What drives product-service integration? An abductive study of decision-makers' motives and value strategies

Abstract

Many firms struggle to successfully translate corporate strategy into value-added solutions for customers by integrating products and services. A particular hurdle is the intrinsic motivation of the people in charge. This study contributes to the microfoundations of servitization literature by exploring what motives and strategies drive decision-makers to pursue product-service integration (PSI). Given the fragmented state of the literature, we follow an abductive approach. First, applying a behavioral strategy lens, we identify the theoretical building blocks to construct a conceptual framework. Next, we collect data of 178 small, Belgian firms to perform an exploratory quantitative analysis. Finally, we develop theory based on the results. Specifically, we find that the need for achievement and affiliation are both directly and positively associated with PSI. Also, achievement-driven people are likely to pursue PSI, originating from a product leadership position. Finally, the power motive is positively associated with operational excellence, but not with PSI.