Abstract for: Failure Modes in Servitization: A Process Theory

The implementation of servitization as a business strategy remains a significant challenge for firms seeking to offer integrated product-service bundles. Despite the growing body of research in the servitization literature, an integrative framework for explaining the recurring failures in servitization efforts has yet to emerge. Through a qualitative meta-analysis of empirical evidence documented in existing case studies, we develop a process theory that examines the tensions between product and service businesses during the service business development process. The process theory is articulated in a system dynamics model that enables the exploration of the parameter space that results in different failure modes. We identify the common servitization failure modes. We highlight contributing factors to common failure modes at various servitization stages and establish causal links between model structure and behavior to explain the heterogeneity in service business performance. We contribute to the theory development in servitization by synthesizing existing literature and integrating empirical evidence into a formal model. The causal mechanisms and model assumptions offer a foundation for further testing and refinement. Our process theory provides a framework to help managers navigate these complexities, focusing on critical decisions at different servitization stages and the structural factors driving them. For proofreading and editing