An organizational change framework for digital servitization: Evidence from the Veneto region

• Author: Emanuel Gomes,Shlomo Y. Tarba,Oscar F. Bustinza,Ferran Vendrell‐Herrero
• Date: 01 March 2018
• DOI: http://doi.org/10.1002/jsc.2186
• Published date: 01 March 2018

RESEARCH ARTICLE

DOI: 10.1002/jsc.2186

Strategic Change. 2018;27(2):111–119. wileyonlinelibrary.com/journal/jsc © 2018 John Wiley & Sons, Ltd. 111

Abstract

Product rms implemenng integrated product/service soluons through in‐house develop‐

ment must have a long‐term commitment to the project and focus on enhancing their resource

base and strategic agility. Our results conrm the importance of organizaonal capabilies and

strong rm commitment to the development of integrated soluons. While previous studies have

demonstrated the importance of the service business unit’s conguraon, this arcle idenes

crical variables (the rm’s strategic agility and capability) that inuence make‐or‐buy decisions.

Agility is a prerequisite for digital organizaonal transformaon, and our results corroborate that

weak rm agility is closely linked to the need for external development of integrated soluons.

1 

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 INTRODUCTION

Fast‐changing technologies and demanding customer requirements in

maturing markets have paved the way for constant transformaon of

business models as a way to create value and grow. In this context,

digital technologies are increasingly important (De Propris, 2016), as

they enable upgrading of manufacturing acvies and facilitate devel‐

opment of integrated product/service soluons (Baines et al., 2017;

Busnza, Vendrell‐Herrero, & Baines, 2017a). To date, however, very

few empirical studies have systemacally invesgated the organiza‐

onal change processes involved in development of new integrated

product/service business models.

Such integrated soluons in the digital domain are a symbiosis

of smart products (Porter & Heppelman, 2014), digizaon of sup‐

ply (Coreynen et al., 2016), and advanced services including soware

and censors (Baines & Lighoot, 2013), in a process known as digital

servizaon (Vendrell‐Herrero, Busnza, Parry, & Georgantzis, 2017).

Digital servizaon includes dierent technology‐enabled business

models that enable rms to achieve a compeve advantage by pro‐

viding customer knowledge‐based digital services during the enre

product life cycle.

Reconguraon of business models requires an organizaonal

eort for connuous adaptaon to the market’s environmental

condions. In this context, manufacturing rms integrate products

and digital services in digitally enabled integrated soluons based on

a beer understanding of customers’ needs (Windahl, Andersson,

Berggren, & Nehler, 2004) enabled by digital technologies (Mar‐

nez, Bastl, Kingston, & Evans, 2010). Such customer‐oriented

business models aect the enre value chain (Busnza, Parry, &

Vendrell‐Herrero, 2013) and are conducive to subsequent pro‐

cesses of organizaonal change (Vendrell‐Herrero, Parry, Busnza,

& O’Regan, 2014).

Organizational change is a challenge for firms that are forced

to reconfigure their strategic business units to integrate service

into the production system while sustaining competitive advan‐

tage (Bustinza, Bigdeli, Baines, & Elliot, 2015). Current debates on

servitization (Einola, Rabetino, & Luoto, 2016) indicate that com‐

panies that have initiated their transition to provision of digital

integrated solutions face organizational tensions, mostly because

they lack internal capabilities. In this article, we argue that effec‐

tive service implementation is linked to critical organizational

capabilities, especially those responsible for successful organiza‐

tional change. To this end, our study contributes to the existing

body of knowledge by developing and testing a comprehensive

framework for organizational change that takes into account both

firms’ resources and competencies (Helfat & Peteraf, 2003; Wer‐

nerfelt, 1984), and their strategic agility (Webber & Tarba, 2014).

An important contribution of this framework is its inclusion of

commitment as the glue that facilitates the transformational pro‐

cess that enhances value creation.

An organizaonal change framework for digital servizaon:

Evidence from the Veneto region*

Oscar F. Busnza1 | Emanuel Gomes2 | Ferran Vendrell‐Herrero3 | Shlomo Y. Tarba3

1 Department of Management, University of

Granada, Granada, Spain

2 Department of Management, Nova

University, Lisbon, Portugal

3 Department of Management, University of

Birmingham, Birmingham, United Kingdom

Correspondence

Oscar F. Busnza, Faculty of Economics,

University of Granada, 18071 Granada,

Spain.

Email: oscar@ugr.es

* JEL classicaon codes: L2.