IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i24p13541-d697008.html
   My bibliography  Save this article

Facilitating Servitization in Manufacturing Firms: The Influence of Strategic Orientation

Author

Listed:
  • Yu Zhang

    (Business School, Hohai University, Nanjing 211100, China)

  • Yajuan Wang

    (International Business School, Shaanxi Normal University, Xi’an 710119, China)

  • Yao Li

    (School of Management, Tianjin University of Technology, Tianjin 300382, China)

Abstract

Servitization has significant implications for the sustainable development of manufacturing, the economy, and the environment. However, it does not always produce returns as the firms expect, which may discourage them from engaging in this transition. In this study, we examine the facilitating effects of two dimensions of strategic orientation (i.e., technology and market orientation) on two types of servitization (i.e., basic and advanced service provision), and further investigate the performance impacts of these servitization types contingent on firm size. By conducting an empirical study, using survey data comprising 210 samples, we confirm that both technology and market orientation are positively related to basic and advanced service provision. Moreover, while they have equal effects on basic services, market orientation is more important than technology orientation for providing advanced services. We also find that, for basic services, these two strategic orientations function independently, whereas they reinforce each other in the provision of advanced services. Finally, the relationship between servitization and firm performance is contingent on the size of the firm. Our results show that small firms can benefit from providing basic services, rather than advanced services, while only advanced services can improve the performance of large firms further.

