Exploring the root causes of servitization challenges: an organisational boundary perspective

Abstract

PurposeThis paper explains how servitization disrupts long-established internal and external boundaries of product-focused manufacturers and investigates the root causes of servitization challenges.Design/methodology/approachThe authors draw from the collective experiences of 20 senior executives from ten multinational manufacturers involved in servitization, using a multiple case study approach, and employ a codebook thematic analysis technique.FindingsThe authors develop an integrative framework based on the theoretical notions of power, competency and identity boundaries to offer insights into the root causes of various servitization-related challenges.Research limitations/implicationsAlthough the extant literature discusses servitization challenges, it does not examine the underlying root causes that create them in the first place. This study contributes to the extant research by establishing rational links between organisational boundaries (internal and external) and servitization challenges in the interest of building a coherent and systematically integrated body of theory that can be successfully applied and built upon by future research.Practical implicationsThis study provides a foundation for managers to recognise, anticipate and systematically manage various boundary-related challenges triggered by servitization.Originality/valueIt is one of the first studies to employ the concept of organisational boundary to understand the challenges created by servitization and to account for both internal (between different functions of the same organisation) and external boundaries (between an organisation and its external stakeholders) to establish a holistic understanding of the impacts of servitization on manufacturers.

Servitization in global markets: role alignment in global service networks for advanced service provision

“…Second, the study contributes to the existing research that uses S‐D logic in the context of servitization and advanced services (Ng et al, 2013; Smith et al, 2014; Chester Goduscheit and Faullant, 2018). In particular, the study contributes to the A2A view of S‐D logic (Vargo and Lusch, 2011) in offering insights into the manifestation of diverse value co‐creation challenges in the business‐to‐business (B2B) context (Kohtamäki and Rajala, 2016; Ziaee Bigdeli et al, 2021). Providing advanced services requires manufacturers and service network partners to assume greater accountability (Visnjic et al, 2017) and, more importantly, to actively engage in a joint sphere of interactive value creation for customers (Grönroos and Voima, 2013; Green et al, 2017).…”

Does organizational readiness matter in lean thinking practices? An agency perspective

“…The interviews were analyzed using NVivo 11® following a hybrid analytical process (Swain, 2018; Bigdeli et al. , 2021; Fereday and Muir-Cochrane, 2006).…”

Industry 4.0 Evolutionary Framework: The Increasing Need to Include the Human Factor

“…Another factor contributing to the expansion of industry 4.0 is the emergence of a new concept in the manufacturing industry. Before the spread of COVID-19, a growing trend was to go beyond smart manufacturing and move to "servitization, " integrating processes from manufacturing inputs to delivery to the final consumer and subsequent post-sale (Diez-Olivan et al, 2019), reinforcing the relationship between manufacturers and customers (Bigdeli et al, 2021). For the development of servitization, big data, cloud services, and mobile Internet through the cyber-physical system are required (Tao & Qi, 2019).…”

“…For the development of servitization, big data, cloud services, and mobile Internet through the cyber-physical system are required (Tao & Qi, 2019). Because servitization involves strategic and organizational alignments, it needs to reshape the company's external and internal boundaries of power, competence, and identity (Bigdeli et al, 2021). However, Frank, Mendes, et al (2019) argued that servitization is achieved when companies and their products have a certain maturity in the market, and it is necessary to continue giving more value or attract new customers.…”