ or ‘processes’ in the delivery

system − Manage mismatch with capacity – by ‘increasing resource’ or the use of ‘queues’

 Quality management of service delivery – through: − Nature – a ‘proactive’ or ‘reactive’ method − Orientation – focused on ‘people’ or the steps in the ‘process’ itself

 Service differentiation from the competition – the level of differentiation is ‘high’ or ‘low’

 Competitor barriers to entry – there is a ‘high’ or ‘low’ level of barriers to entry d) Overall level of fit Finally, a framework has been developed that enables the key elements of the market, operating strategy and service delivery system to be compared against each other and an overall assessment of the level of fit to be made. This is shown in Figure 6.15 and draws together the key dimensions from the market, operating strategy and service delivery system characteristics so that they can be compared with each other.

111

Figure 6.14 Typical characteristics for each dimension of an organisation’s service delivery system

Dimension of service delivery system Typical characteristics

Task Manage customers

Process work

Level of customer interaction

High

Low

Organisational structure

Team

Functional People

Resource In house

Outsourced

Nature Simple

Complex Technology

Level of flexibility Flexible

Dedicated

Equipment Level of automation

Low

High

Number of sites Multiple

Single Layout

Organisational structure

Team

Functional

Role of

Procedures Level of flexibility High

Low

Number of sites Multiple

Single

Structure Team

Functional Capacity

Level of flexibility High

Low

Forecasting People

Processes

Management

Demand Manage mismatch with capacity

Increase resource

Queues

Nature Proactive

Reactive Quality management of service delivery

Orientation People

Process

Service differentiation from the competition High

Low

Competitor barriers to entry High

Low

Note: Based on the data in Figure A12.3 in Appendix 12.

112

Figure 6.15 Typical characteristics of overall level of internal strategic fit of an organisation

Aspects Typical characteristics

Order-winning criteria Design capability, delivery speed

Price

How are orders won?

Qualifying criteria Delivery reliability, price

Delivery reliability, quality conformance

What does the company sell? Capability Standard

product/service

Product customisation High

Low

Business Responding to customer needs

Cost reduction

Key task Management Product design/

meeting schedules Throughput speed/

efficiency

Order volume Low

High Order nature

Technical similarity Low

High

Layout Decentralised

Centralised

Structure Team based

Functional Organisation

Orientation Customers Processes

Performance measurement orientation Level of customer support

Cost reduction

Employee incentivisation, reward and development orientation

Customer need Internal business need

Key task Managing customers

Processing work

Key resource People Technology/

equipment

Level of flexibility High

Low

Level of automation Low

High

Level High

Low

Service delivery system

Customer interaction

Type Face-to-face

Telephone

Quality management orientation People

Process

Level of service differentiation and competitor barriers to entry

High

Low

Note: Based on the data in Figures 6.28, 6.29 and 6.30.

113

ii) EXAMPLE OF LOW FIT IN COMPANY 3 In order to show how the four frameworks that have been developed can be applied to understand the level of fit within a business examples are now given of a ‘low fit’ and ‘high fit’ organisation. The ‘low fit’ organisation is Company 3 and the resultant profiles are shown in Figures 6.16, 6.17, 6.18, and 6.19. From this a number of conclusions can be drawn: • Different market characteristics – the company supports three markets all with

distinctly different characteristics. In Market 1 design capability is the key order-winner and the company is selling this capability through a high level of product customisation. However, Market 3 is at the other extreme and is very price sensitive and requires a standard product/service. Market 2 is a mix of the two, as it requires a higher level of customer service than Market 3 but the company still sells a standard product/service

• Different business and management tasks – the different market characteristics mean

that Company 3 is faced with a variety of business and management tasks. It has to respond to customer needs whilst at the same time reducing costs in the process, and ensure that there is a high level of efficiency whilst design product/service and meeting the customer schedules

• Single operating strategy and service delivery system – although it is faced with

these differing market characteristics and business and management tasks, it tries to meet them with a single operating strategy and service delivery system. The profiles in Figures 6.33 and 6.34 show that this has resulted in a low level of fit in both the operating strategy and the service delivery system, indicated by the fact that neither profile is a straight line

• Low overall fit – Figure 6.19 compares the market, operating strategy and service

delivery system of the business and shows the lack of fit caused by trying to meet all three market requirements through a singe operating strategy and service delivery system

This analysis shows that profiling the different aspects of strategic internal fit allows the business to more clearly see where the conflicts exist and start to understand the steps that can be taken to rectify this.

114

Figure 6.16 Characteristics of the three different markets of Company 3

Aspects Typical characteristics

Order-winning criteria Design capability, customer service,

delivery speed

Price

How are orders won?

Qualifying criteria Delivery reliability,

quality conformance, price

Delivery reliability,

quality conformance, customer service

What does the company sell? Capability Standard

product/service

Product/service customisation High

Low

Business Responding to customer needs

Cost reduction

Key task Management Product design/ meeting schedules

Throughput speed/ efficiency

Order volume Low

High

Technical similarity Low

High

Design High

Low

Technical High

Low

Order nature

Content

Work High

Low

Key

Market segment 1 Market segment 2 Market segment 3

115

Figure 6.17 Typical characteristics of the operating strategy for Company 3

Dimension of operating strategy Typical characteristics

Key business task Responding to customer needs

Cost reduction None Important elements of strategy

Key management task Product design/

Meeting customer requirements

Throughput

speed/ Efficiency

None

Service delivery system People

Technology/ Equipment None

Organisational structure Customer based teams

Centralised None Where investments are made

Advertising and promotion

Customer specific initiatives

Brand

development None

Internal-business need Level of customer support

Cost reduction None How performance is measured

Customer need Level of customer support

Cost reduction None

Incentivisation Customer need

Internal

business need None

Reward Customer need

Internal

business need None Employee

Development Customer need

Internal

business need None

Key Overview across all functions of the business

116

Figure 6.18 Typical characteristics of the service delivery system for Company 3

Dimension of service delivery system Typical characteristics

Task Manage customers Process

work

Level of customer interaction

High

Low

Organisational structure

Team

Functional People

Resource In house

Outsourced

Nature Simple

Complex Technology

Level of flexibility Flexible

Dedicated

Equipment Level of automation

Low

High

Number of sites Multiple

Single Layout

Organisational structure Team

Functional

Role of

Procedures Level of flexibility High

Low

Number of sites Multiple

Single

Structure Team

Functional Capacity

Level of flexibility High

Low

Forecasting People

Processes

Management

Demand Manage mismatch with capacity

Increase resource

Queues

Nature Proactive

Reactive Quality management of service delivery

Orientation People

Process

Service differentiation from the competition High

Low

Competitor barriers to entry High

Low

Key Overview across all functions of the business

117

Figure 6.19 Typical characteristics of overall level of internal strategic fit of Company 3

Aspects Typical characteristics

Order-winning criteria Design capability

Price How are orders won?

Qualifying criteria Delivery reliability, price

Delivery reliability, quality conformance

What does the company sell? Capability Standard

product/service

Product customisation High

Low

Business Responding to customer needs

Cost reduction

Key task Management Product design/

meeting schedules Throughput speed/

efficiency

Order volume Low

High Order nature

Technical similarity Low

High

Layout Decentralised

Centralised

Structure Team based

Functional Organisation

Orientation Customers

Processes

Performance measurement orientation Level of customer support

Cost reduction

Employee incentivisation, reward and development orientation

Customer need Internal business

need

Key task Managing customers

Processing work

Key resource People Technology/

equipment

Level of flexibility High

Low

Level of automation Low

High

Level High

Low

Service delivery system

Customer interaction

Type Face-to-face

Telephone

Quality management orientation People

Process

Level of service differentiation and competitor barriers to entry

High

Low

Key

Market segment 1 Market segment 2 Market segment 3

Overview across all functions of the business

118

iii) EXAMPLE OF HIGH FIT IN COMPANY 4 By contrast to the ‘low fit’ in Company 3, Figures 6.20, 6.21, 6.22 and 6.23 show the ‘high fit’ in Company 4. They illustrate that all aspects of the business are clearly aligned with each other. The main order-winners for all customers are design capability and customer service meaning that its key task is to design products and respond to the needs of customers. To do this it has created a decentralised, team-based organisation that is orientated around its customers. The performance measures that it uses are all customer-specific and orientated to understand the level of customer support is providing. These customer needs are also reflected in the way employees are incentivised, rewarded and developed in all of the functions of the business. The key task within the service delivery system is managing customers and it does this through flexible staff who meet face-to-face with customers on a regular basis. This highly personalised service, customer relationships that have built over the years and the high level of product customisation all mean that the service that it provides is highly differentiated from its competitors and there are high barriers to entry. Again, as with the previous example of ‘low fit’ in Company 3, this analysis clearly shows why there is a high level of fit in the organisation and gives an understanding of what must be done to maintain it. Figure 6.20 Typical characteristics of the markets of Company 4

Aspects Typical characteristics

Order-winning criteria Design capability, customer service,

delivery speed

Price

How are orders won?

Qualifying criteria Delivery reliability,

quality conformance, price

Delivery reliability, quality conformance,

customer service

What does the company sell? Capability Standard

product/service

Product customisation High

Low

Business Responding to customer needs

Cost reduction

Key task Management Product design/

meeting schedules Throughput speed/

efficiency

Order volume Low

High

Technical similarity Low

High

Design High

Low

Technical High

Low

Order nature

Content

Work High

Low

Key

Overview across all the markets of the business

119

Figure 6.21 Typical characteristics of the operating strategy for Company 4

Dimension of operating strategy Typical characteristics

Key business task Responding to customer needs

Cost reduction None Important elements of strategy

Key management task Product design/

Meeting customer requirements

Throughput

speed/ Efficiency

None

Service delivery system People

Technology/ Equipment None

Organisational structure Customer based teams

Centralised None Where investments are made

Advertising and promotion

Customer specific initiatives

Brand

development None

Internal-business need Level of customer support

Cost reduction None How performance is measured

Customer need Level of customer support

Cost reduction None

Incentivisation Customer need

Internal

business need None

Reward Customer need

Internal

business need None Employee

Development Customer need

Internal

business need None

Key

Overview across all the functions of the business

120

Figure 6.22 Typical characteristics of the service delivery system for Company 4

Dimension of service delivery system Typical characteristics

Task Manage customers Process

work

Level of customer interaction

High

Low

Organisational structure

Team

Functional People

Resource In house

Outsourced

Nature Simple

Complex Technology

Level of flexibility Flexible

Dedicated

Equipment Level of automation

Low

High

Number of sites Multiple

Single Layout

Organisational structure Team

Functional

Role of

Procedures Level of flexibility High

Low

Number of sites Multiple

Single

Structure Team

Functional Capacity

Level of flexibility High

Low

Forecasting People

Processes

Management

Demand Manage mismatch with capacity

Increase resource

Queues

Nature Proactive

Reactive Quality management of service delivery

Orientation People

Process

Service differentiation from the competition High

Low

Competitor barriers to entry High

Low

Key Overview across all the functions of the business

121

Figure 6.23 Typical characteristics of overall level of internal strategic fit of Company 4

Aspects Typical characteristics

Order-winning criteria Design capability

Price How are orders won?

Qualifying criteria Delivery reliability, price

Delivery reliability, quality conformance

What does the company sell? Capability Standard

product/service

Product customisation High

Low

Business Responding to customer needs

Cost reduction

Key task Management Product design/

meeting schedules Throughput speed/

efficiency

Order volume Low

High Order nature

Technical similarity Low

High

Layout Decentralised

Centralised

Structure Team based

Functional Organisation

Orientation Customers Processes

Performance measurement orientation Level of customer support

Cost reduction

Employee incentivisation, reward and development orientation

Customer need Internal business need

Key task Managing customers

Processing work

Key resource People Technology/

equipment

Level of flexibility High

Low

Level of automation Low

High

Level High

Low

Service delivery system

Customer interaction

Type Face-to-face

Telephone

Quality management orientation People

Process

Level of service differentiation and competitor barriers to entry

High

Low

Key

Overview across all functions of the business

122

G. COMPARISON WITH EXISTING LITERATURE This section compares the empirical findings that have emerged from the research with the existing literature on service operations strategy discussed earlier in the Chapter on Theory Development. Its purpose it to highlight the consistencies and inconsistencies with existing work in the field and, as a result, further develop the theories and ideas that have been identified. As Eisenhardt (1989: 544) notes, “An essential feature of theory building is comparison of the emergent concepts, theory or hypotheses with extant literature. This involves asking what is it similar to, what does it contradict, and why.” She went on to suggest three reasons for this comparison: • Increased confidence in the findings – if researchers ignore conflicting findings then

confidence in the findings is reduced • Forces a more creative, framebreaking way of thinking – comparison with conflicting

literature also “forces researchers into a more creative, framebreaking way of thinking than they might otherwise be able to achieve. The result can be deeper insight into both the emergent theory and the conflicting literature, as well as sharpening of the limits to generalisability of the focal research” Einsenhardt (1989: 544)

• Ties together similarities in phenomena – finally, discussing similar findings is also important as it “ties together underlying similarities in phenomena normally not associated with each other. The result is often a theory with stronger internal validity, wider generalisability, and higher conceptual level” Einsenhardt (1989: 544)

The findings have been outlined in the previous sections of the chapter and concern five areas: 1. Level of internal strategic fit 2. Process of creating internal strategic fit 3. Business characteristics and elements within the evaluation model that are present in a

situation of fit or lack of fit 4. Developing methodologies for existing conceptual frameworks – in this case, the Heskett

“strategic service vision” 5. Development of a management tool to assess internal strategic fit – a tool which can then

be used to present fit or lack of fit within a business Each area is now compared with the existing service operations strategy literature and the consistencies and inconsistencies are used to further strengthen the research findings. i) LEVEL OF INTERNAL STRATEGIC FIT In terms of the overall level of fit, the research found 38% of the companies were high-fit and 62% low-fit. Other authors who have both researched the presence or absence of external fit in manufacturing organisations from an operations perspective (Schroeder et al., 1986 and Boyer and McDermott, 1998) and from a corporate perspective (Miller, 1992) have also found variance in the level of fit: • 30% high-fit – Schroeder et al. (1986: 405) studied 39 companies and found that about

one-third to have of the companies appear to have a well-developed manufacturing strategy. In those cases where the manufacturing strategy exists it is consistent with the business strategy and internally consistent among mission, objectives, policies, and distinctive competence.

• 50% ‘high fit’ – Miller (1992: 166) analysed fit across three dimensions: environment, structure and strategic decision process within firms across a variety of industries of

123

which 62% were in manufacturing and 38% in services. Their findings showed that the sample spit evenly into 48 high-fit and 47 low-fit organisations. They also found significant variance on each of the three dimensions of fit analysed within each group.

• 57% ‘high fit’ – Boyer and McDermott (1999: 301) “three of the seven plants examined in this study lacked a high level of strategic consensus. Managers and operators in these firms were not in agreement as to what were the most and/or least important objectives for their plant.”

As well as variance in the overall level of fit, the research also found that fit varied across each of the three dimensions analysed. Fit was highest in the service delivery system, then the operating strategy and lowest in the agreement on competitive criteria. This is inconsistent with Boyer and McDermott (1999: 300) who found “the general level of agreement regarding competitive priorities is relatively high.” The reason for this inconsistency seems to lie in the approach to analysing the level of fit. Boyer and McDermott asked executives to only weight four competitive priorities: cost, delivery, flexibility and quality. My research asked individuals to select the dimensions before weighting them and it found that executives typically selected different criteria. It would therefore seem that Boyer and McDermott actually increased the level of fit by restricting the choice of options available. Other variances have been highlighted in the analysis of the importance of competitive criteria. Menda and Dilts (1997) found functional bias of which criteria were considered to be important. This was also present in this research, but there was also often a lack of agreement within the same function too. ii) PROCESS OF CREATING INTERNAL STRATEGIC FIT Whilst not conclusive, the research starts to indicate that emergent and planned strategy processes and market-led and resource-based orientations result in different levels of fit. This adds to Miller’s (1992: 175) findings that the environment, strategic decision process and structure vary between high-fit and low-fit organisations. The environment is more uncertain and diverse in high-fit organisations. These companies are characterised by an emergent strategy process where informal, intuitive decision-making was carried out in more flexible structures. By contrast, low-fit businesses have a prescriptive approach where planned, analytical decision making guided by explicitly codified strategies conducted in structures that emphasised formal controls and liaison devices. This is consistent with the findings that the company with the highest level of overall fit had an emergent and market-led approach. But it contradicts the findings that a prescriptive and resource-based method led to high fit within the ‘operating strategy’ and ‘service delivery system’. The possible reason for this contradiction is that Miller’s research looked at both the internal and external aspects of fit. He found that the uncertainty and diversity within the environment of the high-fit companies meant that an emergent strategy process was more appropriate. As this research focused solely on internal fit, the aspect of environment was not assessed and thus in some instances a perspective approach may have been appropriate as the environment of these organisations was more certain and less diverse. iii) BUSINESS CHARACTERISTICS AND ELEMENTS WITHIN THE EVALUATION

MODEL THAT ARE PRESENT IN ‘HIGH FIT’ AND ‘LOW FIT’ ORGANISATIONS

The findings revealed that two key business characteristics are present in a situation of ‘high fit’ companies: a simpler market in terms of number of segments and number of services offered and a higher frequency of face-to-face communication between the members of the management team in the business. It also found that a number of key elements within the evaluation model were present in ‘high fit’ companies. Figure 6.24 summarises the analysis

124

of the elements that findings and shows that a number of key elements are present in ‘high fit’ organisations: • Higher level of market understanding • Performance measures fit with both ‘internal-business’ and ‘customer’ needs • Employee incentivisation, reward and development are aligned • Consistent investment are made • Services are differentiated from the competition • There are strong competitor barriers to entry The existing research that has been conducted into external and internal fit in operations has found a number of elements to be present in high fit organisations (see Figure 6.25): • Higher involvement and influence of all functional executives (Papke-Shields and Malhorta, 2001) • Executives work and think cross-functionally (Papke-Shields and Malhorta, 2001) • Executives must understand the business as a whole and not just focus on the technical aspects

of their function (Papke-Shields and Malhorta, 2001) • Executives within all functions must be credible (Papke-Shields and Malhorta, 2001) • Effective communication was present between managers and operators (Boyer and

McDermott, 1999) • Management practices of consulting, inspiring, recognising, supportive, mentoring

planning, informing, and clarifying practices Kathuria and Davis (2001) These findings are at a lower, more detailed level than those that emerged from this research. However, it is felt that they are consistent with the findings. For example, a higher level of market understanding could result from executives working and thinking cross- functionally. Equally, consistent investments might be made across the business because executives understand the business as a whole and do not just focus on the technical aspects of their own function. So, whilst comparison with the literature does not seem to highlight consistencies or inconsistencies, what it does show it that further research is required to understand why the six elements found present in high fit companies exist. For example, why employee incentivisation, reward and development are aligned or why a higher level of market understanding exists.

125

Figure 6.24 Summary of analysis of the elements within the evaluation model that are present in a situation of ‘high fit’ or ‘low fit’

Level of fit within ‘high fit’ and ‘low fit’ organisations Aspect of fit

‘High fit’ ‘Low fit’

High

Customer Service Marketing Sales Technical

High Customer Service Within function

Low Distribution Low Distribution Customer Relations Corporate

High Price

High

Price Safety Delivery speed Delivery reliability Quality conformance Customer relationship Product/service design

Medium Delivery speed Delivery reliability Quality conformance

Importance of competitive criteria

Across function

Low Brand name/image Other

Low All other criteria

High All dimensions High Important strategy elements Within function Low - Low All other dimensions

High All dimensions High Employee reward Operating strategy

Across function Low - Low All other dimensions

High All dimensions High

Role of people Role of equipment Role of layout Role of procedures Quality management

Within function

Low - None Service differentiation Competitors barriers

High All dimensions High All other dimensions

Service delivery system

Across function

Low - None Service differentiation Competitors barriers

High Where investments made Employee reward Employee development

High - Operating strategy dimensions

Low - Low Employee incentivisation Employee reward Employee development

High

Price Delivery speed Delivery reliability Quality conformance Customer relationship Product/service design Other

Medium Price

Between operating strategy and competitive criteria Competitive

criteria

Low Brand name/image Low All other criteria

High All dimensions High - Service delivery system dimensions Low - Low All dimensions

High All other criteria Medium Customer service

Between service delivery system and competitive criteria

Competitive criteria Low Brand name/image Low All other criteria

126

Figure 6.25 Elements present in high fit organisations found in existing literature

Dimension Topic Author Elements present in high fit organisations

Factors that create fit Papke-Shields and Malhorta (2001)

• Higher involvement and influence of all functional executives

• Executives work and think cross- functionally

• Executives must understand the business as a whole and not just focus on the technical aspects of their function

• Executives must be credible

External fit

Alignment-performance relationships

Smith and Reece (1999)

• Fit across operational elements more important than choice of strategy

Fit between managers and operators

Boyer and McDermott (1999)

• Effective communication between managers and operators

Internal fit Fit between priorities

and workforce management practices

Kathuria and Davis (2001)

• Management practices of consulting, inspiring, recognising, supportive, mentoring planning, informing, and clarifying practices

ii) DEVELOPING METHODOLOGIES FOR EXISTING CONCEPTUAL FRAMEWORKS Authors have argued that service research has moved beyond the primary classification stage and, therefore, it is now necessary to validate the generally accepted concepts/frameworks and develop specific methodologies for their use (Verma and Thompson, 1999 and Roth and Menor, 2003). In making an assessment of the level of fit in an organisation, methodologies have been developed for using the Heskett (1986) ‘strategic service vision’, shown in Appendix 13, and the order-winner and qualifier technique developed by Hill (1985), shown in Appendix 14. The Heskett (1986) ‘strategic service vision’ framework has not been previously applied and although in his later work (Heskett et al., 1990) he talks about the difference in approach to developing a vision of the service business between ‘merely good’ and ‘breakthrough’ service providers (see Figure 6.26), he still doesn’t outline the steps to be taken to apply the framework. As such, it is not possible to compare the methodology developed to any that have previously existed.

127

Figure 6.26 Developing a vision of the service business

Dimension “Merely good” service providers Breakthrough service providers

Definition of service concept

Define their service concept and their business in terms of services, processes, or even equipment by which they are delivered

Define their service concept and their businesses in terms of results produced for customers

Customer targeting

Identify target customers primarily on demographic dimensions (age, income, etc.)

Identify target customers primarily on psychographic dimensions (life- styles, perceived risks, etc.)

Operating strategy formulation

Formulate operating strategies to provide conventional “low cost” or “differentiation” advantages over competitors

Develop operating strategies that leverage value for customers over cost, often achieving both low cost and significant differentiation

Service delivery system design

Design service delivery systems that focus on reliable and timely service delivery

Design service delivery systems that offer customer assurance and tangible evidence of the service (“leave behinds”, uniforms, etc.) as well as reliability and timeliness

Note: Taken from Heskett et al (1990: 261) In terms of the methodology for applying Hill (1985) order-winners and qualifiers, Hill (2004: 54) identifies the approach to be taken in understanding markets, but does not identify the steps involved in determining order-winners and qualifiers. However, Menda and Dilts (1997: 231) used this concept to manufacturing organisations in the following way: 1. Selection of a relevant set of order-winning criteria 2. Identification of functional views 3. Determination of final set of criteria This methodology varies from that used in this research in three main ways. Firstly, in the ‘selection of a relevant set of order-winning criteria, Menda and Dilts (1997: 231) noted, “Considering the participants’ unfamiliarity with the concepts, and to help keep the discussion focused, it was decided to present the group with a pre-selected and relevant set of order- winners to choose from, but also giving them the option to add other criteria if they deemed necessary.” In my research, pre-selected and relevant criteria were not used. However, unlike Menda and Dilts who used surveys to interview executives, my interviews were conducted face-to-face. This meant that the concepts could be explained to the executive being interviewed and, as such, unfamiliarity was not an issue. This meant that the discussion was able to determine what they felt were the key criteria without their responses being influenced by pre-selected dimensions. As a result, it is felt that the findings are richer, because for internal strategic fit to truly exist, executives must be able to select these criteria as well as weight them. The second difference is in the step of ‘Identification of functional views’. Here, Menda and Dilts (1997: 232) comment, “To expose the participants to all of the responses and to determine the final set of order-winners, all functional representatives were brought to a group meeting which started with an overview of manufacturing strategy concepts and the

128

specific process model being used. This was the first opportunity for all participants to debate the strategic aspects of manufacturing, realise the impact of marketing on manufacturing, and see how the order-winning criteria could provide the important link between marketing and operations functions.” This was not included in the methodology used in this research, but it would have been a useful step. By consolidating functional perspectives using executives’ opinions rather than the researcher, bias would have been removed and the depth of the research increased. It would also start to use order-winners and qualifiers as more than just a tool for assessing the importance of competitive criteria, but also illustrate and understand the impact of different functions on each other and how they can better work together. Therefore, the initial methodology proposed has now been modified to include this step as shown in Figure A14.2 in Appendix 14. iii) DEVELOPMENT OF A MANAGEMENT TOOL TO ASSESS INTERNAL

STRATEGIC FIT The need for management tools has been widely discussed in the literature for businesses to become more competitive (Menda and Dilts, 1997: 239), develop and represent strategies (Mills et al., 1998: 1083) and understand the level of strategic fit that exists (Staughton and Williams, 1994: 84). As a result, there have been calls for the development of further frameworks to assist managers in formulating strategy in service organisations (Edgett and Parkinson, 1993) that would be more powerful if presented in a simple, visual form (Spence and Lewardowsky, 1990). Specifically, the literature has highlighted two disadvantages of Heskett’s (1986) strategic service vision. The model doesn’t provide the service manager with any means of identifying where the gaps may be (Staughton and Williams, 1994) and it requires further development to create an effective management tool (Gianesi and Correa, 1993). The third set of findings from the research concerns developing a management framework to allow a business to present level of fit within their organisation. This allows the business to understand why the current level of fit exists and how it can be improved or maintained. It is developed from Heskett’s strategic service vision and has overcome the criticisms of Staughton and Williams (1994) and Gianesi and Correa (1993). It is the first management tool to be developed for applying the strategic service vision and so cannot be compared directly against another tool. However, there are a number of other similar tools that have been proposed within the literature that are said to provide benefits and uses for both managers and researchers: • More precise than verbal definitions (Shostack, 1984a) • Easier to understand than verbal approaches as they order and structure information

(Weick, 1985) • Easier to communicate strategies than through verbal approaches (Mills et al., 1998) • Allow managers to formulate and plan action (Mills et al., 1998 and Shostack, 1984a) • Encourages creativity, pre-emptive problem solving and controlled implementation

(Shostack, 1984a) • Easier to understand actions and their consequences (Mintzberg and Waters, 1985) • Provoke discussion and debate (Mills et al., 1998) • Make frameworks accessible to the practising manager (Platts and Gregory, 1990) • Provide logic, data and analysis upon which decisions are made and can be revisited at

a later point (Platts and Gregory, 1990) • Compare different markets and services on two or three attributes simultaneously

(Shostack, 1987)

