The Utilisation of Customer Satisfaction Targets

Brief 214312-Individual Research Proposal

The Use of Customer Satisfaction Targets as a Measure of Managerial Performance in theUnited kingdomPassenger Rail Industry

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Dissertation Proposal by ……………

December 2008

Table of Contentss

Title Pagepage 1

Backgroundpage 3

Introductionpage 6

Preamblepage 6

Hypothesispage 7

Literature Reviewpage 8

Indicative Research Methodologiespage 9

Strengths and Failingspage 11

Introduction of Resultspage 12

Drumheadpage 13

Recommendationpage 13

  1. Background

Since the denationalization of British Rail in by the Railways Act 1993 [ 1 ] at that place have been major jobs in the execution of the theoretical account devised by the Government. There was much argument at the clip and since that the theoretical account adopted was flawed. Even the top civil retainer who pushed through the denationalization had uncertainties. Sir Patrick Brown, the lasting secretary at the Department of Transport in the early 1990s, says in a BBC4 programme, Witness to History: “Privatising the Railways that it was the Treasury ‘s insisting that resulted in the separation of the substructure and the operations. This split has non merely led to the recent expensive failure of the substructure company, Railtrack, but has besides been the root cause of several fatal train catastrophes since privatisation.” [ 2 ]

The current construction of the Rail Industry is based on a series of complex contractual agreements between assorted stakeholders and runing companies under the auspices of the Secretary of State for Transport. Authority is exercised on a twenty-four hours to twenty-four hours footing by the Office of Rail Regulation ( ORR ) [ 3 ] as the independent safety and economic regulator forBritain ‘s railroads.

The major institutional and operational constituents of the Passenger Service Networks are:

  • Network Rail [ 4 ] ( NR ) , the publically funded “not for dividend” proprietor and operator of the rail substructure ( path and associated substructure, tunnels, Bridgess etc. , signalling and Stationss )
  • Passenger Train Operating Companies ( TOCs ) , mostly private sector conveyance runing companies who require a Track Access Agreement with NR and a Licence to Operate from the ORR.
  • Rollingstock Renting Companies ( ROSCOs ) , chiefly major Bankss and similar fiscal establishments who own and lease rider turn overing stock and motor power to the OPSs.
  • Maintenance Service Providers ( MSP ) , private sector contractors who maintain and, in some instances, construct new turn overing stock and rail substructure.

There are a figure of statutory organic structures and independent governments who have important interfaces with the UK rider rail services, viz. :

  • Department for Transport ( DfT )
  • Conveyance for London
  • Transport Scotland
  • Welsh Assembly Government
  • Department of Regional Development, Northern Ireland
  • Passenger Transport Executives ( PTEs )
  • European Railway Agency

In peculiar the PTEsare responsible for public conveyance policy and outgo in their parts. The PTEs can contract with the local rider train operators to supply extra rider rail services.

The rider rail industry is monitored by Passenger Focus ( PF ) , whose runing authorization and charter are described as:

“We are an independent public organic structure set up by the Government to protect the involvements of Britain ‘s rail riders. We are funded by the Department for Transport but our independency is guaranteed by an act of Parliament. Our mission is to acquire the best trade for Britain ‘s rail passengers.With a strong accent on evidence-based candidacy and research, we guarantee that we know what is go oning on the land. We use our cognition to act upon determinations on behalf of rail riders and we work with the rail industry, other rider groups and authorities to procure journey improvements” [ 5 ]

The concluding participant in this complex image is the rail rider, the ultimate client of the rider rail industry. Statisticss provided by the ORR ( fig1 ) indicate that there has been important growing in riders utilizing the railroads for the last 15 old ages. Passenger kilometers have increased by 72 % . In the same study rider gross per kilometer has increased by 25 % over the last 5 old ages against a Consumer Price index ( CPI ) addition of 9.7 % . PF studies show that during the same period passenger’s Value for Money perceptual experience of a rail ticket has hovered around 50 % . [ 6 ]

Fig 1 [ 7 ]

In drumhead, the rider and customer’s position of the industry through could be one of confusion and complexness. They may happen it hard to recognize which administration is finally accountable for service proviso in footings of dependability, safety, comfort, convenience and value for money. History has besides witnessed the failure of Railtrack plc with ruinous effects in footings of both public safety and fiscal loss to stockholders and the public bag. As clients of a quickly turning service industry, rail riders deserve to be the chief focal point of service marks for the primary participants in the rider rail industry. This Proposal intends to concentrate on the development of effectual customer-orientated steps which can be used as managerial public presentation standards in the UK rider rail Industry.

