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Oi/421 W 3 Organizational Impact Paper

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Organizational Impact Paper



Organizational Impact Paper
Manufacture and service organizations both pose their challenges when it comes to innovation, designs and creativity within their respective markets. Manufacturing a product takes much detail to define its processes and changes can be made along various points during this process. Service organizations do not have this flexibility. Changes in service type organizations may not be easily implemented until the service has been given and the feedback from consumers are noted.   But even without this flexibility, Von Stamm (2008) stated, “services tend to be much more profitable than products. Blumberg (1989) reported that service obtain margins of 15–25% before tax whereas product can demand only 7–11%” (P. 359). The difference is the tangible and intangible nature between these two elements. While manufacturing a product is a tangible element, service is intangible and is hard to gain ownership of or protect.
Take for example, Bank of America. The banking market is a service market and therefore, deal with an intangible element. Unlike a manufacturing organization such as Pepsi, Bank of America deals mainly with service and providing their consumers with an assumption of satisfaction of what a consumer’s banking experience should be like. Von Stamm (2008) stated, “Because the product is consumed upon delivery there is no manufacturing as such and ergo neither the possibility to ‘manufacture’ in advance and put into an inventory (p.361). This is unlike Pepsi, where it is a tangible product and throughout the varying stages of production and distribution of this product, the organization can change its approach if there is a need presented (Von Stamm, 2008).
The innovation to provide superior service that is different from the competition can also prove difficult for service organizations. While tangible products can be patented, competitors can steal ideas from other service organizations without...

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