Technological Innovation, Organizational Change and Product Related Services

This article investigates technological and organizational antecedents of product related service (PRS) strategies implemented by manufacturing firms. We examine the way manufacturing practices and the related technological and organizational innovations impact PRS offered by firms. Using an original sample of 1,425 German manufacturing firms, we propose a cross-sectional econometric model in order to test the likely impact of technological change (product and process innovations) and organizational change (task integration, team work and decentralization) on PRS profiles. Our results show that product innovation, the adoption of modern manufacturing processes and integration practices all impact both the likelihood of offering PRS but also the type and bundle of PRS proposed. More precisely we show that leadership in product innovation and the early adoption of manufacturing processes are significant drivers of PRS. With respect to organizational change, our findings show that integration practices are more prevalent than team work and decentralization when considering a firm’s ability to offer PRS to customers. However, compared with product innovation and integration practices, the impact that advanced manufacturing processes have on PRS is found to be rather small