Suggested Citation

  • Yu Zhang & Yajuan Wang & Yao Li, 2021. "Facilitating Servitization in Manufacturing Firms: The Influence of Strategic Orientation," Sustainability, MDPI, vol. 13(24), pages 1-20, December.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:24:p:13541-:d:697008
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/24/13541/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/24/13541/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Khanra, Sayantan & Dhir, Amandeep & Parida, Vinit & Kohtamäki, Marko, 2021. "Servitization research: A review and bibliometric analysis of past achievements and future promises," Journal of Business Research, Elsevier, vol. 131(C), pages 151-166.
    2. Vandermerwe, Sandra & Rada, Juan, 1988. "Servitization of business: Adding value by adding services," European Management Journal, Elsevier, vol. 6(4), pages 314-324, December.
    3. Shah, Syed Aamir Ali & Jajja, Muhammad Shakeel Sadiq & Chatha, Kamran Ali & Farooq, Sami, 2020. "Servitization and supply chain integration: An empirical analysis," International Journal of Production Economics, Elsevier, vol. 229(C).
    4. Sucheta Nadkarni & V. K. Narayanan, 2007. "Strategic schemas, strategic flexibility, and firm performance: the moderating role of industry clockspeed," Strategic Management Journal, Wiley Blackwell, vol. 28(3), pages 243-270, March.
    5. Green, Maxwell H. & Davies, Philip & Ng, Irene C.L., 2017. "Two strands of servitization: A thematic analysis of traditional and customer co-created servitization and future research directions," International Journal of Production Economics, Elsevier, vol. 192(C), pages 40-53.
    6. Ja-Shen Chen & Don Kerr & Seng-Su Tsang & Yu Chieh Sung, 2015. "Co-production of service innovations through dynamic capability enhancement," The Service Industries Journal, Taylor & Francis Journals, vol. 35(1-2), pages 96-114, January.
    7. Wolfgang Ulaga & Werner Reinartz, 2011. "Hybrid Offerings: How Manufacturing Firms Combine Goods and Services Successfully," Post-Print hal-00642039, HAL.
    8. Matthieu Crozet & Emmanuel Milet, 2017. "Should everybody be in services? The effect of servitization on manufacturing firm performance," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(4), pages 820-841, December.
    9. M. Antioco & R.K. Moenaert & A. Lindgreen & M.G.M. Wetzels, 2008. "Organizational antecedents to and consequences of service business orientations in manufacturing companies," Post-Print hal-00285794, HAL.
    10. Chin-Hung Tseng & Kuo-Hsiung Chang & Ho-Wen Chen, 2019. "Strategic Orientation, Environmental Innovation Capability, and Environmental Sustainability Performance: The Case of Taiwanese Suppliers," Sustainability, MDPI, vol. 11(4), pages 1-19, February.
    11. Feng, Cong & Patel, Pankaj C. & Xiang, Kexin, 2020. "The well-trodden path: Complementing market and entrepreneurial orientation with a strategic emphasis to influence IPO survival in the United States," Journal of Business Research, Elsevier, vol. 110(C), pages 370-385.
    12. Wolfgang Ulaga & Andreas Eggert & Jens Hogreve & Eva Muenkhoff, 2011. "Industrial services, product innovations, and firm profitability: A multiple-group latent growth curve analysis," Post-Print hal-00632809, HAL.
    13. Jean Pierre Seclen-Luna & Pablo Moya-Fernández & Ángeles Pereira, 2021. "Exploring the Effects of Innovation Strategies and Size on Manufacturing Firms’ Productivity and Environmental Impact," Sustainability, MDPI, vol. 13(6), pages 1-18, March.
    14. Anna Mateja Punstein & Johannes Glückler, 2021. "How Small and Medium Sized Firms Walk the Path to Hybridity," Sustainability, MDPI, vol. 13(5), pages 1-15, February.
    15. Rondi, Emanuela & De Massis, Alfredo & Kraus, Sascha, 2021. "Servitization through open service innovation in family firms: Exploring the ability-willingness paradox," Journal of Business Research, Elsevier, vol. 135(C), pages 436-444.
    16. Valérie Mathieu, 2001. "Product services: from a service supporting the product to a service supporting the client," Post-Print hal-01796270, HAL.
    17. Morgan, Todd & Anokhin, Sergey Alexander & Wincent, Joakim, 2019. "New service development by manufacturing firms: Effects of customer participation under environmental contingencies," Journal of Business Research, Elsevier, vol. 104(C), pages 497-505.
    18. Saccani, Nicola & Visintin, Filippo & Rapaccini, Mario, 2014. "Investigating the linkages between service types and supplier relationships in servitized environments," International Journal of Production Economics, Elsevier, vol. 149(C), pages 226-238.
    19. Kwaku Atuahene-Gima & Anthony Ko, 2001. "An Empirical Investigation of the Effect of Market Orientation and Entrepreneurship Orientation Alignment on Product Innovation," Organization Science, INFORMS, vol. 12(1), pages 54-74, February.
    20. Justyna Kozlowska, 2020. "What Influences the Servitization Process the Most? A Perspective of Polish Machinery Manufacturers," Sustainability, MDPI, vol. 12(12), pages 1-24, June.
    21. Kohtamäki, Marko & Einola, Suvi & Rabetino, Rodrigo, 2020. "Exploring servitization through the paradox lens: Coping practices in servitization," International Journal of Production Economics, Elsevier, vol. 226(C).
    22. Wei Chen & Yinzhong Chen & Yifei Hao & Sili Chen & Daqing Gong, 2021. "Producer Services Openness and the Development of Servitization: The Perspective of Two-Way Openness," Discrete Dynamics in Nature and Society, Hindawi, vol. 2021, pages 1-13, September.
    23. Fisher, Robert J, 1993. "Social Desirability Bias and the Validity of Indirect Questioning," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 20(2), pages 303-315, September.
    24. Kindström, Daniel & Kowalkowski, Christian & Sandberg, Erik, 2013. "Enabling service innovation: A dynamic capabilities approach," Journal of Business Research, Elsevier, vol. 66(8), pages 1063-1073.
    25. Michael Antioco & Rudy Moenaert & Adam Lindgreen & Martin Wetzels, 2008. "Organizational antecedents to and consequences of service business orientations in manufacturing companies," Post-Print hal-02312526, HAL.
