Transformation of traditional manufacturers towards servitized organisations

In response to competitive and economic pressures, an increasing number of manufacturing firms are adding services to their traditional product offerings. However, companies are confronted with an arduous undertaking, and find it difficult to servitize successfully and profitably. This thesis investigates the transformation that traditional manufacturers undergo to become providers of integrated products and services, a phenomenon known as servitization. Servitization is considered a strategic re-direction of the manufacturing organisation and a major challenge for senior management. The purpose of this study is to provide better understanding of the change that occurs when a manufacturer attempts servitization. The study adopts a qualitative theory building approach to investigate an under-researched phenomenon and a major managerial challenge. It follows a strategy of engaged scholarship to understand a complex organisational problem. The research utilised multiple case studies, action research, and focus groups to tackle a problem with significance to industry. The findings reveal the nature of servitization as a complex transformative change which exposes the manufacturing company to its environment in new ways, and closely interlinks the organisation with a network of stakeholders through new dependencies. The transformation of traditional manufacturers towards servitized organisations is multi-dimensional and goes through eleven dimensions of transformation across the organisation and its network. In addition, thirty nine forces of change were found to influence the outcome of servitization, and were categorised into three sets of change drivers for servitization. The results of the study led to the formation of a model for transformation towards a servitized organisation for use by industry practitioners to roadmap and facilitate their organisation‟s shift towards services. The model represents a novel approach to managing servitization. This research has addressed a literature gap and met an industrial need, and has made a significant contribution to knowledge about the change that traditional manufacturers experience to become servitized organisations.