The environment-strategy-structure fit and performance of industrial servitized SMEs

Abstract

International audiencePurposeThe purpose of this paper is to examine the environment-strategy-structure fit in the context of industrial servitization and its impact on the profitability of manufacturing SMEs.Design/methodology/approachData were collected from face-to-face interviews with the CEOs of 184 French manufacturing SMEs. These primary data were complemented by the indicators extracted from a financial database to ensure objective measures of financial performance. Analyses were conducted by means of partial least squares structural equation modeling.FindingsThe research tests the impact of the organizational design (customer interface, service delivery system and service culture (SC)) on financial performance. It also tests the moderating effect on this relationship of servitization strategies adopted by the firm (added services (AS), activities reconfiguration (AR) and business model reconfiguration (BMR)) and the environment in which the firm is situated (industry dynamism, competitive intensity and industry munificence).Research limitations/implicationsThis study considers the coalescence of the environment-strategy-structure to be a driver of firm performance in the context of industrial firms’ servitization. Three specific servitization strategies (AS, AR and BMR) are suggested based on the service offering’s impact on the customer’s activity chain or business model.Practical implicationsThe research proposes some optimal organizational design depending on servitization strategy and environmental factors; for example, SC has a strong impact on financial performance when BMR is adopted.Originality/valueThis empirical study is based on an extended sample of 184 SMEs and provides quantitative support for the claim that good alignment between strategy and organizational design based on environmental factors increases profitability

Seeking competitive advantage with service infusion: a systematic literature review

“…Because the literature search engines rely on fields such as keywords and citations, we conducted a more in-depth search that included content that related to the search context to capture a full picture of the discussion on service infusion and competitive advantage, including earlier texts. JOSM 26,3 For these searches, we used the search functionalities of individual journals because the literature search engines do not allow targeting of the actual content of articles. Performing these queries for all journals within the WOS results is not feasible; therefore, we decided to focus our detailed queries on the most popular outlets.…”

“…We complemented this set with additional strategy-related articles identified in the most comprehensive literature review of the service infusion research stream to date (Lightfoot et al, 2013). Additionally, we added a number JOSM 26,3 of individual articles to provide sufficient background information on specific research results, theories, or terms referred to in the included literature. Finally, we extended the set with a few seminal articles identifying which items our paper set uses in defining servitization and service infusion.…”

“…With regard to direct citations, we looked for articles that cited the seminal authors of the four strategic discourses. After the analysis, we grouped the papers into four corresponding categories, depending on the justification of service JOSM 26,3 infusion from a competitive advantage perspective: market forces, the RBV, dynamic capabilities, and the relational view. Table III shows the results of this categorization.…”

“…Proceeding with the service networks perspective, Bastl et al (2012) made a direct contribution to the relational view of strategy, stating that relationship structures provide a competitive advantage because they are a source of above-normal firm returns. The study analyzed and identified many different dimensions of the JOSM 26,3 relationship, calling for an inter-disciplinary approach toward networked service infusion. In abstract terms, the message was that the relational view requires a balanced approach using many theoretical streams.…”

“…A stream of literature has attempted to capture the essential characteristics of the change toward customized solutions by focussing on the increase of services and customer orientation in businesses. This phenomenon, conceptualized as service infusion [1], has shown that the transformation from transactional business models to solutions is complex and JOSM 26,3 multifaceted. Organizations must design new capabilities, business models, and processes to enable and support this paradigm shift (Lightfoot et al, 2013;Baines et al, 2009;Brax and Jonsson, 2009;Kindström and Kowalkowski, 2009;Oliva and Kallenberg, 2003;Mathieu, 2001a, b;Matthyssens and Vandenbempt, 1998;Levitt, 1983).…”