Service productivity as mutual learning

The purpose of this paper is to analyse the mutual learning implications for service productivity of the characteristics of service and service production.

This is a conceptual paper. The starting point is, first of all, that productivity as a management concept should help a firm to manage its economic profit, and secondly, that service organizations are open systems, where the customers participate as co-producers and are exposed to the firm’s production resources and processes. Unlike in manufacturing, to understand productivity in service organizations as a means of managing profit, cost effects and revenue effects of changes in the productions system cannot be separated. Due to the interaction between customers and the firm’s resources during service production, dialogical collaboration between them develops. This enables mutual learning.

Given the social dynamics in service production processes, four learning processes that influence service productivity are identified. Two processes enhance the organizations’s internal efficiency (cost savings), and two enhance its external effectiveness (perceived quality, revenue generation); two are organization-driven, two are customer-driven.

The mutual learning model demonstrates how the service provider by learning from the dynamics of service encounters in many ways can manage the productivity of the organizations’s processes. It shows that learning enables improvement of service productivity through effects enhancing both internal efficiency and external effectiveness.

In a productivity context, learning has not earlier been studied as a mutual learning phenomenon.