From products to services - Overcoming the challenge of cul- tural alignment in servitization

Abstract

Comprehensive customer needs, high market complexity and increasing competition are forcing manufacturing companies to look for new sources of value and growth by entering or extending their service business. Such a process has been termed “servitization". Research suggests that companies undertaking the path towards servitization have to face and overcome different challenges, cultural transformation being one of them. Creating and managing consistency between the newly service oriented strategy and corporate culture is a prerequisite for organizational growth and success. In order to achieve such consistency and organizational fit, servitizing firms need to understand the weight and value of an often complex and abstract appearing concept such as organizational culture, its main dimensions and determinants and effectively implement all the fundamental changes that the transition towards a service dominant logic entails.In order to promote a service culture, manufacturing companies need to overcome their product embedded values and develop a customer value orientation. The servitization process requires changes in an organization’s culture, its members’ practical, behavioral and intellectual habits.Such a fundamental change can be achieved only if initiated, promoted and implemented by a strong, and determined leadership. HRM practices are strictly related to the creation and diffusion of service values such as quality, flexibility, innovation and cooperation, customer oriented behaviors, attitudes and skills.