The Impact of National Culture and Other Cognitive Factors on Servitization

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Abstract

Servitization research has provided rich insight into servitization at the organisational level and at a broad level across industries; however, understanding of servitization at the individual industry level has been limited. The research began as an exploration of the servitization of the office products (OP) industry. This thesis defined servitization as the shift from a product-centric business model and logic to a service-centric approach (Kowalkowski et al., 2017), which can be measured by comparing the proportion of the firm’s (or business unit’s) revenue from services to total revenue for that firm (or business unit). Quantitative grounded theory was used to analyse longitudinal data from interviews with 5,913 corporate decision makers responsible for service contract decisions between 2008 and 2012. Consistent with the grounded theory method, data guided the analysis and indicated that industry level servitization shows similar characteristics to servitization at the firm level in terms of the evolution of service offerings and the customer outcomes achieved from these offerings. The analysis also indicated that within the OP industry firms were not achieving a consistent level of servitization (as measured by service revenues), despite their similar service offerings and results. To understand this phenomenon, a second phase of research was undertaken using in-depth personal interviews with industry executives to understand why some firms were not achieving the same level of servitization despite their desire to achieve a higher level of servitization. This desire for a higher level of servitization is identified as servitization intent. The second phase of research identified a set of cognitive factors, including what is valued, tradition, belief in services, risk tolerance, intentionality, perspective to service, desire, change tolerance and trust, that appear to represent challenges in the servitization process for some firms. These appear to be limiting factors to achieving servitization intent for firms headquartered in Japan but not for firms headquartered in the United States (US). The servitization process thus appears to be influenced by the national culture of the firm. This is the first contribution of this research. Based upon this doctorial research, a three-layered model of servitization factors was developed, which includes cognitive factors at the micro–meso level, organizational factors at the meso level and industry level factors at the macro level. National culture appears to influence both the cognitive and organizational factors, but it does not appear to be a factor at the industry level. This model represents the second contribution of this research. The third contribution of this research is demonstrating the use of a mixed-methods research design guided by the grounded theory method to provide a dual lens approach for understanding servitization at both the industry level and the organizational / cognitive level. This dual lens approach was critical in identifying that at an industry level there were differences between servitization levels achieved by Japanese and US firms, while also enabling examination of individuals to identify the cognitive and organizational factors and how they differed between Japanese and US firms. Furthermore, the iterative abductive nature of the grounded theory method was well suited for understanding the complex set of dynamics associated with servitization at industry and organizational levels.

Keyword(s)

Cognitive Factors; Industry Factors; National Culture; Organizational Culture; Servitization; Servitization Intent

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