The performance impact of industrial services and service orientation on manufacturing companies

• PurposeProduct-manufacturing firms are increasingly positioning themselves as providers of industrial services and solutions. Despite the increasing conceptual interest in industrial services, empirical evidence about the factors that mediate the relationships between industrial services and firm performance remains limited. This paper investigates the relationship between industrial service offerings, service orientation and firm sales and profit performance.Design/methodology/approachThe study uses data from 115 manufacturing firms and adopts a structural equation modeling technique to test a set of hypotheses on service offerings, service orientation and company sales and profit performance.FindingsThe results underline the importance of implementing service orientation in employees’ behavior, recruitment, training and assessment. Service orientation is demonstrated as an essential mediator for the relationship between service offerings, revenues and profits. The results therefore suggest that both service offerings and service orientation are important when manufacturing companies attempt to position themselves as industrial service providers. Research limitations/implicationsGiven the limitations of the sample collected from the Finnish manufacturing industry, future studies could refine the measures and investigate the applicability of the results in other contexts. Practical implicationsThe results suggest that developing a service orientation is vital for manufacturing companies to profit from increased offerings of industrial services. Because nurturing service orientation is a central enabler of the impact of service offerings on sales and profit performance, it is in the interests of manufacturing firms moving towards a servitized business model to develop training, compensation, and recruitment policies.Originality/valueThe study establishes a link between service offerings, service orientation, sales and profit performance in manufacturing firms. This is among the first studies to provide statistical evidence to support claims that even manufacturing firms can benefit from developing integrated product-service solutions.

Subject headings

TEKNIK OCH TEKNOLOGIER  -- Annan teknik -- Övrig annan teknik (hsv//swe)

ENGINEERING AND TECHNOLOGY  -- Other Engineering and Technologies -- Other Engineering and Technologies not elsewhere specified (hsv//eng)

Keyword

Entreprenörskap och innovation

Entrepreneurship and Innovation

Publication and Content Type

ref (subject category)

art (subject category)