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1 – 10 of 846This chapter reviews the literature on servitization to understand whether and how mergers and acquisitions (M&As) have been dealt with and what the portrayed consequences are of…
Abstract
This chapter reviews the literature on servitization to understand whether and how mergers and acquisitions (M&As) have been dealt with and what the portrayed consequences are of servitization through M&As. Servitization refers to how manufacturing firms extend and remodel their offerings to focus on value in use rather than product transfer. The rationale of the chapter follows from how business model innovation or business modeling has been predicted as the next M&A wave, while the focus on servitization has been pronounced in research and practice as a means for manufacturing firms to refocus operations during the past decade. The chapter concludes that while the servitization literature is vibrant, the mode of reaching service competence and renewing business is not well explored in the literature. In line with the predicted next M&A wave, servitization through M&As would thereby create an interesting path for future research.
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Hamilton Terni Costa, Fernanda Ribeiro Cahen and Juliana Bonomi Santos
The purpose of this paper is to explore how home-country institutions influence firms’ servitization decisions. Existing studies have mostly neglected differences across countries…
Abstract
Purpose
The purpose of this paper is to explore how home-country institutions influence firms’ servitization decisions. Existing studies have mostly neglected differences across countries and implicitly assumed the servitization process and drivers are homogenous across national institutional environments. The authors challenge this assumption.
Design/methodology/approach
Using case-based research, the authors explored the influence of formal institutions of the product, financial and labor markets on the servitization of two firms operating in a developed country and two in an emerging country.
Findings
The absence of robust home-country institutions did not necessarily hinder the servitization process. On the contrary, firms servitizate to overcome the difficulties posed by these institutional voids. The flexibility associated with service offerings enables firms to create viable alternatives to cope with taxes, lack of infrastructure and qualified labor force.
Originality/value
These outcomes contribute to the servitization literature, which has mainly focused on single-country studies and takes for granted the institutional differences between countries. The findings suggest future studies need to consider how and, to what extent, the country where the company is located influences servitization strategies and processes. Such reflections will improve the inferences made concerning firms’ servitization. For practitioners, the results suggest that the move into the provision of services can be a fruitful strategy to overcome the difficulties faced in emerging markets.
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Weijiao Wang, Kee-Hung Lai and Yongyi Shou
Servitization has been recognized as an effective means for manufacturers to achieve superior performance. However, the servitization-performance relationship is controversial…
Abstract
Purpose
Servitization has been recognized as an effective means for manufacturers to achieve superior performance. However, the servitization-performance relationship is controversial since prior empirical studies have provided inconsistent and even contradictory results. Hence, the purpose of this paper is to provide a quantitative review on the servitization-performance relationship based on research findings reported in the extant literature.
Design/methodology/approach
Studies from 41 peer-reviewed journal articles were sampled and analyzed. A meta-analytic approach was adopted to conduct a quantitative review on the relationship between servitization and firm performance.
Findings
The results confirm a positive servitization-performance relationship. In addition, the results reveal that the observed servitization-performance relationship is influenced by the operationalization of constructs (servitization and performance) and control variables (industry and region).
Originality/value
As the first meta-analysis on the servitization-performance relationship, this study contributes to the servitization literature and provides future research directions.
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Tim Baines, Ali Ziaee Bigdeli, Oscar F. Bustinza, Victor Guang Shi, James Baldwin and Keith Ridgway
The purpose of this paper is to consolidate the servitization knowledge base from an organizational change perspective, identifying developed, developing and undeveloped topics to…
Abstract
Purpose
The purpose of this paper is to consolidate the servitization knowledge base from an organizational change perspective, identifying developed, developing and undeveloped topics to provide a platform that directs future research.
Design/methodology/approach
This paper addresses three objectives: it comprehensively examines organizational change management literature for selection of a theoretical framework; it classifies extant studies within the framework through a systemic literature review; and it analyses 232 selected papers and proposes a research agenda.
Findings
Analysis suggests increasing global awareness of the importance of services to manufacturers. However, some topics, especially related to servitization transformation, remain undeveloped.
Research limitations/implications
Although the authors tried to include all publications relevant to servitization, some might not have been captured. Evaluation and interpretation relied on the research team and subsequent research workshops.
