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Digital solutions (DS) that build on recurring revenue models (RRMs) offer new opportunities to continuously create and capture superior value. However, many firms fail to engage their sales force in digital solution selling (DS selling), leading to agency problems that receive little attention in literature. This study aims to examine the drivers of agency problems that surface in the transition toward DS selling and the sales control systems that resolve these problems.

The authors conducted a qualitative, inductive study. Data were collected from interviews with 72 marketing and sales managers representing 53 industrial firms transitioning toward DS selling.

DS selling is subject to adverse selection and moral hazard caused by motivation-related, opportunity-related and ability-related drivers. Input, capability, activity and outcome controls – detailed in this study – can resolve these agency problems.

The limitations of this study’s methodology and scope suggest several directions for future research. Methodology-wise, the authors mainly relied on cross-sectional interview data from informants in Central and Northern Europe. Scope-wise, more research is needed on the capabilities, processes and steering instruments supporting DS sales. Finally, only now do the authors begin to understand which compensation plans motivate DS selling.

The controls identified in this study help managers to steer their sales force in DS sales.

To the best of the authors’ knowledge, this study is the first to investigate DS sales control systems. Thereby, the authors enhance prior understandings of solution selling, agency problems and sales control systems.

In this paper, the authors empirically investigate under which conditions production network management is effective to improve manufacturers' financial performance. For this, the authors explore contingencies between production networks and the three key dimensions of organizational environment.

A survey with senior managers was conducted for this research. The authors used a hierarchical regression analysis to test interaction effects and draw on follow-up interviews with chief operating officers (COOs) and senior managers to elaborate and explain the found associations.

Results indicate that manufacturers' financial performance is only associated with their network capability level if they operate in hostile competitive environments. In moderate competitive environments, improvements in the network capability level are not associated with greater financial performance. In particularly munificent environments, such production network upgrades are even associated with the opposite effect.

Results highlight in which organizational contexts upgrading production networks has positive performance implications and under which circumstances it is ineffective or even counterproductive.

The authors draw on unique survey data to add quantitative evidence to the predominantly conceptual and qualitative literature on global production networks. This is also one of the first studies to connect the topics of production networks and organizational environment.

This paper sets out to identify barriers to intra-network exchange within international manufacturing networks (IMNs) from the micro-level perspective of key actors at the plant level, namely, plant leaders.

Data were collected through interviews with 12 plant leaders from nine different firms operating in at least three geographically dispersed manufacturing facilities.

Six partially interrelated barriers to intra-network exchange were identified. First, there are a lack of resources, network strategies, plant overlap and individual-level ties between plant leaders. Furthermore, this study shows that the pronounced local focus of plant leaders, fierce inter-plant competition and falsely designed incentives constitute barriers to inter-plant exchange. The results underline the need for network management to consider the individual-level perspective when designing rules and policies for IMNs.

The generalisability of the results is limited by the sample, which consists of plant leaders from firms headquartered in German-speaking areas.

The findings indicate that network managers should consider the interests and concerns of plant leaders when trying to facilitate network thinking. In addition to delayering the overall IMN into distinct subnetworks of peer plants, network managers should set clear and openly communicated objectives in a mission for each subnetwork that also points to inter-plant exchange and provides the resources for such activities. Practitioners should also apply shared objectives for plant leaders and promote individual-level ties between them to benefit from intra-network exchange.

By analysing the perceptions of plant leaders, this study sheds light on the individual level of global operations, which has been neglected in research on IMNs to date.

The purpose of this study is to investigate how soft lean practices moderate the performance effects of hard lean practices. The authors provide new evidence from the pharmaceutical industry, which is characterized by a highly regulated and technical environment and has been largely uncharted in the lean literature.

Based on a review of the literature, the authors define a set of soft and hard lean practices. The authors test the hypotheses using factor analysis and moderated hierarchical linear regression on a unique dataset containing survey data and real performance measures of 351 pharmaceutical plants.

The results show that soft lean practices can be both enabling and constraining. When management engages in performance measurement, visualisation and employee empowerment the relationship between hard lean practices and performance is positively moderated. On the other hand, when managers emphasise goal setting and work standardisation the performance outcomes are reduced.

Effective lean managers build organisational commitment by motivating other employees to implement lean. They use performance measurement, visualisation and employee empowerment to focus on the “why”. Less effective managers engage in commanding and micro-management. Such managers focus on the “what” by using practices like goal setting and work standardisation.

This article contributes to the literature on lean management by empirically testing the moderator-variable interaction effects between soft and hard lean practices. In addition, it adds new evidence from the important pharmaceutical industry.

The purpose of this study is to explore organizational enablers of frontline employees’ (FLEs) service-sales ambidexterity (SSA) in industrial firms expanding their digital service portfolios.

The authors conducted a qualitative study of five industrial firms pursuing digital service growth and, for this purpose, collected and analyzed interview data obtained from 50 service and sales managers and FLEs across three continents.

The authors identify and explain eight organizational enablers of digital service-sales ambidexterity (DSSA), operating at the macro, micro and meso levels.

Service and sales managers should use the identified organizational enablers to exploit the established service business and to explore new digital growth paths.

The study expands the prior understanding of SSA by advancing the concept of DSSA, unpacking its multilevel dynamics and operationalizing eight organizational enablers.

The purpose of this paper is to identify and investigate non-technical barriers for smart services in the capital goods industry.