129

It is felt that the management tool proposed in the research meets the criteria outlined above and gives the same benefits to managers. However, this conclusion is only based on the limited amount of feedback from executives during the process of the research. Further research is required to test this and understand if any further developments need to be made. This is discussed in more detail later in Chapter 9. H. SUMMARY AND CONCLUSIONS The purpose of the research was to determine if internal strategic fit exists within service businesses, how it is created, what elements are present in a situation of fit or lack of fit and how can fit or lack of fit within a business be best presented. The findings from the research investigation are presented in this chapter and the key aspects are now summarised. The first finding is the significant variance in the level of fit within each of the companies researched. This variation was in terms of the companies themselves and the aspects of fit being analysed. Three businesses are considered to be ‘high fit’ as they have an average of more than 70% across all eight measures of fit, whereas five businesses are considered ‘low fit’ as they have an average of less than 50%. Overall, across the eight companies analysed, fit was highest in the service delivery system, second in the operating strategy and lowest in the importance of competitive criteria. Given that there are ‘high fit’ and ‘low fit’ organisations, the next set of findings concern how internal strategic fit is created within a business. It was found that a ‘market-led’ strategic orientation would appear to result in a high level of fit on importance of competitive criteria, whereas a ‘resource-based’ focus does not. In fact, the combination of a ‘resource-based’ orientation and an ‘emergent’ process of strategy development seems to create low fit on all three aspects. By contrast, ‘prescriptive’ and ‘resource-based’ look to create high fit within the operating strategy and service delivery system, but not the importance of competitive criteria. The researched also reviewed the business characteristics that appear to be present in a situation of fit or lack of fit. It found that both the market and management style characteristics of a business seem to impact the level of fit in an organisation. The two key characteristics present in a situation of ‘high fit’ are a simpler market in terms of number of segments and number of services offered and a higher frequency of face-to-face communication between the members of the management team in the business. It also seems that a number of key elements within the evaluation model are present in ‘high fit’ companies. Figure 6.24 in the previous section on comparison with existing literature summarises these findings and shows that a number of key elements appear to be present in ‘high fit’ organisations: • Market understanding – is higher in ‘high fit’ rather than ‘low fit’ companies with a higher

level of agreement on important competitive criteria  Performance measures – have high fit both in terms of ‘internal-business need’ and

‘customer need’  Employee incentivisation, reward and development – all have a high level of fit in

‘high fit’ companies. By contrast, employee development had a low level of fit within the ‘low fit’ organisations. In fact, in four of the five cases there was no fit at all

 Where investment are made – has a high level of fit within all the ‘high fit’ organisations  Service differentiation from the competition – there is 100% fit within the ‘high fit’

businesses. In ‘low fit’ organisations there is no fit on this dimension  Competitor barriers to entry – as with service differentiation, it is 100% within the ‘high

fit’ businesses and 0% within the ‘low fit’ businesses

130

So far, these findings show concepts that have been built from answering the first three research questions. However, the next set of findings concern the building a managerial framework with which to best show the fit or lack of fit within a business. Based on the data collected through the research, four frameworks have been developed that allow a business to profile of their characteristics. These are shown in Figures 6.12, 6.13, 6.14 and 6.15. They look at the market, operating strategy, service delivery system and overall level of fit in an organisation. Using these frameworks it is possible to assess the different aspects of strategic internal fit and allow businesses to see where conflicts exist and understand the steps that can be taken to rectify this. In order to demonstrate how the frameworks can be applied, examples are given of a ‘low fit’ and a ‘high fit’ organisation. The resulting profiles for the ‘low fit’ business of Company 3 are outlined in Figures 6.16, 6.17, 6.18 and 6.19. The low overall fit is caused by trying to meet all three distinctly different market requirements with a singe operating strategy and service delivery system. The result is low fit in the operating strategy, service delivery system and also between these two elements and the important competitive criteria. The frameworks can also be used to understand why ‘high fit’ exists. The profiles for Company 4 in Figures 6.20, 6.21, 6.22 and 6.23 allow us to understand why there is a high fit in the organisation and what must be done to maintain it. The key order-winners for all customers are design capability and customer service, thus its key tasks are to design products and respond to the needs of its customers. This is reflected in all of the dimensions of its operating strategy and service delivery system. The final finding is that by conducting the research, a methodology for applying the Heskett (1986) ‘strategic service vision’ was developed concerning how data is collected, represented and analysed: • Data collection – data was collected using a variety of different methods for each

dimension being reviewed within each aspect of strategic internal fit as shown in Figure A13.1 in Appendix 13. Within this collection process, a number of sets of structured questions were used to interview executives and these are summarised in Figures A13.2, A13.3, A13.4 and A13.5 in Appendix 13.

• Data representation – the information collected was then put into various frameworks to

enable it to be analysed. Based on the dimensions within the Heskett model, six tables were used to compare the different aspects of fit. These are shown in Figures A13.6, A13.7, A13.8, A13.9, A13.10 and A13.11 in Appendix 13 and they are used to assess fit in the importance of competitive criteria, operating strategy, service delivery system, between the operating strategy and competitive criteria, between the service delivery system and competitive criteria and the overall level of fit.

• Data analysis – the tables used to represent the data were also used to analyse the

level of strategic fit ‘within function’ and ‘across all functions’ on each aspect. The assessment that was made then formed the basis of whether a business was defined as ‘high fit’ or ‘low fit’. ‘High fit’ was defined as an average of more than 70% across all of the measures of fit, whereas ‘low fit’ was less than 50%.

One of the steps within the data collection phase of applying Heskett’s ‘strategic service vision’ involved the use of the Hill (1985) order-winner and qualifier methodology. The structured questions used in the application of this are shown in Figures A14.1 and A14.2 Appendix 14 and the framework used for representing and analysing the data collected is shown in Figure A14.3 in Appendix 14.

131

7. CONCLUSION This chapter summarises the conclusions from all the chapters looking at the work to date in the field of service operations strategy, the research questions used, the methodology adopted, the multiple case study design employed and the findings from the work undertaken. It looks at the purpose of the research, its main findings, the subsequent contribution that has been made to the field of service operations management and reflects on the limitations of the work completed. A. INTRODUCTION The chapter consists of five sections: 1. Purpose of the research – it has been identified that there is a gap within the literature

in terms of research into the dimension of internal strategic fit within service businesses. The purpose of the research was to conduct an exploratory investigation into this area. It aimed to build concepts regarding whether internal strategic fit exists, how it is created and the elements that are present in a situation of ‘high fit’. It also intended to build a conceptual framework with which to best show the fit or lack of fit within a business

2. Findings from the research – the findings from the research revealed that there was a significant variance in the level of fit within each company and across each aspect of fit. The strategic process used had an impact on the level of fit, as did its market and management characteristics. Within the evaluation model there was also a particularly high level of fit on certain dimensions in a ‘high fit’ organisation. Based on the data collected through the research a framework was developed that enables a business to profile the different aspects of strategic internal fit, see where the conflicts exist and start to understand the steps that can be taken to rectify this

3. Contribution to the field of service operations management – based on its purpose and findings, the contribution to the field of service operations management is assessed. The research is the first step in filling the gap in the literature in the area of internal strategic fit within service businesses

4. Research limitations and reflections – this section reflects on the research completed and highlights its limitation

5. Future research – areas that need to be further investigated 6. Summary – finally, the key points from the chapter are highlighted and summarised B. PURPOSE OF THE RESEARCH The service operations management literature has developed significantly since the mid 1980s. However, the orientation of the research issues addressed has been predominantly operational and not strategic (Johnston, 1999). Thus, there is still a strong need to conduct research in the area of service operations strategy. Particularly in terms of validating the concepts that have been identified and developing methodologies for using these frameworks (Gianesi and Correa, 1993; Roth and Menor, 2003; Verma and Thompson, 1999). Within the literature, it is commonly agreed that the effectiveness of a business’s operations strategy can be measured by the degree of linkage or consistency between the competitive

132

priorities which are emphasised and the corresponding decisions regarding the structure and infrastructure of operations (Hayes and Wheelwright, 1984; Adam and Swamidass, 1989; Anderson et al., 1989; Leong et al., 1990; Hill, 1994). This linkage is referred to as ‘strategic fit’ and has two different dimensions (Draaijer, 1993): • External - Are operations processes and infrastructure consistent with the

competitive configuration in the market

• Internal - Consistency between the operations strategy and the overall business strategy

- Consistency with the other functions in the company - Consistency between the constituent elements and processes of the

operations system The research conducted to date on both dimensions of strategic fit has been predominantly associated with manufacturing businesses. The only two sets of authors who investigated the concept of strategic fit in service organisations are Nayyar (1992) and Smith and Reece (1999). Both of these concerned themselves with the relationship between fit and performance within the external aspect of fit. Thus, there is a gap within the literature in terms of research into the dimension of internal strategic fit within services businesses. The purpose of this research was to conduct an exploratory investigation in service organisations into the area of internal strategic fit by reviewing three key aspects within a business: • Importance of different competitive criteria in the firm market(s) – which markets a

company serves. The competitive criteria employees consider important. Do the criteria vary in importance within the different markets? (Menda and Ditts, 1997; Boyer and McDermott, 1999). The level of importance of competitive criteria identified by executives in each business was analysed using the market order-winners and qualifiers technique developed by Hill (1985)

• Operating strategy – are the operating strategies of each of the functions consistent with each other in terms of aspects such as investments, performance measures and employee incentivisation? (Heskett, 1986). The technique and dimensions used to analyse the operating strategy was Heskett’s (1986) “strategic service vision”

• Service delivery system – are the different steps in the service delivery system, provided by different functions, aligned with each other? (Heskett, 1986). A review of this aspect was conducted using Heskett’s (1986) “strategic service vision”

The purpose of the research was to build theory within the field of service operations strategy and the final product was to develop concepts, such as the Mintzberg and Waters (1982) deliberate and emergent strategies, and a conceptual framework, as with Harris and Sutton’s (1986) framework of bankruptcy. The first three research questions were concerned with building concepts: Does internal strategic fit exist within service businesses? How is fit created? And what elements are present in a situation of fit or lack of fit? Whereas the fourth question is concerned with building a conceptual framework with which to best show the fit or lack of fit within a business. The decision was made to use a multiple case study design because the research question is one of ‘how and why’ as opposed to one of ‘who, what, where, how many and how much’ (Yin, 1994: 6), it focuses on contemporary events, does not require control over the behavioural proceedings being investigated (Yin, 1994: 6) and its theory building nature means it concerns identifying key variables, identifying linkages between these variables and identifying ‘why’ these relationships exist (Voss et al., 2002: 198).

133

Eight case studies were investigated as it was felt this would be a sufficient number to overcome the problems of observer bias and lack of generalisability of findings, but at the same time not too great a number to significantly reduce the depth of research within each case (Eisenhardt, 1989; Voss et al., 2002). Case studies were selected using replication logic in order to build a database that would enable both the subject of strategic internal fit to be researched and also provide sufficient evidence to answer the research questions (Eisenhardt, 1989; Voss et al., 2002; Yin, 1994). The cases selected had a range of characteristics in terms of the markets they serve, their organisational size and structure, the style of management within the business, the types of employees, the operating strategies and service delivery systems used; thus creating the literal and theoretical replication required to build theory. Once it was felt that theoretical saturation had been reached no further case studies were added (Eisenhardt, 1989: 545). Within each of the case studies, data was collected using site visits, documentation, archival information analysis, structured interviews, unstructured interviews and observation. At least two and often as many as five methods were used to collect data on a dimension of internal strategic fit within each business researched. During this process, the results were perceptually triangulated to assure that the facts being collected were indeed correct and increase the validity of the theory being developed (Yin, 1994). C. FINDINGS FROM THE RESEARCH The findings from the research revealed that there is significant variance both in the level of fit within each company and across each of the three aspects of strategic internal fit. Three businesses are considered to be ‘high fit’ as they have an average of more than 70% across all measures of fit, whereas five businesses are considered ‘low fit’ as they have an average of less than 50%. Across the eight companies analysed, fit was highest in the service delivery system, second in the operating strategy and lowest in the importance of competitive criteria. How fit is created and the characteristics that are present in ‘high fit’ organisations are summarised in Figure 7.1. Figure 7.1 How fit was created, business characteristics and elements of the evaluation model that were present in a ‘high fit’ organisation

Aspect Characteristics that were present in ‘high fit’ organisations

How fit is created

• Market-led’ strategic orientation resulted in a high fit on importance of competitive criteria

• ‘Market-led’ and ‘emergent’ created high fit within all aspects • ‘Prescriptive’ and ‘resource-based’ created high fit within the

operating strategy and service delivery system, but not the importance of competitive criteria.

Business characteristics

• Simpler market in terms of number of segments and number of services offered

• Higher frequency of face-to-face communication between the members of the management team in the business

134

Elements of the evaluation model with high level of fit

• Market understanding and agreement on important competitive criteria

 Performance measures used  Employee incentivisation, reward and development  Where investments are made  Service differentiation from the competition  Competitor barriers to entry

In terms of how fit is created in a business, the findings showed that a ‘market-led’ strategic orientation appears to create high fit on importance of competitive criteria, whereas a ‘resource-based’ focus does not. In fact, the combination of a ‘resource-based’ orientation and an ‘emergent’ process of strategy development seems to create a low fit on all three aspects. By contrast, ‘prescriptive’ and ‘resource-based’ look to create high fit within the operating strategy and service delivery system, but not the importance of competitive criteria. Interestingly, the organisation with the highest overall level of fit used a ‘market-led’ and ‘emergent’ strategic process. The market and management style characteristics of a business also seem to impact the level of fit. The two key characteristics present in a situation of ‘high fit’ were a simpler market in terms of number of segments and number of services offered and a higher frequency of face-to-face communication between the members of the management team in the business. Within the evaluation model there appears to also be a particularly high level of fit on the following dimensions in a ‘high fit’ organisation: • Level of market understanding and agreement on important competitive criteria  Performance measures used  Employee incentivisation, reward and development  Where investments are made  Service differentiation from the competition  Competitor barriers to entry The findings on the level of fit, how it is created and the characteristics present in ‘high fit’ businesses are all concepts that emerged from the research. As well as these concepts, the other main finding concerns the development of a managerial framework that allows businesses to present and assess their level of fit. Based on the data collected through the research, four frameworks were developed that enable businesses to profile their market, operating strategy and service delivery system characteristics (see Figures 6.28 to 6.31). Using these frameworks it is possible to assess the different aspects of strategic internal fit and see where conflicts exist and understand the steps to rectify this. Examples were given of both a ‘low fit’ and ‘high fit’ company to show how the frameworks can be used (see Figures 6.32 to 6.35 and 6.36 to 6.39) and the insights they reveal are summarised in Figures 7.2 and 7.3.

135

Figure 7.2 Example of the insights that can be gained through profiling the market, operating strategy, service delivery system and overall characteristics of Company 3 a ‘low fit’ organisation

Business characteristic Insights revealed through profile of Company 3

Market

• Different market characteristics – Company 3 supports three

markets all with distinctly different characteristics. In Market 1 design capability is the key order-winner and the company is selling this capability through a high level of product customisation. However, Market 3 is at the other extreme and is very price sensitive and requires a standard product/service. Market 2 is a mix of the two, as it requires a higher level of customer service than Market 3 but the company still sells a standard product/service.

• Different business and management tasks – the different market

characteristics mean that Company 3 is faced with a variety of business and management tasks. It has to respond to customer needs whilst at the same time reducing costs in the process

Operating strategy

• Single operating strategy – although it is faced with these differing

market characteristics and business and management tasks, it tries to meet them with a single operating strategy. This has resulted in a low level of fit within its operating strategy indicated by the fact that it is not a straight line. It has tried to meet the needs of all three markets but has ended up not fully meeting the needs of any of them.

Service delivery system

• Single service delivery system – as with the operating strategy, it

has tried to meet the differing market characteristics and business and management tasks with a single service delivery system. Again, the result is a low level of fit as indicated by the fact that the profile is not a straight line.

Overall

• Low overall fit – the overall comparison of the market, operating

strategy and service delivery system of the business shows the lack of fit caused by trying to meet all three-market requirements through a singe operating strategy and service delivery system.

136

Figure 7.3 Example of the insights that can be gained through profiling the market, operating strategy, service delivery system and overall characteristics of Company 4 a ‘high fit’ organisation

Business characteristic Insights revealed through profile of Company 3

Market

• Single market characteristics – the main order-winner for all of the

customers that it serves is design capability and customer service • Single business and management task – the main order-winner of

design capability and customer service means that its key task is to design products and respond to the needs of its customers

Operating strategy

• Decentralised and team-based organisation – to meet the needs of

the market and its key business and management tasks it has created a decentralised, team-based organisation that is orientated around its customers.

• Customer orientated and specific measures – the performance

measures that it uses are all customer-specific and orientated to understand the level of customer support it is providing

• Customer orientated employee incentivisation, reward and

development – these customer needs are also reflected in the way employees are incentivised, rewarded and developed in all of the functions of the business

Service delivery system

• Flexible staff with high customer interaction – the key task within

the service delivery system is managing customers and it does this through flexible staff who meet face-to-face with customers on a regular basis.

• Personalised service and strong customer relationships – this

highly personalised service, customer relationships that have built over the years and the high level of product customisation all mean that the service that it provides is highly differentiated from its competitors and creates high barriers to entry.

Overall

• High overall fit – all of the aspects of the business are clearly aligned

with each other.

137

D. CONTRIBUTION TO THE FIELD OF SERVICE OPERATIONS MANAGEMENT

Since its emergence in the mid 1980s, service research has moved beyond the primary classification stage and has reached a point where it is necessary to validate the generally accepted concepts/frameworks (Chase, 1996; Flynn et al., 1990; Meredith et al., 1989; Swamidass, 1991; Verma and Thompson, 1999) and broaden the understanding of service operations strategy (Johnston’s 1999; Roth and Menor, 2003; Verma and Thompson, 1999; Vickery et al, 1993). In terms of broadening service operations strategy Roth and Menor (2003: 156) conclude, “much of the descriptive and explanatory work behind existing service classification required rigorous testing… Focusing specifically on service operations strategy, a number of prescriptive and competing service operations management frameworks are especially deserving of ongoing research.” The focus of the research conducted was to assess the level of ‘internal strategic fit’ within eight service business case studies and contribute to the literature by: • Starting to develop understanding of why internal strategic fit does or does not exist

within certain service businesses • Developing methodologies for using the frameworks that have been identified to date • Starting to identify certain tools and techniques that can be used to assess and represent

the level of internal strategic fit that exists within a service business In terms of the first point, the research has started to understand the level of fit that exists, how it is created and the elements present in ‘high fit’ and ‘low fit’ organisations. In making an assessment of the level of fit in an organisation, a methodology has been developed for using the Heskett (1986) ‘strategic service vision’ and the order-winner and qualifier technique developed by Hill (1985). These methodologies have been summarised in Figures 7.4 and 7.5. Also, a managerial framework has been developed to allow businesses to present the level of fit within their organisation so that they can understand why the current level of fit exists and how it can be improved or maintained. The result is that all three contributions to the literature have been made and the first step has been taken to fill the gap regarding the lack of research into internal strategic fit within service businesses.

138

Figure 7.4 Methodology for applying the Heskett (1986) ‘strategic service vision’

Step Detail

Data collection

Collect data using a variety of different methods for each dimension being reviewed within each aspect of strategic internal fit as shown in Figure 5.12. Within this collection process, a number of sets of structured questions were used to interview executives and these are summarised in Figures 5.13 to 5.16.

Data representation

Put the information collected into various frameworks to enable it to be analysed. Based on the dimensions within the Heskett model, six tables were used to compare the different aspects of fit. These are shown in Appendix 1 to 6 and they are used to assess fit in the importance of competitive criteria, operating strategy, service delivery system, between the operating strategy and competitive criteria, between the service delivery system and competitive criteria and the overall level of fit.

Data analysis

The tables used to represent the data can then be used to analyse the level of strategic fit ‘within function’ and ‘across all functions’ on each aspect. The assessment that was made then formed the basis of whether a business was defined as ‘high fit’ or ‘low fit’. ‘High fit’ was defined as an average of more than 70% across all of the measures of fit, whereas ‘low fit’ was less than 50%.

139

Figure 7.5 Methodology for applying the Hill (1985) order-winner and qualifier technique

Step Detail

1. Segment the market

D. How many markets does your business compete in? E. What ‘name’ would you give to each of these segments? F. What is the size (£k) of each of these market segments?

2. Identify customer groups

Take each market segment, and ask further questions: F. What products or services do you either sell or provide to customers

within this segment? G. What types of customers do you sell or provide products or services to

within this segment? H. Is it possible to group together any of these customers in terms of the

way in which they behave? In terms of the needs and demands that they place on the business.

I. Could you give me some examples of representative customers within each of these groups?

J. Are all of these customers representative of this customer group? (Check for each customer group). Or are there further customer groups in this segment?

3. Identify order- winners and qualifiers

Take each customer group and ask further questions: C. How do you win business with each customer group? D. What dimensions are important within each customer group? For

example: price, delivery reliability or design capability. Take each dimension and ask further questions: C. Is this dimension an order-winner or a qualifier? Explain the distinction

between these 2 dimensions. D. Is this the same for all customers within this group? If not, does this

group actually split into more than one group?

4. Weight order- winners and qualifiers

Take each qualifier and ask further questions: E. Would the failure to meet this qualifier affect future business with this

customer group? F. If so, how quickly would the impact on future business be? G. How do you feel the importance of each qualifier will vary over the next

5 years within this customer group? H. Would the answer to the previous 3 questions be the same for all

customers within this group? If not, does this group actually split into more than one group?

Take each order-winner and ask further questions: C. How would you rate each of these order-winners in terms of their

relative important to this customer group? Allocate 100 points across all the order-winners in each customer group to show their importance in terms of winning business with this customer group.

D. Would these weightings be the same for all customers within this group? ? If not, does this group actually split into more than one group?

Data collection

5. Determine overall business perspective

Hold a group meeting with all of the functional representatives previously interviewed A. Repeat steps 3 and 4 with the whole group B. Determine overall business perspective of order-winners and qualifiers

Data representation Put the information collected into the framework shown in Figure A14.3 in Appendix 14 to enable it to be analysed.

Data analysis Analyse the level of strategic fit ‘within function’ and ‘across all functions’ on each aspect using the framework in Appendix 1.

140

E. RESEARCH LIMITATIONS AND REFLECTIONS The previous section showed the contribution that has been made to the field of service operations management through the research conducted. However, as with any piece of research, it is important to realise that it has its limitations. One of these is the cross- sectional nature of the work. The eight case studies were analysed at a single point in time to see if internal fit existed, how it is created, the elements that are present in a situation of fit or lack of fit and how this can best be presented. However, in answering these questions it would have been useful to perform longitudinal analyses of each case study to assess how fit is achieved over time and to identify the evolutionary patterns associated with each type of fit (Ginsberg, 1988). A longitudinal analysis would be required to determine if internal fit is associated with quantum change as suggested by a number of authors (Hinings and Greenwood, 1988; Miller and Friesen, 1984) or does it actually favour incremental change. By only having conducted cross-sectional research at a single point in time, it is not possible to answer these questions and it may also mean the issue of how fit is created is not fully understood. A longitudinal analysis would need to be completed to test the conclusions that have been developed. A second limitation of the research concerns the assessment of the importance of competitive criteria. As Menda and Dilts (1997: 237) noted from their research into this area, “Respondents appear to give responses as to how they perceive manufacturing strategy should be, rather than what the realities of the marketing place actually are; hence researchers should seek verification or external validation of individual responses.” This was overcome in part by the use of other data collection methods to test the opinions of executives such as market research and customer surveys that had been completed and analysis of customer behaviour through observation and a representative sample of orders. However, these were secondary sources of data. If a true understanding of the organisation’s market is to be obtained then primary analysis should be conducted to assess customer perspectives and behaviour. A third limitation is that the research did not look at the dimensions within the Heskett (1986) and Hill (1985) models. It looked at how they can be applied and the insights that they reveal by analysing a service business rather than if they are the correct. From the work that was completed, it was felt that all the dimensions contained within the model were important to assessing internal strategic fit, but that maybe they should be further developed to incorporate other criteria. One example might be the ‘customer relationship management' aspects of the business both in terms of the market requirement and how this is met within the operating strategy and service delivery system. This appeared to be an important aspect within the high fit organisations operating strategy. The limitations within the research show that although the first step has been made in exploring internal strategic fit in service organisations, significant further investigation is still required. The theories that have been developed now need to be tested and further theory built in other subject areas is this field that have not yet been addressed. The next chapter on future research looks at this in more detail. F. FUTURE RESEARCH The research has conducted an exploratory investigation into the field of internal strategic fit in service businesses. It has developed concepts about the level of fit that exists, how it is

141

created and the elements present in a situation of ‘high fit’ and ‘low fit’. A methodology for applying the Heskett (1986) ‘strategic service vision’ and Hill (1985) ‘order-winner and qualifier’ technique has been developed, and a managerial framework for profiling different aspects of fit within a business proposed. However, this is simply the first step in addressing the gap in the literature and more research needs to follow. Using the methodology developed for applying the Heskett (1986) and Hill (1985) models, the concepts around the level of fit that exists, how it is created and the elements present in ‘high fit’ and ‘low fit’ service businesses need to be tested. The theories proposed have been built on eight case studies and this sample now needs to be expanded to further test the concepts. This is also required for the framework proposed for profiling the different aspects of the business. The dimensions and characteristics within the framework were based on the findings from the research into eight companies and it now need to be tested against a larger sample. This will ensure it is applicable and useful in understanding why conflicts do or do not exist within organisations and the steps required to rectify low fit or reinforce high fit. The dimensions within the Heskett (1986) and Hill (1985) models need to be tested to ensure they are important in assessing internal strategic fit, and if further criteria need to be incorporated. As stated in the previous section, it was felt that there would be benefit in including the ‘customer relationship management’ aspects of the business to understand how the operating strategy and service delivery system meet this requirement. These are all future research areas that concern the testing of theories and methodologies developed through the work conducted. However, there are also a number of topics that are still to be explored: • Assess how fit is achieved over time, and to identify the evolutionary patterns associated

with each type of fit (Ginsberg, 1988) • Is internal fit, because of lags in adaptation, associated with quantum change? (Hinings

and Greenwood, 1988; Miller and Friesen, 1984) • Does environmental fit, because it suggests prompt adaptation and loose internal

coupling, favour incremental change? (Quinn, 1980; Weick, 1979) This all shows that significant investigation is still required in the subject of internal strategic fit. The first step has been made through the research completed, but the theories that have been developed now need to be tested and further theory built in other subject areas is this field that have not yet been addressed. G. SUMMARY AND CONCLUSIONS The research has contributed significantly to the current service operations management literature by starting to address the fact that work to date has been predominantly operational and not strategic. Specifically, it has started to fill the gap within the literature in the terms of the research into the dimension of internal strategic fit within service businesses by developing concepts and a strategic framework within this area. A multiple case study research design was used and the findings revealed that there was a significant variance both in the level of fit within each company and across each of the three aspects of internal strategic fit. The strategic process used had an impact on the level of fit, as did its market and management characteristics. Within the evaluation model there was also a particularly high level of fit on certain dimensions in a ‘high fit’ organisation.

142

The process of collecting, presenting and analysing the data has developed a methodology for using the Heskett (1986) ‘strategic service vision’ and the Hill (1985) ‘order-winner and qualifier’ technique. Based on the data collected a managerial framework was developed that enables a business to profile the different aspects of strategic internal fit. Profiles can be created showing the characteristics of a business in terms of its market, operating strategy, service delivery system and overall level of fit. This was shown to be useful for both a ‘low fit’ and ‘high fit’ organisation as it allows them to see more clearly why conflicts do or do not exist and start to understand the steps that can be taken to rectify a low level or reinforce a high level of fit.

