Knowledge in Servitization Management A Comparative View H. M. Belal Kunio Shirahada Michitaka Kosaka Olatunde Amoo Durowoju Knowledge in Servitization Management · · H. M. Belal Kunio Shirahada · Michitaka Kosaka Olatunde Amoo Durowoju Knowledge in Servitization Management A Comparative View H. M. Belal Kunio Shirahada School of Business and Management, Transformative Knowledge Liverpool Business School Management Research Area, Liverpool John Moores University Graduate School of Knowledge Liverpool, UK Science Japan Advanced Institute of Science Michitaka Kosaka and Technology Japan Advanced Institute of Science Nomi, Japan and Technology Nomi, Japan Olatunde Amoo Durowoju School of Business and Management, Liverpool Business School Liverpool John Moores University Liverpool, Merseyside, UK ISBN 978-3-031-18686-8 ISBN 978-3-031-18687-5 (eBook) https://doi.org/10.1007/978-3-031-18687-5 © The Editor(s) (if applicable) and The Author(s) under exclusive license to Springer Nature Switzerland AG 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and informa- tion in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover illustration: © Melisa Hasan This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland To my dearly loved parents Md Akbar Ali P. K. and Mrs. Joygon Begum, my family have always surrounded me with inspiration- my wife, sons, brothers, and sisters. H. M. Belal Preface During the last two decades, remarkable changes have occurred in the world’s business environment. Firms have realized the importance of service to sustain as well as innovate their business. Consumers desire service-based value through a knowledge co-creation process rather than the manufactured goods alone. This has instigated a big task for tradi- tional manufacturers to create knowledge and adapt to such trends and create new business line-ups. It is suggested that manufacturing compa- nies need to have a value chain perspective and should adapt servitization as a new business opportunity. While there are several definitions of servi- tization, authors adopt the definition of servitization as the transition process of adding service concepts into product-based business in manu- facturing companies. Servitization is a new way of thinking for traditional product-based businesses and represents new business opportunities. However, managing it successfully is a difficult challenge. Servitization requires the development of a new service opportunity in terms of knowl- edge co-creation with customers. Therefore, the first part of this book discusses the theoretical view of knowledge in relation to servitization. This is important because a defining component of the value co-creation process in servitization requires integrating knowledge from different parties, such as human resources and organizations. Consequently, the first part of this book review connects and applies the knowledge view of relevant service concepts including service-dominant (S-D) logic and product service system (PSS) to servitization. vii viii PREFACE The knowledge view includes four sections. The first one provides and explains a clear overview of ‘knowledge concept’ using up-to- date sources. The second section discusses ‘knowledge management and knowledge creation concept’. It shows the importance of understanding and proper management approach and creates new knowledge according to that plan into service value creation. Knowledge management and organizational learning are all about the dealings and interaction between tacit knowledge and explicit knowledge through working on informa- tion treatment, corporate infrastructure, culture, people’s mindset, and so on. This section also shows that organizational knowledge manage- ment practice is a regular aspect as the organization always aims to offer service per market situation, and managing knowledge is required for it. The third section is ‘development of knowledge management and knowledge creation in process application’, where the theories and models suggest that the constant dialogue between tacit knowledge and explicit knowledge is significant for knowledge creation and knowledge creation is a dynamic process. This part also describes the influence of collabo- ration on the aim of the idea, concept, and/or information sharing in managing new knowledge for a service-based value offering. It argues the importance of corporate collaboration is increasing due to changing busi- ness environment from a goods-oriented to a service-oriented basis. To become a service-oriented view business platform, additional resources are required. In this scheme, two or more independent organized businesses ‘engage in collaboration and share or integrate their competencies (e.g., resources, knowledge)’ to achieve a common purpose of new knowledge creation. The fourth section is ‘knowledge management and knowledge creation practice in the service sector’. This part describes GE Health- care’s knowledge management and knowledge creation practice as an example. The example shows that GE relates all its competencies and strengths to manufacturing its medical equipment. Simultaneously, they connected with their stakeholders to gather and share knowledge and generate more services to achieve total hospital management. Therefore, developing an active method of connecting stakeholders to understand their value and create services as a solution. Another good example is Nike Inc., which collaborated with Apple and has become a servitized firm through knowledge integration in managing and co-creating knowledge to produce service-based