Paradoxes in Servitization: A processual perspective

Abstract

Servitization describes a paradoxical and lengthy transformation process in the field of manufacturing, requiring manufacturers to move from competing on the basis of their products to competing on the basis of their services; yet the delivery of these services relies on the production of high-quality products. Such transformations may take several years, necessitating manufacturers to balance the competing demands of both the product and service businesses, as well as navigating their interdependency. In order to illuminate these competing demands, and understand their progression over the course of a manufacturer’s servitization journey, the present study conceptualises a processual perspective on the paradoxes inherent in servitization. The conceptualisation of the processual perspective integrates a servitization stage model with established paradox theory to depict the paradoxical tensions that servitization creates, while also demonstrating how, and when, these emerge. The conceptualisation is applied to longitudinal data from three case studies that reconstruct the manufacturers’ experiences from the point of the initial exploration of servitization to the implementation of their outcome-based service offering. The findings identify how learning, belonging, organising and performing paradoxical tensions emerge over time, and how they unfold and change depending on the objectives and activities of the manufacturers’ servitization stage.