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Organisational structures for the service business in product-oriented companies

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abstract Confronted with stagnating growth rates and decreasing margins in
the product business, product manufacturing companies are increasingly extending the service business. The present paper explores differences in how organisational structures trigger the service business. The study is based on the survey among manufacturing companies (product-oriented companies) that
have implemented different organisational arrangements: (1) integrating the service organisation into the product division and (2) separating the service business from the product division. The investigated companies are still in the early stages of extending their service business. The total offering of the participating companies includes both services and products, but products still dominate the total offering. According to the results, separating the service
business from the product division significantly enhances the extension of the service business. More specifically, the companies separating the service business achieve a higher share of service revenue, service orientation in the business strategy, corporate culture, human resource management and total
offering than companies integrating the service organisation into product business. Both types of organisational arrangements achieve a similar degree of direct service profitability and quality of customer relationship. For managers, these finding indicate that setting-up a separate service division triggers the extension of the service business.
   
type journal paper
   
keywords Organisational structure; service business; product-oriented firms
   
language English
kind of paper journal article
date of appearance 27-11-2009
journal Int. J. Services Technology and Management
publisher Inderscience
ISSN 1460-6720
volume of journal 11
number of issue 1
page(s) 64-81
review external review
   
citation Gebauer, H., & Puetz, F. (2009). Organisational structures for the service business in product-oriented companies. Int. J. Services Technology and Management, 11(1), 64-81.