143

Appendix 1 LEVEL OF INTERNAL STRATEGIC FIT IN THE IMPORTANCE OF COMPETITIVE CRITERIA OF THE COMPANIES RESEARCHED Figure A1.1 Level of strategic fit in the importance of competitive criteria of Company SD

Identified at being important by executives in each function (% executives interviewed) Competitive criteria selected

Operations Sales and Marketing Other

Strategic fit across functions

Group # criteria identified Customer Service Distribution Marketing Sales Retail # executives % total

Financial benefit to the customer 7 different criteria

50 - - n/a n/a 6 60

Customer service 11 criteria - - - n/a n/a 3 30

Products & services 7 criteria 10 - - n/a n/a 2 20

Lifestyle 2 criteria - - - n/a n/a - -

Brand 3 criteria 10 - - n/a n/a 2 20

Corporate 2 criteria 10 - - n/a n/a 1 10

Other 2 criteria - - - n/a n/a - -

Market knowledge not available - - - n/a n/a 2 20

# executives 2 - - n/a n/a Strategic fit within function % 50 - - n/a n/a

Note: The total number of executives interviewed was 10 – 4 Customer Service, 2 Distribution, 2 Marketing, 1 Sales and 1 Retail executives

144

Figure A1.2 Level of strategic fit in the importance of competitive criteria of Company SS

Identified at being important by executives in each function (% executives interviewed) Competitive criteria selected

Operations Sales and Marketing

Strategic fit across functions

Group # criteria identified Customer Service Distribution Marketing Sales # executives % total

Price 1 different criteria 100 100 n/a 100 12 100

Customer service 9 criteria 60 - n/a 50 4 33

Knowledge 5 criteria 20 - n/a 50 2 16

Product 4 criteria - - n/a - - -

Sales 3 criteria - - n/a - - -

Brand name 1 criteria - - n/a - - -

# executives 3 - n/a 2 Strategic fit within function % total 60 - n/a 50

Note: The total number of executives interviewed was 12 – 5 Customer Service, 2 Distribution, 1 Marketing and 4 Sales executives

145

Figure A1.3 Level of strategic fit in the importance of competitive criteria of Company FC

Identified at being important by executives in each function (% executives interviewed) Competitive criteria selected

Operations Sales and Marketing Other

Strategic fit across functions

Group # criteria identified Customer Service Distribution Marketing Customer Relations Technical # executives % total

Price 1 different criteria 100 100 100 100 100 10 100

Delivery speed 1 criteria 100 100 - - 100 6 60

Delivery reliability 1 criteria 100 100 100 - 100 6 60

Quality conformance 1 criteria 50 100 50 100 100 6 60

Licensed operator 1 criteria - - - - - - -

Product design 1 criteria 100 - - 4 40

# executives 1.5 1 1 0.8 1 Strategic fit within function % 75 50 50 40 50

Note: The total number of executives interviewed was 10 – 2 Customer Service, 2 Distribution, 2 Marketing, 2 Customer Relations and 2 Technical

146

Figure A1.4 Level of strategic fit in the importance of competitive criteria of Company SB

Identified at being important by executives in each function (% executives interviewed) Competitive criteria selected

Operations Sales and Marketing Other

Strategic fit across functions

Group # criteria identified Customer Service Distribution Sales Marketing Technical # executives % total

Product design 2 different criteria 100 100 100 100 100 10 100

Delivery 2 criteria 100 100 100 100 100 10 100

Quality conformance 1 criteria 100 100 100 100 100 10 100

Customer relationship 1 criteria 100 - 100 100 - 7 70

Technical support 1 criteria 100 - - 100 100 7 70

Price 1 criteria 100 100 100 100 100 10 100

Financial benefit to the customer 3 criteria

- - 100 100 - 5 50

Market 4 criteria - - - - - 2 20

# executives 1.4 1 1.6 1.6 1.4 Strategic fit within function % 70 50 80 80 70

Note: The total number of executives interviewed was 10 – 2 Customer Service, 2 Distribution, 2 Sales, 2 Marketing and 2 Technical executives

147

Figure A1.5 Level of strategic fit in the importance of competitive criteria of Company TE

Identified at being important by executives in each function (% executives interviewed) Competitive criteria selected

Operations Sales and Marketing

Strategic fit across functions

Group # criteria identified Customer Service Distribution Operations Commercial # executives % total

Customer service 5 different criteria 50 50 33 50 4 50

Price 1 criteria 100 100 100 100 8 100

Safety 1 criteria 100 100 100 100 8 100

Delivery speed 1 criteria 100 100 100 100 8 100

Delivery reliability 1 criteria 100 100 100 100 8 100

Brand image 1 criteria - - - - 3 38

Data integrity 1 criteria - - - - 2 25

Technical capability 1 criteria - - - - 2 25

# executives 1.2 0.8 1.2 1 Strategic fit within function % total 60 40 60 50

Note: The total number of executives interviewed was 8 – 2 Customer Services, 2 Distribution, 2 Operations and 2 Commercial executives

148

Figure A1.6 Level of strategic fit in the importance of competitive criteria of Company TM

Identified at being important by executives in each function (% executives interviewed) Competitive criteria selected

Operations Sales and Marketing

Strategic fit across functions

Group # criteria identified Customer Service Distribution Operations Commercial # executives % total

Customer service 5 different criteria 40 50 33 50 4 50

Price 1 criteria 100 100 100 100 8 100

Safety 1 criteria 100 100 100 100 8 100

Delivery speed 1 criteria 100 100 100 100 8 100

Delivery reliability 1 criteria 100 100 100 100 8 100

Brand image 1 criteria - - - - 2 25

Data integrity 1 criteria - - - - 2 25

Technical capability 1 criteria - - - - 2 25

# executives 1 0.6 1.2 1 Strategic fit within function % total 50 30 60 50

Note: The total number of executives interviewed was 8 – 3 Customer Service, 1 Distribution and 3 Sales executives

149

Figure A1.7 Level of strategic fit in the importance of competitive criteria of Company SM

Identified at being important by executives in each function (% executives interviewed) Competitive criteria selected

Operations Sales and Marketing

Strategic fit across functions

Group # criteria identified Customer Service Distribution Sales # executives % total

Customer service 7 different criteria 75 n/a 50 3 38

Price 2 criteria 100 n/a 100 8 100

Product design 4 criteria - n/a 60 2 25

Account management 3 criteria - n/a 60 2 25

Brand image 3 criteria - n/a - - -

# executives 2 n/a 1.8 Strategic fit within function % 50 n/a 60

Note: The total number of executives interviewed was 8 – 4 Customer Service, 1 Distribution and 3 Sales executives

150

Figure A1.8 Level of strategic fit in the importance of competitive criteria of Company SL

Identified at being important by executives in each function (% executives interviewed)

Competitive criteria selected

Operations Sales and Marketing Other

Strategic fit across functions

Group # criteria identified Customer Service Sales Marketing Corporate # executives % total

Price 1 different criteria 100 100 100 100 12 100

Customer service 4 criteria 75 100 100 - 10 83

Product design and offering 6 criteria

50 100 100 75 5 42

Financial 2 criteria 50 - - 50 5 42

Sales service 5 criteria 10 100 100 10 4 33

Customer relationship 5 criteria 50 - - 50 2 17

Service delivery system 3 criteria - - - - 2 17

Brand name 1 criteria - - - - - -

# executives 2.8 1.4 1.4 1.6 Strategic fit within function % 70 70 70 40

Note: The total number of executives interviewed was 12 – 4 Customer Service, 2 Sales, 2 Marketing and 4 Corporate executives

151

Appendix 2 LEVEL OF INTERNAL STRATEGIC FIT IN THE OPERATING STRATEGIES OF THE COMPANIES RESEARCHED Figure A2.1 Level of strategic fit in the operating strategy of Company 1

Function

Operations Sales and Marketing Other

Strategic fit across functions Dimension of

operating strategy

Customer Service Distribution Marketing Sales Retail # %

Important elements of strategy

Increase sales revenue Reduce cost Reduce customer complaints

Reduce cost Increase sales revenue Increase sales revenue Increase sales revenue Reduce cost 4 80

Where investments are made

Technology – computer system to sell wider range of products Reduce number of sites

Reduce number of sites Reduce number of sites Bonuses for sales force based on sales revenue Reduce number of sites Develop internet shop 4 80

Internal- business need

Cost – 54 measures Work management – 18 Debt management – 10 Sales revenue – 2 CRM – 2

Cost – 14 Work management – 4 No measures

Sales revenue – 7 measures CRM – 4 Cost – 2 Work management - 2

Cost – 108 Sales revenue – 39 Cash – 35 Work management – 25

3 60

H ow

p er

fo rm

an ce

m ea

su re

d (#

m ea

su re

Customer need

Price – 54 Customer service – 6

Price – 14 No measures Price – 2 Customer Service – 2

Price – 108 2 40

Incentivisation

Soft incentives for sales revenue for cross-selling products to existing customers

None None Financial incentives for sales revenue None 2 40

Reward Basic salary Basic salary Basic salary Basic salary Bonus based on sales revenue

Basic salary 4 80

E m

pl oy

Development Unstructured On-the-job Unstructured On-the-job

Unstructured On-the-job

Unstructured On-the-job - -

# 3 3 1 5 3 Strategic fit within function % 43 43 14 71 43

19 54

152

Figure A2.2 Level of strategic fit in the operating strategy of Company 2

Function

Operations Sales and Marketing

Strategic fit across functions Dimension of operating strategy

Customer Service Distribution Marketing Sales # %

Important elements of strategy

Reduce cost Reduce customer complaints

Reduce cost Increase sales revenue Increase sales revenue 2 50

Where investments are made

Technology – computer system to sell wider range of products Set up dedicated division in business to support this market

Reduce number of sites Reduce number of sites Bonuses for sales force based on sales revenue 2 50

Internal- business need

Debt management – 6 Work management – 6 Cost – 2 CRM – 2 Sales revenue – 2

Cost – 14 Work management – 4 No measures

Sales revenue – 25 Work management – 20 Cost – 16

1 25

H ow

p er

fo rm

an ce

m ea

su re

d (#

m ea

su re

Customer need

Customer service – 14 Price – 2

Price – 14 No measures Price – 16 Customer service – 2

2 50

Incentivisation None None None Financial incentives for sales revenue - -

Reward Basic salary Basic salary Basic salary Basic salary Bonus based on sales revenue 3 75

E m

pl oy

Development Unstructured On-the-job Unstructured On-the-job

Unstructured On-the-job

Unstructured On-the-job - -

# 2 3 1 5 Strategic fit within function % 28 43 14 71

13 46

Notes:

1. Strategic fit is measured as the highest number of functions or dimensions that align with each other 2. If development is unstructured and on the job, it cannot be aligned between functions due to its informal nature 3. If incentivisation is none, it cannot be aligned between functions because it does not exist

153

Figure A2.3 Level of strategic fit in the operating strategy of Company 3

Function

Operations Sales and Marketing Other

Strategic fit across functions Dimension of operating strategy

Operations Customer Service Marketing Customer Relations Technical # %

Important elements of strategy

Reduce costs Reduce customer complaints

Reduce cost Reduce customer complaints

Understand dynamics of an unstable market Increase market share Develop new markets

Manage contracts with customers

Design products to meet customer specification 2 40

Where investments are made

Technology – computer system to link operations to customer service Reduce number of sites

Technology – computer system to link customer service to operations Reduce number of sites

No investment No investment No investment 2 40

Internal- business need

Work management – 13 Cost – 2 Sales revenue – 2

No measures No measures Work management – 21 Cost – 4

No measures 2 40

H ow

p er

fo rm

an ce

m ea

su re

d (#

m ea

su re

Customer need

Customer service – 7 Delivery – 4 Price – 2 Quality conformance – 1

No measures No measures

Customer service – 13 Delivery – 4 Price – 4 Quality conformance – 1 Design – 1

No measures 2 40

Incentivisation None None None None None - -

Reward Basic salary Plus overtime payment

Basic salary Basic salary Basic salary Basic salary 4 80

E m

pl oy

Development Unstructured On-the-job

Unstructured On-the-job

- -

# 3 2 1 1 1 Strategic fit within function % 43 29 14 14 14

12 34

Notes:

154

Figure A2.4 Level of strategic fit in the operating strategy of Company 4

Function

Operations Sales and Marketing Other

Strategic fit across functions Dimension of operating strategy

Customer Service Distribution Sales Marketing Technical # %

Important elements of strategy

Manage customer relationship Process customer requirements

On-time delivery to customers Achieve short delivery lead-time

Identify new market opportunities Manage customer relationship

Identify new market opportunities Understand existing markets

Identify new market opportunities Design and develop new products

4 80

Where investments are made

Technology – computer system to link distribution to customer service

Technology – computer system to link distribution to customer service Industry safety initiatives

Membership of industry institutes

Marketing initiatives to promote brand name Membership of industry institutes

Equipment – new testing and development facility Membership of industry institutes

3 60

Internal- business need

No measures Work management – 3 Customer visit plan Key account management system

Customer marketing plan

Customer technical plan 3 60

H ow

p er

fo rm

an ce

m ea

su re

d (#

m ea

su re

Customer need No measures

Delivery – 3 Safety – 1

Customer visit plan Key account management system

Customer marketing plan Customer technical plan 3 60

Incentivisation High level of customer contact Short feedback loop

High level of customer contact Short feedback loop

5 100

Reward Basic salary Bonus based on performance targets

Basic salary Bonus based on performance targets

5 100

E m

pl oy

Development Structured around specific customer requirements

Structured around specific customer requirements

5 100

# 4 6 7 7 7 Strategic fit within function % 57 86 100 100 100

28 80

Note: Strategic fit is measured as the highest number of functions or dimensions that align with each other

155

Figure A2.5 Level of strategic fit in the operating strategy of Company 5

Function

Operations Sales and Marketing

Strategic fit across functions Dimension of operating strategy

Customer Service Distribution Operations Commercial # %

Important elements of strategy

Reduce costs Reduce customer complaints

Reduce costs On-time delivery Reduce customer complaints

Manage contracts with customers and suppliers

2 50

Where investments are made

Technology – computer system to link all operations functions

Technology – computer system to link customer service to operations

No investment 3 75

Internal- business need

Cost – 27 Work management – 15 Staff development – 4

4 100

H ow

p er

fo rm

an ce

m ea

su re

d (#

m ea

su re

Customer need

Price – 27 Delivery – 15 Customer service – 9 Safety – 7 Data integrity – 4 Quality conformance – 1

4 100

Incentivisation Structured appraisal system linked to promotion Structured appraisal system linked to promotion

Structured appraisal system linked to promotion

Structured appraisal system linked to promotion 4 100

Reward Basic salary Bonus based on performance targets

Basic salary Bonus based on performance targets

4 100

E m

pl oy

Development Formal linked to skill assessments

Formal linked to skill assessments

4 100

# 7 7 7 6 Strategic fit within function % 100 100 100 86

25 89

Notes: 1. Strategic fit is measured as the highest number of functions or dimensions that align with each other 2. The same performance measurement system is used in Customer Service, Distribution, Operations and Commercial 3. The same structured employee incentivisation, reward and development system is used across all of the business functions. This is also linked into the performance measurement system.

156

Figure A2.6 Level of strategic fit in the operating strategy of Company 6

Function

Operations Sales and Marketing

Strategic fit across functions Dimension of operating strategy

Customer Service Distribution Operations Commercial # %

Important elements of strategy

Reduce costs Reduce customer complaints

Reduce costs On-time delivery Reduce customer complaints

Manage contracts with customers and suppliers

2 50

Where investments are made

Technology – computer system to link all operations functions

Technology – computer system to link customer service to operations

No investment 3 75

Internal- business need

Cost – 27 Work management – 15 Staff development – 4

4 100

H ow

p er

fo rm

an ce

m ea

su re

d (#

m ea

su re

Customer need

Price – 27 Delivery – 15 Customer service – 9 Safety – 7 Data integrity – 4 Quality conformance – 1

4 100

Incentivisation Structured appraisal system linked to promotion Structured appraisal system linked to promotion

Structured appraisal system linked to promotion

Structured appraisal system linked to promotion 4 100

Reward Basic salary Bonus based on performance targets

Basic salary Bonus based on performance targets

4 100

E m

pl oy

Development Formal linked to skill assessments

Formal linked to skill assessments

4 100

# 7 7 7 6 Strategic fit within function % 100 100 100 86

25 89

Notes:

157

Figure A2.7 Level of strategic fit in the operating strategy of Company 7

Function

Operations Sales and Marketing

Strategic fit across functions Dimension of operating strategy

Customer Service Distribution Sales # %

Important elements of strategy

Reduce cost Manage relationship with customer

Reduce cost Increase sales revenue Manage relationship with customer

2 67

Where investments are made

Technology – computer system to sell wider range of products Set up customer based teams

Reduce number of sites Bonuses for sales force based on sales revenue Set up customer based teams

2 67

Internal- business need

Work management – 21 Debt management – 2 Cost – 1

Work management – 14 Cost – 8

Cost – 3 Sales revenue – 2 Profit margin – 1

1 33

H ow

p er

fo rm

an ce

m ea

su re

d (#

m ea

su re

Customer need

Customer service – 4 Price – 1 Price – 8

Price – 3 Customer service – 2 2 67

Incentivisation None None Financial incentives for sales revenue 1 33

Reward Basic salary Basic salary Basic salary Bonus based on sales revenue 2 67

E m

pl oy

Development Unstructured On-the-job Unstructured On-the-job

Unstructured On-the-job - -

# 2 2 5 Strategic fit within function % 29 29 71

10 48

Notes:

158

Figure A2.8 Level of strategic fit in the operating strategy of Company 8

Function

Customer Service Sales and Marketing Other

Strategic fit across functions Dimension of operating strategy

Front office Back office Sales Marketing Corporate # %

Important elements of strategy

Reduce cost Process customer telephony requirements

Reduce cost Process customer paperwork requirements

Increase sales revenue Manage relationship with third party who sells to customer

Identify new market opportunities Develop new products

Ensure that legal requirements are met 2 20

Where investments are made

Technology – computer system No investment

Bonuses for sales force based on sales revenue

Advertising and promotion to reinforce brand name and generate demand

No investment 2 20

Internal- business need

Work management – 76 Sales revenue – 68 Asset management – 42 Cost – 18 Sales channel – 6 Debt management – 3

Work management – 76 Sales revenue – 68 Sales channel – 6 Cost – 18 Debt management – 3 Asset management – 42

Work management – 15 Sales revenue – 20 Sales channel – 5

None None 2 20

H ow

p er

fo rm

an ce

m ea

su re

d (#

m ea

su re

Customer need

Price – 18 Customer service – 10

Price – 18 Customer service – 10 None None None 2 20

Incentivisation None None Financial incentives for sales revenue

None None 3 60

Reward Basic salary Basic salary Basic salary Bonus based on sales revenue

Basic salary Basic salary 4 80

E m

pl oy

Development Formal linked to skill assessments Formal linked to skill assessments

Unstructured On-the-job

Unstructured On-the-job 2 40

# 3 2 6 2 2 Strategic fit within function % 43 43 86 29 29

17 49

Note: Strategic fit is measured as the highest number of functions or dimensions that align with each other

159

Appendix 3 LEVEL OF STRATEGIC FIT IN THE SERVICE DELIVERY SYSTEM OF EACH COMPANY RESEARCHED Figure A3.1 Level of strategic fit in the service delivery system of Company 1

Functions involved in delivering service

Operations Other

Strategic fit across functions

Customer Service

Dimension of service delivery

system Site PO Site PE Site BA

Distribution Retail # %

Key steps in the delivery system

Receive customer telephone contact Receive and process customer payments

Receive mail from new and existing customers Send mail to existing customers – e.g. bills

Install equipment at customer’s site Read equipment on customer’s site

Sell new products Distribute new products Service existing products

n/a n/a

People In house staff Interact with customers Process transactions on computer system

In house management Agency staff used to install & read equipment

In house staff 4 80

Technology Complex single integrated computer system that links all Customer Service processes and sites together Simple computer system Simple computer system Internet shop High street shops

3 60

Equipment Computers Computers Computers 5 100

Layout Functional layout Multi site – 3 sites Customer passed through different sites and teams during service delivery

Functional layout Single site

Functional layout Single site 2 40

R ol

e of

Procedures Formal procedures – driven by computer system, with a degree of flexibility Formal procedures Formal procedures 3 60

Capacity Each site processes different steps in the delivery system Functional teams around processes No flexibility across processes

Single site Functional teams No flexibility across teams

5 100

M an

ag em

en t

Demand Forecasted around functional steps in the computer system Queues used to manage mismatch between capacity and demand No forecasting Queues

No forecasting Queues 3 60

Quality management of service delivery

Formal procedures in computer system All customer contact recorded and a sample analysed Monitor customer complaints

Monitor customer complaints

3 60

Service differentiation from the competition

No differentiation No differentiation Internet shop High street shops

1 20

Competitors barriers No barriers to entry No barriers to entry No barriers to entry - - # 7 7 7 5 5 Strategic fit

within function % 70 70 70 50 50 29 58

Note: Strategic fit is measured as the highest number of functions or dimensions that align with each other

160

Figure A3.2 Level of strategic fit in the service delivery system of Company 2

Functions involved in delivering service

Operations

Strategic fit across functions

Customer Service

Dimension of service delivery

system Site PO Site PE Site CA

Distribution # %

Key steps in the delivery system

Receive customer telephone contact for a geographical region of customers Receive and process customer payments Register and set up new customer accounts Close down existing customer accounts Receive mail from new and existing customers Send mail to existing customers – e.g. bills

Install equipment at customer’s site Read equipment on customer’s site n/a n/a

People In house staff organised into a hybrid of customer-based and functional teams Used to interact with customers and process transactions on computer system

In house management Agency staff used to install & read equipment

3 75

Technology Complex single integrated computer system that links all Customer Service processes together

Simple computer system 3 75

Equipment Computers Computers 4 100

Layout Each site handles a geographic region of customers Functional teams within each site around processes Customer passed through teams during service delivery, but on a single site

Functional layout Single site

3 75

R ol

e of

Procedures Formal procedures – driven by computer system, with a degree of flexibility Formal procedures 4 100

Capacity Each site processes all the steps in the delivery system for a set of customers Functional teams around processes Small level of flexibility across processes within a site

Single site Functional teams No flexibility across teams

3 75

M an

ag em

en t

Demand Forecasted around customer groups and steps in the computer system Queues used to manage mismatch between capacity and demand No forecasting Queues used to manage mismatch with capacity 3 75

Quality management of service delivery

Formal procedures in computer system All telephone contact recorded and a sample analysed All mail contact recorded and a sample analysed Monitor customer complaints

Monitor customer complaints 3 75

Service differentiation from the competition No differentiation No differentiation - -

Competitors barriers to entry No barriers to entry No barriers to entry - -

# 7 7 7 5 Strategic fit within function % 70 70 70 50

26 65

Note: Strategic fit is measured as the highest number of functions or dimensions that align with each other

161

Figure A3.3 Level of strategic fit in the service delivery system of Company 3

Functions involved in delivering service Operations Other

Operations

Strategic fit across functions

Dimension of service delivery

system Customer Service Site N Site S Site W Site E

Technical # %

Key steps in the delivery system

Receive customer telephone contact Use information on computer system to answer queries Updates job details when necessary

Receive requests from customer Complete quotation and send to customer Complete work requested by customer Invoice customer and process payment

Design product for customer n/a n/a

People

In house staff Customer interacts with single individual during service delivery Individual uses information on computer system to answer queries about job status or update job details

Completion of work outsourced to agency In house staff to process quotations and manage project to complete work. Organised into functional teams

In house staff Customer interacts with single individual during service delivery Complete design as part of quotation

4 67

Technology Simple single integrated computer system that links all processes together

Number of separate computer systems High level of paperwork in the process

Simple CAD computer system

1 17

Equipment Computers Computers Paperwork

Computers 4 67

Layout Single site that handles all customers Customer interacts with single individual during service delivery

Each site handles a geographic region of customers Functional teams within each site around processes

Single site that handles all customers that require a designed product

4 67

R ol

e of

Procedures Formal procedures – driven by computer system Informal procedures Informal procedures 1 17

Capacity Single site process all the steps in the delivery system for all customers Individuals highly flexible across all processes

Each site processes all the steps in the delivery system for a set of customers Functional teams around processes No flexibility across processes within a site

Single site process all the steps for all customers Individuals highly flexible across all processes

4 67

M an

ag em

en t

Demand Forecasting for site as a whole No forecasting Queues used to manage mismatch with capacity

No forecasting Queues used to manage mismatch with capacity

1 17

Quality management of service delivery

Customer complaints Customer complaints Customer complaints 6 100

Service differentiation from the competition

No differentiation No differentiation No differentiation - -

Competitors barriers to entry

No barriers No barriers No barriers - -

# 7 2 2 2 2 7 Strategic fit within function % 70 20 20 20 20 70

25 42

Note: Strategic fit is measured as the highest number of functions or dimensions that align with each other

162

Figure A3.4 Level of strategic fit in the service delivery system of Company 4

Functions involved in delivering service

Operations Sales and Marketing Other

Strategic fit across functions

Dimension of service delivery

system Customer Service Distribution Sales Technical # %

Key steps in the delivery system

Receive customer telephone contact Process requested transactions

Despatch product to customer Key Account Manager manages relationship with each customer

Design product for customer n/a n/a

People

In house staff – small team that processes all customers Process transactions on computer system

Key Account Manager for each customer Regularly meet face-to-face with customer Monitor and manage all business contact with customer

Technical Manager for each customer Regularly meet face-to-face with customer Often develop products with customer

2 50

Technology Simple computer system Simple computer system Spreadsheets for customer visit plan and KAM process

Specific technical modelling software

2 50

Equipment Computers Computers Computers Computers 4 100

Layout Cross functional team Single site Cross functional team Single site

Cross functional team Single site

Cross functional team Two sites – laboratory & office 3 75

R ol

e of

Procedures Formal procedures Formal procedures Formal procedures Formal procedures 4 100

Capacity

Single site processes all the steps in the delivery system for all customers High level of flexibility across all processes

Single individual processes all the steps for a customers High level of flexibility across all processes

2 50

M an

ag em

en t

Demand

Not forecasted Resource from other business areas used to manage mismatch with capacity

Not forecasted Overtime used to manage mismatch with capacity

3 75

Quality management of service delivery

KAM customer feedback process

KAM customer feedback process Performance measures

KAM customer feedback process

KAM customer feedback process 3 75

Service differentiation from the competition

High level of personalisation High level of customisation to different customers

4 100

Competitors barriers to entry

Established customer relationship High customisation of service

Established customer relationship Product design

Established customer relationship High customisation of service

Established customer relationship Product design capability

4 100

# 7 8 9 9 Strategic fit within function % 70 80 90 90

31 78

163

Figure A3.5 Level of strategic fit in the service delivery system of Company 5

Functions involved in delivering service Operations

Customer Service Distribution

Strategic fit across functions

Dimension of service delivery

system Site KI Site HI Site GL Site N Site S Site W Site E # %

Key steps in the delivery system

Receive customer telephone contact Ask standard questions to determine job details Type job details into computer

Computer system allocates jobs Receive job details Travel to customer site and complete job Update computer system to show that job is complete

n/a n/a

People

In house staff Customer interacts with single individual during service delivery Organised into functional teams Used to interact with customers to establish job details and type into computer system

In house staff Customer interacts with single individual during service delivery Organised into functional teams Travel to site and complete job Update computer system

