Service implementation in manufacturing firms

Abstract

Purpose Given the importance of frontline employees in implementing the service strategy, the purpose of this paper is to examine whether service-orientated human resource management (SHRM) practices are important organizational antecedents to help manufacturing firms gain the benefit of the service strategy. Furthermore, the paper also explores whether SHRM practices promote manufacturing firms’ performance through demand-side search. Design/methodology/approach This study employs survey methodology to examine a research model that explores whether and how SHRM practices influence manufacturing firms’ performance through demand-side search. Data from 151 high-tech manufacturing firms in a science park of China are analyzed to test the research model. Findings This study finds that SHRM practices can enhance manufacturing firms’ performance, and demand-side search plays a mediating role in this relationship. Research limitations/implications Depending on a single science park in China to provide cross-sectional subjective data for the core variables and the choice of firms limits the capacity to generalize the findings. Practical implications These findings suggest that during transition to service business model, manufacturing firms should design supported organizational systems, especially SHRM practices, and commit to demand-side search as an efficient means to gain the benefit of the service strategy. Originality/value The study highlights the crucial role of SHRM practices in the implementation of the service strategy, as well as the mediating role of demand-side search. These results provide some new insights to explain the inconsistent findings in the servitization literature.