value. PREFACE ix Again, the ‘servitization view’ includes four sections: service concept, service-dominant logic (SDL), product service system (PSS), and serviti- zation. The service concept part reviews the service literature and defined service. The SDL section explains the goods-based company’s trends to move into the service-oriented view, and thereby, the company can produce the customer’s desired value. PSS unit clarifies the company’s functional aspect to engage in service offering to the market for maxi- mizing customer value. And servitization portion gives the overview of a company’s operational process, transforming from the goods-based and/or product-based view to a service-based one. And based on the review of theory, this section also develops a model called the ‘knowledge-oriented servitization management model’. A knowledge-oriented servitization management model is considered as an ‘organizational learning outline and its transformational approach’ in this book. Since to manage a successful servitization, a product-based company should be capable of dealing with new knowledge and adopting a co-creation process or ‘system’ with the aim of offering service-based value. Consequently, additional resources are required to support this both internally and externally. In this, ‘resource integration’ along with partners’ involvement is the most appropriate technique for dealing with and adapting the stated ‘system’. The knowledge-oriented servitization management model supports the theory and concept explained in this book and connects readers to existing knowledge. It also gives the foundation of our hypotheses in this book. The second part of this book examines Asia-based businesses in both developed and developing economies (Focuses on Japan and Malaysia) and six real-life examples for testing the proposed model and theories. Authors selected Japanese and Malaysian businesses to contrast successful and failed examples from developed (Japan) and developing (Malaysia) country perspectives. Moreover, according to this book’s hypothesis, the company can manage knowledge-oriented servitization through ‘different knowledge integration’ and ‘organizational knowledge creation’, so the case examples are designed to confirm the mentioned hypothesis and test theories and concepts. For instance, HDRIVE-Hitachi Capital Case and Uniqlo-Toray Case confirm ‘different knowledge integration’ percep- tions in the servitization practice. Japanese Monitor Maker: Company ‘A’; PKT Logistics Group; and Feruni Ceramiche (Malaysian Ceramiche company) confirm organizational knowledge creation perception in servi- tization management practice. In addition, Company B (health products x PREFACE and traditional medicines manufacturer) is considered a failure case in this book. At the same time, a successful discussion presented over this company is based on knowledge and service view aimed at servitization. Evidence was collected through a series of investigations, actions (e.g., seminars, workshops, and training), and structured interviews. Then, the accumulated evidence is further analyzed through the theoretical lenses of service science, knowledge science, servitization concept, organiza- tional culture management, and operations management. However, by looking into different case examples and comparisons, readers can gain an insight into the co-creating knowledge process and understand why ‘inte- grating knowledge’ from operating partners and/or through ‘creating organizational knowledge’ is significant for transforming a traditional product-based company into a service-based value provider. This book would be handy for those who are in the field of researching and teaching operations, service, and knowledge management. The students will be able to learn about knowledge and service views. They also will gain insight into servitization management practice by analyzing the proposed model and evaluating different case examples. In addition, it will be beneficial for practicing managers with limited experience and knowledge of building resource-based models/frameworks to manage and change organizational culture. Finally, authors hope this book can encourage further academic interest with more exploratory and empirical studies conducted in this significant or related study area. Liverpool, UK H. M. Belal Nomi, Japan Kunio Shirahada Nomi, Japan Michitaka Kosaka Liverpool, UK Olatunde Amoo Durowoju Acknowledgments The authors acknowledge an immeasurable debt of gratefulness to the almighty God, the supreme merciful and kind. Authors would like to acknowledge the reviewers who reviewed and provided their invaluable feedback on the draft manuscript. Their comments helped us to improve the quality of this book. Authors would like to thank the staff at Palgrave Macmillan who contributed, directly or indirectly, to the editing and production of this book. I sincerely thank Alec Selwyn, Abarna Antonyra, Srishti Gupta, Ruth Jenner, Andreas Beierwaltes, and Guido Zosimo-Landolfo. Thanks also go to the students and collaborators who helped us at various stages of this project in many ways, such as giving up-to-date information, most notably Dato’ Michael Tio, Quamrul Hasan, Norani Nordin, Naoki Takahashi, Dato’ CC Ngei, and Anas Hasbullah. Authors would like to convey our gratitude to all case companies and their employees for providing support and feedback to share perceptions and experiences in this book project. Authors would like to thank our colleagues at the Liverpool Busi- ness School, Liverpool John Moores University, UK, and the School of xi