    26. Laure Ambroise & Isabelle Prim-Allaz & Christine Teyssier, 2017. "Financial performance of servitized manufacturing firms: a configuration issue between servitization strategies and customer-oriented organizational design," Post-Print hal-01663162, HAL.
    27. Gebauer, Heiko & Fleisch, Elgar & Friedli, Thomas, 2005. "Overcoming the Service Paradox in Manufacturing Companies," European Management Journal, Elsevier, vol. 23(1), pages 14-26, February.
    28. Gebauer, Heiko & Saul, Caroline Jennings & Haldimann, Mirella & Gustafsson, Anders, 2017. "Organizational capabilities for pay-per-use services in product-oriented companies," International Journal of Production Economics, Elsevier, vol. 192(C), pages 157-168.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yuli Liu & Mingyi Shang & Jianwei Xu & Lei Zhang & Honglian Hua, 2023. "Value Chain and the Integrated Development of Manufacturing and Modernized Services: A Case Study of Shandong Province, China," Sustainability, MDPI, vol. 15(2), pages 1-25, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wim Coreynen & Arjen van Witteloostuijn & Johanna Vanderstraeten, 2021. "Toward Servitized Research: An Integrated Approach for Sustainable Product-Service Innovation," Sustainability, MDPI, vol. 13(15), pages 1-21, July.
    2. Shah, Syed Aamir Ali & Jajja, Muhammad Shakeel Sadiq & Chatha, Kamran Ali & Farooq, Sami, 2020. "Servitization and supply chain integration: An empirical analysis," International Journal of Production Economics, Elsevier, vol. 229(C).
    3. Zhou, Dan & Yan, Tingting & Dai, Weiqi & Feng, Junzheng, 2021. "Disentangling the interactions within and between servitization and digitalization strategies: A service-dominant logic," International Journal of Production Economics, Elsevier, vol. 238(C).
    4. Wang, Yanping & Gao, Jie & Wei, Zelong, 2022. "The double-edged sword of servitization in radical product innovation: The role of latent needs identification," Technovation, Elsevier, vol. 118(C).
    5. Marko Kohtamäki & Stephan C. Henneberg & Veronica Martinez & Koji Kimita & Heiko Gebauer, 2019. "A Configurational Approach to Servitization: Review and Research Directions," Service Science, INFORMS, vol. 11(3), pages 213-240, October.
    6. Ornella Benedettini, 2022. "Structuring Servitization-Related Capabilities: A Data-Driven Analysis," Sustainability, MDPI, vol. 14(9), pages 1-20, May.
    7. Wei, Zelong & Huang, Wengao & Wang, Yanping & Sun, Lulu, 2022. "When does servitization promote product innovation? The moderating roles of product modularization and organization formalization," Technovation, Elsevier, vol. 117(C).
    8. Kohtamäki, Marko & Einola, Suvi & Rabetino, Rodrigo, 2020. "Exploring servitization through the paradox lens: Coping practices in servitization," International Journal of Production Economics, Elsevier, vol. 226(C).
    9. Rabetino, Rodrigo & Kohtamäki, Marko & Gebauer, Heiko, 2017. "Strategy map of servitization," International Journal of Production Economics, Elsevier, vol. 192(C), pages 144-156.
    10. Jieun Lee & Hyung-Deok Shin & Saehwa Hong, 2021. "Servitization of Global Manufacturing Business," Journal of Industry, Competition and Trade, Springer, vol. 21(4), pages 565-584, December.
    11. Jovanovic, Marin & Raja, Jawwad Z. & Visnjic, Ivanka & Wiengarten, Frank, 2019. "Paths to service capability development for servitization: Examining an internal service ecosystem," Journal of Business Research, Elsevier, vol. 104(C), pages 472-485.
    12. Yan, Kaining & Li, Gang & Cheng, T.C.E., 2020. "The impact of service-oriented organizational design factors on firm performance: The moderating role of service-oriented corporate culture," International Journal of Production Economics, Elsevier, vol. 228(C).
    13. Peter Qvist-Sørensen, 2020. "Applying IIoT and AI - Opportunities, Requirements and Challenges for Industrial Machine and Equipment Manufacturers to Expand Their Services," Central European Business Review, Prague University of Economics and Business, vol. 2020(2), pages 46-77.
    14. Guedes, Maria João & Patel, Pankaj C. & Kowalkowski, Christian & Oghazi, Pejvak, 2022. "Family business, servitization, and performance: Evidence from Portugal," Technological Forecasting and Social Change, Elsevier, vol. 185(C).
    15. Kohtamäki, Marko & Parida, Vinit & Oghazi, Pejvak & Gebauer, Heiko & Baines, Tim, 2019. "Digital servitization business models in ecosystems: A theory of the firm," Journal of Business Research, Elsevier, vol. 104(C), pages 380-392.
    16. Andrea Tenucci & Enrico Supino, 2020. "Exploring the relationship between product-service system and profitability," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 24(3), pages 563-585, September.
    17. Mar’atus Sholihah & Tatsuru Maezono & Yuya Mitake & Yoshiki Shimomura, 2020. "Formulating Service-Oriented Strategies for Servitization of Manufacturing Companies," Sustainability, MDPI, vol. 12(22), pages 1-30, November.
    18. Khanra, Sayantan & Dhir, Amandeep & Parida, Vinit & Kohtamäki, Marko, 2021. "Servitization research: A review and bibliometric analysis of past achievements and future promises," Journal of Business Research, Elsevier, vol. 131(C), pages 151-166.
    19. Coreynen, Wim & Vanderstraeten, Johanna & van Witteloostuijn, Arjen & Cannaerts, Nele & Loots, Ellen & Slabbinck, Hendrik, 2020. "What drives product-service integration? An abductive study of decision-makers’ motives and value strategies," Journal of Business Research, Elsevier, vol. 117(C), pages 189-200.
    20. Bustinza, Oscar F. & Lafuente, Esteban & Rabetino, Rodrigo & Vaillant, Yancy & Vendrell-Herrero, Ferran, 2019. "Make-or-buy configurational approaches in product-service ecosystems and performance," Journal of Business Research, Elsevier, vol. 104(C), pages 393-401.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:13:y:2021:i:24:p:13541-:d:697008. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.