  1. Introduction

This proposal outlines the acceptance of a research plan to supply the footing for a thesis on the hypothesis that stakeholders in the UK rider rail industry could profit if the Office of Rail Regulation, Network Rail and the rider Train Operating Companies following Customer Satisfaction Targets as one of the Key Performance Indicators ( KPI ) for the industry. It examines the current functions, duties and relationships of the major participants and develops a modus operandi for a research plan to develop the hypothesis into a practical procedure for puting a KPI for the industry.

It suggests a series of beginnings for a wide-ranging literature reappraisal of the UK and other legal powers denationalization plans. It besides suggests beginnings peculiarly pertinent to the complex regulative and contractual environment in the privatised UK rail industry. Research methodological analysiss are proposed and their strengths and failings discussed. The drumhead suggests that there could be important benefits if the research were successful and its results adopted by the UK rider rail industry.

  1. Preamble

Since the ORR is the primary participant in the rail regulative environment, they hold the cardinal to public presentation measuring for participants in the Industry. A hunt of their certification suggests that the cardinal standards they have adopted appears to be “on-time running” . An infusion from the latest ORR Annual study states” Performance of franchised rider operators across the web continued to better over the twelvemonth making an norm of 89.9 % trains which arrived at their concluding finish on clip within industry tolerance for the first clip since 2002.” [ 8 ]

The primary contractual and fiscal understandings in the rider rail concern prevarication between NR and the TOCs referred to as Franchise Operators by NR. These relationships are complex and incorporate a figure of duties and commissariats for public presentation between the assorted parties which can ensue in wagess and punishments. These franchise understandings once more use “on clip running” as a cardinal component in the public presentation marks.

A figure of TOCs have developed Passenger Charters which include similar committednesss for “on clip running” . For illustration, Virgin Trains who operate the West Coast Main Line from London to Glasgow and Edinburgh province “We will run at least 99 % of our trains and guarantee that at least 90 % of our trains arrive at their finish within 10 proceedingss of the scheduled clip, Monday to Saturday, measured at destination.” [ 9 ]

The ORR has launched a Joint Performance Improvement Plan ( JPIP ) defined as: “A less normative replacement to Local Output Commitments. A JPIP is based on a bipartisan duty of Network Rail and the train runing company ( TOC ) to better performance.” [ 10 ] The chief focal point of these agreements once more appears to be “on clip running” . Although utile as a step of operational efficiency it could be argued that from a rail customer’s point of view it is but one facet of a satisfactory rail experience.

  1. Hypothesis

Customer satisfaction is a step of how merchandises and services supplied by a company meet or surpass client outlook. It is seen as a cardinal public presentation index within most concerns. The UK rider rail industry seems to hold paid light attending to this “Holy Grail” of any market orientated concern. The lone effort at mensurating some facets of client satisfaction in the UK rider rail industry is through the studies conducted by PF. It is besides interesting to observe that PF appears to hold no statutory function or powers and small influence in puting public presentation criterions for the industry as a whole. None of its findings or statistics are utilized or quoted in the ORR public presentation indexs, the JPIP or NR’s understandings with the TOC’s.

This proposed Dissertation will research the hypothesis that:

“Stakeholders in the UK rider rail industry could profit if the Office of Rail Regulation, Network Rail and the rider Train Operating Companies adopt client satisfaction marks as one of the Key Performance Indicators for the industry”

  1. Literature Review

Further reading is required and more to the full understand the cultural, operational and selling doctrines of the rail industry in general and the UK industry in peculiar. More elaborate certification reappraisals will besides be required to better understand the current mechanisms and techniques for puting and mensurating public presentation standards in the UK rider rail industry. This will be indispensable to developing the elaborate attack to planing and put to deathing the research methodological analysiss and techniques to prove the hypothesis.