7 100

Technology Simple single integrated computer system that links all processes together Automated allocation of work to individuals based on availability

Simple single integrated computer system that links all processes together Automated allocation of work to individuals based on availability

7 100

Equipment Computers Computers 7 100

Layout Each site handles a geographic region of customers Customer interacts with single individual during service delivery

Each site handles a geographic region of customers Customer interacts with single individual during service delivery

7 100

R ol

e of

Procedures Highly formal procedures – driven by computer system Highly formal procedures – driven by computer system 7 100

Capacity

Each site processes all the steps in the delivery system for a set of customers Functional teams around processes Small level of flexibility across processes within a site

7 100

M an

ag em

en t

Demand

Forecasted around customer groups and steps in the computer system If any single site becomes overloaded, then work will automatically overflow to other sites

7 100

Quality management of service delivery

Highly formal procedures in computer system Customer complaints Customer satisfaction surveys

7 100

Service differentiation from the competition

Speed of delivering service Speed of delivering service 7 100

Competitors barriers to entry

Fully integrated computer system UK wide coverage Staff skill level and qualification

7 100

# 10 10 10 10 10 10 10 Strategic fit within function % 100 100 100 100 100 100 100

7 100

Note: Strategic fit is measured as the highest number of functions or dimensions that align with each other

164

Figure A3.6 Level of strategic fit in the service delivery system of Company 6

Functions involved in delivering service Operations

Customer Service Distribution

Strategic fit across functions

Dimension of service delivery

system Site KI Site HI Site GL Site N Site S Site W Site E # %

Key steps in the delivery system

Receive customer telephone contact Ask standard questions to determine job details Type job details into computer

Computer system allocates jobs Receive job details Travel to customer site and complete job Update computer system to show that job is complete

n/a n/a

People

In house staff Customer interacts with single individual during service delivery Organised into functional teams Used to interact with customers to establish job details and type into computer system

In house staff Customer interacts with single individual during service delivery Organised into functional teams Travel to site and complete job Update computer system

7 100

Technology Simple single integrated computer system that links all processes together Automated allocation of work to individuals based on availability

Simple single integrated computer system that links all processes together Automated allocation of work to individuals based on availability

7 100

Equipment Computers Computers 7 100

Layout Each site handles a geographic region of customers Customer interacts with single individual during service delivery

Each site handles a geographic region of customers Customer interacts with single individual during service delivery

7 100

R ol

e of

Procedures Highly formal procedures – driven by computer system Highly formal procedures – driven by computer system 7 100

Capacity

Each site processes all the steps in the delivery system for a set of customers Functional teams around processes Small level of flexibility across processes within a site

7 100

M an

ag em

en t

Demand

Forecasted around customer groups and steps in the computer system If any single site becomes overloaded, then work will automatically overflow to other sites

7 100

Quality management of service delivery

Highly formal procedures in computer system Customer complaints Customer satisfaction surveys

7 100

Service differentiation from the competition

Speed of delivering service Speed of delivering service 7 100

Competitors barriers to entry

Fully integrated computer system UK wide coverage Staff skill level and qualification

7 100

# 10 10 10 10 10 10 10 Strategic fit within function % 100 100 100 100 100 100 100

7 100

Note: Strategic fit is measured as the highest number of functions or dimensions that align with each other

165

Figure A3.7 Level of strategic fit in the service delivery system of Company 7

Functions involved in delivering service Operations Sales and Marketing

Strategic fit across functions

Customer Service Sales

Dimension of service delivery

system Site PO Site PE Site CA

Distribution Site PO Site PE Site CA

# %

Key steps in the delivery system

Receive customer telephone contact Receive and process customer payments Close down existing customer accounts Receive mail from new and existing customers Send mail to existing customers – e.g. bills

Install equipment at customer’s site Read equipment on customer’s site

Each customer account is managed by a single Key Account Manager Register and set up new customer accounts

n/a n/a

People

In house staff Cross functional teams around customer groups Receive customer telephone contact Process transactions on computer system

In house management Agency staff used to install & read equipment

In house staff Cross functional teams Manage customer relationships Process transactions

6 86

Technology Complex single integrated computer system that links all Customer Service processes together Simple computer system Simple computer system 4 57

Equipment Computers Computers Computers 7 100

Layout Cross functional layout around customer groups Three sites

Functional layout Single site

Cross functional layout around customer groups Three sites

6 86

R ol

e of

Procedures Formal procedures Formal procedures Formal procedures 7 100

Capacity Three sites – each serving a geographical customer group Cross functional teams High level of flexibility within a team

Single site Functional teams No flexibility across teams

Three sites – each serving a customer group Cross functional teams High level of flexibility within a team

6 86

M an

ag em

en t

Demand Forecasted around customer groups and processes Queues used to manage mismatch with capacity

No forecasting Queues used to manage mismatch with capacity

4 57

Quality management of service delivery

Monitor customer complaints All telephone contact recorded and a sample analysed All mail contact recorded and a sample analysed

- - 4 57

Service differentiation from the competition

No differentiation No differentiation No differentiation - -

Competitors barriers to entry

No barriers to entry No barriers to entry No barriers to entry - -

# 7 7 7 5 6 6 6 Strategic fit within function % 70 70 70 50 60 60 60

44 63

Note: Strategic fit is measured as the highest number of functions or dimensions that align with each other

166

Figure A3.8 Level of strategic fit in the service delivery system of Company 8

Functions involved in delivering service

Customer service Sales and Marketing

Strategic fit across functions

Dimension of service delivery

system Front office Back office Sales # %

Key steps in the delivery system

Receive customer telephone contact Process simple requested transactions Process complex requested transactions

Key Account Manager manages relationship with 3rd party who sell to customer

n/a n/a

People In house staff – small team that processes all customers Process transactions on computer system

In house staff – small team that processes all customers Process transactions on paperwork

In house staff Key Account Manager for area of 3rd party Regularly meet face-to-face with 3rd party Monitor and manage all business contact with 3rd party

2 66

Technology Simple computer system Simple computer system Spreadsheets for customer visit plan and KAM process 2 66

Equipment Computers Computers Computers 3 100

Layout Functional teams based on products Single site

Functional teams based on products Single site

Area based teams Single site

2 66

R ol

e of

Procedures Formal procedures Formal procedures Formal procedures 3 100

Capacity Single site processes all the steps in the delivery system for all customers Flexibility across processes and products

Single site processes all the steps in the delivery system for all customers Teams dedicated to products

Single individual processes all the steps for a customers Flexibility across processes and products

1 33

M an

ag em

en t

Demand

Forecasted around products and processes Queues used to manage mismatch with capacity

No forecasting Overtime used to manage mismatch with capacity

2 66

Quality management of service delivery

All telephone contact recorded and a sample analysed

All mail contact recorded and a sample analysed

KAM customer feedback process 2 66

Service differentiation from the competition

No differentiation No differentiation No differentiation - -

Competitors barriers to entry

No barriers to entry No barriers to entry No barriers to entry - -

# 8 8 8 Strategic fit within function % 80 80 80

17 57

167

Appendix 4 OVERALL LEVEL OF INTERNAL STRATEGIC FIT WITHIN THE COMPANIES RESEARCHED Figure A4.1 Overall level of internal strategic fit in Company 1

Dimension of internal strategic fit Operating strategy Service delivery system Competitive criteria

Dimensions that align with criteria

Aspect Findings Aspect Findings Group Importance OS SDS T%

People In house staff - interact with customers & process transactions on computer system Agency staff used to install & read equipment Important elements of

strategy

Increase sales revenue – 4 Reduce cost – 3 Reduce customer complaints

Technology Complex integrated computer system – 3 Simple stand alone computer system – 2 Internet shop and high street shops

Customer Service

11 executives identified criteria as important

2 4 35

Equipment Computers – 5

Layout

Functional layout – 5 Three sites – 3 Customer passed through different sites/teams Single site – 2

Where investments are made

Reduce number of sites – 4 Technology – computer system to sell wider range of products Bonuses based on sales £ Develop internet shop

R ol

e of

Procedures Formal procedures – 5

Price 7 executives 4 4 47

Internal- business need

Cost – 134 measures Work management – 49 Sales revenue – 48 Cash – 35 Debt management – 54 CRM – 6

Capacity

Three sites – each site processes different steps in the delivery system Single site – 2 Functional teams around processes No flexibility across processes

Products and services

7 executives - - -

P er

fo rm

an ce

m ea

su re

Customer need

Price – 134 Customer service – 10

M an

ag em

en t

Demand

Forecasted around functional steps in the computer system No forecasting – 2 Queues manage mismatch with capacity

Brand name 3 executives - - -

Incentive Soft incentives for sales £ Financial incentives for sales £

Quality management

Formal procedures in computer system – 3 All contact recorded & sample analysed – 3 Monitor customer complaints – 5

Life style 2 executives - - -

Reward Basic salary – 5 Bonus based on sales Service differentiation

No differentiation – 4 Internet shop and High street shops Corporate 2 executives - - -

E m

pl oy

Develop Unstructured – 5 On-the-job – 5 Competitors barriers to entry No barriers to entry – 5 Other 1 executive - - -

# dimensions 6 8 Level of internal strategic fit % total 12 11

Note: Internal strategic fit is measured as the highest number of functions or dimensions that align with each other

168

Figure A4.2 Overall level of internal strategic fit in Company 2

Dimension of internal strategic fit Operating strategy Service delivery system Competitive criteria

Dimensions that align with criteria

Aspect Findings Aspect Findings Group Importance OS SDS T%

People In house staff interact with customers and process transactions – 3 Agency staff used to install & read equipment

Important elements of strategy

Reduce cost – 2 Increase sales revenue – 2 Reduce customer complaints

Technology Complex single integrated computer system – 3 Simple computer system – 1

Price

10 executives identified as important

4 6 59

Equipment Computers – 4

Layout

Three sites – geographical customer groups – 3 Single site – 1 Functional teams within each site – 4 Customer passed through teams during service delivery, but on a single site – 3

Where investments are made

Reduce cost – 2 Increase sales revenue – 2 Reduce customer complaints

R ol

e of

Procedures Formal procedures – 4

Customer service

10 executives 3 5 47

Internal- business need

Cost – 32 Work management – 30 Sales revenue – 27 Debt management – 6 CRM – 2

Capacity

Three sites – geographical customer groups – 3 Single site – 1 Functional teams around processes – 4 Small level of flexibility across processes – 3 No flexibility across teams – 1

Knowledge 5 executives - - -

P er

fo rm

an ce

m ea

su re

Customer need

Price – 32 Customer service – 16

M an

ag em

en t

Demand

Forecasted around customer groups and steps in the computer system – 3 No forecasting Queues manage mismatch with capacity – 4

Product 1 executive - - -

Incentive None – 3 Financial incentives for sales revenue

Quality management

Formal procedures in computer system – 3 All contact recorded and a sample analysed – 3 Monitor customer complaints – 4

Sales 2 executives - - -

Reward Basic salary – 4 Bonus based on sales revenue

Service differentiation

No differentiation – 4

E m

pl oy

Develop Unstructured – 4 On-the-job – 4

Competitors barriers to entry

No barriers to entry – 4

Brand name 2 executives - - -

# dimensions 7 11 Level of internal strategic fit

% total 17 18 18

Note: Internal strategic fit is measured as the highest number of functions or dimensions that align with each other

169

Figure A4.3 Overall level of internal strategic fit in Company 3

Dimension of internal strategic fit Operating strategy Service delivery system Competitive criteria

Dimensions that align with criteria

Aspect Findings Aspect Findings Group Importance OS SDS T%

People

In house staff – 5 Agency staff – 4 Customer interacts with single individual – 2 Customer interacts with # departments – 4 Customer interfaces with agency staff – 4

Important elements of strategy

Reduce costs – 2 Reduce complaints – 2 Understand unstable market Increase market share Develop new markets Manage customer contracts Design customer products Technology

Single integrated computer system – 1 Number of separate computer systems – 5 High level of paperwork in the process – 4

Price 4 executives identified as important

4 1 29

Equipment Computers – 6 Paperwork – 5

Layout Single site – handles all customers – 2 Four sites – geographic customer groups – 4 Functional teams – 4

Where investments are made

Technology – computer system links operations – 2 Reduce number of sites – 2 No investment – 3

R ol

e of

Procedures Formal procedures – 1 Informal procedures – 5

Delivery speed 3 executives 2 1 18

Internal- business need

Work management – 34 Cost – 6 Sales revenue – 2 No measures – 3

Capacity

Single site – handles all customers – 2 Four sites – geographic customer groups – 4 Flexibility across all processes – 2 No flexibility across processes – 4

Delivery reliability 3 executives 2 1 18

P er

fo rm

an ce

m ea

su re

Customer need

Customer service – 20 Delivery – 8 Price – 6 Quality conformance – 2 Design – 1 No measures – 3

M an

ag em

en t

Demand Forecasting for site as a whole – 1 No forecasting – 5 Queues manage mismatch with capacity – 5

Quality conforma- nce

2 executive 2 1 18

Incentive None – 5 Quality management

Customer complaints – 6 Licensed operator

1 executive 1 1 12

Reward Basic salary – 5 Plus overtime payment

Service differentiation

No differentiation – 6

E m

pl oy

Develop Unstructured – 5 On-the-job – 5

Competitors barriers to entry

No barriers – 6

Product design 2 executives 1 1 12

# dimensions 12 6 Level of internal strategic fit

% total 29 10 18

Note: Internal strategic fit is measured as the highest number of functions or dimensions that align with each other

170

Figure A4.4 Overall level of internal strategic fit in Company 4

Dimension of internal strategic fit Operating strategy Service delivery system Competitive criteria

Dimensions that align with criteria

Aspect Findings Aspect Findings Group Importance OS SDS T%

People

In house staff – 4 Small team that processes all customers – 2 Manager for each customer – 2 Regularly meet face-to-face with customer – 2

Important elements of strategy

New market opportunities – 3 Customer relationship – 2 On-time delivery to customers Understand existing markets Design new products Technology

Simple computer system – 2 Spreadsheets for customer visit plan and KAM Specific technical modelling software

Product design

4 executives identified as important

7 9 94

Equipment Computers – 4

Layout Cross functional team – 4 Single site – 3 Two sites – laboratory & office

Where investments are made

Part of industry institutes – 3 Computers link operations Industry safety initiatives Marketing brand initiatives Test and development facility

R ol

e of

Procedures Formal procedures – 4

Delivery 4 executives 6 9 94

Internal- business need

Work management – 3 Customer visit, marketing & technical plan Key account management

Capacity Single site processes all the steps in the delivery system for all customers – 4 High level of flexibility across all processes – 4

Quality conforma- nce

4 executives 5 7 71

P er

fo rm

an ce

m ea

su re

Customer need

Delivery – 3 Safety – 1 Customer visit, marketing & technical plan Key account management

M an

ag em

en t

Demand

Not forecasted – 4 Resource from other business areas manages mismatch with capacity – 1 Overtime manages mismatch with capacity – 3

Customer relationship 3 executive 7 10 100

Incentive High customer contact – 5 Short feedback loop – 5

Quality management

KAM customer feedback process – 4 Performance measures – 1

Technical support

2 executive 7 9 94

Reward Basic salary – 5 Bonus performance targets – 5

Service differentiation

High personalisation - 4 High customisation to different customers – 4

Price 2 executives 7 8 88

E m

pl oy

Develop Meet specific customer requirement – 5

Competitors barriers to entry

Established customer relationship – 4 High service customisation – 4

Market 2 executives 7 7 94

# dimensions 46 59 Level of internal strategic fit

% total 94 84 88

Note: Strategic fit is measured as the highest number of functions or dimensions that align with each other

171

Figure A4.5 Overall level of internal strategic fit in Company 5

Dimension of internal strategic fit Operating strategy Service delivery system Competitive criteria

Dimensions that align with criteria

Aspect Findings Aspect Findings Group Importance OS SDS T%

People In house staff – 7 Customer served by single individual – 7 Organised into functional teams – 7

Important elements of strategy

Reduce costs – 3 Reduce complaints – 3 On-time delivery – 2 Manage contracts Technology Simple integrated computer system – 7 Automated allocation of work – 7

Customer service

6 executives identified as important

6 10 94

Equipment Computers – 7

Layout Each site processes customer group – 7 Customer served by single individual – 7

Where investments are made

Computer system to link all operations functions – 3 No investment

R ol

e of

Procedures Highly formal procedures – 7

Price 6 executives 7 10 100

Internal- business need

Cost – 108 Work management – 60 Staff development – 16

Capacity Each site processes all customer needs – 7 Functional teams around processes – 7 Small level of flexibility across processes – 7

Safety 6 executives 4 8 71

P er

fo rm

an ce

m ea

su re

Customer need

Price – 108 Delivery – 60 Customer service – 36 Safety – 28 Data integrity – 16 Quality conformance – 4

M an

ag em

en t

Demand Forecasted by customer group & process – 7 Work automatically overflowed – 7 Brand image 2 executives - - -

Incentive Structured appraisal system linked to promotion – 4

Quality management

Highly formal procedures – 7 Customer complaints – 7 Customer satisfaction surveys – 7

Data integrity

1 executive 5 8 76

Reward Basic salary – 4 Bonus on performance – 4 Service differentiation Speed of delivering service – 7

E m

pl oy

Develop Formal linked to skill assessments – 4 Competitors barriers to entry

Fully integrated computer system – 7 UK wide coverage – 7 Staff skill level and qualification – 7

Technical capability 1 executive 3 8 65

# dimensions 25 44 Level of internal strategic fit

% total 59 73 68

Note: Internal strategic fit is measured as the highest number of functions or dimensions that align with each other

172

Figure A4.6 Overall level of internal strategic fit in Company 6

Dimension of internal strategic fit Operating strategy Service delivery system Competitive criteria

Dimensions that align with criteria

Aspect Findings Aspect Findings Group Importance OS SDS T%

People In house staff – 7 Customer served by single individual – 7 Organised into functional teams – 7

Important elements of strategy

Reduce costs – 3 Reduce complaints – 3 On-time delivery – 2 Manage contracts Technology Simple integrated computer system – 7 Automated allocation of work – 7

Customer service

6 executives identified as important

6 10 94

Equipment Computers – 7

Layout Each site processes customer group – 7 Customer served by single individual – 7

Where investments are made

Computer system to link all operations functions – 3 No investment

R ol

e of

Procedures Highly formal procedures – 7

Price 6 executives 7 10 100

Internal- business need

Cost – 108 Work management – 60 Staff development – 16

Capacity Each site processes all customer needs – 7 Functional teams around processes – 7 Small level of flexibility across processes – 7

Safety 6 executives 4 8 71

P er

fo rm

an ce

m ea

su re

Customer need

Price – 108 Delivery – 60 Customer service – 36 Safety – 28 Data integrity – 16 Quality conformance – 4

M an

ag em

en t

Demand Forecasted by customer group & process – 7 Work automatically overflowed – 7 Brand image 2 executives - - -

Incentive Structured appraisal system linked to promotion – 4

Quality management

Highly formal procedures – 7 Customer complaints – 7 Customer satisfaction surveys – 7

Data integrity

2 executives 5 8 76

Reward Basic salary – 4 Bonus on performance – 4 Service differentiation Speed of delivering service – 7

E m

pl oy

Develop Formal linked to skill assessments – 4 Competitors barriers to entry

Fully integrated computer system – 7 UK wide coverage – 7 Staff skill level and qualification – 7

Technical capability 1 executive 3 8 65

# dimensions 25 44 Level of internal strategic fit

% total 59 73 68

Note: Internal strategic fit is measured as the highest number of functions or dimensions that align with each other

173

Figure A4.7 Overall level of internal strategic fit in Company 7

Dimension of internal strategic fit Operating strategy Service delivery system Competitive criteria

Dimensions that align with criteria

Aspect Findings Aspect Findings Group Importance OS SDS T%

People

In house staff – 6; Agency staff – 1 Cross functional teams – 6 Receive customer contact – 3 Process transactions – 6 Manage customer relationships – 3

Important elements of strategy

Reduce cost – 2 Manage relationship with customer – 2 Increase sales revenue

Technology Complex integrated computer system – 3 Simple computer system – 4

Customer service

8 executives identified as important

3 8 65

Equipment Computers – 7

Layout

Three sites – 2 Cross functional around customer groups – 2 Single site – 1 Functional layout

Where investments are made

Customer based teams – 2 Computer – product flexibility Reduce number of sites Bonuses based on sales £

R ol

e of

Procedures Formal procedures – 7

Price 8 executives 4 4 47

Internal- business need

Work management – 35 Cost – 12 Debt management – 2 Sales revenue – 2 Profit margin – 1

Capacity

Three sites – serve geographical customer group – 2 Cross functional teams – 2 High level of flexibility within a team – 2 Single site Functional teams No flexibility across teams

Product design 6 executives - - -

P er

fo rm

an ce

m ea

su re

Customer need

Price – 12 Customer service – 6

M an

ag em

en t

Demand Forecasting on customer group & process – 3 No forecasting – 4 Queues manage mismatch with capacity – 7

Incentive None – 2 Financial incentives for sales £ Quality management

Monitor customer complaints – 7 All contact recorded and a sample analysed

Account management 4 executives 3 8 65

Reward Basic salary – 3 Bonus based on sales revenue Service differentiation No differentiation – 7

E m

pl oy

Develop Unstructured – 3 On-the-job – 3 Competitors barriers to entry No barriers to entry – 7

Brand image 2 executives - - -

# dimensions 10 20 Level of internal strategic fit

% total 29 40 35

Note: Internal strategic fit is measured as the highest number of functions or dimensions that align with each other

174

Figure A4.8 Overall level of internal strategic fit in Company 8

Dimension of internal strategic fit Operating strategy Service delivery system Competitive criteria

Dimensions that align with criteria

Aspect Findings Aspect Findings Group Importance OS SDS T%

People

In house staff – 3 Process transactions on computer system Process transactions on paperwork Key account manager for area of 3rd party Regularly meet face-to-face with 3rd party Monitor and manage all contact with 3rd party

Important elements of strategy

Reduce cost – 2 Process customer requirements – 2 Manage 3rd party relationship Increase sales revenue Identify market opportunities Develop new products Meet legal requirements Technology

Simple computer system – 2 Spreadsheets for KAM process

Price

10 executives identified as important

3 6 53

Equipment Computers – 3

Layout Single site – 3 Functional teams based on products – 2 Area based teams

Where investments are made

No investment – 2 Technology – computers Bonuses for sales force based on sales £ Advertising and promotion

R ol

e of

Procedures Formal procedures – 3

Customer service

9 executives 1 5 35

Product design and offering

9 executives 1 1 12 Internal- business need

Work management – 167 Sales revenue – 156 Asset management – 84 Cost – 36 Sales channel – 17 Debt management – 6

Capacity

Single site processes all the steps in the delivery system for all customers – 2 Flexibility across processes and products – 2 Single ndividual processes all the steps for customer Teams dedicated to products

Financial 5 executives 1 1 12

P er

fo rm

an ce

m ea

su re

Customer need

Price – 36 Customer service – 20

M an

ag em

en t

Demand

No forecasting – 2 Overtime manages mismatch with capacity Forecasting on products & process Queues manage mismatch with capacity

Sales service 5 executives 1 5 35

Incentive None – 4 Financial incentives for sales £ Quality management

Telephone contact recorded & analyse sample Mail contact recorded & analyse sample KAM customer feedback process

Customer relationship 4 executives 1 5 35

Reward Basic salary – 4 Bonus based on sales revenue

Service differentiation

No differentiation – 3 Service delivery system

3 executives 1 6 41

E m

pl oy

Develop Formal link to assessment – 4 Unstructured and on-the-job

Competitors barriers to entry

No barriers to entry – 3 Brand name 1 executive 1 - 6

# dimensions 10 29 Level of internal strategic fit

% total 18 36 29

Note: Internal strategic fit is measured as the highest number of functions or dimensions that align with each other

175

Appendix 5 ANALYSIS OF LEVEL OF INTERNAL STRATEGIC FIT IN THE OPERATING STRATEGIES OF THE COMPANIES RESEARCHED Figure A5.1 Level of strategic fit in the operating strategy of Company 1

Function

Operations Sales and Marketing Other

# times dimension

fitted Dimension of operating strategy

Customer Service Distribution Marketing Sales Retail # %

Important elements of strategy      5 100

Where investments are made     4 80

Internal- business need     4 80 How performance is measured (# measures) Customer need - -

Incentivisation  1 20

Reward  1 20 Employee

Development - -

# 3 3 1 5 3 Strategic fit within function % 43 43 14 71 43

Note: Based on data in Appendix 1

176

Figure A5.2 Level of strategic fit in the operating strategy of Company 2

Function

Operations Sales and Marketing

# times dimension

fitted Dimension of operating strategy

Customer Service Distribution Marketing Sales # %

Important elements of strategy     4 100

Where investments are made   2 50

Internal- business need    3 75 How performance is measured (# measures) Customer need - -

Incentivisation  1 25

Reward  1 25 Employee

Development - -

# 2 3 1 5 Strategic fit within function % 28 43 14 71

177

Figure A5.3 Level of strategic fit in the operating strategy of Company 3

Function

Operations Sales and Marketing Other

# times dimension

fitted Dimension of operating strategy

Operations Customer Service Marketing Customer Relations Technical # %

Important elements of strategy      5 100

Where investments are made   2 40

Internal- business need  1 20 How performance is measured (# measures) Customer need - -

Incentivisation - -

Reward - - Employee

Development - -

# 3 2 1 1 1 Strategic fit within function % 43 29 14 14 14

178

Figure A5.4 Level of strategic fit in the operating strategy of Company 4

Function

Operations Sales and Marketing Other

# times dimension

fitted Dimension of operating strategy

Customer Service Distribution Sales Marketing Technical # %

Important elements of strategy      5 100

Where investments are made    3 60

Internal- business need    3 60 How performance is measured (# measures) Customer need     4 80

Incentivisation      5 100

Reward      5 100 Employee

Development      5 100

# 4 6 7 7 7 Strategic fit within function % 57 86 100 100 100

179

Figure A5.5 Level of strategic fit in the operating strategy of Company 5

Function

Operations Sales and Marketing

# times dimension

fitted Dimension of operating strategy

Customer Service Distribution Operations Commercial # %

Important elements of strategy     4 100

Where investments are made    3 75

Internal- business need     4 100 How performance is measured (# measures) Customer need     4 100

Incentivisation     4 100

Reward     4 100 Employee

Development     4 100

# 7 7 7 6 Strategic fit within function % 100 100 100 86

180

Figure A5.6 Level of strategic fit in the operating strategy of Company 6

Function

Operations Sales and Marketing

# times dimension

fitted Dimension of operating strategy

Customer Service Distribution Operations Commercial # %

Important elements of strategy     4 100

Where investments are made    3 75

Internal- business need     4 100 How performance is measured (# measures) Customer need     4 100

Incentivisation     4 100

Reward     4 100 Employee

Development     4 100

# 7 7 7 6 Strategic fit within function % 100 100 100 86

181

Figure A5.7 Level of strategic fit in the operating strategy of Company 7

Function

Operations Sales and Marketing

# times dimension

fitted Dimension of operating strategy

Customer Service Distribution Sales # %

Important elements of strategy    3 100

Where investments are made    3 100

Internal- business need  1 33 How performance is measured (# measures) Customer need  1 33

