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Service capabilities and servitized SME performance: contingency on firm age
Linköping University, Department of Management and Engineering, Business Administration. Linköping University, Faculty of Arts and Sciences.ORCID iD: 0000-0003-4543-0015
Linköping University, Department of Management and Engineering, Business Administration. Linköping University, Faculty of Arts and Sciences. Karlstad Univ, Sweden.
2018 (English)In: International Journal of Operations & Production Management, ISSN 0144-3577, E-ISSN 1758-6593, Vol. 38, no 4, p. 1144-1164Article in journal (Refereed) Published
Abstract [en]

Purpose The purpose of this paper is to study the impact of back-office (BO) service capability and front-office (FO) service capability, and how firm age influences the impact of these service capabilities on small and medium size enterprise (SME) performance. Design/methodology/approach Based on the prior literature on servitization and firm operational capabilities, hypotheses were developed on the impact of service capabilities on firm performance. These hypotheses were tested using a survey and externally sourced financial data on 224 SMEs in the software industry. Findings FO service capability has a positive impact on firm performance of SMEs. The effect of BO service capability was weaker and partly contrary to expectations, showing a negative effect on firm performance for young SMEs. As hypothesized, the impact of both BO and FO service capability is moderated by firm age. Young SMEs benefit more from FO service capability. For older SMEs, BO service capability becomes increasingly more important. Practical implications As different capabilities lead to different outcomes, SMEs need to carefully consider which service capabilities to invest in. As the relative importance of capabilities changes over time, SMEs need to be ready to change their strategic focus over time toward BO capabilities to attain optimal outcomes. Originality/value The findings suggest that factors such as industry, firm size, and firm age affect the optimal servitization path, and that current understanding of servitization does not necessarily apply to all servitized firms. The study also provides further evidence of the impact of service capabilities on firm performance.

Place, publisher, year, edition, pages
EMERALD GROUP PUBLISHING LTD , 2018. Vol. 38, no 4, p. 1144-1164
Keywords [en]
Service management; SMEs; Firm performance; Servitization; Capabilities; Software firms
National Category
Business Administration
Identifiers
URN: urn:nbn:se:liu:diva-147172DOI: 10.1108/IJOPM-06-2016-0328ISI: 000428074300010OAI: oai:DiVA.org:liu-147172DiVA, id: diva2:1199467
Available from: 2018-04-20 Created: 2018-04-20 Last updated: 2019-06-04

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