Cultural differences in servitization

Nordic manufacturers in China

Sen Bao, Marja Toivonen

Research output: Contribution to journalArticleScientificpeer-review

3 Citations (Scopus)

Abstract

Purpose - The purpose of this study is to examine the challenge of cultural differences in servitizing manufacturing. The focus is on services that the representatives of small, developed and open economies (exemplified by Nordic countries) provide in a large, developing and centralized economy (exemplified by China). Along with internationalization, cultural differences in business practices have become a topical issue. They may be particularly challenging when the business area is new and the cultures of business parties include opposing characteristics. Design/methodology/approach - A multiple case study approach is applied, including five case companies from Finland and Sweden. They are all manufacturing companies in metals and mechanical engineering industries, offering product services, process optimization and consultancy services. Empirical data have been collected from both Nordic service providers and their customers in China. Findings - The data reveal that services including tangible elements (e.g. spare parts) are successful in China. However, there is also a growing demand for total solutions. Customers' buying behavior is not only influenced by the Chinese business culture, e.g. "guanxi", but it also varies according to the ownership of companies (state-owned, private, foreign) and to the geography. A prerequisite for success is a shared understanding of central business concepts - in this case, the interpretations of "tangibility" and "added-value" turned out to be particularly important. Originality/value - This study indicates that generalizations based on the experience of developed countries may be misleading in developing countries, as they may "jump over" some steps on their way toward advanced services. In China, services as offerings are newcomers, but service culture in a "tacit" form is embedded due to the Confucian influence. The recent view of service-dominant logic that highlights the mutual benefit as the core of service business may actually be quite near to the original Chinese thinking.
Original languageEnglish
Pages (from-to)223-245
JournalJournal of Science and Technology Policy Management
Volume6
Issue number3
DOIs
Publication statusPublished - 2015
MoE publication typeA1 Journal article-refereed

Fingerprint

Industry
Service economy
China
Cultural differences
Nordic
Mechanical engineering
Developing countries
Metals
Shared understanding
Open economy
Empirical data
Buying behaviour
Sweden
Design methodology
Multiple case study
Geography
Developed countries
Manufacturing companies
Manufacturing
Finland

Keywords

  • cultural differences
  • developing countries
  • industrial services in China
  • services internationalization
  • servitization

Cite this

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abstract = "Purpose - The purpose of this study is to examine the challenge of cultural differences in servitizing manufacturing. The focus is on services that the representatives of small, developed and open economies (exemplified by Nordic countries) provide in a large, developing and centralized economy (exemplified by China). Along with internationalization, cultural differences in business practices have become a topical issue. They may be particularly challenging when the business area is new and the cultures of business parties include opposing characteristics. Design/methodology/approach - A multiple case study approach is applied, including five case companies from Finland and Sweden. They are all manufacturing companies in metals and mechanical engineering industries, offering product services, process optimization and consultancy services. Empirical data have been collected from both Nordic service providers and their customers in China. Findings - The data reveal that services including tangible elements (e.g. spare parts) are successful in China. However, there is also a growing demand for total solutions. Customers' buying behavior is not only influenced by the Chinese business culture, e.g. {"}guanxi{"}, but it also varies according to the ownership of companies (state-owned, private, foreign) and to the geography. A prerequisite for success is a shared understanding of central business concepts - in this case, the interpretations of {"}tangibility{"} and {"}added-value{"} turned out to be particularly important. Originality/value - This study indicates that generalizations based on the experience of developed countries may be misleading in developing countries, as they may {"}jump over{"} some steps on their way toward advanced services. In China, services as offerings are newcomers, but service culture in a {"}tacit{"} form is embedded due to the Confucian influence. The recent view of service-dominant logic that highlights the mutual benefit as the core of service business may actually be quite near to the original Chinese thinking.",
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Cultural differences in servitization : Nordic manufacturers in China. / Bao, Sen; Toivonen, Marja.

In: Journal of Science and Technology Policy Management, Vol. 6, No. 3, 2015, p. 223-245.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

T1 - Cultural differences in servitization

T2 - Nordic manufacturers in China

AU - Bao, Sen

AU - Toivonen, Marja

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DO - 10.1108/JSTPM-01-2015-0001

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JO - Journal of Science and Technology Policy Management

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