Incentivisation  1 33

Reward  1 33 Employee

Development - -

# 2 3 5 Strategic fit within function % 29 43 71

182

Figure A5.8 Level of strategic fit in the operating strategy of Company 8

Function

Customer Service Sales and Marketing Other

# times dimension

fitted Dimension of operating strategy

Front office Back office Sales Marketing Corporate # %

Important elements of strategy      5 100

Where investments are made    3 60

Internal- business need    3 60 How performance is measured (# measures) Customer need - -

Incentivisation  1 20

Reward  1 20 Employee

Development   2 40

# 4 3 5 2 1 Strategic fit within function % 57 43 71 29 14

183

Appendix 6 AREAS OF STRATEGIC FIT IN THE SERVICE DELIVERY SYSTEM OF EACH COMPANY RESEARCHED Figure A6.1 Level of strategic fit in the service delivery system of Company 1

Functions involved in delivering service

Operations Other

# times dimension

fitted Customer Service

Dimension of service delivery system

Site PO Site PE Site BA Distribution Retail # %

People      5 100

Technology    3 60

Equipment      5 100

Layout      5 100

Role of

Procedures      5 100

Capacity    3 60 Management

Demand    3 60

Quality management of service delivery      5 100

Service differentiation from the competition - -

Competitors barriers - -

# 7 7 7 5 5 Strategic fit within function % 70 70 70 50 50

Note: Based on data in Appendix 2

184

Figure A6.2 Level of strategic fit in the service delivery system of Company 2

Functions involved in delivering service

Operations

# times dimension

fitted Customer Service

Dimension of service delivery system

Site PO Site PE Site CA Distribution # %

People    3 75

Technology  1 25

Equipment     4 100

Layout     4 100

Role of

Procedures     4 100

Capacity    3 75 Management

Demand    3 75

Quality management of service delivery     4 100

Service differentiation from the competition - -

Competitors barriers to entry - -

# 7 7 7 5 Strategic fit within function % 70 70 70 50

185

Figure A6.3 Level of strategic fit in the service delivery system of Company 3

Functions involved in delivering service Operations Other

Operations

# times dimension

fitted Dimension of service delivery system Customer Service

Site N Site S Site W Site E Technical

# % People       6 100

Technology   2 33

Equipment   2 33

Layout   2 33

Role of

Procedures  1 17

Capacity   2 33 Management

Demand - -

Quality management of service delivery       6 100

Service differentiation from the competition - -

Competitors barriers to entry - -

# 7 2 2 2 2 6 Strategic fit within function % 70 20 20 20 20 60

186

Figure A6.4 Level of strategic fit in the service delivery system of Company 4

Functions involved in delivering service

Operations Sales and Marketing Other

# times dimension

fitted Dimension of service delivery system

Customer Service Distribution Sales Technical # % People     4 100

Technology   2 50

Equipment     4 100

Layout     4 100

Role of

Procedures     4 100

Capacity     4 100 Management

Demand - -

Quality management of service delivery    3 75

Service differentiation from the competition     4 100

Competitors barriers to entry     4 100

# 7 8 9 9 Strategic fit within function % 70 80 90 90

187

Figure A6.5 Level of strategic fit in the service delivery system of Company 5

Functions involved in delivering service Operations

Customer Service Distribution

# times dimension

fitted Dimension of service delivery system

Site KI Site HI Site GL Site N Site S Site W Site E # % People        7 100

Technology        7 100

Equipment        7 100

Layout        7 100

Role of

Procedures        7 100

Capacity        7 100 Management

Demand        7 100

Quality management of service delivery        7 100

Service differentiation from the competition        7 100

Competitors barriers to entry        7 100

# 10 10 10 10 10 10 10 Strategic fit within function % 100 100 100 100 100 100 100

188

Figure A6.6 Level of strategic fit in the service delivery system of Company 6

Functions involved in delivering service Operations

Customer Service Distribution

# times dimension

fitted Dimension of service delivery system

Site KI Site HI Site GL Site N Site S Site W Site E # % People        7 100

Technology        7 100

Equipment        7 100

Layout        7 100

Role of

Procedures        7 100

Capacity        7 100 Management

Demand        7 100

Quality management of service delivery        7 100

Service differentiation from the competition        7 100

Competitors barriers to entry        7 100

# 10 10 10 10 10 10 10 Strategic fit within function % 100 100 100 100 100 100 100

189

Figure A6.7 Level of strategic fit in the service delivery system of Company 7

Functions involved in delivering service Operations Sales and Marketing

# times dimension

fitted Customer Service Sales

Dimension of service delivery system

Site PO Site PE Site CA Distribution

Site PO Site PE Site CA # %

People        7 100

Technology - -

Equipment        7 100

Layout        7 100

Role of

Procedures        7 100

Capacity       6 86 Management

Demand    3 43

Quality management of service delivery        7 100

Service differentiation from the competition - -

Competitors barriers to entry - -

# 7 7 7 5 6 6 6 Strategic fit within function % 70 70 70 50 60 60 60

190

Figure A6.8 Level of strategic fit in the service delivery system of Company 8

Functions involved in delivering service

Customer service Sales and Marketing

# times dimension

fitted Dimension of service delivery system

Front office Back office Sales # % People    3 100

Technology    3 100

Equipment    3 100

Layout    3 100

Role of

Procedures    3 100

Capacity    3 100 Management

Demand    3 100

Quality management of service delivery    3 100

Service differentiation from the competition - -

Competitors barriers to entry - -

# 8 8 8 Strategic fit within function % 80 80 80

17 57

191

Appendix 7 LEVEL OF STRATEGIC FIT BETWEEN THE OPERATING STRATEGY AND THE IMPORTANT COMPETITIVE CRITERIA OF EACH COMPANY RESEARCHED Figure A7.1 Level of strategic fit between the operating strategy and the competitive criteria of Company 1

Competitive criteria group # times

dimension fitted Dimension of operating strategy

Customer Service

Financial benefit to the customer

Products and services

Brand name

Life style Corporate Other # %

Important elements of strategy   2 29

Where investments are made  1 14

Internal- business need  1 14 How performance is measured (# measures) Customer need  1 14

Incentivisation  1 14

Reward - - Employee

Development - -

# 2 4 - - - - - Strategic fit within competitive criteria % 29 57 - - - - -

6 12

192

Figure A7.2 Level of strategic fit between the operating strategy and the competitive criteria of Company 2

Competitive criteria group # times

dimension fitted

Dimension of operating strategy

Price Customer service Knowledge Product Sales Brand name # %

Important elements of strategy   2 33

Where investments are made   2 33

Internal- business need   2 33 How performance is measured (# measures) Customer need   2 33

Incentivisation   2 33

Reward  1 17 Employee

Development - -

# 6 5 - - - - Strategic fit within competitive criteria % 86 71 - - - -

11 26

193

Figure A7.3 Level of strategic fit between the operating strategy and the competitive criteria of Company 3

Competitive criteria group # times

dimension fitted

Dimension of operating strategy

Price Delivery speed Delivery reliability

Quality conformance

Licensed operator

Product design # %

Important elements of strategy  1 17

Where investments are made     4 67

Internal- business need    3 50 How performance is measured (# measures) Customer need     4 67

Incentivisation - -

Reward - - Employee

Development - -

# 4 2 2 2 1 1 Strategic fit within competitive criteria % 57 29 29 29 14 14

12 29

194

Figure A7.4 Level of strategic fit between the operating strategy and the competitive criteria of Company 4

Competitive criteria group # times

dimension fitted

Dimension of operating strategy

Product design Delivery

Quality conformance

Customer relationship

Technical support Price Market # %

Important elements of strategy       6 86

Where investments are made        7 100 Internal- business need

     5 71 How performance is measured (# measures)

Customer need        7 100

Incentivisation        7 100

Reward        7 100 Employee

Development        7 100

# 7 6 5 7 7 7 7 Strategic fit within competitive criteria % 100 86 71 100 100 100 100

46 94

195

Figure A7.5 Level of strategic fit between the operating strategy and the competitive criteria of Company 5

Competitive criteria group # times

dimension fitted

Dimension of operating strategy

Customer service Price Safety Brand image Data integrity

Technical capability # %

Important elements of strategy   2 33

Where investments are made      5 83 Internal- business need   2 33 How performance is

measured (# measures) Customer need     4 67

Incentivisation   2 33

Reward      5 83 Employee

Development      5 83

# 6 7 4 - 5 3 Strategic fit within competitive criteria % 86 100 57 - 71 43

23 55

196

Figure A7.6 Level of strategic fit between the operating strategy and the competitive criteria of Company 6

Competitive criteria group # times

dimension fitted

Dimension of operating strategy

Customer service Price Safety Brand image Data integrity

Technical capability # %

Important elements of strategy   2 33

Where investments are made      5 83 Internal- business need   2 33 How performance is

measured (# measures) Customer need     4 67

Incentivisation   2 33

Reward      5 83 Employee

Development      5 83

# 6 7 4 - 5 3 Strategic fit within competitive criteria % 86 100 57 - 71 43

23 55

197

Figure A7.7 Level of strategic fit between the operating strategy and the competitive criteria of Company 7

Competitive criteria group # times

dimension fitted

Dimension of operating strategy

Customer service Price Product design Account management Brand image # %

Important elements of strategy    3 60

Where investments are made    3 60 Internal- business need  1 20 How performance is

measured (# measures) Customer need    3 60

Incentivisation - -

Reward - - Employee

Development - -

# 3 4 - 3 - Strategic fit within competitive criteria % 43 57 - 43 -

10 29

198

Figure A7.8 Level of strategic fit between the operating strategy and the competitive criteria of Company 8

Competitive criteria group # times

dimension fitted

Dimension of operating strategy

Price Customer service Product

design and offering

Financial Sales service Customer

relationship Service delivery system

Brand name # %

Important elements of strategy      5 63

Where investments are made  1 13 Internal- business need   2 25 How performance is

measured (# measures) Customer need   2 25

Incentivisation - -

Reward - - Employee

Development - -

# 3 1 1 1 1 1 1 1 Strategic fit within competitive criteria % 43 14 14 14 14 14 14 14

10 18

199

Appendix 8 LEVEL OF STRATEGIC FIT BETWEEN THE SERVICE DELIVERY SYSTEM AND THE IMPORTANT COMPETITIVE CRITERIA OF EACH COMPANY RESEARCHED Figure A8.1 Level of strategic fit between the service delivery system and the competitive criteria of Company 1

Competitive criteria group # times

dimension fitted Dimension of service delivery system

Customer service

Financial benefit to the customer

Products and services Brand name Life style Corporate Other # %

People - -

Technology  1 14

Equipment   2 28

Layout  1 14

Role of

Procedures  1 14

Capacity  1 14 Management

Demand  1 14

Quality management of service delivery  1 14

Service differentiation from the competition - -

Competitors barriers - -

# 4 4 - - - - - Strategic fit within function % 40 40 - - - - -

8 11

Note: Based on data in Appendix 2

200

Figure A8.2 Level of strategic fit between the service delivery system and the competitive criteria of Company 2

Competitive criteria group # times

dimension fitted

Dimension of service delivery system

Price Customer service Knowledge Product Sales Brand name # %

People - -

Technology  1 17

Equipment   2 34

Layout  1 17

Role of

Procedures   2 34

Capacity   2 34 Management

Demand   2 34

Quality management of service delivery  1 17

Service differentiation from the competition - -

Competitors barriers - -

# 6 5 - - - - Strategic fit within function % 60 50 - - - -

11 18

Note: Based on data in Appendix 3

201

Figure A8.3 Level of strategic fit between the service delivery system and the competitive criteria of Company 3

Competitive criteria group # times

dimension fitted

Dimension of service delivery system

Price Delivery speed Delivery reliability Quality

conformance Licensed operator Product design # %

People - -

Technology  1 17

Equipment - -

Layout   2 34

Role of

Procedures - -

Capacity - - Management

Demand  1 17

Quality management of service delivery   2 34

Service differentiation from the competition - -

Competitors barriers - -

# 1 1 1 1 1 1 Strategic fit within function % 10 10 10 10 10 10

6 10

Note: Based on data in Appendix 3

202

Figure A8.4 Level of strategic fit between the service delivery system and the competitive criteria of Company 4

Competitive criteria group # times

dimension fitted

Dimension of service delivery system Product design Delivery

Quality conformance

Customer relationship

Technical support Price Market # %

People        7 100

Technology        7 100

Equipment        7 100

Layout        7 100

Role of

Procedures        7 100

Capacity      5 71 Management

Demand      5 71

Quality management of service delivery      5 71

Service differentiation from the competition       6 86

Competitors barriers    3 43

# 9 9 7 10 9 8 7 Strategic fit within function % 90 90 70 100 90 80 70

59 84

Note: Based on data in Appendix 3

203

Figure A8.5 Level of strategic fit between the service delivery system and the competitive criteria of Company 5

Competitive criteria group # times

dimension fitted

Dimension of service delivery system Customer

service Price Safety Brand image Data integrity Technical capability # %

People      5 83

Technology      5 83

Equipment      5 83

Layout      5 83

Role of

Procedures      5 83

Capacity   2 33 Management

Demand   2 33

Quality management of service delivery      5 83

Service differentiation from the competition      5 83

Competitors barriers      5 83

# 10 10 8 - 8 8 Strategic fit within function % 100 100 80 - 80 80

54 90

Note: Based on data in Appendix 3

204

Figure A8.6 Level of strategic fit between the service delivery system and the competitive criteria of Company 6

Competitive criteria group # times

dimension fitted

Dimension of service delivery system Customer

service Price Safety Brand image Data integrity Technical capability # %

People      5 83

Technology      5 83

Equipment      5 83

Layout      5 83

Role of

Procedures      5 83

Capacity   2 33 Management

Demand   2 33

Quality management of service delivery      5 83

Service differentiation from the competition      5 83

Competitors barriers      5 83

# 10 10 8 - 8 8 Strategic fit within function % 100 100 80 - 80 80

Note: Based on data in Appendix 3

205

Figure A8.7 Level of strategic fit between the service delivery system and the competitive criteria of Company 7

Competitive criteria group # times

dimension fitted

Dimension of service delivery system

Customer service Price Product design Account management Brand name # %

People   2 40

Technology   2 40

Equipment    3 60

Layout   2 40

Role of

Procedures    3 60

Capacity    3 60 Management

Demand    3 60

Quality management of service delivery   2 40

Service differentiation from the competition - -

Competitors barriers - -

# 8 4 - 8 - Strategic fit within function % 80 40 - 80 -

20 40

Note: Based on data in Appendix 3

206

Figure A8.8 Level of strategic fit between the service delivery system and the competitive criteria of Company 8

Competitive criteria group # times

dimension fitted

Dimension of service delivery system

Price Customer service Product design

and offering Financial Sales

service Customer

relationship Service delivery

system Brand name # %

People       6 75

Technology      5 63

Equipment  1 13

Layout      5 63

Role of

Procedures      5 63

Capacity   2 25 Management

Demand  1 13

Quality management of service delivery     4 50

Service differentiation from the competition - -

Competitors barriers - -

# 6 5 1 1 5 5 6 - Strategic fit within function % 60 50 10 10 50 50 60 -

Note: Based on data in Appendix 3

207

Appendix 9 LEVEL OF INTERNAL STRATEGIC FIT Figure A9.1 Level of strategic fit on importance of competitive criteria – agreement in, and between, functions on their market segments

Company Number of functional

departments

Number of market segments identified

Agreement within functions

(%)

Agreement across functions

(%)

2 3 7 36 13 3 3 6 100 77 4 2 15 100 100 5 3 18 80 12 6 3 20 40 9 7 3 37 25 14 8

Figure A9.2 Level of strategic fit of operating strategies in, and between, functions in each case study

Level of strategic fit of operating strategy

Company Number of functional

departments Within each function (%)

Across all the functions (%)

1 5 43 54 2 3 39 46 3 3 23 34 4 2 86 80 5 3 96 82 6 3 96 82 7 3 43 48 8

Note: Level of strategic fit of operating strategies is calculated as a simple average across all of the dimensions of operating strategy within each function

208

Figure A9.3 Level of strategic fit of service delivery systems in, and between, functions in each case study

Level of strategic fit of service delivery system

Company # functional departments

and sites involved in service delivery Within each function

(%) Across all the functions

(%)

1 5 62 58 2 4 65 65 3 6 37 42 4 4 83 78 5 7 100 100 6 7 100 100 7 7 63 63 8

3 80

Notes: 1. In many of the companies, service was delivered through more than one site within a function. Where this was the case,

each site was considered to be a separate functional department as they were often run and managed differently to the other sites within that function.

2. Level of strategic fit of service delivery system is calculated as a simple average across all of the dimensions of service delivery

Figure A9.4 Overall level of strategic fit of operating strategies and service delivery systems with competitive criteria categories identified by executives in each case study

Competitive criteria categories

Level of strategic fit with competitive criteria categories (% of dimensions)

Company # with

strategic fit # without

strategic fit Operating strategy Service delivery system

1 2 5 12 11 2 2 4 17 18 3 6 - 29 10 4 7 - 94 84 5 5 1 59 73 6 5 1 59 73 7 3 2 29 40 8

Note: Level of strategic fit of operating strategies is calculated as a simple average across all of the dimensions of operating strategy within each function

209

Appendix 10 CHARACTERISTICS OF MANAGEMENT IN EACH ORGANISATION AND THE RESULTING STRATEGIC ‘ORIENTATION’ AND ‘PROCESS’

Orientation Process

Company Characteristics of management in organisation

M ar

ke t-

le d

R es

ou rc

e- ba

se d

P re

sc ri

pt iv

E m

er ge

• Markets are not debated or understood • Focus on managing the resources of the business • Focus on day-to-day operation of the business • Strategic decisions only addressed when there is an issue

 

• Key account management process to understand markets • Focus on developing business to support markets • Focus on day-to-day operation of the business • Strategic decisions only addressed when there is an issue

 

• Markets are not debated or understood • Focus on managing the resources of the business • Business control framework links overall strategic intent of the

business to performance contracts of individuals (see Figure 6.x) • Focus on strategic and day-to-day decisions

 

• Markets are not debated or understood • Focus on managing the resources of the business • Business control framework links overall strategic intent of the

business to performance contracts of individuals (see Figure 6.x) • Focus on strategic and day-to-day decisions

 

210

Appendix 11 ELEMENTS OF THE EVALUATION MODEL THAT ARE PRESENT IN A SITUATION OF FIT OR LACK OF FIT Figure A11.1 Level of fit within functions in each dimension of importance of competitive criteria for organisations with ‘high’ and ‘low’ overall internal strategic fit

Organisation by internal level of fit

High Low Competitive criteria group selected

4 5 6 3 8 7 2 1

Customer service 70 60 50 75 70 50 60 50

Distribution 50 40 30 50 n/a - - Operations

Operations 60 60

Marketing 80 50 70 n/a -

Sales 80 70 60 50 n/a

Customer Relations 40

Sales and Marketing

Commercial 50 50

Retail n/a

Technical 70 50 Other

Corporate 40

Importance of competitive criteria Level of

strategic fit Overall 88 75 70 44 43 41 37 36

Key

Indicates a score of less than 50 Indicates a score of 50 to 69 Indicates a score of greater then 70

211

Figure A11.2 Level of fit across functions in each dimension of importance of competitive criteria for organisations with ‘high’ and ‘low’ overall internal strategic fit

Organisation by internal level of fit

High Low Competitive criteria group selected

4 5 6 3 8 7 2 1

Price 100 100 100 100 100 100 100 100

Safety 100 100

Delivery speed 100 100 100 60

Delivery reliability 100 100 100 60

Quality conformance 100 100 100 60

Customer relationship 70 17

Technical support/capability 70 25 25

Product/service design and offering 100 40 42 25 - 20

Customer Service 50 50 63 38 33 30

Financial benefit to the customer 42 60

Brand name/image 38 25 - - - 20

Account management/Sales service 33 25 -

Other 20 25 25 - 17 16 -

Total # groups identified 8 6 6 6 8 5 6 6

Importance of competitive criteria Level of

strategic fit Overall 88 75 70 44 43 41 37 36

Note: Other includes criteria groups such as Lifestyle, Knowledge, Delivery System, Market, Licensed Operator and Corporate

and Data Integrity Key

Indicates a score of less than 50 Indicates a score of 50 to 69 Indicates a score of greater then 70

212

Figure A11.3 Level of fit within functions in each dimension of operating strategy for organisations with ‘high’ and ‘low’ overall internal strategic fit

Organisation by internal level of fit

High Low Operating strategy dimensions

4 5 6 3 8 7 2 1

Important elements of strategy 100 100 100 100 100 100 100 100

Where investments are made 60 75 75 40 60 100 50 80

Internal- business need

60 100 100 20 60 33 75 80 How performance is measured (# measures) Customer need 80 100 100 - - 33 - -

Incentivisation 100 100 100 - 20 33 25 20

Reward 100 100 100 - 20 33 25 20 Employee

Development 100 100 100 - 40 - - -

Operating strategy 86 96 96 23 43 43 39 43 Level of strategic fit Overall 88 75 70 44 43 41 37 36

Key

Indicates a score of less than 50 Indicates a score of 50 to 69 Indicates a score of greater then 70

213

Figure A11.4 Level of fit across functions in each dimension of operating strategy for organisations with ‘high’ and ‘low’ overall internal strategic fit

Organisation by internal level of fit

High Low Operating strategy dimensions

4 5 6 3 8 7 2 1

Important elements of strategy 80 50 50 40 20 67 50 80

Where investments are made 60 75 75 40 20 67 50 80

Internal- business need

60 100 100 40 20 33 25 60 How performance is measured (# measures) Customer need 60 100 100 40 20 67 50 40

Incentivisation 100 100 100 - 60 33 - 40

Reward 100 100 100 80 80 67 75 80 Employee

Development 100 100 100 - 40 - - -

Operating strategy 80 89 89 34 49 48 46 54 Level of strategic fit Overall 88 75 70 44 43 41 37 36

Key

Indicates a score of less than 50 Indicates a score of 50 to 69 Indicates a score of greater then 70

214

Figure A11.6 Level of fit within functions in each dimension of service delivery system for organisations with ‘high’ and ‘low’ overall internal strategic fit

Organisation by internal level of fit

High Low Service delivery system dimensions

4 5 6 3 8 7 2 1

People 100 100 100 100 100 100 75 100

Technology 50 100 100 33 100 - 25 50

Equipment 100 100 100 33 100 100 100 100

Layout 100 100 100 33 100 100 100 100

Role of

Procedures 100 100 100 17 100 100 100 100

Capacity 100 100 100 33 100 86 75 60 Management

Demand - 100 100 - 100 43 75 60

Quality management of service delivery 75 100 100 100 100 100 100 100

Service differentiation from the competition 100 100 100 - - - - -

Competitors barriers 100 100 100 - - - - -

Service delivery system 83 100 100 37 80 63 65 62 Level of strategic fit Overall 88 75 70 44 43 41 37 36

Key

Indicates a score of less than 50 Indicates a score of 50 to 69 Indicates a score of greater then 70

215

Figure A11.7 Level of fit across functions in each dimension of service delivery system for organisations with ‘high’ and ‘low’ overall internal strategic fit

Organisation by internal level of fit

High Low Service delivery system dimensions

4 5 6 3 8 7 2 1

People 50 100 100 67 66 86 75 80

Technology 50 100 100 17 66 57 75 60

Equipment 100 100 100 67 100 100 100 100

Layout 75 100 100 67 66 86 75 40

Role of

Procedures 100 100 100 17 100 100 100 60

Capacity 50 100 100 67 33 86 75 100 Management

Demand 75 100 100 17 66 57 75 60

Quality management of service delivery 75 100 100 100 66 57 75 60

Service differentiation from the competition 100 100 100 - - - - 20

Competitors barriers 100 100 100 - - - - -

Service delivery system 78 100 100 42 57 63 65 58 Level of strategic fit Overall 88 75 70 44 43 41 37 36

Key

Indicates a score of less than 50 Indicates a score of 50 to 69 Indicates a score of greater then 70

216

Figure A11.8 Level of fit within each operating strategy dimension in fit between operating strategy and important competitive criteria for organisations with ‘high’ and ‘low’ overall internal strategic fit

Organisation by internal level of fit

High Low Operating strategy dimensions

4 5 6 3 8 7 2 1

Important elements of strategy 86 33 33 17 63 60 33 29

Where investments are made 100 83 83 67 13 60 33 14

Internal- business need 71 33 33 50 25 20 33 14 How performance is measured (# measures) Customer need 100 67 67 67 25 60 33 14

Incentivisation 100 33 33 - - - 33 14

Reward 100 83 83 - - - 17 - Employee

Development 100 83 83 - - - - -

Between operating strategy and competitive criteria 94 55 55 29 18 29 26 12 Level of

strategic fit Overall 88 75 70 44 43 41 37 36

Key

Indicates a score of less than 50 Indicates a score of 50 to 69 Indicates a score of greater then 70

217

Figure A11.9 Level of fit within each competitive criteria group in fit between operating strategy and important competitive criteria for organisations with ‘high’ and ‘low’ overall internal strategic fit

Organisation by internal level of fit

High Low Competitive criteria group selected

4 5 6 3 8 7 2 1

Price 100 100 100 57 43 57 86 57

Safety 57 57

Delivery speed 86 71 71 29

Delivery reliability 86 71 71 29

Quality conformance 71 71 71 29

Customer relationship 100 14

Technical support/capability 100 43 43

Product/service design and offering 100 14 14 - - -

Customer Service 86 86 14 43 71 29

Financial benefit to the customer 14 -

Brand name/image - - 14 - - -

Account management/Sales service 14 43 -

Other 100 71 71 14 14 - -

Importance of competitive criteria 94 55 55 29 18 29 26 12 Level of

strategic fit Overall 88 75 70 44 43 41 37 36

Key

Indicates a score of less than 50 Indicates a score of 50 to 69 Indicates a score of greater then 70

218

Figure A11.10 Level of fit within each service delivery dimension in fit between service delivery system and important competitive criteria for organisations with ‘high’ and ‘low’ overall internal strategic fit

Organisation by internal level of fit

High Low Service delivery system dimensions

4 5 6 3 8 7 2 1

People 100 83 83 - 75 40 - -

Technology 100 83 83 17 63 40 17 14

Equipment 100 83 83 - 13 60 34 28

Layout 100 83 83 34 63 40 17 14

Role of

Procedures 100 83 83 - 63 60 34 14

Capacity 71 33 33 - 25 60 34 14 Management

Demand 71 33 33 17 13 60 34 14

Quality management of service delivery 71 83 83 34 50 40 17 14

Service differentiation from the competition 86 83 83 - - - - -

Competitors barriers 43 83 83 - - - - -

Between service delivery system and competitive criteria 84 90 90 10 36 40 18 11 Level of

strategic fit Overall 88 75 70 44 43 41 37 36

Key

Indicates a score of less than 50 Indicates a score of 50 to 69 Indicates a score of greater then 70

219

Figure A11.11 Level of fit within each competitive criteria group in fit between service delivery system and important competitive criteria for organisations with ‘high’ and ‘low’ overall internal strategic fit

Organisation by internal level of fit

High Low Competitive criteria group selected

4 5 6 3 8 7 2 1

Price 80 100 100 10 60 40 60 40

Safety 80 80

Delivery speed 90 80 80 10

Delivery reliability 90 80 80 10

Quality conformance 70 80 80 10

Customer relationship 100 50

Technical support/capability 90 80 80

Product/service design and offering 90 10 10 - - -

Customer Service 100 100 50 80 50 40

Financial benefit to the customer 10 -

Brand name/image - - - - - -

Account management/Sales service 50 80 -

Other 70 80 80 10 60 - -

Importance of competitive criteria 84 90 90 10 36 40 18 11 Level of

strategic fit Overall 88 75 70 44 43 41 37 36

Key

Indicates a score of less than 50 Indicates a score of 50 to 69 Indicates a score of greater then 70

220

Appendix 12 CHARACTERISTICS FOUND WITHIN THE RESEARCH Figure A12.1 Competitive criteria found within the companies researched

Competitive criteria Examples identified within the companies researched

Price Price

Discount Commission

Design capability

Design capability Technical support Technical capability Product/service design

Product/service offering Product warrantee Added value products Loyalty products

Green products Flexible payment Budget payments

Customer service

Customer Service Not hassled Accurate and timely bills Answer telephone Knowledgeable staff

One point of contact Easy to do business with Friendly/professional Clear product explanation Existing relationship

One stop shop Quick and efficient Account manager Quick quote Quick decision

Delivery speed Delivery speed

Delivery reliability

Delivery reliability Reliability of supply

Time window available Keeping appointment

Quality conformance Quality conformance Safety Meeting design specification

Other

Brand name Corporate

Environmental Licensed operator

Market leader

221

Figure A12.2 Characteristics of the market found within the companies researched

Dimension of market Characteristics found within the companies researched

Design capability Orders are won on the design of the product/service

Delivery speed Orders are won by being able to provide a product/service quickly to a customer

Customer service Orders are won through the level of service provided to the customer

Order-winning criteria

Price Customers are price sensitive Orders are won on price Profit margins tend to be low per order

Delivery reliability It is important to meet the requested delivery date specified to quality for future orders with a customer

Price Profit margins tend to be high Orders are not won on price

Quality conformance

It is important to meet the design specification of the product/service to quality for future orders with a customer

How are orders won?