A multiple methodology approach is adopted. First, qualitative workshops and interviews were conducted with 14 experts from five companies. The findings generated subsequently provided a basis for a large-scale quantitative survey of manufacturing company service representatives in the capital goods industry, the data from which were analyzed using explorative factor analysis.

In total, 25 items that represent barriers to smart service businesses were identified, using qualitative research. Large-scale quantitative research revealed 24 items structured into four factors. Additionally, the respondents’ assessment of the individual barriers’ impact on their smart service businesses is presented.

The study focuses on manufacturing companies in the capital goods industry, mainly, in the European countries. Caution should be exercised in seeking to generalize the results to other industries. The findings should be confirmed with subsequent confirmatory analyses using additional data.

The authors’ findings provide a comprehensive list and classification of barriers, as well as an assessment of their severity, serving as a practical guideline for managers.

This paper explores the barriers to smart services from a provider’s perspective. Its holistic approach and use of large-scale quantitative data qualify it as one of the first studies of this kind.

Manufacturers seek to innovate and improve processes using new digital technologies. However, knowledge about these new technologies often resides outside a firm's boundaries. The authors draw on the concept of absorptive capacity and the literature on open innovation to explore the role of external search in the digitization of manufacturing.

The authors developed and distributed a survey to manufacturing firms in Switzerland, for which 151 complete responses were received from senior managers. The authors used multiple linear regressions to study the relations among the breadth and depth of external search, firms' adoption of digital technologies and operational performance outcomes.

External search depth was found to relate positively to higher adoption of computing technologies and shop floor connectivity technologies. No significant correlation was found between external search breadth and firms' adoption of digital technologies. Regarding performance outcomes, there is some evidence that increased adoption of digital technologies relates positively to higher volume flexibility, but not to increased production cost competitiveness.

Manufacturing firms that aim to digitize their processes can benefit from inbound open process innovation, but its utility varies for different clusters of digital technologies. Generally, the findings suggest that firms should build strong ties with a few external knowledge partners rather than surface relations with many.

This study contributes to the growing literature on the digitization of manufacturing with an analysis of the relation between firms' external search and their adoption of digital technologies. It adds early empirical insights to the literature on open process innovation.

To cope with the increasing challenges of globalisation, various manufacturing companies have established intra-company manufacturing networks. The purpose of this paper is to link the strategic network targets (i.e. accessibility, thriftiness represented by economies of scale and economies of scope, mobility, and learning) with the capabilities and characteristics of the constituting sites of the manufacturing network and thus facilitate the identification of mismatches and the discussion of possible development paths for the network.

The authors derive a conceptual framework from the literature which is tested with a single case; a manufacturing network consisting of eight manufacturing sites. Case data were collected based on 24 interviews with operations managers at network level and a standardised online survey among the sites’ management teams.

Results indicate that manufacturing network and site levels need to be related when striving for a fit between manufacturing strategy, network strategy, and site capabilities and characteristics.

Single case studies have only limited generalisability. Nevertheless, the case demonstrates the usefulness of several dimensions when analysing manufacturing networks on site and network level.

This paper represents the first attempt to link strategic targets of intra-company manufacturing networks with site capabilities and characteristics. Thereby, it provides a theoretical basis for future research on the relationship between strategic targets of manufacturing networks and their fulfilment. The developed manufacturing site portfolio, moreover, extends the site role typology discussion by a multi-dimensional perspective and represents a starting point for a multi-faceted discussion of site roles.

This paper aims to answer the following two research questions: “What antecedents are required for the innovation of product‐related services?” and “How do the antecedents differ for product‐related services developed during the product development process or during the product usage?”

A multi‐case research design was employed.

Involvement of frontline employees, information sharing, multifunctional teams, funnel tools, information technology, internal organization, and training and education have a similar impact on the success of integrated and separated service innovations. Presence of service champion, autonomy of employees, market testing, and market research have a positive effect on separated, but a negative impact on integrated service innovations. The strategic focus, external contacts, availability of resources, and management support are positively associated with both innovation types, but their importance is essentially higher for separated than for integrated product‐related service innovations.

The external validity (generalizability) of the antecedents could not be assessed accurately.

The explanation of antecedents forms a model that can guide managers who wish to develop product‐related services successfully.

The findings imply that managers contemplating a product‐related service innovation project have to consider the innovation type (integrated or separated) and reframe the antecedents accordingly.

This paper attempts to provide a better understanding of behavioral processes and their impact on the transition from products to services.

Case studies are the main tool of theory development. The paper focuses mainly on German and Swiss product manufacturers, whose products require a high level of customer investment.

The objective was merely to explain behavioral dimension of transition. The paper indicated seven behavioral processes which play a critical role during the transition. Managerial service awareness and role understanding, as well as employee service awareness and role understanding seem to be the right triggers to change the behavioral processes in the desired manner.

The main focus was on the German and Swiss machinery and medical equipment manufacturing industries, and the remarks are limited to these sectors.

The key managerial implications and recommendations can be formulated as follows: establish a “value‐added” managerial service awareness; change managerial role understanding – from traditional customer support to business manager; establish a “value‐added” employee service awareness; and change employee role understanding – from selling products to providing services.

The authors were able to add a complementary perspective to existing literature on the transition process from products to services. For service management theorists, it is suggested that the transition from product manufacturers into service providers is influenced strongly by several behavioral processes. A complete theory of the transition process requires an interdisciplinary theory that integrates service management and human decision making.