The general background literature hunt and reappraisal will cover the:

  • theoretical accounts adopted by major rail denationalization plans in other legal powers with peculiar mention to France, Japan and Australia
  • regulative governments and there relationship with the major proprietors and operators of the rider rail webs
  • critical KPIs and public presentation standards adopted by the regulators/operators in these legal powers to mensurate managerial public presentation of the rider webs

The UK rail industry literature reappraisal will cover the:

  • background to inveigh denationalization and the rational for following the theoretical account dividing operations from substructure
  • history since denationalization, peculiarly the grounds for the death of Railtrack plc and the creative activity, doctrine of NR
  • development and civilization of the ORR and its relationship with PF
  • current construction, activities, functions and commercial relationships of participants in the UK rider rail industry.

A elaborate reappraisal of the principle, development and standards for the current public presentation measuring government is required. A sample of the cardinal certification covering the current operating patterns, monitoring and aim setting activity is shown in the tabular array below.

Document

Beginning

Web Address

The Railways Act 1993

Office of Public Sector Information

hypertext transfer protocol: //www.opsi.gov.uk/

ORR Annual Report

2007–08

Office of Rail Regulation

hypertext transfer protocol: //www.rail-reg.gov.uk

NR Business Planning Criteria

Network Rail

hypertext transfer protocol: //www.networkrail.co.uk/

NR Report & amp ; Histories 2007

Network Rail

hypertext transfer protocol: //www.networkrail.co.uk/

NR Business Plan 2007

Network Rail

hypertext transfer protocol: //www.networkrail.co.uk/

National Passenger Survey Spring 2008

Passenger Focus

hypertext transfer protocol: //www.passengerfocus.org.uk/

NR Network Code

Network Rail

hypertext transfer protocol: //www.networkrail.co.uk/

NR 2010 Network Statement

Network Rail

hypertext transfer protocol: //www.networkrail.co.uk/

The concluding literature reappraisal will be aimed at deriving extended cognition of satisfaction measuring techniques used in client focussed selling. In peculiar, a better apprehension of the usage of studies and associated trying techniques to find consumer penchants and behavior, with a specific accent on client satisfaction will be required. This literature reappraisal will be developed in concurrence with a more general reappraisal of media and associated popular remark on the UK rider rail industry.

  1. Indicative Research Methodologies

A timescale and plan for the research undertaking will be prepared. The research methodologies to be adopted to prove the hypothesis will be divided into five chief phases as follows:

  • Interviews with senior direction involved in the industry
  • Test the PF rider study techniques and methodological analysiss against modern selling theory and practise
  • Develop and design a robust client satisfaction proving government which could be acceptable to the key stakeholders
  • Pilot tests of the client satisfaction trying plan to guarantee hardiness, truth and acceptableness
  • Review consequences and refine to bring forth a client testing government for concluding presentation to the key stakeholders
  1. Interviews

Wherever possible interviews will be conducted with senior directors from the following stakeholder administrations:

  • Office of Rail Regulation
  • Network Rail
  • Passenger Focus
  • Two Train Operating Companies ( one long distance, say Virgin Trains and one commuter, say Southern )

Interviews will be carefully prepared and structured with a basic criterion questionnaire with fluctuations to accommodate the participants. The major focal point of the interviews will be to explicate the intent of the research exercising, elicit the manager’s positions and thoughts on industry KPIs and derive the assurance and cooperation for the research activity.

The chief focal point of the interviews will be to arouse the manager’s positions on:

  • Managerial and operational public presentation measuring
  • Customer satisfaction standards
  1. PF Methodologies

It is non clear which methodological analysis and sampling technique PF utilises for its current client studies. The first measure will be to understand the methodological analysis, trial and compare it against both robust sampling statistics and modern client satisfaction proving research. An analysis and review of PF methodological analysis will be prepared.

  1. Design a Customer Satisfaction Testing Regime

From the research above, a test testing government, study technique and questionnaire will be developed. This will be prepared within the modern theory and in line with current on both statistical and attitudinal research.

  1. Pilot Tests

With the understanding of the train operating companies, hopefully the two interviewed in phase a ) , pilot tests of the rider satisfaction study will be carried out. .