Qualifying criteria

Customer service It is important to meet, but not exceed, the service level expected to quality for future orders with a customer

Capability The company sells a capability to customers such as the ability to design a product/service or produce one very quickly

What does the company sell? Standard

product/service The company sells a standard product/service to all of its customers

Product/service customisation Low level of customisation of product/service for each customer High level of customisation o product/service for each customer

Responding to customer needs

Ensure that the business has the capability to respond to customer needs such as being able to design a product/service or provide one quickly to customer requirements Business

Cost reduction Reduce cost in its organisational structure and service delivery system so that it can compete on price in the market place but still be profitable

Product design Design the product/service to meet customer specification Meeting schedules

Deliver the product/service in line with customer requirements

Key task

Management

Throughput speed/efficiency

Ensure that the productivity of the service delivery system is high

Order volume Customer orders are for a low number of products/services Customer orders are for a high number of products/services

Technical similarity Customer orders are all for technically similar products/services Customer orders are all for technically different products/services

Design Design time in producing each product/service is high Design time in producing each product/service is low

Technical Technical time in producing each product/service is high Technical time in producing each product/service is low

Order nature

Content

Work Work time in producing each product/service is high Work time in producing each product/service is low

222

Figure A12.3 Characteristics of ‘operating strategy’ found within the companies researched

Dimension of operating strategy Characteristics found within the companies researched

Cost reduction Reduce cost

Market development

Increase sales revenue Increase market share Develop new markets Identify new market opportunities Understand dynamics of an unstable market

Design capability

Design new products Develop new products Design products to meet customer specification

Responding to customer needs

Reduce customer complaints Manage customer relationship Process customer requirements Process customer telephony requirements Process customer paperwork requirements On-time delivery to customers Achieve short delivery lead-time

Important elements of strategy

Legal requirement

Ensure that legal requirements are met Manage contracts with customers Manage contracts with suppliers

Technology/ Equipment

Computer system Computer system sell wide product range Computer system link ops to customer service Computer system link all operations functions New testing and development facility

People Bonuses for sales force based on sales £ Training and development

Service delivery system

None No investment

Organisational structure

Reduce number of sites Set up dedicated division in business to support this market Set up customer based teams Develop internet shop No investment

Where investments are made

Advertising and promotion

Marketing initiatives to promote brand name Advertising and promotion to reinforce brand name Advertising and promotion to generate demand Industry safety initiatives Membership of industry institutes No advertising

223

Dimension of operating strategy Characteristics found within the companies researched

Cost reduction Cost Work management

Level of customer support

CRM Customer visit plan Key account management system Customer marketing plan Customer technical plan Work management

Business financial performance

Cash Debt management Sales revenue Profit margin

People development

Staff development

Internal- business need

None No measures Cost reduction Price

Level of customer support

Customer service Delivery Quality conformance Data integrity Design Customer visit plan Key account management system Customer marketing plan Customer technical plan

How performance is measured

Customer need

None No measures Internal business need

Financial incentives for sales revenue Soft incentives for sales revenue for cross-selling products

Customer need

High level of customer contact Short feedback loop Structured appraisal system linked to promotion

Incentivisation

None None Internal business need

Bonus based on sales revenue

Customer need

Bonus based on performance targets Reward

None Basic salary Overtime payment

Internal business need

Formal linked to skill assessments

Customer need

Structured around specific customer requirements

Employee

Development

None Unstructured On-the-job

Note: Based on the data in Appendix 2.

224

Figure A12.4 Characteristics of ‘service delivery system’ found within the companies researched

Dimension of service delivery system Characteristics found within the companies researched

Process work

Process transactions on computer system Establish job details Update computer system Use information on system to answer queries/update status Complete design as part of quotation

Manage customers

Manage customer relationships Monitor and manage all business contact with customer Key Account Manager for each customer Key Account Manager for area of 3rd party Monitor and manage all business contact with 3rd party Technical Manager for each customer

Level of customer interaction

Interact with customers Customer interacts with single individual in service delivery Regularly meet face-to-face with 3rd party Regularly meet face-to-face with customer Often develop products with customer Travel to site and complete job

Functional structure

Organised into functional teams

Team structure

Hybrid of customer-based and functional teams Small team that processes all customers Cross functional teams around customer groups Cross functional teams

In house In house staff In house management In house staff process quotations and manage project

People

Outsourced Agency staff used to install & read equipment Completion of work outsourced to agency

Complex Complex single integrated computer system Number of separate computer systems

Simple Simple computer system Simple integrated computer system links all processes Simple CAD computer system

Dedicated Automated allocation of work to individuals Specific technical modelling software

Technology

Flexible High level of paperwork in the process Spreadsheets for customer visit plan and KAM process

Equipment Level of automation

Computers Paperwork

Single site

Single site Single site that handles all customers Single site that handles all customers with designed product Customer handled by single individual

Multi site

Multi site – 3 sites Three sites Two sites – laboratory & office Customer passed through different sites and teams

Functional Functional layout Functional teams within each site around processes Functional teams based on products

Layout

Team

Cross functional team Cross functional layout around customer groups Each site handles a geographic region of customers Area based teams

Informal Informal procedures

Role of

Procedures Formal

Formal procedures Formal procedures – driven by computer system Highly formal procedures – driven by computer system

225

Dimension of service

delivery system Characteristics found within the companies researched

Single site Single site Single site process all the steps in the delivery system Single individual processes all the steps for a customers

Multi site Three sites – each serving a geographical customer group Three sites – each serving a customer group Each site processes different steps in the delivery system

Functional Functional teams Functional teams around processes

Team Cross functional teams Capacity

Level of flexibility

Individuals highly flexible across all processes High level of flexibility within a team Small level of flexibility across processes within a site No flexibility across processes No flexibility across processes within a site No flexibility across teams

Not forecasted No forecasting Forecasted by process

Forecasting for site as a whole Forecasted around functional steps in the computer system

Forecasted by customers or products

Forecasted around customer groups and steps in the computer system Forecasted around customer groups and processes Forecasted around products and processes

Management

Demand

Manage mismatch with capacity

Queues used to manage mismatch with capacity Overtime used to manage mismatch with capacity Resource from other business areas manage mismatch If site becomes overloaded, work overflows to other sites

Nature

All customer contact recorded and a sample analysed All telephone contact recorded and a sample analysed All mail contact recorded and a sample analysed Monitor customer complaints Performance measures Customer satisfaction surveys

People KAM customer feedback process

Quality management of service delivery

Process Highly formal procedures in computer system Formal procedures in computer system

Service differentiation from the competition

Level of differentiation

No differentiation High level of personalisation High level of customisation to different customers Speed of delivering service

Competitors barriers Level of barriers to entry

No barriers to entry Established customer relationship High customisation of service Product design Product design capability Fully integrated computer system UK wide coverage Staff skill level and qualification

Note: Based on the data in Appendix 3.

226

Figure A12.5 Multiple variable nature of the data gathered through the research showing the different dimensions and characteristics within each aspect of internal strategic fit

Aspect

Dimension

# characteristics

Market

How are orders won? What does the company sell? Product/service customisation Key task Order nature Total

8 2 2 5 10

Operating strategy

Important elements of strategy Where investments are made How performance is measured Employee incentivisation Employee reward Employee development Total

5 5 8 3 3 3

Service delivery system

Role of people Role of technology Role of equipment Role of layout Role of procedures Capacity management Demand management Quality management of service delivery Service differentiation from the competition Competitor barriers to entry Total

7 4 1 4 2 5 4 3 1 1

Total

21 96

Note: Based on information in Figures 6.23, 6.24 and 6.25.

227

Figure A12.6 Multiple positions that have to be presented on each aspect of internal strategic fit within each organisation researched

Aspect Company # positions

Market

1 2 3 4 5 6 7 8 Average Total

5 4 5 5 4 4 3 4

4 34

Operating strategy

1 2 3 4 5 6 7 8 Average Total

5 4 5 5 4 4 3 5

4 35

Service delivery system

1 2 3 4 5 6 7 8 Average Total

5 4 6 4 7 7 7 3

5 43

Average Total

8 24

5 112

Note: Based on information in Appendix 1, 2 and 3.

228

Appendix 13 METHODOLOGY FOR APPLYING THE HESKETT (1986) ‘STRATEGIC SERVICE VISION’ Figure A13.1 Data collection methods used to analyse the different aspects of strategic internal fit

Data collection methods used

Aspect of internal

strategic fit Element being reviewed

D oc

um en

ta tio

A rc

hi va

l r ec

or ds

S tr

uc tu

re d

in te

rv ie

U ns

tr uc

tu re

d in

te rv

ie w

O bs

er va

tio n

To ta

Market research   2

Customer surveys   2

Customer behaviour   2

Importance of different competitive criteria

Executives’ opinion of customer demands   2

What are the important elements of the strategy within each function?

    4

Where are investments made?      5

How is the performance of the business measured?     4

Operating strategy

How are employees incentivised, rewarded and developed?     4

What are the key steps in the service delivery system?      5

What is the role of people, technology, equipment, layout and procedures?

     5

How are capacity and demand managed?      5

How are quality standards ensured?      5

Service delivery system

How is the service differentiated from the competition?

     5

Total 10 10 10 10 7 47

Note: Based on examples given in Figures 5.9, 5.10 and 5.11.

229

Figure A13.2 Structured set of questions asked within focused interviews used to analyse the executive’s opinion of the importance of different competitive criteria in the markets they serve

Element being reviewed Structured set of questions

1. Segment the market

A. How many markets does your business compete in? B. What ‘name’ would you give to each of these segments? C. What is the size (£k) of each of these market segments?

2. Identify customer groups

group). Or are there further customer groups in this segment?

3. Identify order- winners and qualifiers

Take each customer group and ask further questions: A. How do you win business with each customer group? B. What dimensions are important within each customer group? For example: price, delivery

reliability or design capability. Take each dimension and ask further questions: A. Is this dimension an order-winner or a qualifier? Explain the distinction between these 2

dimensions. B. Is this the same for all customers within this group? If not, does this group actually split into

more than one group?

4. Weight order- winners and qualifiers

customer group? D. Would the answer to the previous 3 questions be the same for all customers within this

customer group? Allocate 100 points across all the order-winners in each customer group to show their importance in terms of winning business with this customer group.

B. Would these weightings be the same for all customers within this group? ? If not, does this group actually split into more than one group?

230

Figure A13.3 Structured set of questions asked within focused interviews used to establish general background information on the company

Element being reviewed Structured set of questions

Organisational structure

• What is the organisational structure of the function? • What are the key activities and roles within the function? • What are staff levels within each of the key activities and roles?

Management activities

• Are there any regular meetings? Within function and with other

functions? • Are there any regular reports? • Have there been any major developments/projects within the last

year?

Figure A13.4 Structured set of questions asked within focused interviews used to analyse the executive’s opinion of the operating strategy within their business function

Element being reviewed Structured set of questions

Elements of strategy • What are the important elements of the strategy within your function?

Investments

• Where are investments made? • What have been the investment priorities in the last 5 years? • What are the projected investment priorities for the next 5 years?

Performance measures

organisation? • Are there soft measures as well as hard measures? • Do the measures vary in level of importance? • Which is the most useful to you? Which does your manager consider to be

most useful? • Do these measures reflect the importance of different competitive criteria

identified in the previous section? • How is customer satisfaction measured?

Employee incentivisation, reward and development

business functions?

231

Figure A13.5 Structured set of questions asked within focused interviews used to analyse the executive’s opinion of the elements of the service delivery system conducted within their business function

Element being reviewed Structured set of questions

Key steps in the service delivery system

Role of people, technology, equipment, layout and procedures

• What is the role of people, technology, equipment, layout and procedures

within the service delivery system? • How does this vary by the different steps within the delivery system?

Demand management

• How is demand managed within the different steps of the service delivery

(E.g. advertising and promotions) • How often is demand forecasted? Hourly, daily or weekly basis?

Capacity management

• How is capacity managed within the different steps of the service delivery

process?

Quality management

Service differentiation • How is the service differentiated from the competition?

Barriers to entry • How are barriers to entry provided?

232

Figure A13.6 Level of strategic fit in the importance of competitive criteria

Competitive criteria selected

Identified at being important by executives in each function

(% executives interviewed) Strategic fit

across functions

Group # criteria identified Function A Function B Etc #

executives %

total

Group A

Group B

Etc

# executives Strategic fit within function %

Figure A13.7 Level of strategic fit in the operating strategy

Function Strategic fit across functions Dimension of operating strategy

Function A Function B Etc # %

Important elements of strategy

Where investments are made

Internal- business need How performance is measured (# measures) Customer need

Incentivisation

Reward Employee

Development

# Strategic fit within function %

233

Figure A13.8 Level of strategic fit in the service delivery system

Functions involved in delivering service Strategic fit across functions Dimension of service delivery system

Function A Function B Etc # %

Key steps in the delivery system n/a n/a

People

Technology

Equipment

Layout

Role of

Procedures

Capacity Management

Demand

Quality management of service delivery

Service differentiation from the competition

Competitors barriers

# Strategic fit within function

Figure A13.9 Level of strategic fit between the operating strategy and the competitive criteria

Competitive criteria group # times

dimension fitted Dimension of operating strategy

Group A Group B Etc # %

Important elements of strategy

Where investments are made

Internal- business need How performance is measured (# measures) Customer need

Incentivisation

Reward Employee

Development

# Strategic fit within competitive criteria %

234

Figure A13.10 Level of strategic fit between the service delivery system and the competitive criteria

Competitive criteria group # times

dimension fitted Dimension of service delivery system

Group A Group B Etc # %

People

Technology

Equipment

Layout

Role of

Procedures

Capacity Management

Demand

Quality management of service delivery

Service differentiation from the competition

Competitors barriers

# Strategic fit within function %

Figure A13.11 Overall level of internal strategic fit

Dimension of internal strategic fit

Operating strategy Service delivery system Competitive criteria Dimensions that align with criteria

Aspect Findings Aspect Findings Group Importance OS SDS T%

People Important elements of strategy

Technology Equipment Layout

Where investments are made

R ol

e of

Procedures

Group A

#executives identified criteria as important

Internal- business need

Capacity

P er

fo rm

an ce

m ea

su re

Customer need

M an

ag em

en t

Demand

Group B # executives

Incentive Quality management

Reward Service differentiation

E m

pl oy

Develop Competitors barriers to entry

Etc # executives

# dimensions Level of internal strategic fit % total

235

Appendix 14 METHODOLOGY FOR APPLYING THE HILL (1985) ORDER-WINNER AND QUALIFIER TECHNIQUE Figure A14.1 Structured set of questions asked within focused interviews used to analyse the executive’s opinion of the importance of different competitive criteria in the markets they serve

Element being reviewed Structured set of questions

1. Segment the market

A. How many markets does your business compete in? B. What ‘name’ would you give to each of these segments? C. What is the size (£k) of each of these market segments?

2. Identify customer groups

group). Or are there further customer groups in this segment?

3. Identify order- winners and qualifiers

Take each customer group and ask further questions: A. How do you win business with each customer group? B. What dimensions are important within each customer group? For example: price, delivery

reliability or design capability. Take each dimension and ask further questions: C. Is this dimension an order-winner or a qualifier? Explain the distinction between these 2

dimensions. D. Is this the same for all customers within this group? If not, does this group actually split into

more than one group?

4. Weight order- winners and qualifiers

customer group? D. Would the answer to the previous 3 questions be the same for all customers within this

group? If not, does this group actually split into more than one group? Take each order-winner and ask further questions: E. How would you rate each of these order-winners in terms of their relative important to this

customer group? Allocate 100 points across all the order-winners in each customer group to show their importance in terms of winning business with this customer group.

F. Would these weightings be the same for all customers within this group? ? If not, does this group actually split into more than one group?

236

Figure A14.2 Additional step included developing and overall business of the importance of different competitive criteria in the markets they serve

Element being reviewed Structured set of questions

5. Determine overall business perspective of order-winners and qualifiers

Figure A14.3 Framework for representing level of strategic fit in the importance of competitive criteria

Competitive criteria selected

Identified at being important by executives in each function

(% executives interviewed) Strategic fit

across functions

Group # criteria identified Function A Function B Etc #

executives %

total

Group A

Group B

Etc

# executives Strategic fit within function %

237

REFERENCES 1. Acur, N. and Bititci, U. (2004) “A balanced approach to strategy process”, International

Journal of Operations and production Management, v24 n4, pp.388-408. 2. Adam, E.E. and Swamidass, P.M. (1989) “Assessing operations management from a

strategic perspective”, Journal of Management, v15 n2, pp.181-203. 3. Aguinis, H. (1993) “Action research and scientific method: presumed discrepancies and

actual similarities”, Journal of Applied Behavioural Science, vol. 29, pp.416-431. 4. Ahmed, N.U., Montagno, R.V. and Firenze, R.J. (1996) “Operations strategy and

organisational performance: An empirical study”, International Journal of Operations and production Management, v16 n5, pp.41-53.

5. Anderson, P. (1983) “Decision making by objection and the Cuban missile crisis”, Administrative Science Quarterly, vol. 28, pp.201-222.

6. Anderson, E.W. and Fornell, C. (1994) “A customer satisfaction research prospectus”, in Rust, R.T. and Olivier, R.L. (Eds) “Service quality: New directions in theory and practice” Sage Publications, Thousand Oaks, CA, pp.241-268.

7. Anderson, E.W., Fornell, C. and Lehman, D.R. (1993) “Economic consequences of providing quality and customer satisfaction”, Working Paper (report 93-112), Marketing Science Institute, Cambridge, Mass.

8. Anderson, J.C., Cleveland, G. and Schroeder, R.G. (1989) “Operations strategy: A literature review”, Journal of Operations Management, v8, n2, pp.133-158.

9. Anderson, J.C., Gerbing, D.W. (1988) “Structural equation modelling in practice: A review and recommended two-step approach”, Psychological Bulletin, v103, pp.411- 423.

10. Anderson, J.C., Schroeder, R.G. and Cleveland, G. (1991) “The process of manufacturing strategy: Some empirical observations and conclusions”, International Journal of Operations and Production Management, v11, n3, pp.86-110.

11. Andreson, T. (1991) “Effects and causes of service quality – a case study from the hospital industry”, in van der Wiele, T. and Timmers, J.G. (Eds) “Proceedings of the workshop on Quality Management in Services, The Strategic Quality Management Institute.

12. Argyris, C., Putman, R. and Smith, D. (1985) “Action science”, Jossey-Bass, San Francisco.

13. Arias-Aranda, D. (2002) “Relationship between operations strategy and size in engineering consulting firms”, International Journal of Service Industry Management, v13, n3, pp.263-285.

14. Arias-Aranda, D. (2003) “Service operations strategy, flexibility and performance in engineering consulting firms”, International Journal of Operations and Production Management, v23, n11, pp.1401-1421.

15. Arias-Aranda, D., Minguela Rata, B. and Rodrõ Âguez Duarte, A. (2001) “Innovation and firm size: an empirical study for Spanish engineering consulting companies”, European Journal of Innovation Management, v4, n3.

16. Armistead, C.G. (1985) in Voss, C.A., Armistead, C., Johnston, R. and Morris, B. (Eds) “Operations management in service industries and the public sector”, Wiley, Chichester.

17. Armistead, C.G. (1990) “Service operations strategy: framework for matching the service operations task and the service delivery system”, International Journal of Service Industry Management, v1, n2, pp.6-17.

18. Armistead, C.G. and Clark, G. (1993) “Resource activity mapping: The value chain in service operations strategy”, The Service Industries Journal, v13, n4, pp.221-239.

19. Armistead, C.G. and Clark, G. (1994a) “The ‘coping’ capacity management strategy in services and the influence on quality performance”, International Journal of Service Industry Management, v5, n2, pp.5-22.

238

20. Armistead, C.G. and Clark, G. (1994b) “Service quality and service recovery: The role of capacity management”, in Arimstead, C.G. (Ed) “The future of services management”, Kogan Page, London.

21. Armistead, C.G., Johnston, R. and Slack, N. (1988) “The strategic determinants of service productivity”, International Journal of Operations and production Management, v8, n3, pp.95-108.

22. Babakus, E. and Boller, G.W. (1992) “An empirical assessment of the SERVQUAL scale”, Journal of Business Research, v26, n6, pp.253-268.

23. Babbie, E. (1990) “Survey research methods”, Wadsworth, Belmont. 24. Barney, J. (1991) “The resource-based model of the firm: Origins, implications and

prospect”, Journal of Management, v17, n1. 25. Barton, S. (1988) “Diversification and systematic risk: Another look”, Academy of

Management Journal, v25, pp.166-175. 26. Baskerville, R.L. and Wood-Harper, T. (1996) “A critical perspective on action research

as a method for information systems research”, Journal of Information Technology, vol. 11, pp. 235-246.

27. Bechhofer, F. (1974) “Current approaches to empirical research: some central ideas”, in Rex, J. (Ed.) “Approaches to sociology”, Routledge, London.

28. Behara, R.S. and Chase, R.B. (1993) “Service quality deployment: Quality service by design”, in Sarin, R.V. (Ed) “Perspectives in Operations Management: Essays in honor of Elwood S. Buffa”, Kluwer Academic Press, Norwall, MA.

29. Beinhocker, E.D. (1999) “Robust adaptive strategies”, Sloan Management Review, v40, n3, pp.95-106.

30. Bell, C.R. and Zemke, R.E. (1987) “Service breakdown: The road to recovery”, Management Review, Oct, pp.32-35.

31. Ben-Akiva, M. and Lerman, S.R. (1991) “Discrete choice analysis”, The MIT Press, Boston, MA.

32. Benbasat, I., Goldstein, D.K. and Mead, M. (1987) “The case research strategy in studies of information systems”, Management Information Systems Quarterly, vol. 11, no. 3, pp. 369-386.

33. Bernhardt, K.L., Donthu, N. and Kennett, P.A. (1994) “The relationship between customer satisfaction, employee satisfaction, and profitability: A longitudinal analysis”, Department of Marketing, Georgia State University, Atlanta.

34. Berry, L.L. (1995) “On great service: A framework for action”, Free Press, New York. 35. Berry, L.L. (1999) “Discovering the soul of service: The nine drivers for sustainable

business”, Free Press, New York. 36. Berry, W.L., Hill, T.J. and Klompmaker, J.E. (1995) “Customer-driven manufacturing”,

International Journal of Operations and production Management, v15, n3, pp.4-15. 37. Bettis, R. and Mahajan, V. (1985) “Risk/return performance of diversified firms”,

Management Science, v31, pp.785-799. 38. Bitner, M.J. and Hubert, A.R. (1994) “Encounter satisfaction versus overall satisfaction

versus service quality: the customer’s voice”, in Rust, R.T. and Olivier, R.L. (Eds) “Service quality: New directions in theory and practice” Sage Publications, Thousand Oaks, CA, pp.72-94.

39. Bitner, M.J., Booms, B.H. and Tetreault, M.S. (1990) “The service encounter: Diagnosing favourable and unfavourable incidents”, Journal of Marketing, v54, Jan, pp.71-84.

40. Booz Allen and Hamilton, Inc. (1982) “Manufacturing strategy: Concepts and application”, Nov.

41. Bonoma, T.V. (1985) “Case research in marketing: opportunities, problems and a process”, Journal of Marketing Research, vol. 22, pp. 199-208.

42. Boudreau, J., Hopp, W., McClain, J.O. and Thomas, L.J. (2003) “On the interface between operations and human resources management”, Manufacturing and Service Operations Management, v5, n3, pp.179-202.

239

43. Bourne, M., Mills, J. and Faull, N. (2003) “Operations strategy and performance: A resource-based perspective”, International Journal of Operations and Production Management, v23, n9, pp.944-946.

44. Boston Consultancy Group (1972) “Perspectives in experience”. 45. Boyer, K.K. and Lewis, M.W. (2002) “Competitive priorities: Investigating the need for

trade-offs in operations strategy”, Production and Operations Management, v11, n1, pp.9-20.

46. Boyer, K.K. and Mcdermott, C. (1999) “Strategic consensus in operations strategy”, Journal of Operations Management, v17, pp.289-305.

47. Bowen, D.E. (1986) “Managing customers as human resources in service organisations”, Human Resource Management, v25, n3, Fall, pp.371-384.

48. Bowen, J. and Ford, R.C. (2002) “Suppose we took service seriously? An introduction to the special issue”, Academy of Management Executive, v16, n4, pp.69-72.

49. Bowen, J. and Ford, R.C. (2002) “Managing service organisations: Does having a ‘thing’ make a difference?”, Journal of Management, v28, n3, pp.447-469.

50. Brignall, T.J., Fitzgerald, L., Silvestro, R. and Johnston, R. (1992) “Product costing in service organisations”, Management Accounting Research, n2, pp.227-248.

51. Brown, S.A. (Editor) (1997) "Breakthrough customer service", Wiley, Toronto. 52. Brown, S. (2000) “Manufacturing the future: Strategic resonance for enlightened

manufacturing”, Pearson Education, London. 53. Bryman, A. (1988) “Doing research in organisations”, Routledge, London. 54. Buffa, E.S. (1984) “Making American manufacturing competitive”, California

Management Review, v26 n3, pp.29-46. 55. Burgelman, R. (1983) “A process model of internal corporate venturing in a major

diversified firm”, Administrative Science Quarterly, vol. 28, pp.223-244. 56. Cadotte, E.R. and Turgeon, N. (1988) “Dissatisfiers and satisfiers: suggestions for

consumer complaints and compliments”, Journal of Consumer Satisfaction, Dissatisfaction and Complaining Behaviour, v1, pp.74-79.

57. Carman, J.M. and Langeard, E. (1990) “Growth strategies for service firms”, Strategic Management Journal, v1, pp.7-22.

58. Chase, R.B. (1978) “Where does the customer fit in a service operation”, Harvard Business Review, v56, pp.137-142.

59. Chase, R.B. (1981) “The customer contact approach to services: Theoretical bases and practical extensions”, Operations Research, v21, pp.98-105.

