Enablers of Servitization Roles and Action Mechanism

Enablers of Servitization Roles and Action Mechanism

Flair Karaki (Al Quds Open University, Palestine)
DOI: 10.4018/978-1-7998-3473-1.ch160
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Abstract

To build a long-term competitive advantage, manufacturing industry has witnessed a movement from product offering to a wider value customer-based solutions, which is known as “servitization”. Manufacturers can use any of the service models according to the level of service integration. For the purposes of transforming to a service driven organization, Academic literature has presented various types of enablers to facilitate this transition. The Purpose of this paper is to investigate servitization enablers by answering the following questions: 1- How does organizational cultural differ in servitized manufacturing? 2- How do digital technologies support servitization? 3- How do organizational structure and operations facilitate servitization? 4- What is the role of leadership through the process of servitization? and what is the way to manage personnel during the servitization process? 5- How do enablers interact and link?
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Introduction

To build a long-term competitive advantage, the manufacturing industry has begun a movement to transform itself from simply offering products to offering customer-based services and solutions in addition to their products. This new business model is known as “servitization.” There are several business service models that manufacturers can use according to their level of service integration.

In order to transform into a service-driven organization effectively, various types of servitization enablers have been presented and examined in this study. This paper is organized to investigate servitization enablers thoroughly and to analyze their interrelations. Perona et al. (2017) pointed out that enablers have not been discussed comprehensively by servitization literature. Moreover, the enablers for servitization have been, in general, investigated individually without analyzing their interactions, which are important to facilitate the desired transition.

The first section of this paper addresses the most influential enablers by focusing on:

  • 1.

    Type of organizational cultural in servitized manufacturing.

  • 2.

    Leadership behavior and personnel management during the process of servitization.

  • 3.

    The role of digital technologies in supporting servitization.

  • 4.

    Organizational structure and operations that facilitate servitization.

The second section emphasizes the interrelations between servitization enablers. In order to make appropriate decisions, it is essential to understand how enablers can be redesigned to achieve servitization as a new business strategy, and to analyze the nature of interactions between enablers, as lacking a holistic view of their collaboration may lead to servitization failure.

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Background

The term “servitization” was firstly introduced by researchers Vandermerwe and Rada (1988). Since then, researchers have studied it from different perspectives. Baines et al. (2009) defined servitization as “The innovation of an organizations’ capabilities and processes to create mutual value by shifting from selling products to selling integrated solutions.” The early literature introduces servitization as adding services to supplement the existing product (Vandermerwe & Rada, 1988). The more recent literature introduces service offering and customization as a dynamic and central activity (Ng et al., 2011). Servitization enablers have gained the attention of researchers, and they have classified them into multiple categories. Matthyssens and Vandenbempt (1998) identified organizational culture, organizational structure, and human resources as the key enablers, whereas Mathieu (2001) and Galbraith (2002) believed that strategy, people, structure, rewards, and processes were the key enablers. Gebauer and Fleisch (2007) also presented the latter key enablers and extended them to include market-oriented service processes, relationship marketing, customer-oriented services, and creating a separate service organization.

The impact of servitization enablers is important to organizational stakeholders, and therefore this paper offers a great opportunity to add new knowledge regarding the understanding of servitization.

Key Terms in this Chapter

Service Structure: Set of people, technologies, and shared information designed to perform services.

Digital Technology: Device or application to record, process, receive, transmit, or display information in a numerical form.

Servitization: A shift of firms, mainly manufacturers, from selling products to selling customer solutions coupled with their existing products.

Transformational Leadership: Leadership style that motivates change of individuals and social systems.

Service Culture: Culture where employees have a desire and ability to serve customers and solve their problems.

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