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Mitigating adverse customer behaviour for product-service system provision: An agency theory perspective
Luleå University of Technology, Department of Business Administration, Technology and Social Sciences. (Entreprenörskap och Innovation)ORCID iD: 0000-0002-8939-5509
Luleå University of Technology, Department of Business Administration, Technology and Social Sciences.
Luleå University of Technology, Department of Business Administration, Technology and Social Sciences.
(English)In: Industrial Marketing Management, ISSN 0019-8501, E-ISSN 1873-2062Article in journal (Refereed) Accepted
Abstract [en]

Offering product-service systems (PSS) arguably results in economic, environmental and social benefits but also entails significant challenges related to relational dynamics between the provider and the customer. Although prior studies suggest that adverse customer behaviour during PSS provision is likely, they provide a limited theoretical understanding of the conceptualization of such relational problems and, more importantly, offer few possible ways to address these problems. By applying the lens of agency theory, this study examines PSS provider-customer relational problems and solutions. Therefore, the purpose of this study is to identify agency problems and propose mechanisms to mitigate adverse customer behaviour in PSS provision. Based on a multiple case study approach involving two manufacturing companies, several results are presented. First, we identify and describe two underlying reasons for adverse customer behaviour. These reasons are associated with goal differentiation and monitoring challenges. Second, different agency mechanisms (i.e. sharing, monitoring and trust) are presented as approaches to mitigate the likelihood of adverse customer behaviour. The matching of agency problems with agency mechanisms to mitigate these problems lays the groundwork for developing a framework for agency situation evaluation during the formation and ongoing phases of the PSS agreement. In addition, the choice of agency mechanism is found to be correlated with the maturity and type of customer relationship and can change over time as new customers become known and then become loyal. The proposed framework has major theoretical implications for the PSS literature as well as managerial implications for large manufacturing companies engaged in PSS provision.

National Category
Social Sciences
Identifiers
URN: urn:nbn:se:ltu:diva-68346OAI: oai:DiVA.org:ltu-68346DiVA, id: diva2:1197735
Available from: 2018-04-13 Created: 2018-04-13 Last updated: 2018-05-14
In thesis
1. Towards a framework for product-service system business model implementation
Open this publication in new window or tab >>Towards a framework for product-service system business model implementation
2018 (English)Doctoral thesis, comprehensive summary (Other academic)
Alternative title[sv]
Implementering av affärsmodeller: Ett ramverk för produkt-tjänstesystem
Place, publisher, year, edition, pages
Luleå: Luleå tekniska universitet, 2018
Series
Doctoral thesis / Luleå University of Technology 1 jan 1997 → …, ISSN 1402-1544
National Category
Business Administration Other Engineering and Technologies not elsewhere specified
Research subject
Entrepreneurship and Innovation
Identifiers
urn:nbn:se:ltu:diva-68716 (URN)978-91-7790-148-8 (ISBN)978-91-7790-149-5 (ISBN)
Public defence
2018-09-05, A109, Luleå, 09:30 (English)
Opponent
Supervisors
Available from: 2018-05-14 Created: 2018-05-14 Last updated: 2018-05-14Bibliographically approved

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Citation style
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