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Servitization : the impact of organizational culture on service orientation

Wijbenga, E. (2012) Servitization : the impact of organizational culture on service orientation.

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Abstract:Traditional products alone cannot make the difference anymore in the changing competitive environment. Increasing complexity, because of specialization, and dynamic value networks require new approaches. Servitization is seen as an outcome. But there are also challenges in the execution of a service strategy. This research focuses on the challenge of cultural mindset among employees when shifting from a product-oriented organization to a service-oriented organization. Ceschin (2012) argues that in order to support a more service oriented business it is needed to implement changes in the corporate culture and organization. This research focuses on the relationship between organizational culture and service orientation. The following research question is the starting point of the research: “What is the effect of organizational culture on service orientation?” Organizational culture is divided into clan, adhocracy, market, and hierarchy culture based on the Organizational Culture Assessment Instrument of Cameron and Quinn (1999). A service culture is needed to support servitization. Therefore a change is required from a product-oriented organization to a service-oriented organization. This can be viewed as a transformation from an old product-oriented core task to more customer- and service- oriented core task (Nuutinen & Lappalainen 2012). According to Nuutinen and Lappalainen (2012) organizations need to make a change in de following dimensions, namely understanding service business, management practices, development practices and customer relationship. To answer the research question a literature study is executed and empirical data is obtained from an online survey at the Dutch subsidiary of an international IT company. Afterwards the hypotheses are tested with the use of a linear regression analysis. Based on the tested hypotheses it can be concluded that the clan culture and adhocracy culture both have a positive relationship with service orientation. The market culture has shown to have a negative relationship with service orientation. The hierarchy culture did not show a significant relationship with service orientation. As clan culture has the most positive effect on service orientation it is necessary to further develop or change the organizational culture into a clan culture. Some practical implications to change or develop clan culture are: design a career development program which focuses on mobility and cross-functional communication, develop programs to increase teambuilding, change incentive to make middle manager more innovative and independent, and make an assessment of the training needs in each unit.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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