60. Chase, R.B. (1996) “The mall is my factory: Reflections of a service junkie”, Production and Operations Management, v5 n4, pp.298-308.

61. Chase, R.B. and Aquilano, N.J. (1981) “Production and operations management – A life cycle approach”, Irwin, Homewood, IL/Boston.

62. Chase, R.B. and Aquilano, N.J. (1992) “Production and operations management”, 6th Ediiton, Irwin, Homewood, IL/Boston.

63. Chase, R.B. and Garvin, D.A. (1989) “The service factory”, Harvard Business Review, Jul-Aug, pp.61-69.

64. Chase, R. B. and Hayes, R. H. (1991) “Beefing up operations in service firms” Sloan Management Review, Fall, pp.15-26.

65. Checkland, P. and Holwell, S. (1998) “Action research: its nature and validity”, Systems Practice and Action Research, vol. 11, no. 1, pp. 9-21.

66. Chen, H. T. and Rossi, P. H. (Editors) (1992) “Theory-driven evaluation in analysing policies and programs”, Greenwood Publishing Group, Westport, CT.

67. Clark, K.B. (1996) “Competing through manufacturing and the new manufacturing paradigm: Is manufacturing strategy passé?” Production Operations Management, v5 n1, pp.42-58.

68. Clark, C., Johnston, R. and Shulver, M. (2000) “Developing the service concept for service design”, in Fitzsimmons, J. and Fitzsimmons, M. (Eds) “New Service Design”, Sage Publications, Thousand Oaks, CA, pp.71-91.

240

69. Clegg, B. (2001) “The business of being irresistible” Professional Manager, Mar, pp.24- 25.

70. Cleveland, G., Schroeder, R.G. and Anderson, J.C. (1989) “A theory of production competence”, Decision Sciences, vol.20, no.4, pp.655-668.

71. Coghlan, D. (1994) “Research as a process of change: action science in organisations”, Irish Business and Administration Research, vol. 15, pp. 119-130.

72. Collier, D.A. (1985) “Service management – The automation of services”, Prentice-Hall. 73. Collier, D.A. (1991) “A service quality process map for credit card processing”, Decision

Sciences, v22, pp.406-420. 74. Collier, D.A. (1994) “The service/quality solution: Using service management to gain

competitive advantage”, Irwin Professional, New York. 75. Collier, D.A. and Meyer, S.M. (1998) “A service positioning matrix”, International Journal

of Production and Operations Management, v18, n12, pp.1223-1244. 76. Comstock, D.E. (1982) “A method of critical research” in Bredo, E. and Feinberg, W.

(Eds) “Knowledge and values in social and educational research”, Temple University Press, Philadelphia.

77. Cook, T.D. and Campbell, D.T. (1979) “Quasi-experimentation: Design and analysis issues for field settings” Boston MA et al., Houghton Mifflin Company.

78. Coughlan, P. (1992) “Seamless service: British Airways’ first-class chinaware”, Design Management Journal, Winter, pp.83-89.

79. Coughlan, P. and Coghlan, D. (2002) “Action research for operations management”, International Journal of Operations Management, vol. 22, no. 2, pp.220-240.

80. Cowell, D. (1984) “The marketing of services”, Heinemann, London. 81. Cronin, J.J. and Taylor, S.A. (1994) “SERVPERF versus SERVQUAL: Reconciling

performance-based and perceptions-minus-expectations measurement of service quality”, Journal of Marketing, v58, n1, Jan, pp.125-131.

82. Croom, S. (2002) “Methodology editorial”, International Journal of Operations Management, vol. 22, no. 2, pp.148-151.

83. Dale, B. G. (1994) “Managing quality”, 2nd Edition, Prentice Hall, London. 84. Danaher, P.J. and Mattsson, J. (1994) “Cumulative encounter satisfaction in the hotel

conference process”, International Journal of Service Industry Management, v5, n4, pp.69-80.

85. Davidow, W. H. and Uttal, B. (1989a) “Service companies. Focus or falter?” Harvard Business Review, Jul-Aug, pp.77-85.

86. Davidow, W. H. and Uttal, B. (1989b) “Total customer service”, Harper Perennial, New York, NY.

87. Davidow, W. H. and Uttal, B. (1990) “Total customer service: The ultimate weapon”, Harper Business, New York.

88. Davis, M.M. (1991) “How long should a customer wait for service?” Decision Sciences, v22, pp.421-434.

89. Dees, G.G., Gupta, A., Hennart, J. and Hill, C.W.L. (1995) “Conducting and integrating strategy research at the international, corporate and business unit levels: Issues and directions”, Journal of Management, vol. 21, no. 3, pp.357-393.

90. Denscombe, M. (1998) “The good research guide”, Open University Press, Buckingham.

91. Denzin, N.K. and Lincoln, Y.S. (1994) “Introduction: Entering the field of qualitative research”, in Denzin, N.K. and Lincoln, Y.S. (Eds) “Handbook of qualitative research”, Sage Publications, Thousand Oaks, CA.

92. Desler, G. and Farrow, D.L. (1990) “Implementing a successful quality improvement programme in a service company: Winning the Deming prize”, International Journal of Service Industry Management, v1, n2, pp.45-54.

93. Desnet, S., Van Looy, B. and Van Dierdonck, R. (1998) “The nature of services”, in Van Looy, B., Van Dierdonck, R. and Gemmel, P. (Eds) “Services management: An integrated approach”, Financial Times Management, London.

241

94. Dewhurst, F.W., Martinez-Lorente, A.R. and Sanches-Rodriguez, C. (2003) “An initial assessment of the influence of IT on TQM: A multiple case study”, International Journal of Production and Operations Management, v23 n4, pp.348-374.

95. Draaijer, D. (1993) “Market orientated manufacturing systems – theory and practice”, Drukkerij Wormgoor.

96. DTI (1988) “Competitive manufacturing: A practical approach to the developing of a manufacturing strategy”, IFS Publications, Bedford.

97. Dublin, R. (1978) “Theory building”, The Free Press, New York. 98. Duclos, L.K.; Siha, S.M. and Lummus, R.R. (1995), “JIT in services: A review of current

practices and future directions for research”, International Journal of Service Industry Management, v6, n5, pp.36-52.

99. Eden, C. and Huxham, C. (1996) “Action research for management research”, British Journal of Management, vol. 7, pp.75-86.

100. Edgett, S. and Parkinson, S. (1993) “Marketing for service industries – A review”, The Service Industries Journal, v13, n3, Jul, pp.19-39.

101. Eisenhardt, K. and Bourgeois, L. (1988) Politics of strategic decision making in high velocity environments”, Academy of Management Journal, vol.31, pp.737-770.

102. Eisenhardt, K.M. (1989) “Building theories from case study research”, Academy of Management Review, vol. 14, iss. 4, pp. 532-550.

103. Faulhaber, G., Noam, E. and Tasley, R. (Eds) (1986) “Services in transition: the impact of information technology on the service sector”, Ballinger, Cambridge, MA.

104. Filippini, R. (1997) “Operations management research: some reflections on evolution, models and empirical studies in OM”, International Journal of Operations Management, vol. 17, no. 7, pp.655-670.

105. Fine, C.H. and Hax, A.C. (1985) “Manufacturing strategy: A methodology and an illustration”, Interfaces, v15 n6, pp.28-46.

106. Finn, D.W. and Lamb, C.W. (1991) “An evaluation of the SERVQUAL scales in a retailing setting”, Advances in Consumer Research, v18, pp.483-490.

107. Fitzgerald, L., Johnston, R., Brignall, T.J., Silvestro, R. and Voss, C. (1991) “Performance measurement in service businesses”, CIMA, London.

108. Fitzsimmons, J.A and Fitzsimmons, M.J. (1998) “Service management: operations, strategy and information technology”, Irwin McGraw-Hill, Boston, MA.

109. Fitzsimmons, J.A and Fitzsimmons, M.J. (2004) “Service management: operations, strategy and information technology”, 4th Edition, Irwin McGraw-Hill, Boston, MA.

110. Fitzsimmons, J.A. and Maurer, G.B. (1991) “A walk-through audit to improve restaurant performance”, The Cornell HRA Quarterly, Feb, pp.95-99.

111. Foster, M. (1972) “An introduction to the theory and practice of action research in work organisations”, Human Relations, vol. 25, pp.529-556.

112. Forza, C. (1995) “Quality information systems and quality management: a reference model and associated measures for empirical research”, Industrial Management and Data Systems, vol. 95, no. 2, pp.6-14.

113. Forza, C. (2002) “Survey research in operations management: a process based perspective”, International Journal of Operations Management, vol. 22, no. 2, pp.152- 194.

114. Gagnon, S. (1999) “Resource-based competition and the new operations strategy”, International Journal of Operations and Production Management, v19 n2, pp.125-138.

115. Galunic, D.C. and Eisenhardt, K.M. (2001) “Architectural innovation and modular corporate forms”, Academy of Management Journal, vol. 44, no. 6, pp. 1229-1249.

116. Gergen, K.J. (1996) “Organisational science in a post-modern context”, Journal of applied behavioural science, vol. 32, pp.356-378.

117. Gersick, C. (1988) “Time and transition in work teams: Toward a new model of group development”, Academy of Management Journal, vol. 31, pp.9-41.

118. Gianesi, I.B.N. and Correa, H.L. (1993) “Contribution to service operations strategy development”, in Johnston, R. and Slack, N.D.C. (Eds) “Service superiority: The design

242

and delivery of effective service operations”, Operations Management Association, Warwick, UK.

119. Gill, J. and Johnson, P. (1997) “Research methods for Managers”, Paul Chapman Publishing, London.

120. Glaser, B.G. and Strauss, A.L. (1967) “The discovery of grounded theory: Strategies for qualitative research”, Aldine, Chicago.

121. Goodman, R.S. and Kruger, E.J. (1988) “Data dredging or legitimate research method? Historiography and its potential for management research”, Academy of Management Review, vol. 13, iss. 2, pp. 315-325.

122. Goldstein, S.M. (2003) “Employee development of service strategy in a high-contact service environment”, Production and Operations Management, v12, i2, pp.186-204.

123. Goldstein, S.M., Johnston, R., Duffy, J. and Rao, J. (2002) “The service concept: The missing link in service design research?” Journal of Operaions Management, v20, pp.121-134.

124. Gouillart, F.J. and Sturdivant, F.D. (1994) “Spend a day in the life of your customers”, Harvard Business Review, Jan-Feb, pp.116-125.

125. Gray, J. (1998) “Narrative inquiry”, Unpublished paper, Edith Cowan University, Western Australia.

126. Greenwood, D. and Levin, M. (1998) “Introduction to action research”, Sage, Thousand Oaks, CA.

127. Gremler, D.D., Bitner, M.J. and Evans, K.R. (1994) “The internal service encounter”, International Journal of Service Industry Management, v5, n2, pp.34-56.

128. Griffin, A. and Hauser, J.R. (1993) “The voice of the customer”, Marketing Science, v12 n1, pp.1-27.

129. Gronroos, C. (1984) “A service quality model and its marketing implications”, European Journal of Marketing, vol.18, no.4, pp.36-44.

130. Guba, E.G. (1990) “The alternative paradigm dialog”, in Guba, E.G. (Ed), “The paradigm dialog”, Sage Publications, Newbury Park, CA.

131. Guba, E.G. and Lincoln, Y.S. (1994) “Competing paradigms in qualitative research”, in Denzin, N.K. and Lincoln, Y.S. (Eds) “Handbook of Qualitative research”, Sage Publications, Thousands Oaks, CA, pp. 105-117.

132. Gummesson, E. (2000) “Qualitative methods in management research”, 2nd Edition, Sage, Thousand Oaks, CA.

133. Gupta, Y.P. and Somers, T.M. (1996) “Business strategy, manufacturing flexibility, and organisational performance relationships: A path analysis approach”, Production Operations Management, v5 n3, pp.204-233.

134. Hanley, M. (1997) “Customer service as a basis for breakthrough business strategy” in Brown, S.A. (Ed) "Breakthrough customer service", Wiley, Toronto.

135. Harris, S. and Sutton, R. (1986) “Functions of parting ceremonies in dying organisations”, Academy of Management Journal, vol. 29, pp.5-30.

136. Harrison, M. (1993) “Operations management strategy”, Pilanan, London. 137. Hart, C.W.L. (1988) “The power of unconditional service guarantees”, Harvard Business

Review, Jul-Aug, pp.54-62. 138. Hart, C.W.L. (1990a) “Designing and implementing service guarantees in professional

services firms”, in Scheuing, E.E., Gummesson, E. and Little, C.H. (Eds) “Selected papers from quality in service conference 2”, St John’s University, New York, NY, pp.121-132.

139. Hart, C.W.L. (1990b) “The profitable art of service recovery”, Harvard Business Review, Jul-Aug, pp.148-156.

140. Hart, C.W.L. (1995) “The power of internal guarantees”, Harvard Business Review, Jan- Feb, pp.64-73.

141. Harvey, J. (1992) “The operations management challenge in the delivery of complex professional services”, Journal of Operations and production Management, v12, n4, pp.100-107.

243

142. Harvey, J. (1998) “Service quality: A tutorial”, Journal of Operations Management, v16, pp.583-597.

143. Hayes, R.H. (1985) “Strategic planning – forward in reverse?” Harvard Business Review, Nov-Dec.

144. Hayes, R.H. (2000) “Towards a ‘new architecture’ for POM”, Production and Operations Management, v9, n2, pp.105-110.

145. Hayes, R.H. and Pisano, G.P. (1994) "Beyond World Class: The New Manufacturing Strategy", Harvard Business Review, Jan-Feb, pp.77-86.

146. Hayes, R.H. and Pisano, G.P. (1996) “Manufacturing strategy: At the intersection of two paradigm shifts”, Production Operations Management, v5 n1, pp.25-41.

147. Hayes, R.H. and Schmenner, R.W. (1978) "How Should You Organise Manufacturing," Harvard Business Review, Jan-Feb, pp.105-118.

148. Hayes, R.H. and Upton, D.M. (1998) “Operations-based strategy”, California Management Review, v40, n4, Summer, pp.8-25.

149. Hayes, R.H. and Wheelwright, S.C. (1979a) "Link Manufacturing Process and Product Life Cycles", Harvard Business Review, vol. 57 no.1, pp. 133-140.

150. Hayes, R.H. and Wheelwright, S.C. (1979b) "The Dynamics of Process-Product Life Cycles", Harvard Business Review, Mar-Apr, pp. 127-136.

151. Hayes, R.H. and Wheelwright, S.C. (1984) "Restoring Our Competitive Edge: Competing Through Manufacturing", Wiley, New York.

152. Hayes, R.H. and Wheelwright, S.C. (1985) "Competing Through Manufacturing", Harvard Business Review, Jan-Feb, pp. 145-154.

153. Hayes, R.H., Wheelwright, S.C. and Clark, K.B. (1988) “Dynamic manufacturing: Creating the learning organization”, Free Press, New York, NY.

154. Haynes, R.M. and DuVall, P.K. (1992) “Service quality management: A process control approach”, International Journal of Service Industry Management, v3, n1, pp.14-24.

155. Haywood-Farmer, J. (1988) “A conceptual model of service quality”, International Journal of Operations and Production Management, v8, pp.19-29.

156. Hederick, T.E., Bickman, L. and Rog, D.J. (1993) “Applied research design: A practical guide”, Sage Publications, Newbury Park, CA.

157. Heene, A., Van Looy, B. and Van Dierdonck, R. (1998) “Defining a service strategy”, in Van Looy, B., Van Dierdonck, R. and Gemmel, P. (Eds) “Services management: An integrated approach”, Financial Times Management, London.

158. Heron, J. and Reason, P. (1997) “A participatory inquiry paradigm”, Qualitative Inquiry, vol. 3, no. 3, pp. 274-294.

159. Hertzberg, F. (1968) “One more time: How do you motivate employees?” Harvard Business Review, Jan-Feb, pp.53-62.

160. Heskett, J.L. (1986) “Managing in the service economy”, HBS Press, Boston. 161. Heskett, J.L. (1987) “Lessons in the service sector”, Harvard Business Review, Mar-

Apr. 162. Heskett, J.L., Jones, J.O., Loveman, G.W., Sasser, W.E. and Schlesinger, L.A. (1994)

“Putting the service-profit chain to work”, Harvard Business Review, Mar-Apr, pp.164- 174.

163. Heskett, J.L., Sasser. W.E. and Hart, C.W.L. (1990) “Service breakthroughs: Changing the rules of the game”, Free Press, New York.

164. Heskett, J.L., Sasser, W.E. and Schlesinger, L.A. (1997) “The service profit chain: How leading companies link profit and growth to loyalty, satisfaction and value”, Free Press, New York.

165. Heskett, J.L., Sasser, W.E. and Schlesinger, L.A. (2003) ”The value profit chain”, Free Press, New York.

166. Hill, T.J. (1983) “Manufacturing’s strategic role”, Journal of the Operational Research Society, v34, n9, pp.853-860.

167. Hill, T.J. (1985) “Manufacturing strategy”, Macmillan, Basingstoke. 168. Hill, T.J. (1993) “Manufacturing strategy: The strategic management of the

manufacturing function”, MacMillan, London. 169. Hill, T.J. (1994) “Manufacturing strategy: Text and cases”, Irwin, Burr Ridge, IL.

244

170. Hill, T.J. (1996) “Manufacturing strategy: Keeping it relevant by addressing the needs of the market”, Opening address at 3rd EUROMA conference, London.

171. Hill, T.J. (2000) “Operations management: Strategic context and managerial analysis”, Macmillian, London.

172. Hill, T.J. (2004) “Operations management: Strategic context and managerial analysis”, 2nd Edition, Macmillian, London.

173. Hill, T.J., Menda, R. and Dilts, D.M. (1998) “Using product profiling to illustrate manufacturing-marketing misalignment”, Interfaces, v28, n4, pp.47-63.

174. Hill, T.J., Nicholson, A. and Westbrook, R. (1999) “Closing the gap: a polemic on plant- based research in operations management”, International Journal of Operations & Production Management, Feb, vol.19, iss.2, p.139.

175. Hill, T.J. and Westbrook, R. (2002) “Market analysis – Setting the strategic agenda for manufacturing: Multiple case studies from the UK”, Working Paper.

176. Hill, T.P. (1977) “On goods and services”, Review of Income and Wealth, v23, Dec, pp.315-338.

177. Howard, K. and Sharp, J. A. (1983) “The management of a student research project”, Gower, London.

178. Hutt, M.D. and Speh, T.W. (1992) “Business marketing management: A strategic view of industrial and organisational markets”, The Dryden Press, Orlando, FL.

179. IMP Group (1982) “An interaction approach”, in IMP Group (Ed) “International marketing and purchasing of industrial goods”, Wiley, Chichester.

180. Johnson, W.J., Leach, M.P. and Liu, A.H. (1999) “Theory testing using case studies in business- to-business research”, Industrial Marketing Management, vol. 28, pp.201-213.

181. Johnston, R. (1989) “The customer as employee”, International Journal of Operations and Production Management, v9, n5, pp.15-23.

182. Johnston, R. (1994) “Operations: From factory to service management”, International Journal of Service Industry Management, v5, n1, pp.49-63.

183. Johnston, R. (1995a) “The determinants of service quality: Satisfiers and dissatisfiers” International Journal of Service Industry Management, v6, n5, pp.53-71.

184. Johnston, R. (1995b) “The zone of tolerance: Exploring the relationship between service transactions and satisfaction with the overall service”, International Journal of Service Industry Management, v6, n2, pp.46-61.

185. Johnston, R. (1999) “Service operations management: Return to roots”, International Journal of Operations and Production Management, vol.19, no.2, pp.104-124.

186. Johnston, R. and Bryan, B. (1993) “Products and services – a question of visibility”, The Service Industries Journal, v13, n3, Jul, pp.125-136.

187. Johnston, R., Chambers, S., Harland, C., Harrison, A. and Slack, N. (1992) “Cases in operations management”, Pitman, London.

188. Johnston, R. and Clark, G. (2001) “Service operations management”, Pearson Education Limited.

189. Johnston, R. and Lyth, D. (1988) “Service quality: integrating customer expectations and operational capability”, in The Proceedings of the QIS Symposium, University of Karlstad, Sweden, August.

190. Johnston, R. and Silvestro, R. (1990) “The determinants of service quality – a customer- based approach”, in The Proceedings of the Decision Science Institute Conference, San Diego, CA, Nov.

191. Joshi, M.P., Kathuria, R. and Porth, S.J. (2003) “Alignment of strategic priorities and performance: an integration of operations and strategic management perspectives”, Journal of Operations Management, v21, pp.353-369.

192. Judd, R.C. (1964) “The case for redefining services”, Journal of Marketing, v28, Jan, p.59.

193. Kahneman, D. and Tversky, A. (1973) “On the psychology of prediction”, Psychological Review, v80, pp.237-251.

245

194. Kathuria, R. and Davis, E.B. (2001) “Quality and work force management practices: The managerial performance implications”, Production and Operations Management, v10, n4, pp.460-477.

195. Katz, K.L., Larson, B.M. and Larson, R. (1991) “Prescription for the waiting-in-line blues: Entertain, enlighten and engage”, Sloan Management Review, Winter, pp.44-53.

196. Kelley, S.W. and Davis, M.A. (1994) “Antecedents to customer expectations for service recovery”, Journal of Academy of Marketing Science, v22, n1, pp.52-61.

197. Kelley, S.W., Hoffman, K.D. and Davis, M.A. (1993) “A typology of retail failures and recoveries”, Journal of Retailing, v69, n4, pp.429-452.

198. Kellogg, D.L. and Nie, W. (1995) “A framework for strategic service management”, Journal of Operations Management, v13, pp.323-337.

199. Kemmis, S. (2001) “Exploring the relevance of critical theory for action research: Emancipatory action research in the footsteps of Jurgen Habermas”, in Reason, P. and Bradbury, H. (Eds) “Handbook of Action Research: Participative Inquiry and practice”, Sage Publications, London, pp. 91-102.

200. Kerlinger, F.N. (1986) “Foundations of behavioural research”, 3rd Edition, Harcourt Brace Jovanovich College Publishers, New York.

201. Ketokivi, M. and Schroeder, R. (2004) “Manufacturing practices, strategic fit and performance: A routine-based view”, International Journal of Production and Operations Management, v24 n2, pp.171-191.

202. Kidder, T. (1982) “Soul of a new machine”, Avon, New York. 203. Kidder, L.H., and Judd, C.M. (1986) “Research methods in social relations”, 5th edition,

Holt, Rinehart and Winston, New York 204. Kim, J.S. and Arnold, P. (1996) “Operationalising manufacturing strategy: An

exploratory study of constructs and linkage”, International Journal of Production and Operations Management, v16 n12, pp.45-73.

205. Kim, S. (2003) “Research paradigms in organisational learning and performance: Competing modes of inquiry”, Information Technology, Learning and Performance Journal, v21, n1, pp.9-18.

206. Kim, Y. and Lee, J. (1993) “Manufacturing strategy and production systems: an integrated framework”, Journal of Operations Management, v11 n1, pp.3-16.

207. Kimes, S.E. (1989) “Yield management: A tool for capacity-constrained service firms”, Journal of Operations Management, v8, n4, pp.348-363.

208. Kimes, S.E. and Johnston, R. (1990) “The application of focused manufacturing in the hospitality sector”, Proceedings of the Manufacturing Strategy Conference of the Operations Management Association UK, University of Warwick.

209. Kingman-Brundage, J. (1989) “The ABCs of service system blueprinting”, in Bitner, M.J. and Crosby, L. (Eds) “Designing a winning service strategy”, American Marketing Association, Chicago, IL.

210. Kogut, B. (1985) “Designing global strategies: Profiting from operational flexibility”, Sloan Management Review, v27, n1, pp.27-38.

211. Kolb, D.A., Rubin, I.M. and McIntyre, J.M. (1979) “ Organisational psychology: An experimental approach”, Prentice-Hall, London.

212. Kotha, S. and Orne, D. (1989) “Generic manufacturing strategies: A conceptual synthesis”, Strategic Management Journal, v10, pp.211-231.

213. Kotler, P. (1980) “Principles of marketing”, Prentice-Hall, Englewood Cliffs, NJ. 214. Kotler, P. (1997) “Marketing management: Analysis, planning, implementation and

control”, Prentice-Hall, Englewood Cliffs, NJ. 215. Krajewski, D.L. and Ritzman, L.P. (1993) “Operations management: Strategy and

analysis”, 3rd Edition, Addison-Wesley, Reading, MA. 216. Law, J. and Lodge, P. (1984) “Science for social scientists”, Allen and Unwin, London. 217. Lawrence, B. S. (1984) “Historical perspective: Using the past to study the present”,

Academy of Management Review, vol. 9, pp. 307-312. 218. Lazarsfeld, P. F. (1958) “Evidence and inference in social research”, Deadalus, vol. 87,

no. 4, pp. 99-130.

246

219. Lee, A.S. (1989) “Case studies as natural experiments”, Human Relations, vol.42, iss.2, pp.117-137.

220. Lehmann, D.R. and O’Shaughessy, J. (1982) “Decision criteria used in buying different categories of products”, Journal of Purchasing and Materials Management, v18, pp.9- 14.

221. Leonard-Barton, D. (1990) “A dual methodology for case studies: synergistic use of a longitudinal single site with replicated multiple sites”, Organisation Science, vol. 1, iss. 3, pp. 248-266.

222. Leong, G.K., Snyder, D.L. and Ward, P.T. (1990) “Research in the process and content of manufacturing strategy”, OMEGA International Journal of Management Science, v18 n2, pp.109-122.

223. Levitt, T. (1972) “Production-line approach to service”, Harvard Business Review, v50, n4, pp.323-337.

224. Lewis, B.R. (1989) “Quality in the service sector: A review”, IJBM, vol.7, no.5, pp.4-11. 225. Lewis, B.R. (1991) “Service Quality: An international comparison of bank customers’

expectations and perceptions”, Journal of Marketing Management, Jan, vol.7, no.1, pp.47-62.

226. Lewis, B.R. (1993) “Service quality measurement”, Marketing Intelligence and Planning, vol.11, no.4, pp.4-11.

227. Lewis, M. W. (1998) “Iterative triangulation: a theory development process using existing case studies”, Journal of Operations Management, vol. 16, pp.455-469.

228. Linden, G., Mowery, D.C. and Ziedonis, R. H. (2000) “National technology policy in global markets: Developing next-generation lithography in the semiconductor industry”, Business and Politics, vol. 2, no. 2, pp.93-113.

229. Lipset, S. Trow, M. and Coleman, J. (1956) “Union Democracy: What Makes Democracy Work in Unions and Other Organizations?” Anchor, Garden City, NY

230. Longman (1995) “Dictionary of contemporary English”, 3rd Edition, Longman Group Ltd., Harlow.

231. Louviere, J.J. (1988) “Analysing decision making: Metric conjoint analysis”, Sage Publications, Newbury Park, CA.

232. Lovelock, C.H. (1980) “Towards a classification of services” in Lamb, C.W. and Dunne, P.M. (Eds) “Theoretical developments in marketing”, American Marketing Association, Chicago, IL, pp.72-76.

233. Lovelock, C.H. (1983) “Classifying services to gain strategic marketing insights”, Journal of Marketing, v47, pp.9-20.

234. Lovelock, C.H. (1992) “Managing Services: Marketing, Operations and Human Resources”, 2nd Edition, Prentice-Hall, Englewood Cliffs, NJ.

