An Investigation of Antecedents for the Development of Customer Support Services in Manufacturing Companies

ABSTRACT Purpose of this paper. The existing literature remains silent on the necessary antecedents for developing customer support services (CSS). This paper constitutes an attempt to close part of this gap by addressing the following research question: What are the antecedents for developing CSS in machinery and equipment manufacturing companies? Design/methodology/Approach. The unit of analysis was a Strategic Business Unit (SBU) in both German and Swiss machinery and equipment manufacturing companies. The data collection is based on a broad survey among 212 firms. The hypothesized model was estimated by means of structural equation modeling techniques. Findings. The results suggest that the positive associations of the external environment and orientation of the business strategy towards CSS are supported in terms of significance and size of effect. The orientation of the business strategy towards CSS is also positively related with organization of development activities, service manager decision-making authority, and creation of an innovation culture in the service organization. Furthermore, the overall profitability is influenced positively by these three factors of organizational design. Research Limitations/Implications (if applicable). The study only concentrates on machinery and equipment manufacturing companies. It would be also useful to examine whether similar relationships hold in other manufacturing industries. Practical Implications (if applicable). Machinery and equipment manufacturing companies which wish to switch from being a provider of product-related services for the installed base, to being a service provider offering CSS, must confront and meet the challenge of finding an optimal alignment between external environment, business strategy and factors of organizational design. What is original/value of paper. To best of the author's knowledge, there has been no empirical research which addresses how to successfully implement a strategy for offering CS internally. Thus, the study attempts to address an important research gap. Creating sustainable competitive advantages means that machinery and equipment manufacturing firms must shift the emphasis of their business from providing only product-related services for the installed base to offer customer support services as a service provider. In this context, the research focuses on two important issues. First, it focuses on the proper alignment among external environment such as competitive intensity and customer expectations, corporate strategy's orientation towards customer support services and organizational factors to support the development of them. Second, the moderating effect of top management recognition and a service orientation which permeates corporate culture and human resource management is analyzed. Based on a survey, the paper illustrates that the business strategy for customer support services and the organizational factors such as service manager decision-making authority, organization of development activities, and creation of an innovation culture play important roles in achieving greater overall profitability in a changing external environment. The intensity of the effects depends additionally on the moderating effects of top management recognition and a service orientation which permeates corporate culture and human resource management.