  1. Review, Refine and Report

When complete the consequences can be compared and calibrated against the latest consequences available from PF for the same populations. The procedure can so be reviewed and refined as required. The consequences can be collated, analysed charted and interpreted and prepared for presentation to the stakeholders interviewed in phase a )

  1. Strengths and Failings

The research methodological analysiss described supra have the following strong points:

  • The research plan is based on audience and engagement. The constructs, intent, methodological analysis, techniques, activities and the installations and entree required to carry on the research will be to the full explained and permissions sought.
  • All consequences will be shared with and commented on by some of the cardinal industry stakeholders. The research procedure and techniques are flexible and can be modified and refined as the plan develops.
  • The methodological analysiss adopted will be in line with modern client satisfaction measuring theory and statistically robust trying techniques. Thus the pilot consequences should hold cogency and point to the best patterns and techniques to be developed for ongoing full graduated table rider satisfaction testing.
  • The literature reappraisal will supply a house foundation and valid theoretical base for the design and development of the research.

The weak points of the research plan are:

  • The rail industry in the UK is inherently conservative. It has a long history and alone civilization. Many of the current senior directors were old employees off British Rail ( BR ) , peculiarly in NR. Thus there is a natural intuition and reluctance to encompass new constructs and thoughts.
  • The rule of “on clip running” as the cardinal step for every facet of efficiency and operational effectivity is entrenched in the railroad mind. The image of the station agent with a gold pocket ticker in manus is as relevant today as it was 100 old ages ago. This attitude will be hard to modify, peculiarly within NR.
  • Legislative issues and commercially sensitive agreements between the chief stakeholders will be hard to modify. The risk-reward elements of the TOCs relationship with NR are based on specific public presentation standards collected and verified by both parties. These standards are based on a scope of mensurable, mostly operational marks being met on either side. Fiscal inducements and punishments are related to these standards. A Customer Satisfaction KPI, even based on independently collected, collated verifiable informations may be hard to suit into this current government.
  • The industry is inherently monopolistic in some markets peculiarly on busy commuter lines. This colours management’s opinion and attack to the client. Adopting a more client focussed KPI may non be seen as in the best involvements of certain TOC’s.
  1. Introduction of Results

The concluding results from the research will be included in the full thesis. The critical result from the research will be the practicality of following rider satisfaction steps as a substantial KPI for regular study and specific action by the relevant industry stake-holders. This would doubtless necessitate some signifier of directive from the DfT or the ORR. Assuming a favorable reaction from the cardinal industry participants to the results of the research and the attendant thesis, a meeting with the relevant officers from the DfT with the ORR could be arranged to discourse the signifier and procedure for incorporation of Customer Satisfaction Measure in the industries on a regular basis reported KPIs

  1. Drumhead

This research proposal is based on the premiss that:

  • Passengers utilizing the UK rider rail industry would welcome a more client focussed industry. Anecdotal grounds suggests current client perceptual experiences of the UK rider rail industry are unfavorable. The results if research if adopted and acted upon could assist to better those perceptual experiences.
  • This attack to better rail client satisfaction would be helpful both from a political point of view. The Government’s current rail conveyance scheme does non hold a favorable image. In 2007, the Government announced a ?10 billion investing in rail over the following seven old ages. A typical reaction was reported from TSSA general secretary Gerry Doherty as: “ Passengers will be forced to pay twice for betterments which are meant to profit them, foremost as taxpayers and so as rail users. Curates claim they want to promote inveigh travel and so kick riders in the dentition with immense regular hikings in menus. They are pricing people off rail and onto the roads. ” [ 11 ]
  • The TOCs should welcome any enterprise aimed at increasing client satisfaction which could take to an addition in gross and could assist supply improved concern chances.
  • The primary end of any service industry is to develop client trueness and repetition concern. This can be achieved through supplying relevant and up criterions of service which are perceived by the client to be value for money against viing services. Regular, monitoring and describing client satisfaction steps can concentrate directions attending and action on bettering services and hence gross.
  1. Recommendation

This proposal for research for a thesis is based on a practical and good sweetening to the direction of a cardinal national plus. It is recommended it be adopted.

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