This article addresses the performance implication of servitization and the configuration of servitization and organizational characteristics. We propose hypotheses regarding the relation between two types of servitization (basic services vs. advanced services) and firm performance, and how organizations’ decision-making features moderate these relations. Hypotheses are tested based on a survey of 931 plants from 22 countries. The results show that the advanced services (ADS) improve market, financial, and operational performance, while the basic services (BAS) only improve market performance. In addition, the positive relation between the ADS and firm performance is stronger in organizations with a participative and decentralized decision-making process.
VandermerweS. and RadaJ., Servitization of business: Adding value by adding services, European Management Journal6(4) (1988), 314–324.
2.
KastalliI.V. and VanB., Looy, Servitization: Disentangling the impact of service business model innovation on manufacturing firm performance, Journal of Operations Management31(4) (2013), 169–180.
3.
MartinezV., NeelyA., VeluC., et al., Exploring the journey to services, International Journal of Production Economics192 (2017), 66–80.
4.
FangE., PalmatierR.W. and SteenkampJ-BE., Effect of service transition strategies on firm value, Journal of Marketing72(5) (2008), 1–14.
5.
EggertA., HogreveJ., UlagaW., et al., Revenue and profit implications of industrial service strategies, Journal of Service Research17(1) (2014), 23–39.
6.
RabetinoR., KohtamäkiM. and GebauerH., Strategy map of servitization, International Journal of Production Economics192 (2017), 144–156.
7.
BenedettiniO., SwinkM., NeelyA., et al., Why do servitized firms fail? A risk-based explanation, International Journal of Operations & Production Management35(6) (2015), 946–979.
8.
BurtonJ., StoryV.M., RaddatsC., et al., Overcoming the challenges that hinder new service development by manufacturers with diverse services strategies, International Journal of Production Economics192 (2017), 29–39.
9.
BraxS., A manufacturer becoming service provider– challenges and a paradox, Managing Service Quality15(2) (2005), 142–155.
10.
StoryV.M., RaddatsC., BurtonJ., et al., Capabilities for advanced services: A multi-actor perspective, Industrial Marketing Management60 (2017), 54–68.
11.
BainesT. and LightfootH.W., Servitization of the manufacturing firm: Exploring the Operations Practices and Technologies that deliver advanced services, International Journal of Operations & Production Management34(1) (2014), 2–35.
12.
ZhangW. and BanerjiS., Challenges of servitization: A systematic literature review, Industrial Marketing Management65 (2017), 217–227.
13.
BustinzaO.F., BigdeliA.Z., BainesT., et al., Servitization and competitive advantage: The importance of organizational structure and value chain position, Research-Technology Management58(5) (2015), 53–60.
14.
LuotoS., BraxS.A. and KohtamäkiM., Critical meta-analysis of servitization research: Constructing a model-narrative to reveal paradigmatic assumptions, Industrial Marketing Management60 (2017), 89–100.
15.
OliveiraP. and RothA.V., Service orientation: The derivation of underlying constructs and measures, International Journal of Operations & Production Management32(2) (2012), 156–190.
16.
ElorantaV. and TurunenT., Seeking competitive advantage with service infusion: A systematic literature review, Journal of Service Management26(3) (2015), 394–425.
17.
KowalkowskiC., GebauerH. and OlivaR., Service growth in product firms: Past, present, and future, Industrial marketing management60 (2017), 82–88.
18.
SousaR. and daG.J., Silveira, Capability antecedents and performance outcomes of servitization: Differences between basic and advanced services, International Journal of Operations & Production Management37(4) (2017), 444–467.
19.
WiseR. and BaumgartnerP., Go downstream: The new profit imperative in manufacturing, Harvard Business Review77(5) (1999), 133–141.
20.
EggertA., HogreveJ., UlagaW., et al., Industrial services, product innovations, and firm profitability: A multiple-group latent growth curve analysis, Industrial Marketing Management40(5) (2011), 661–670.
21.
NeelyA., Exploring the financial consequences of the servitization of manufacturing, Operations Management Research1(2) (2008), 103–118.
22.
SuarezF.F., CusumanoM.A. and KahlS.J., Services and the business models of product firms: An empirical analysis of the software industry, Management Science59(2) (2013), 420–435.
23.
GebauerH., EdvardssonB. and BjurkoM., The impact of service orientation in corporate culture on business performance in manufacturing companies, Journal of Service Management21(2) (2010), 237–259.
24.
RaddatsC. and EasingwoodC., Services growth options for B2B product-centric businesses, Industrial Marketing Management39(8) (2010), 1334–1345.
25.
HuangX., KristalM.M. and SchroederR.G., The impact of organizational structure on mass customization capability: A contingency view, Production and Operations Management19(5) (2010), 515–530.
26.
TushmanM.L. and NadlerD.A., Information processing as an integrating concept in organizational design, Academy of Management Review3(3) (1978), 613–624.
27.
PodsakoffP.M., MacKenzieS.B., LeeJ.-Y., et al., Common method biases in behavioral research: A critical review of the literature and recommended remedies, Journal of Applied Psychology88(5) (2003), 879.
28.
GebauerH., EdvardssonB., GustafssonA., et al., Match or mismatch: Strategy-structure configurations in the service business of manufacturing companies, Journal of Service Research13(2) (2010), 198–215.