Practical implications
One of the most significant challenges for practitioners of servitization is how to transform a manufacturing organization to exploit the opportunity. This paper consolidates literature regarding servitization, identifying progress concerning key research topics and contributing a platform for future research. The goal is to inform research to result eventually in a roadmap for practitioners seeking to servitize.
Originality/value
Although extant reviews of servitization identify themes that are examined well, they struggle to identify unanswered questions. This paper addresses this gap by focusing on servitization as a process of organizational change.
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Koji Kimita, Tim C. McAloone, Keiji Ogata and Daniela C.A. Pigosso
This study aims to develop a systematic method called servitization maturity model to support companies in developing distinctive capabilities for successful servitization.
Abstract
Purpose
This study aims to develop a systematic method called servitization maturity model to support companies in developing distinctive capabilities for successful servitization.
Design/methodology/approach
The concept of maturity models is adopted to support companies in developing distinctive capabilities for servitization. A systematic literature review and case study approach are employed to develop the maturity model.
Findings
The findings highlight 46 capabilities classified into seven categories: strategy and leadership, performance, offerings, customers, organization, network and digital technology. Furthermore, the evolutionary path is defined by combining two types of levels, i.e. capability and maturity levels, to develop these capabilities.
Research limitations/implications
The evolutionary path was partially validated through the application, while further investigation is required to validate the evolutionary path. Therefore, future research should investigate the further validation of the evolutionary path by conducting multiple case studies.
Practical implications
The proposed maturity model enables companies to not only capture the bigger picture of the required capabilities without oversight, but also determine a process for improving the requisite capabilities with feasible efforts.
Originality/value
Existing maturity models focused on the transition from less to more advanced services. However, recent studies emphasized that companies need to determine strategies that reflect their capabilities rather than simply move toward more advanced services. Based on this assumption, this study provides successive stages that enable companies to improve their capabilities through feasible efforts.
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Scott Wagstaff, Jamie Burton and Judy Zolkiewski
An abundance of literature suggests that organisations adopting a cooperative approach achieve greater rewards than those that act in opposition or isolation. An emerging body of…
Abstract
Purpose
An abundance of literature suggests that organisations adopting a cooperative approach achieve greater rewards than those that act in opposition or isolation. An emerging body of work also highlights the multiple actors involved in servitization. Despite this, in some contexts the benefits of servitization are not apparent. This paper examines business relationships in the oil industry and how they affect levels of servitization.
Design/methodology/approach
A mixed method study employing qualitative and quantitative methods was used to fully explore the context. In the quantitative phase, 48 oil industry specialists responded to a scenario based on game theory. This aimed to determine if the relationships between their respective organisations are cooperative or adversarial. Abduction drove a second qualitative phase. This consisted of a series of semi-structured interviews used to explore the servitization level and influence of servitization on relationships and vice versa.
Findings
The statistical results suggest that all parties used adversarial strategies despite the publicised intent to work cooperatively. The interviews suggested that increasing (decreasing) servitization could increase (decrease) cooperation and, in turn, value co-creation but revealed nuances to this effect. It also adds to our understanding of the darker side of servitization by illustrating the impact of mimetic isomorphism.
Originality/value
The findings add to understanding of the complex dynamics around servitization by showing that it is only at advanced levels of servitization that cooperative behaviour is observed, and base and intermediate levels result in non-cooperative behaviour and thus illustrate the importance of adopting a multi-actor lens to explore servitization.
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Soyeon Kim and Keiko Toya
Given the emergence of servitization as a viable strategy for manufacturers to gain a competitive advantage, determining what factors influence effective servitization is…
Abstract
Purpose
Given the emergence of servitization as a viable strategy for manufacturers to gain a competitive advantage, determining what factors influence effective servitization is imperative. Drawing on organizational change and leadership theories, the purpose of this paper is to identify the leadership styles required for successfully implementing servitization in Japan.
Design/methodology/approach
Via stratified sampling method, 5,000 Japanese manufacturers registered in the Tokyo Chamber of Commerce and Industry were selected for participation in a mail survey. Survey data from 187 responding CEOs were matched with firm-level archival data, after which the matched data were analyzed.
Findings
The findings indicated that industry type is important in implementing servitization, but firm size and performance are not. The results also revealed that charismatic leadership style is especially critical in implementing and elevating servitization, whereas autocratic and autonomous leadership styles impede this process.
