A contingency perspective on global service development in manufacturing firms

Abstract

This paper explores the contingencies that affect the integration of operating models of large manufacturing firms and their downstream actors, such as dealers and service partners, when developing global services. A qualitative in-depth case study is employed as the research methodology. The research follows a theory adaptation approach in which global service development in the context of manufacturing firms (i.e. servitization across international borders) is the domain theory, while contingency theory is the lens used to observe, identify, and discuss the influence of specific factors on the integration of the operating models of downstream actors. We identify four key contingencies impacting this integration: market heterogeneity, downstream network configuration, end customers' orientation, and service partners' resistances. These contingencies significantly influence the balance between global and local adaptation of the operating models of downstream actors, highlighting the complexity of developing global services in fragmented networks. This study contributes to the existing literature by proposing a novel empirical model that explains how the interrelations between the identified contingencies affect the integration of operating models of downstream actors. Using this model, the paper shows three scenarios that unfold from these interrelations, each having positive and negative outcomes that managers should consider.