What are the implications of Hesketts Service Profit Chain for the Essay

What are the implications of Hesketts Service Profit Chain for the practice of service management - Essay Example According to him employees represent the front end of the company, in the sea of market forces, the customer. Higher satisfaction levels in these groups drives profits in the value chain. In fact higher the satisfaction, the better the performance and more profitable an organisation becomes. We will critically examine the ideas of Heskett. et. al with reference to remarks made on it, by on it by modern theorists, practitioners, researchers and business leaders of service industry. In order to develop conclusive arguments on the theory of Hesket et. al. we need to begin by stating definitions of terms like Value Chain, Profit, Customer, Investor, and Services. Value Chain: ICH Resource Architecture Center defines it as â€Å"a set of support activities to deliver valued added outputs to customers; an interrelated set of generic activities of inbound logistics, outbound logistics with intermittent functions of operations and sales (Porter); ACDI/VOCA sums all activities that bring a product from conception to end stage in the value chain. Employee: The British Employment Law defines employee as â€Å""an individual who has entered into or works under a contract of employment. (emplaw.co.uk)†. The employment can be of short duration and long duration and its rules, regulations vary from country to country. Investor: Investor is an individual who puts in money into an enterprise and seek profit thereof. In the current parlance, the word stakeholder is being used for investors. But sometimes the stakeholder is also used to mean the employees, the consumers and the community in which a company operates. Services: Answers.com defines a service that sells assistance and expertise rather than a tangible product. However service may also has a wider connotation for tangible items called product servicing. For theoretical purposes we will service in the tangible and intangible context. Critical