A typology of service organizations is presented and a conceptual framework is advanced for the impact of physical surroundings on the behaviors of both customers and employees. The ability of the physical surroundings to facilitate achievement of orhanizational as well as marketing is explored. Literature from diverse disciplines theoretical grounding for the framework , which serves as a base for focussed propositions. By examining the multiple strategic roles that physical surroundings can exert in service organizations, the author highlights key managerial and research implications.