Technological Innovation, Organizational Change and Product Related Services

Abstract

The literature regarding the determinants of servitization emphasizes the role of organizational change and usually overlooks the role of technological change. Using an original sample of 1,129 German manufacturing firms, we reverse the hierarchy: product novelty is a main driver of product-related service (PRS) activities. It especially boosts consulting and training services. The structure of the PRS portfolio is dependent on product novelty. Organizational changes toward a more flexible company or the adoption of new advanced manufacturing processes are found, with few exceptions, hardly to influence the decision to offer a product-related service. Our results suggest however, that process innovation is positively linked to the breadth of service surrounding products, whereas organizational innovation is more prone to lead to a larger breadth of services surrounding customer offerings. Product, process, and organizational innovation are not found to be complementary drivers of product-related service offerings.