Service Orientation of Organizational Structures

Abstract

Despite the high level of interest in how organizational structures facilitate service orientation in capital goods manufacturing companies, researchers have neglected this field. This article explores 4 different organizational approaches contributing to service orientation: (a) product strategic business unit (SBU), (b) product–service SBU, (c) service–product SBU, and (d) service SBU and product SBU. Each organizational approach reflects a unique degree of service orientation that leads to different levels of performance outcome. The description of organizational approaches enlightens the discussion of integration and the separation of product and service business. Complementary to existing research, this article clarifies whether companies should integrate or separate service and product functions in order to achieve service orientation.

KEYWORDS:

• capital goods manufacturer
• integration and separation of products and services
• organizational distinctiveness
• organizational function
• strategic business unit