Service Productivity How to Measure and Improve It?

  • Erik den HartighEmail author
  • Marc Zegveld
Part of the Service Science: Research and Innovations in the Service Economy book series (SSRI)


Productivity is a key performance measure for service businesses and serves as a compass for measuring their innovativeness. In this chapter we present a tool for measuring productivity in service businesses. Improvements in service business productivity do not depend on industry, business size or business growth, but on the specific knowledge and competences of managers. Using case examples we show various ways of how managers can improve the productivity of their service businesses. They can do so by adopting a perspective of standardization, flexibility or individualization. Based on these perspectives, we provide a framework that shows how managers can improve service business productivity by coordinating strategic orientation, value creation and the configuration of business processes.


Business Process Productivity Growth Total Factor Productivity Service Business Total Factor Productivity Growth 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. Araujo, L., and Spring, M. (2006). Services, products and the institutional structure of production. Industrial Marketing Management, 35, 797–805.CrossRefGoogle Scholar
  2. Bangma, K., Gibcus, P., Kuijpers, J., and De Wit, G. (2004). Arbeidsproductiviteit in de Nederlandse dienstensector: een literatuurstudie en enkele eigen empirische bevindingen. Research Report H200405. Zoetermeer: EIM.Google Scholar
  3. Baumol, W.J. (1967). Macroeconomics of unbalanced growth: the anatomy of urban crises. American Economic Review, 57(3), 415–426.Google Scholar
  4. Boone, T., Ganeshan, R., and Hicks, R.L. (2008). Learning and knowledge depreciation in professional services. Management Science, 54(7), 1231–1236.CrossRefGoogle Scholar
  5. Brynjolfsson, E., and Hitt, L.M. (2003), Computing productivity: firm-level evidence. The Review of Economics and Statistics, 85(4), 793–808.CrossRefGoogle Scholar
  6. Chesbrough, H., and Spohrer, J. (2006). A research manifesto for service science. Communications of the ACM, 49(7), 35–40.CrossRefGoogle Scholar
  7. De Jong, J.P.J., and Vermeulen, P.A.M. (2003). Organizing successful new service development: a literature review. Management Decision, 41(9), 844–858.CrossRefGoogle Scholar
  8. Demirkan, H., Kauffman, R.J., Vayghan, J.A., Fill, H.-G., Karagiannis, D., and Maglio, P.P. (2008). Service-oriented technology and management: perspectives on research and practice for the coming decade. Electronic Commerce Research and Applications, 7, 356–376.CrossRefGoogle Scholar
  9. Diewert, E. (2000). The challenge of Total Factor Productivity measurement. Working Paper, University of British Columbia.Google Scholar
  10. Dorgan, S.J., Dowdy, J.J., and Rippin, T.M. (2006). The link between management and ­productivity. McKinsey, February 2006.Google Scholar
  11. Dosi, G. (1982). Technological paradigms and technological trajectories: a suggested interpretation of the determinants and directions of technical change. Research Policy, 11, 147–162.CrossRefGoogle Scholar
  12. Drucker, P.F. (1994). The theory of the business. Harvard Business Review, September–October, 95–104.Google Scholar
  13. Drucker, P.F. (1999). Knowledge-worker productivity: the biggest challenge. California Management Review, 41(2), 79–94.Google Scholar
  14. Hamel, G., and Prahalad, C.K. (1993). Strategy as stretch and leverage. Harvard Business Review, March–April, 75–86.Google Scholar
  15. Heskett, J.L., Jones, T.O., Loveman, G.W., Sasser, Jr., W.E., and Schlesinger, L.A. (1994). Putting the service-profit chain to work. Harvard Business Review, March–April, 164–174.Google Scholar
  16. Johnson, B.C., Manyika, J.M., and Yee, L.A. (2005). The next revolution in interactions. McKinsey Quarterly, 4, 21–33.Google Scholar
  17. Karni, R., and Kaner, M. (2007). An engineering tool for the conceptual design of service systems. In: D. Spath and K.-P. Fähnrich (Eds.) Advances in services innovations. Berlin: Springer.Google Scholar
  18. Maglio, P.P., Srinivasan, S., Kreulen, J.T., and Spohrer, J. (2006). Service systems, service ­scientists, SSME, and innovation. Communications of the ACM, 49(7), 81–85.CrossRefGoogle Scholar
  19. Nelson, R.R., and Winter, S.G. (1982). An evolutionary theory of economic change. Cambridge: The Belknap Press of Harvard University Press.Google Scholar
  20. Penrose, E. (1959). The theory of the growth of the firm. New York: Wiley.Google Scholar
  21. Porter, M.E. (1985). Competitive advantage: creating and sustaining superior performance. New York: Free Press.Google Scholar
  22. Prahalad, C.K., and Hamel, G. (1990). The core competence of the corporation. Harvard Business Review, May–June, 79–91.Google Scholar
  23. Solow, R.M. (1957). Technical change and the aggregate production function. The Review of Economics and Statistics, 39, 312–320.CrossRefGoogle Scholar
  24. Spohrer, J., Maglio, P.P., Bailey, J., and Gruhl, D. (2007). Steps toward a science of service systems. IEEE Computer Society, 40(January), 71–77.Google Scholar
  25. Tien, J.M., Berg, D. (2003). A case for service systems engineering. Journal of Systems Science and Systems Engineering, 12(1), 13–38.CrossRefGoogle Scholar
  26. Triplett, J.E., and Bosworth, B.P. (2003). Productivity measurement issues in services industries: “Baumol’s disease” has been cured. FRBNY Economic Policy Review, September, 23–33.Google Scholar
  27. Van Ark, B., and De Jong, G. (2004). Productiviteit in dienstverlening. Deel 1: Wat het is en waarom het moet. Study for Stichting Management Studies (Foundation of Management Studies, affiliated with the Confederation of Netherlands Industry and Employers, VNO-NCW). The Hague: Royal Van Gorcum.Google Scholar
  28. Van Asseldonk, A.G.M. (1998). Mass-individualisation: business strategies applying networked order to create economic value in heterogeneous and unpredictable markets. Veldhoven: TVA management bv.Google Scholar
  29. Wolff, E.N. (1999). The productivity paradox: evidence from indirect indicators of service sector productivity growth. The Canadian Journal of Economics, 32(2), Special issue on service sector productivity and the productivity paradox, 281–308.CrossRefGoogle Scholar
  30. Zegveld, M.A. (2000). Competing with dual innovation strategies: a framework to analyse the balance between operational value creation and the development of resources. Den Haag: Werk-Veld.Google Scholar
  31. Zegveld, M.A. (2004). The productivity and governance of company-specific knowledge. International Journal of Learning and Intellectual Capital, 1(3), 317–333.CrossRefGoogle Scholar
  32. Zegveld, M.A., and Den Hartigh, E. (2007). De winst van productiviteit: sturen op resultaat in dienstverlening. Study for Stichting Management Studies (Foundation of Management Studies, affiliated with the Confederation of Netherlands Industry and Employers, ­VNO-NCW). The Hague: Royal Van Gorcum.Google Scholar

Copyright information

© Springer US 2011

Authors and Affiliations

  1. 1.Özyeğin UniversityAltunizade ÜsküdarTurkey
  2. 2.Partner Strategy and Change IBMAmsterdanThe Netherlands

Personalised recommendations