Cutting Corners and Working Overtime: Quality Erosion in the Service Industry

  title={Cutting Corners and Working Overtime: Quality Erosion in the Service Industry},
  author={Rogelio Oliva and John D. Sterman},
  journal={Manag. Sci.},
The erosion of service quality throughout the economy is a frequent concern in the popular press. The American Customer Satisfaction Index for services fell in 2000 to 69.4%, down 5 percentage points from 1994. We hypothesize that the characteristics of services--inseparability, intangibility, and labor intensity--interact with management practices to bias service providers toward reducing the level of service they deliver, often locking entire industries into a vicious cycle of eroding service… 

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