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Relational governance strategies for advanced service provision: Multiple paths to superior financial performance in servitization

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  • Sjödin, David
  • Parida, Vinit
  • Kohtamäki, Marko

Abstract

The ability of manufacturing companies to offer advanced services and achieve superior financial performance remains an open question in the servitization literature. One central question relates to how providers govern customer relationships to realize profits through servitization. This study addresses this question by unraveling the complex relations between advanced service provision, relational governance strategies, and the financial performance of manufacturing firms. Drawing on a dataset of 50 Swedish advanced service providers, this study uses a configurational comparative method—namely, fuzzy-set qualitative comparative analysis (fsQCA)—to identify the influence of configurations of governance conditions (i.e., service innovation, perceived switching costs, the attractiveness of alternatives, and explicit contracts) on firm performance. This study contributes through the identification of three alternative governance strategies that enable advanced service providers to benefit from service provision: 1) innovation governance strategy (high service innovation, low attractiveness of alternatives, and low use of explicit contracts); 2) relational governance strategy (high service innovation, high perceived switching costs, and low use of explicit contracts); and 3) market-based governance strategy (high service innovation, low perceived switching costs, high attractiveness of alternatives, and high use of explicit contracts). These results enrich the literature on servitization and advanced services by reflecting the need to apply diverse relational governance strategies. The results suggest multiple paths to superior financial performance.

Suggested Citation

  • Sjödin, David & Parida, Vinit & Kohtamäki, Marko, 2019. "Relational governance strategies for advanced service provision: Multiple paths to superior financial performance in servitization," Journal of Business Research, Elsevier, vol. 101(C), pages 906-915.
    • Handle: RePEc:eee:jbrese:v:101:y:2019:i:c:p:906-915
    DOI: 10.1016/j.jbusres.2019.02.042
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    Citations

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    Cited by:

    1. 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.
    2. Mota, Joao & Santos, Jose Novais, 2021. "Dynamic roles of suppliers in the specification of business services," Technological Forecasting and Social Change, Elsevier, vol. 164(C).
    3. Tian, Jiamian & Coreynen, Wim & Matthyssens, Paul & Shen, Lei, 2022. "Platform-based servitization and business model adaptation by established manufacturers," Technovation, Elsevier, vol. 118(C).
    4. Paiola, Marco & Khvatova, Tatiana & Schiavone, Francesco & Jabeen, Fauzia, 2022. "Paths toward advanced service-oriented business models: A configurational analysis of small- and medium-sized incumbent manufacturers11A previous version of the present article was presented at the EI," Technological Forecasting and Social Change, Elsevier, vol. 182(C).
    5. Caputa, Wiesława & Krawczyk-Sokolowska, Izabela & Pierscieniak, Agata, 2021. "The potential of web awareness as a determinant of dually defined customer value," Technological Forecasting and Social Change, Elsevier, vol. 163(C).
    6. Sjödin, David & Parida, Vinit & Kohtamäki, Marko & Wincent, Joakim, 2020. "An agile co-creation process for digital servitization: A micro-service innovation approach," Journal of Business Research, Elsevier, vol. 112(C), pages 478-491.
    7. Natalia Szozda & Artur Świerczek, 2022. "Upstream and downstream dyad governance within the network structures: Creating supply chain governance for the customized products," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(2), pages 873-898, June.
    8. Sjödin, David & Parida, Vinit & Palmié, Maximilian & Wincent, Joakim, 2021. "How AI capabilities enable business model innovation: Scaling AI through co-evolutionary processes and feedback loops," Journal of Business Research, Elsevier, vol. 134(C), pages 574-587.
    9. 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.
    10. Maximilian Bock & Martin Wiener & Carol Saunders, 2023. "Non-ownership business models in the manufacturing industry: Uncertainty-exploiting versus uncertainty-mitigating designs and the role of context factors," Electronic Markets, Springer;IIM University of St. Gallen, vol. 33(1), pages 1-18, December.
    11. Xing, Yijun & Liu, Yipeng & Davies, Philip, 2023. "Servitization innovation: A systematic review, integrative framework, and future research directions," Technovation, Elsevier, vol. 122(C).
    12. Linde, Lina & Sjödin, David & Parida, Vinit & Wincent, Joakim, 2021. "Dynamic capabilities for ecosystem orchestrationA capability-based framework for smart city innovation initiatives," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
    13. Kohtamäki, Marko & Parida, Vinit & Patel, Pankaj C. & Gebauer, Heiko, 2020. "The relationship between digitalization and servitization: The role of servitization in capturing the financial potential of digitalization," Technological Forecasting and Social Change, Elsevier, vol. 151(C).
    14. Lars Hornuf & Milan F. Klus & Todor S. Lohwasser & Armin Schwienbacher, 2021. "How do banks interact with fintech startups?," Small Business Economics, Springer, vol. 57(3), pages 1505-1526, October.
    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. 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.
    17. Kolagar, Milad & Parida, Vinit & Sjödin, David, 2022. "Ecosystem transformation for digital servitization: A systematic review, integrative framework, and future research agenda," Journal of Business Research, Elsevier, vol. 146(C), pages 176-200.
    18. Korkeamäki, Lauri & Kohtamäki, Marko & Parida, Vinit, 2021. "Worth the risk? The profit impact of outcome-based service offerings for manufacturing firms," Journal of Business Research, Elsevier, vol. 131(C), pages 92-102.
    19. Fabio Blanco-Mesa & Ernesto Leon-Castro, 2023. "Fuzzy Analysis of the Strategic Actions of Travel Agencies in Boyacá, Colombia, in a Post-COVID-19 Era," Sustainability, MDPI, vol. 15(21), pages 1-22, October.
    20. Linus Thomson & Anmar Kamalaldin & David Sjödin & Vinit Parida, 2022. "A maturity framework for autonomous solutions in manufacturing firms: The interplay of technology, ecosystem, and business model," International Entrepreneurship and Management Journal, Springer, vol. 18(1), pages 125-152, March.
    21. Reim, Wiebke & Sjödin, David R. & Parida, Vinit, 2019. "Servitization of global service network actors – A contingency framework for matching challenges and strategies in service transition," Journal of Business Research, Elsevier, vol. 104(C), pages 461-471.

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