Page 136 - Crisis in Higher Education

A Customer-Focused, Resource Management Perspective • 107

of Commerce. While these employees impact quality, reputation, and rev-
enue at their firms, their impacts are far less significant than the impacts
of tenured faculty. Tenured, faculty experts are like MDs in hospitals, law-
yers in legal firm, or scientists in biotech companies. They should be at the
core of the organization. They must work closely with customers, suppli-
ers, and others professionals, and some of them should become admin-
istrators who organize and manage the process. These factors, which are
attributes of service dominant logic, are vital for success.

5.2.3 Service Dominant Logic
In addition to being PSOs, universities operate in an environment where
value is created by close and careful cooperation among customers, ser-
vice providers, and suppliers. This is referred to as SDL. Dominant logic is
a model of exchange from economics, and it is based on the exchange of
“goods” that emphasizes transactions and uses tangible resources and lim-
ited information about customers to create embedded value. SDL argues
that the logic of exchange should be different because it applies to intan-
gible resources, uses close and continuing working relationships with cus-
tomers, and co-creates value. Intangible resources, including knowledge
and information, and close relationships are used to intensify interactions
among the organization (university) providing the goods or services, aca-
demic leaders (tenured faculty), customers (students, governments, and
potential employers), and key suppliers (providers of learning materials).
These interactions lead to an exchange of knowledge and information that
continuously improves and fits the value of the good or service to the needs
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of specific customers; thus, value is co-created through this process. SDL
seems particularly useful under the following conditions:

1. Products have high intellectual content: Designing and producing goods
such as sophisticated computer hardware, surgical equipment, or even
today’s automobile requires in-depth knowledge of customers’ chang-
ing expectations and emerging technologies. Creating services such
as hospital care or university research projects depends on frequent
exchanges of information and continuing efforts to improve outcomes.
2. Organizations have multiple customers: It is essential for the experts
within the organization to synchronize expectations and mediate
relationships among the customer groups through repeated contacts
so value is co-created.