Different types of service organization

Consumers are central to services. Satisfaction of need here is a variable of the interaction between employee and customer. Thus, services are labour intensive. Degree of labour intensity is the ratio of investment on labour to that of total capital costs, while degree of customer interaction is the effect consumers have on the service being offered. Modification of services to suit the needs of a specific customer is customization. Grounding on these variables, Roger Schmenner has identified a differentiation of services on his service process matrix. Degree of labour intensity on Y-axis and degree of interaction with consumers and customization on X-axis, result in four quadrants (Schmenner 21-32), as shown in figure below.