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Strategic orientation of servitization in manufacturing firms and its impacts on firm performance

Strategic orientation of servitization in manufacturing firms and its impacts on firm performance

Lin, Yong ORCID: 0000-0001-7118-2946, Luo, Jing, Ieromonachou, Petros ORCID: 0000-0002-5842-9585, Rong, Ke and Huang, Lin (2018) Strategic orientation of servitization in manufacturing firms and its impacts on firm performance. Industrial Management & Data Systems, 119 (2). pp. 292-316. ISSN 0263-5577 (doi:https://doi.org/10.1108/IMDS-10-2017-0485)

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Abstract

Purpose:
The purpose of this study is to provide implementation insights and implications regarding the strategic orientations of servitization by testing its impacts on firm performance, including financial performance and customer service performance.

Design/methodology/approach:
Empirical research is conducted using an online survey disseminated to manufacturing firms in southeast China. This research develops and verifies a strategic fit framework to understand the relationship between the strategic orientation of servitization and service innovation, and its resulting impacts on firm performance.

Findings:
The results show that service orientation has direct positive impacts on firm performance in the manufacturing sector. Customer orientation and learning orientation have no direct impact on firm performance, although they have indirect impacts on it via the mediating role of service innovation capability. Moreover, service orientation has a similar indirect impact on firm performance via service innovation capability.

Research limitation/implications:
The survey focuses only on China; future studies should verify whether different cultural backgrounds impact the research results.

Practical implications:
The results suggest that firms should build up three strategic orientations (service orientation, customer orientation, and learning orientation) for implementing servitization to facilitate service innovation capability and thus to improve firm performance.

Originality/value:
This research contributes to enhancing the theory of servitization by developing a strategic fit model of servitization and revealing the impact mechanism of servitization in the manufacturing sector.

Item Type: Article
Uncontrolled Keywords: servitization, service innovation, strategic orientation, service-dominant logic, firm performance, manufacturing systems, manufacturing strategy
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Faculty / Department / Research Group: Faculty of Business
Faculty of Business > Networks and Urban Systems Centre (NUSC) > Connected Cities Research Group
Faculty of Business > Department of Systems Management & Strategy
Related URLs:
Last Modified: 03 May 2019 08:44
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
Selected for GREAT 2019: GREAT 2
URI: http://gala.gre.ac.uk/id/eprint/20479

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