Service Organization: Benefits And Values Of Service Organizations

To establish a new organization, numerous resources are required. One of the needed important elements to start an organization is human resources. As a matter of fact, there is no organization that can operate without the presence of people as a part of it. For example, in a manufacturing company, people are the personnel responsible for managing every stage in a production process. Although automation is now becoming common in modern business, it still needs operators to monitor and control the machineries and robots. This condition will be more important as in the case of service organizations, which involves human assets as the most essential component of the “product” delivery.
Organizations such as banks or airline companies require many high-skilled employees to provide their service. These persons should be recognized closely due to their significant roles to the organizations. Failure to acknowledge their existence may result in their job dissatisfaction. Moreover, it may also cause the termination of their contracts with the organizations. A sport organization is another form of service institution that strongly relies on its human resources (Flamholtz 1999). Athletes are the major and most vital assets in this sort of institution where most of the funds are allocated towards the athletes’ development. Therefore, this outflow should be treated as an investment, rather than expenditure, because it will bring economic benefits for the organization in the future. According to that reason, it becomes an essential requirement for the organization to disclose the human resource costs and value explicitly in the financial report, so that the report is able to portray the real condition of the organization. This concept is know...

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...tion of human resource as an asset must be compulsory in order to reflect the real value of the organization. Although some authorities have a different point of view of this concept, others suggest many measurement methods that can be applied in an organization. Recent studies have also provided strong evidence on the benefits of implementing this managerial tool. First, human resource accounting may act as a communication tool among top managers in the organization. It presents a numerical measurement that can be more easily understood by the managers. Therefore, strategic decision making can be derived from such measurement, and finally it will result in the improvement of the organization's financial performance. In all, the concept of human resource accounting offers many advantages to the organization that it should be implemented in order to obtain success.