235. Lowson, R.H. (2002) “Operations strategy: Genealogy, classification and anatomy”, International Journal of Operations and production Management, v22, n10, pp.1112- 1129..

236. Macbeth, D.K. (1989) “Advanced manufacturing strategy and management”, IFS Publications, Bedford.

237. Malhotra, M.K., Steele, D.C. and Grover, V. (1994) “Important strategic and tactical manufacturing issues in the 1990s”, Decision Sciences, v25, n2, pp.189-214.

238. Malhotra, M.K. and Grover, V. (1998) “An assessment of survey research in POM: from constructs to theory”, Journal of Operations Management, vol. 16, no. 17, pp. 407-425.

239. Mattsson, J. (1992) “Quality blueprints of internal producer services”, Proceedings of the 2nd International Research Seminar in Service Management, La Londes les Maures, Jun, pp.379-409.

240. Mayer, R.J. and Moore, J. (1983) “Applying manufacturing strategy concepts to practice”, Operations Management Review, Fall, pp.45-50.

241. McCarthy, L.P. and Tan, T.K. (2000) “Manufacturing competitiveness and fitness landscape theory”, Journal of Materials Processing Technology, v107, n1-3, pp.347-352.

242. McCarthy, L.P. (2004) “Manufacturing strategy: Understanding the fitness landscape”, International Journal of Production and Operations Management, v24 n2, pp.124-150.

247

243. McCutcheon, D.M. and Meredith, J.R. (1993) “Conducting case study research in operations management”, Journal of Operations Management, vol.11, iss.3, pp.239- 256.

244. McDonagh, J. and Coghlan, D. (2001) “The art of clinical inquiry in information technology-related organisational research”, in Reason, P. and Bradbury, H. “Handbook of action research”, Sage, London, pp. 372-378.

245. McDougall, P.P., Deane, R.H. and D’Souza, D.E. (1992) “Manufacturing strategy and business origin of new venture firms in the computer and communications equipment industry”, Production and Operations Management, v1 n1, pp.53-69.

246. McFadden, D. (1986) “The choice theory approach to marketing research”, Marketing Science, v5, n4, pp.275-297.

247. Menda, R. and Dilts, D. (1997) “Manufacturing strategy formulation process: Linking multifunctional viewpoints”, Journal of Operations Management, v15, n4, pp.223-241.

248. Merchants Group (2001) “Merchants Global Contact Centre Benchmarking Report”, Merchants Group.

249. Meredith, J.R. (1998) “Building operations management theory through case and field research”, Journal of Operations Management, vol.16, pp.441-454.

250. Meredith, J.R., McCutcheon, D.M. and Hartley, J. (1994) “Enhancing competitiveness through the new market value equation”, International Journal of Operations and Production Management, v14, n11, pp.7-22.

251. Meredith, J.R. and Roth, A.V. (1998) “Operations management in the USA”, International Journal of Operations and Production Management, v17, n7, pp.668-674.

252. Mersha, T. (1990) “Enhancing the customer contact model”, Journal of Operations Management, v9 n3, pp.391-405.

253. Merton, R.K. (1957) “Social theory and social structure”, Free Press, New York. 254. Metters, R.K., King-Metters, K. and Pullman, M. (2003) “Successful service operations

management”, Thompson/South-Western, Mason, OH. 255. Meyer (1991) “Visual data in organisational research”, Organisation Science, v2, n2,

pp.218-236. 256. Miles, M.B. and Huberman, A.M. (1984) “Qualitative data analysis”, Sage, Beverly Hills,

CA 257. Miller, D. (1988) “Relating Porter’s business strategies to environment and structure:

Analysis and performance implications”, Academy of Management Journal, v31 n2, pp.280-308.

258. Miller, D. (1992) “Environmental fit versus internal fit”, Organisation Science, v3, n2, pp.159-178.

259. Miller, J.G. (1981) “Fit production systems to the task”, Harvard Business Review, v59 n1, pp.145-154.

260. Miller, J.G. and Roth, A.V. (1994) “A taxonomy of manufacturing strategies”, Management Science, v40 n3, pp.285-304.

261. Mills, J., Neely, A., Platts, K. and Gregory, M. (1998) “Manufacturing strategy: a pictorial presentation”, International Journal of Operations and Production Management, v18, n11, pp.1067-1085.

262. Mills, P.K. and Margulies, N. (1980) “Toward a core typology of service organisations”, Academy of Management Review, v6, pp.255-265.

263. Mills, P.K. and Morris, J.H. (1986) “Clients as ‘partial’ employees of service organisations: Role development in client participation”, Academy of Management Review, v11, n4.

264. Mintzberg, H. (1973) “The nature of managerial work”, Harper and Row, New York. 265. Mintzberg, H. and McHugh, A. (1985) “Strategy formulation in an adhocracy”,

Administrative Science Quarterly, vol. 30, pp.160-197. 266. Mintzberg, H. and Waters, J.A. (1985) “Of strategies, deliberate and emergent”,

Strategic Management Journal, v6, pp.257-272. 267. Mitchell, A. (2001) “Deep service companies have yet to take flight” Marketing Week,

May 10, pp. 38-39.

248

268. Mitroff, I.I., Betz, F., Pondy, L.R. and Sagasti, F. (1974) “On managing science in the systems age: two schemas for the study of science as a whole systems phenomenon”, Interfaces, vol. 4, no. 3, pp. 46-58.

269. Moreno, V. Jr (1999) “On the social implications of organisational reengineering: A phenomenological study of individual experiences of BPR processes”, Information Technology and People, v12, i4, pp.359-388.

270. Moustakas, C. (1994) “Phenomenological research methods”, Sage Publications, Thousand Oaks, CA.

271. Mufatto, M. and Panizzolo, R. (1993) “Service quality design using quality function deployment: Adoption and implementation requirements”, in Johnston, R. and Slack, N.D.C. (Eds) “Service superiority: The design and delivery of effective service operations”, Operations Management Association, Warwick, UK.

272. Nachimas, D. and Nachimas, C. (1976) “Research methods in the social sciences”, St Martin’s Press, New York.

273. Nayyar, P.A. (1990) “Information asymmetrices: A source of competitive advantage for diversified service firms”, Strategic Management Journal, v11, pp.513-519.

274. Nayyar, P.A. (1992) “Performance effects of three foci in service firms”, Academy of Management Journal, v35, Dec, pp.985-1009.

275. New, C.C. (1989) “CEMPAS”, documentation from a series of seminars supported by the UK Department of Trade and Industry.

276. New, C.C. (1992) “World class manufacturing versus strategic trade-offs”, International Journal of Operations and Production Management, v12, n6, pp.19-31.

277. Nie, W. and Kellogg, D.L. (1999) “How professors of operations management view service operations”, Production and Operations Management, v8, n3, pp.339-355.

278. Nieto Antolin, M, Arias Aranda, D., Minguela Rata, B. and Rodriguez Duarte, A. (1999) “The evolution of operations management contents: an analysis of most relevant textbooks,” Industrial Management and Data Systems, v99, n7/8, pp.345-353.

279. Nisbett, R. and Ross, L. (1980) “Human inference: Strategies and shortcomings of social judgement”, Englewood Cliffs, Prentice Hall, NJ.

280. Normann, R. (1984) “Service management: Strategy and leadership in service businesses”, Wiley, New York, NY.

281. Oliviera, P., Roth, A.V., Conley, M.V. and Voss, C. (2003) “Knowledge assets in global services strategy,” in Gibson, D.V., Stolp, C., Coneiçào and Heitor, M.V. (Eds) “Systems and policies for the global learning economy”, Prager Publishers, Westport, CT.

282. Pannirselvan, G., Ferguson, L., Ash, R. and Siferd, S. (1999) “Operations management research: an update for the 1990s”, Journal of Operations Management, vol. 18, pp.95- 112.

283. Papke-Shields, K.E. and Malhotra, M.K. (2001) “Assessing the impact of the manufacturing executive’s role on business performance through strategic alignment”, Journal of Operations Management, v19, n1, pp.5-22.

284. Parasuraman, A., Zeithaml, V.A. (2002) “Understanding and improving service quality: A literature review and research agenda”, in Weitz, B. and Wensley, R. (Eds) “Handbook of marketing”, Sage Publications, London, UK.

285. Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1985) “A conceptual model of service quality and its implications for future research”, Journal of Marketing, v49, Fall, pp.41- 50.

286. Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1988) “SERVQUAL: A multiple-item scale for measuring consumer perceptions of service quality”, Journal of Retailing, v64 n1, pp.12-40.

287. Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1991) “Understanding customer expectations of service”, Sloan Management Review, v39, Spring, pp.38-48.

288. Peters, M. and Robinson, V. (1984) “The origins and status of action research”, Journal of Applied Behavioural Science, vol. 20, pp.113-124.

289. Pettigrew, A.M. (1990) “Longitudinal field research on change: Theory and practice”, Organisational Science, vol.1, pp.265-292.

249

290. Pinfield, L. (1986) “A field evaluation of perspectives on organisational decision making”, Administrative Science Quarterly, vol. 31, pp.365-388.

291. Pinsonneault, A. and Kraemer, K.L. (1993) “Survey research methodology in management information systems: an assessment”, Journal of Management Information Systems, vol. 10, no. 2, pp.75-106.

292. Platts, K.W. and Gregory, M.J. (1990) “Manufacturing audit in the process of strategy formulation”, International Journal of Operations and Production Management, v10 n9.

293. Popper, K.R. (1961) “The logic of scientific discovery”, Science Editions, New York. 294. Porter, M.E. (1985) “Competitive advantage: Creating and sustaining superior

performance”, Free Press, New York, NY. 295. Prokesch, S. E. (1995) “Competing on Customer Service: An interview with British

Airways’ Sir Colin Marshall”, Harvard Business Review, Nov-Dec, pp. 101-112. 296. Quinn, J.B. (1980) “Strategies for change: Logical incrementalism”, Irwin, Homewood,

IL. 297. Quinn, J.B., Dorley, T.L. and Paquette, P.C. (1990) “Beyond products: Service-based

strategy”, Harvard Business Review, Mar-Apr, pp.58-67. 298. Quinn, J.B. and Gagnon, C.E. (1986) “Will services follow manufacturing into decline?”

Harvard Business Review, Nov-Dec, pp.95-103. 299. Rafii, F. (1984) “Upgrading the manufacturing function’s strategic role”, Operations

Management Review, v3, n1, pp.42-47. 300. Ramanujam, V. and Varadarajan, P. (1989) “Research on corporate diversification: A

synthesis”, Strategic Management Journal, v10, pp.523-551. 301. Rathmell, J.M. (1974) “Marketing in the service sector”, Winthrop, Cambridge, MA. 302. Reason, P. and Bradbury, H. (2001) “Handbook of action research”, Sage, Thousand

Oaks, CA. 303. Reicheld, F.F. (1996) "The loyalty effect", Harvard Business School Press. 304. Reicheld, F.F. and Sasser, W.E. (1990) “Zero defections: Quality comes to services”,

Harvard Business Review, Sep-Oct, pp.105-111. 305. Reinartz, W. and Kumar, V. (2002) “The mismanagement of customer loyalty”, Harvard

Business Review, Jul, pp.86-94. 306. Robinson, A.G. and Stern, S. (1998) “Corporate creativity: How innovations and

improvement actually happen”, Berrett-Koehler Publishers, San Francisco, CA. 307. Robinson, P.J., Faris, C.W. and Wind, Y. (1967) “Industrial buying and creative

marketing”, Allyn and Bacon, Boston, MA. 308. Rorty, R. (1999) “Philosophy and social hope”, Penguin Books, London. 309. Rossi, P.H., Wright, J.D. and Anderson, A.B. (1983) “Handbook of survey research”,

Academic Press, New York. 310. Rouse, M.J. and Daellenbach, U.S. (1999) “Rethinking research methods for the

resource-based perspective: Isolating sources of sustainable competitive advantage”, Strategic Management Journal, v20, i5, pp.487-494.

311. Roth, A.V. and Menor, L.J. (2003) “Insights into service operations management: A research agenda”, Production and Operations Management, v12, i2, pp.145-165.

312. Rumelt, R.P. (1982) “Diversification strategy and profitability”, Strategic Management Journal, v3, pp.359-369.

313. Rust, R.T. and Olivier, R.L. (Eds) (1994) “Service quality: New directions in theory and practice”, Sage Publications, Thousand Oaks, CA.

314. Safizadeh, M.H., Ritzman, L.P., Sharma, D., and Wood, C. (1996) “An empirical analysis of the product-process matrix”, Management Science, v42 n11, pp.1576-1591.

315. Safizadeh, M.H., Ritzman, L.P. and Mallick, D. (2000) “Revisiting alternative theoretical paradigms in manufacturing strategy”, Production and Operations Management, v9, n2, pp.111-127.

316. Samson, D. (1991) “Manufacturing and operations strategy”, Prentice-Hall, Sydney. 317. Samson, S. (1997) “October newsletter”, On-line posting, Newsgroup SOMA.byu.edu,

October 1.

250

318. Sasser, W.E., Olsen, R.P. and Wyckoff, D.D. (1978) “Management of service operations”, 1st Edition, Allyn and Bacon, Boston, MA.

319. Sasser, W.E., Olsen, R.P. and Wyckoff, D.D. (1982) “Management of service operations”, 2nd Edition, Allyn and Bacon, Boston, MA.

320. Schmenner, R.W. (1986) “How can service businesses survive and prosper?” Sloan Management Review, v27, pp.21-32.

321. Schmenner, R.W. (1990) “Production/operations management”, 4th Edition, Macmillan, New York, NY.

322. Schmenner, R.W. and Swink, M.L. (1998) “On theory in operations management”, Journal of Operations Management, v17, pp.97-113.

323. Schmitt, R. (1967) “Husserl’s transcendental-phenomenological reduction”, in Kockelmas, J.J. (Ed) “Phenomenology”, Doubleday Anchor, Garden City, NY, pp.58-68.

324. Schneider, B. and Bowen, D.E. (1985) “Employee and customer perceptions of service in banks: Replication and extension”, Journal of Applied Psychology, v70, pp.423-433.

325. Schneider, B. and Bowen, D.E. (1995) "Winning the service game", Harvard Business School Press, Boston.

326. Schonberger, R. (1999) “Comment: using product profiling to illustrate manufacturing- marketing misalignment”, Interfaces, v29, n6, pp.127-132.

327. Schroeder, R.G. (1984) "Operations Strategy: Missing Link in Corporate Planning?" Management Review, Aug, pp. 20-23.

328. Schroeder, R.G. (1993) "Operations Management: Decision Making in the Operations Function", 4th Edition, McGraw-Hill International Editions.

329. Schroeder, R.G., Anderson, J.C. and Cleveland, G. (1986) “The content of manufacturing strategy: An empirical study”, Journal of Operations Management, v6, n4, Aug, pp.405-415.

330. Scudder, G.D. and Hill, C.A. (1998) “A review and classification of empirical research in operations management”, Journal of Operations Management, vol. 16, pp. 91-101.

331. Shapiro, B.P., Rangan, V.K. and Sviokla, J.J. (1992) “Staple yourself to an order”, Harvard Business Review, Jul-Aug, pp.113-122.

332. Shostack, G.L. (1977) “Breaking free from product marketing”, Journal of Marketing, v41, Apr, pp.73-80.

333. Shostack, G.L. (1984a) “Designing services that deliver”, Harvard Business Review, Jan-Feb, pp.133-139.

334. Shostack, G.L. (1984b) “A framework for services marketing”, in Brown, S.W. and Fisk, R.P. (Eds) “Marketing theory: Distinguished contributors”, J. Wiley and Sons, New York.

335. Shostack, G.L. (1987) “Service positioning through structural change”, Journal of Marketing, v51, Jan, pp.34-43.

336. Silvestro, R. (1999) “Positioning services along the volume-variety diagonal: The contingencies of service design, control and improvement”, International Journal of Operations and Production Management, v19, n4, pp.399-420.

337. Silvestro, R., Fitzgerald, L., Johnston, R. and Voss, C. (1992) “Towards a classification of service processes”, International Journal of Service Industry Management, v3, n3, pp.62-75.

338. Silvestro, R. and Johnston, R. (1990) “The determinants of service quality: Hygiene and enhancing factors”, QUIS II Symposium, St John’s University, New York, July.

339. Silvestro, R. and Silvestro, C. (2003) “New service design in the NHS: An evaluation of the strategic alignment of NHS direct”, International Journal of Production and Operations Management, v23 n4, pp.401-417.

340. Skinner, W. (1969) "Manufacturing: Missing link in corporate planning", Harvard Business Review, May-Jun, pp.5-15.

341. Skinner, W. (1974) "The Focused Factory", Harvard Business Review, May-Jun, pp. 113-121.

342. Skinner, W. (1978) “Manufacturing in business strategy”, John Wiley and Sons, New York, NY.

343. Slack, N. (1991) “The manufacturing advantage”, Mercury, London.

251

344. Slack, N., Chambers, S. and Johnston, R. (2001) “Operations management”, 3rd Edition, Pearson Education Ltd, Harlow.

345. Slack, N. and Lewis, M. (2001) “Operations strategy”, Financial Times, Prentice Hall. 346. Slack, N., Lewis, M. and Bates, H. (2004) “The two worlds of operations management research

and practice: Can they meet, should they meet?”, International Journal of Production and Operations Management, v16 n12, pp.372-387.

347. Smith, J.K. and Heshusius, L. (1986) “Closing down the conversation: The end of the quantitative-qualitative debate among educational inquiries”, Educational Researcher, v15, n1, pp.4-12.

348. Smith, T.M. and Reece, J.S. (1999) “The relationship of strategy, fit, productivity, and business performance in a service setting”, Journal of Operations Management, v17, pp.145-161.

349. Smith, W.L., Weatherly, K.A. and Tansik, D.A. (1992) “A customer-based service quality study: use of sorting/cluster analysis methodology”, Proceedings of the 2nd International Research Seminar in Service Management, La Londes les Maures, June, pp.591-603.

350. Spence, I. and Lewandowsky, S. (1990) “Graphical perception”, in Fox, J. and Scott Long, J. (Eds) “Modern methods of data analysis”, Sage, London, pp.13-57.

351. Staughton, R.V.W. and Williams, C.S. (1994) “Towards a simple, visual representation of fit in service organisations: The contribution of the service template”, International Journal of Operations and Production Management, v14, n5, pp.76-85.

352. Stauss, B. (1993) “Service problem deployment: Transformation of problem information into problem prevention activities”, International Journal of Service Industry Management, v4, n2, pp.41-62.

353. Stobaugh, R. and Telesio, P. (1983) “Match manufacturing policies and product strategy”, Harvard Business Review, v61 n2, pp.113-120.

354. Stonebraker, P.W. and Leong, G.K. (1994) “Operations strategy: Focusing competitive excellence”, Allyn and Bacon, Boston, MA.

355. Storbacka, K. (1995) “The nature of customer relationship profitability”, Swedish School of Economics and Business Administration, Helsingfors.

356. Storbacka, K., Strandvik, T. and Gronroos, C. (1994) “Managing customer relationships for profit: The dynamics of relationship quality”, International Journal of Service Industry Management, v5, n5, pp.21-38.

357. Strauss, A. and Corbin, J. (1994) “Grounded theory methodology” in Denzin, N.K. and Lincoln, Y.S. (Eds) “Handbook of qualitative research”, Sage, New York, pp. 273-285.

358. Sum, C-C., Kow, L. S-J. and Chen, C-S. (2004) “A taxonomy of strategies of high performing small and medium enterprises in Singapore”, International Journal of Operations and production Management, v24 n3, pp.321-345.

359. Susman, G. and Evered, R. (1978) “An assessment of the scientific merits of action research”, Administrative Science Quarterly, vol. 23, pp.582-603.

360. Sutton, R. and Callahan, A. (1987) “The stigma of bankruptcy: Spoiled organisational image and its management”, Academy of Management Journal, vol.30, pp.405-436.

361. Swamidass, P.M. (1986) “Manufacturing strategy: its assessment and practice”, Journal of Operations Management, v6 n3-4, pp.471-85.

362. Swamidass, P.M. and Newell, W.T. (1987) “Manufacturing strategy, environmental uncertainty and performance: A path analytic model”, Management Science, v33 n4, pp.509-524.

363. Swan, J.E. and Combs, L.J. (1976) “Product performance and consumer satisfaction: A new concept”, Journal of Marketing, v40, April, pp.25-33.

364. Swenseth, S.R., Olson, J.R. and Southard, P.B. (2002) “Extending product profiling through simulation”, International Journal of Operations and Production Management, v22, n9, pp.956-971.

365. Swink, M. and Way, M.H. (1995) “Manufacturing strategy: propositions, current research, renewed directions”, International Journal of Operations and Production Management, v15, n7, pp.4-26.

252

366. Taylor, S.A. and Baker, T.L. (1994) “An assessment of the relationship between service quality and customer satisfaction in the formation of consumers’ purchase intentions”, Journal of Retailing, vo.70, no.2, pp.163-178.

367. Teece, D.J. (1980) “Economies of scope and the scope of the enterprise”, Journal of Economic Behaviour and Organisation, v1, pp.223-247.

368. Teece, D.J. and Pisano, G. (1994) “The dynamic capabilities of firm: An introduction”, 369. Thomas, D.R.E. (1978) “Strategy is different in service businesses”, Harvard Business

Review, v56, pp.158-165. 370. Thorelli, H.B. (1986) “Networks: Between markets and hierarchies”, Strategic

Management Journal, v7, pp.37-51. 371. Tinnila, M. and Vespalainen, A.P.J. (1995) “A model for strategic repositioning of

service processes”, International Journal of Service Industry Management, v6, n4, pp.57-80.

372. Vandermerwe, S. and Gilbert, D.J. (1991) “Internal services: Gaps in needs/performance and prescriptions for effectiveness”, International Journal of Service Industry Management, v2, n1, pp.50-60.

373. Van Dierdonck, R and Brandt, G. (1988) “The focused factory in service industry”, International Journal of Operations and Production Management, v8, n3, pp.31-38.

374. Van Dierdonck, R. and Miller, J.G. (1980) “Designing production planning and control systems”, Journal of Operations Management, v1 n1, pp.37-46.

375. Van Looy, Van Dierdonck and Gemmel (1998) "Services management: An integrated approach", FT/Pitman, London.

376. Varadarajan, P.R. (1985) “A two-factor classification of competitive strategy variables”, Strategic Management Journal, v6, pp.53-62.

377. Venkatraman, N. (1989) “The concept of fit in strategy research: Toward verbal and statistical correspondence”, Academy of Management Review, v14 n3, pp.423-444.

378. Verma, R. and Thompson, G.M. (1996) “Basing service management on customer determinants: The importance of hot pizza”, Cornell Hotel and Restaurant Administration Quarterly, v16 n4, pp.793-814.

379. Verma, R. and Thompson, G.M. (1999) “Managing service operations based on customer preferences”, International Journal of Production and Operations Management, v19 n9, pp.891-908.

380. Verma, R., Thompson, G.M. and Louviere, J.J. (1999) “Discrete choice analysis in hospital management research”, Journal of Service Research, v1, n3.

381. Vickery, S.K., Droge, C. and Markland, R.E. (1993) “Production competence and business strategy: Do they affect business performance?” Decision Sciences, v24 n2, pp.435-455.

382. Vickery, S.K., Droge, C. and Markland, R.E. (1997) “Dimensions of manufacturing strength in the furniture industry”, Journal of Operations Management, v15, pp.317-330.

383. Voss, C.A., Armistead, C.G., Johnston, R. and Morris, B. (1985) “Operations management in service industries and the public sector”, Wiley, Chichester.

384. Voss, C., Tsikriktsis, N. and Frohlich, M. (2002) “Case research in operations management”, International Journal of Operations Management, vol. 22, no. 2, pp.195- 219.

385. Wacker, J.G. (1998) “A definition of theory: research guidelines for different theory building research methods in operations management”, Journal of Operations Management, vol. 16, no. 4, pp. 361-385.

386. Wakefield, K.L. and Blodgett, J.G. (1994) “The importance of servicescapes in leisure service settings”, Journal of Services Marketing, v8, n3, pp.66-76.

387. Ward, P.T., Leong, G.K. and Boyer, K.K. (1994) “Manufacturing proactiveness and performance”, Decision Sciences, v25, n3, pp.337-359.

388. Wardlow, G. (1989) “Alternative modes of inquiry for agricultural education”, Journal of Agricultural Education, v30, n4, pp.2-7.

253

389. Weick, K.E. (1985), “Sources of order in under-organized systems: themes in recent organizational theory”, in Lincoln, Y.S. (Ed.), Organizational Theory and Inquiry, Sage, Beverly Hills, CA.

390. Wemmerlov, U. (1990) “A taxonomy for service processes and its implications for system design”, International Journal of Service Industry Management, v1 n3, pp.13-27.

391. Westbrook, R. (1995) “Action research, a new paradigm for research in production and operations management”, International Journal of Operations Management, vol. 15, no. 12, pp.123-142.

392. Wheelwright, S.C. (1978) "Reflecting Corporate Strategy in Manufacturing Decisions", Business Horizons, Feb, pp.57-66.

393. Wheelwright, S.C. (1984a) "Manufacturing Strategy: Defining the missing link", Strategic Management Journal, v5, pp. 77-91.

394. Wheelwright, S.C. (1984b) "Strategy, Management and Strategic Planning Approaches", Interfaces, v14, Jan-Feb, pp. 19-33.

395. White, R.E. and Hamermesh, R.G. (1981) “Toward a model of business unit performance: An integrative approach”, Academy of Management Review, v6 n2, pp.213-223.

396. Will, J., Bertrand, M. and Fransoo, J.C. (2002) “Operations management research methodologies using quantitative modelling”, International Journal of Operations Management, vol. 22, no. 2, pp.241-264.

397. Williams, F.P., D’Souza, D.E., Rosenfeldt, M.E. and Kassaee, M. (1995) “Manufacturing strategy, business strategy and firm performance in a mature industry”, Journal of Operations Management, v13, pp.19-33.

398. Wilson, J.M. (1995) “A historical perspective on operations management”, Production and Inventory Management Journal, Third Quarter, pp.61-66.

399. Wilson, E.J. and Volsky, R.P. (1997) “Partnering relationship activities: building theory from case study research”, Journal of Business Research, vol.39, no.1, pp.59-71.

400. Wilson, E.J. and Woodside, A.G. (1995) “The relative importance of choice criteria in organisational buying: Implications for adaptive selling”, Journal of Business-to- Business Marketing, v2, n1, pp.33-57.

401. Wilson, E.J. and Woodside, A.G. (1999) “Degrees-of-freedom analysis of case data in business marketing research”, Industrial Marketing Management, vol. 28, pp. 215-229.

402. Yin (1994) "Case study research: Design and methods", 2nd edition, Sage. 403. Yin (1993) "Applications of case study research", Sage. 404. Youndt, M.A., Snell, S.A., Dean Jr., J.W. and Lepak, D.P. (1996) “Human resource

management, manufacturing strategy and firm performance”, Academy of Management Journal, v39, n4, pp.836-866.

405. Zahay, D. and Griffin, A. (2004) “Customer learning processes, strategy selection, and performance in business-to-business service firms”, Decision Sciences, v35, n2, pp. 169-203.

406. Zeithaml, V., Parasuraman, A. and Berry, L.L. (1990) “Delivering quality service – balancing customer perceptions and expectations”, The Free Press, New York, NY.