Servitization: organizational implications and acquisition of competencies

Abstract

Servitization is a strategic move in which firms —usually manufacturers in high value-added industries— expand their offerings by bundling core products with additional services. This article aims to study the transition toward servitization from an organizational perspective, because the required organizational changes are among the main difficulties to overcome. The Star Model of organizational design was employed to describe and explain how such changes, in terms of strategy, structure, processes, people and rewards, were carried out in the textbook publishing industry. It is a particularly interesting sector, which has increasingly offered services and digital content, bundled with the printed textbook. A multi-case research was conducted in three textbook publishers in Brazil, focusing on their relationship with a key customer: the private primary and secondary schools. Data collected from the publishers’ reports as well as interviews in the publishers and in the schools they serve, were analyzed and compiled in descriptive insights. Evidence suggest the adaptation of the publishers’ capabilities and processes included changes in mindset to better understand the customer’s needs; the acquisition of new competencies, usually by hiring former school employees with experience and interpersonal skills; and stronger integration between services (commercial) and product development (editorial) teams. The insights herein provided may encourage managers to evaluate and revise their current or future transition toward servitization.