Research limitations/implications
The study fills a gap in the literature by identifying a notable relationship between leadership style and servitization. Because the study was conducted in an Asian economic context, which has received less attention in servitization research, it advances the existing body of research on servitization by breaking the former geographical constraints in this field of studies.
Practical implications
This study presents practical implications for Japanese manufacturers who wish to devise a strategic leadership plan in the servitization process. CEOs of the firms can initiate the transition to servitization by employing charismatic leadership skills and convincing employees of the benefits of the change.
Originality/value
The research is distinguished from existing studies in that it provides the first empirical evidence on effective CEO leadership styles for servitization in Japanese manufacturing firms.
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Torben Juul Andersen and Søren Bering
The aim of this study is to gain important insights on integration oriented servitization identifying essential dimensions of effective structures, coordination approaches and…
Abstract
Purpose
The aim of this study is to gain important insights on integration oriented servitization identifying essential dimensions of effective structures, coordination approaches and management controls adopted by manufacturing firms that integrate forward towards distribution, sales and services.
Design/methodology/approach
The study adopts a theory-guided qualitative abductive methodology to conduct a comparative case-study of two manufacturing firms in the same industry integrating forward to enhance servitization but with significantly different performance outcomes. The findings are uncovered from a broad spectrum of primary and secondary data spanning two decades.
Findings
The consistently high-performing firm puts equal emphasis on production and downstream distribution, sales and services and motivate individuals to engage in entrepreneurial efforts to develop combined product-services offerings that are valued by customers. The underperforming firm prioritizes operating efficiency driven by engineering prowess and managed through planning, standardization, authority and central controls.
Research limitations/implications
The study is based on two representative firms operating in a specific industry context, which has ramifications for the generalizability of results and calls for replication studies to substantiate and extend findings.
Practical implications
Forward integration from manufacturing into distribution, sales and services represents a specific servitization strategy that needs structure and particular coordination approaches to be effective in complex dynamic product-markets. The characteristics of the outperforming case company provide useful insights on effective integrated servitization efforts.
Social implications
Forward integration is a commonly adopted strategy among manufacturing firms that constitute the backbone of modern economies and effective governance of these integration oriented servitization efforts has important implications for societal value creation.
Originality/value
This study builds on rationales from management science including economic theory, corporate strategy and different micro-foundational lenses and thereby hone recent calls for broader theoretical foundations to enlighten studies of the servitization puzzle.
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Jörg Freiling, Perttu Kähäri, Rebecca Piekkari and Fabian Schmutz
This study sheds light on the uncharted phenomenon of regional management in coordinating services across borders. Based on a multiple case study of four German industrial…
Abstract
This study sheds light on the uncharted phenomenon of regional management in coordinating services across borders. Based on a multiple case study of four German industrial manufacturing firms with servitization strategies we seek to better understand what kind of organizational challenges servitization poses for the MNC and whether these challenges can be met through regional management models. This chapter initiates a conversation on the available design options for running service operations regionally.
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T.S. Baines, H.W. Lightfoot, O. Benedettini and J.M. Kay
The purpose of this paper is to report the state‐of‐the‐art of servitization by presenting a clinical review of literature currently available on the topic. The paper aims to…
Abstract
Purpose
The purpose of this paper is to report the state‐of‐the‐art of servitization by presenting a clinical review of literature currently available on the topic. The paper aims to define the servitization concept, report on its origin, features and drivers and give examples of its adoption along with future research challenges.
Design/methodology/approach
In determining the scope of this study, the focus is on articles that are central and relevant to servitization within a wider manufacturing context. The methodology consists of identifying relevant publication databases, searching these using a wide range of key words and phrases associated with servitization, and then fully reviewing each article in turn. The key findings and their implications for research are all described.
Findings
Servitization is the innovation of an organisation's capabilities and processes to shift from selling products to selling integrated products and services that deliver value in use. There are a diverse range of servitization examples in the literature. These tend to emphasize the potential to maintain revenue streams and improve profitability.
Practical implications
Servitization does not represent a panacea for manufactures. However, it is a concept of significant potential value, providing routes for companies to move up the value chain and exploit higher value business activities. There is little work to date that can be used to help practitioners.
Originality/value
This paper provides a useful review of servitization and a platform on which to base more in‐depth research into the broader topic of service‐led competitive strategy by drawing on the work from other related research communities.
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