Abstract

This article explores how service organizations respond to changes in work pressure, why they respond the way they do, and what managers can do about it. The system dynamics method captures the organizational and behavioral components of the social systems that produce and consume services, as well as the physical characteristics of the service delivery system. This method also supports the assessment of long-term consequences of complex interactions among responses to work pressure. The major recurring problems observed in the service industry—erosion of service quality, high turnover, and low profitability—can be explained by the organization’s responses to changes in work pressure. This article also suggests ways to identify the structural characteristics that determine the preferred response to work pressure. By providing a specific link between characteristics of service settings and dysfunctional outcomes, the model assists managers in the design of high-leverage policies to eliminate undesired behaviors.