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

Yong Lin, Jing Luo, Petros Ieromonachou, Ke Rong, Lin Huang

    Research output: Journal PublicationArticlepeer-review

    14 Citations (Scopus)

    Abstract

    Purpose: The purpose of this paper 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 (SI), and its resulting impacts on firm performance. Findings: The results show that service orientation (SO) has direct positive impacts on firm performance in the manufacturing sector. Customer orientation (CO) and learning orientation (LO) have no direct impact on firm performance, although they have indirect impacts on it via the mediating role of SI capability. Moreover, SO has a similar indirect impact on firm performance via SI capability. Research limitations/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 (SO, CO and LO) for implementing servitization to facilitate SI 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.

    Original languageEnglish
    Pages (from-to)292-316
    Number of pages25
    JournalIndustrial Management and Data Systems
    Volume119
    Issue number2
    DOIs
    Publication statusPublished - 21 Feb 2019

    Keywords

    • Firm performance
    • Manufacturing system
    • Service innovation
    • Service-dominant logic
    • Servitization
    • Strategic orientation

    ASJC Scopus subject areas

    • Management Information Systems
    • Industrial relations
    • Computer Science Applications
    • Strategy and Management
    • Industrial and Manufacturing Engineering

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