Effect of Service Transition Strategy on Intra-Organizational Tensions

Manufacturing companies increasingly search to improve their competitiveness through service growth opportunities. However, the service transition strategy brings additional risks as complementary yet substitutive relationship between products and services also creates recurring tensions in firms’ daily operations. In this paper, we seek to add clarity to the transitional sift from product to advanced service offering by unpacking intra-organizational tensions between product and service business units. We use the exemplar case of Swedish capital goods manufacturer that turned into product-service provider. We cross-compared 10 national subsidiaries to investigate product-service tensions as service business strengthen from peripheral to core in organizational functioning. We propose intriguing contribution to the dynamic perspective on organizational tension as we present the observation of the tension coevolution. We extend that the change in the hierarchy of goals and stages (product-dominant, service ...