Other publication
Organizing for solution business: internal vs. external resource integration
Authors: Anna Salonen, Elina Jaakkola
Conference name: 29th Annual IMP Conference
Publication year: 2013
Web address : https://www.impgroup.org/paper_view.php?viewPaper=8025
Despite increased importance of solution business, we know surprisingly little about the organizational configurations through which manufacturers seek access to, and integrate resources required for developing and delivering solutions to extensive customer needs. Existing literature identifies two ideal forms: the systems seller approach; where the firm primarily uses resources based in the organization; and the systems integrator approach where the firm coordinates resources residing outside its boundaries. This paper explores the drivers behind choice of systems seller or systems integrator approach, as the manufacturer transitions towards solution based business. We apply an abductive approach where literature on solutions, servitization, industrial networks, strategic management, and organizational modularity is combined with rich empirical material to identify and conceptualize the premises for choosing an appropriate organizational mode of solution provision. We draw on two in-depth case studies of global manufacturers, Wärtsilä and Kone, operating in the metal engineering sector. The cases represent manufacturing companies that have increasingly transitioned to solution based business, but have followed very different paths. This paper contributes to solution research by increasing understanding of manufacturing firms’ approaches for organizing for solution business, the drivers prompting these choices, and the related organizational challenges and opportunities.