Digital visions vs. product practices: Understanding tensions in incumbent manufacturing firms

Abstract

Incumbent manufacturing firms face challenges when expanding their product focus with digital services. Such expansion creates tensions in organizations in the servitization process. While management visions and conceptualizes new service oriented businesses, the actual practice of implementing these service concepts is influenced by the product paradigmatic way of thinking in the organization. This dominant thinking creates tensions between business visions and business practice. We use the case of remote diagnostics services to provide insights into a manufacturing firm's attempt to transform the dominant oriented business models into a new networked environment. We suggest that such acts that may or may not lead to transition are lingered by dominant logics related to the product focus. This indicates that firms are required to embed new logics into their existing practice in order to exploit the full potential of digital technology. © 2014 IEEE.