Nurturing a service orientated paradigm of management within a traditionally manufacturing enterprise : a South African case study

Abstract

PURPOSE: The purpose of this paper is to analyse and draw a correlation between service science theory and practice as it relates to the complexity of engendering a services orientated paradigm of management within a traditionally manufacturing enterprise. It is suggested that the traditional manufacturing paradigm is founded on scientific management principles whereas that of service science is far more multidisciplinary and complex in nature. It would seem that the service science paradigm is directed at co-creational value in contrast to a transactional paradigm of management that form the foundation of the manufacturing era. PROBLEM INVESTIGATED: With the emergence of an essentially services orientated global economy, manufacturing enterprises are increasing adding a range of services to the value offerings they make available to clients. The first part of this paper constitutes a literature study directed at gaining a theoretical understanding and insight into the underlying principles of management involved in moving from an essentially manufacturing management setting to one that incorporates services and in some instances where services assume the dominant paradigm of management. The second part of the paper attempts to correlate the theoretical insights gain from the literature study with relation to that of practice by means of a case study undertaken at a South African manufacturing enterprise that has implemented a servitization strategy. METHODOLOGY: A multidisciplinary literature review and analysis is undertaken to gain an insight of contemporary management theory and practice, as it relates to servitization or the transition from an essentially manufacturing to a services inclusive operational setting. With the insights gained from the literature research serving as a source of information and reference a case study was undertaken at a South African enterprise to determine if a correlation exists between theory as expressed in the literature and practice as reflected in the enterprise concerned. As only a single case study was undertaken it is acknowledged that the research concerned needs to be extended in scope to gain a far more representative insight into the validity of the correlating insights gained from this research study. South African research in relation to servitization would seem to be extremely limited in extent and this paper needs to be seen as an attempt to address the knowledge base, from a South African perspective, and not as providing a fully fledged servitization research study. FINDINGS: Findings indicate that the incorporation of services necessitates fundamental changes to the enterprises' essentially manufacturing dominant business model and the socio-cultural context, often termed to be "the way things are done around here". This has very fundamental implications in terms of nuance differences in paradigms of management. VALUE OF THE RESEARCH: Increasingly South African manufacturing enterprises are incorporating services into their value proposition offered to clients and the research findings could be used to mitigate some of the possible pitfalls in managing paradigmatic shifts involved in implementing a servitization strategy. CONCLUSION: A primary conclusion drawn from the study is that the implementation of a servitization strategy entails some very fundamental changes in manufacturing paradigms of management. The paradigms that underpin a service science based dominant logic of management have very fundament nuance differences, which if not addressed could derail the servitization strategy in implementation.