Explaining the servitization paradox: a configurational theory and a performance measurement framework

Saara A. Brax*, Armando Calabrese, Nathan Levialdi Ghiron, Luigi Tiburzi, Christian Grönroos

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

1 Citation (Scopus)

Abstract

Purpose: Previous research reports mixed results regarding the performance impact of servitization in manufacturing firms. To resolve this, the purpose of this paper is to develop a conceptually consistent and comprehensive measurement framework for both dimensions, servitization and its performance effect, and apply in a configurational analysis to reexamine previous evidence, arriving at a configurational theory of the relationship between servitization and firm performance. Design/methodology/approach: Combining systematic literature review (SLR) and inductive reasoning, the existing indicators for servitization and performance are identified and clustered into groups that adequately represent both dimensions. The dataset is reanalyzed against the resulting framework to identify the configurational patterns and to formulate the theoretical propositions. Findings: Financial and nonfinancial indicators of servitization and its performance impact are organized into a comprehensive measurement framework grounded on existing research. The subsequent meta-analysis shows that the positive or negative impacts of servitization on performance depend on how firms implement servitization strategies and which performance aspects are examined. Research limitations/implications: The results explain when servitization can be successful and confirm the existence of the so-called servitization paradox. The meta-analysis identified patterns that explain the previous mixed results, shaping a configurational theory of servitization. Thus, the measurement framework is conceptually robust and has sufficient detail to capture servitization and its performance outcome as it feasibly distinguished between different organizational configurations. Originality/value: The framework provides a comprehensive portfolio of indicators for both managers and scholars to measure servitization intensity and performance. This supports managers of servitizing firms in leading this organizational transformation while avoiding its organizational and financial paradoxes.

Original languageEnglish
Peer-reviewed scientific journalInternational Journal of Operations and Production Management
Volume41
Issue number5
Pages (from-to)517-546
Number of pages30
ISSN0144-3577
DOIs
Publication statusPublished - 31.05.2021
MoE publication typeA1 Journal article - refereed

Keywords

  • 512 Business and Management
  • Configurational analysis
  • Firm performance
  • Measurement
  • Servitization
  • Servitization level
  • Servitization paradox

Areas of Strength and Areas of High Potential (AoS and AoHP)

  • AoS: Competition economics and service strategy - Service and customer-oriented management

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