Theoretical contributions

The current dissertation aims to advance the knowledge on industrial OBS offerings from the provider point of view. Most of the articles appended to the dissertation contribute to more than one OBS literature stream (with the exception being Article 1, which focuses solely on the semiotics of the OBS concept and definitions). To address the interplay between objective and subjective accounts characterizing the social reality of OBS offerings, a structurationist standpoint (Gioia & Pitre; Giddens) was chosen. The more objective characteristics (e.g., profitability effects) were explored from a functionalist angle, while the more subjective accounts (e.g., legitimacy) were approached interpretively. Bridging the boundaries of the two distinct paradigms also necessitated a mixed methodology research design (Ihantola & Kihn, 2011) for the dissertation as a whole.

Paradigmatic flexibility helped the researcher pursue the research objective of a multiperspectival contribution that reflects all three OBS literature streams (i.e., concept, consequences and requirements; Schaefers et al., 2020). On the other hand, the inherent weakness of multiperspectivity is that it restricts the amount of detail that the researcher can go into regarding each perspective (the limitations of the dissertation are discussed more thoroughly in section 5.3). As mentioned earlier, Schaefers et al. (2021) divided the literature related to OBS offerings into three streams.

The first stream considers the OBS concept and can be further divided into three areas of focus: definition(s), types and design elements (Schaefers et al., 2021, p.

468). In terms of the OBS concept literature stream, the current dissertation offers two clear contributions. First, Article 1 argues that associated contracts should be termed OBCs instead of PBCs because “outcome” is a more univocal term than

“performance” and because the latter term should be reserved for describing the manner in which a mechanism operates in the contract language. Moreover, Article 1 elaborates that the term “performance” is rooted in the PBL tradition and that marketing and innovation scholars use the term “outcome” more frequently.

Second, extant research has found that OBS offerings fall under two types:

contracts based on availability (aOBCs) and contracts based on economic results (eOBCs; Böhm et al., 2016). The existence of the latter has been called into question (Grubic & Jennions, 2018a). To refute this suggestion, Article 3 maps the ecosystem of an OBS offering in the energy technology sector. The case’s findings posit that eOBCs exist: because the customer sells the generated power onwards for a predetermined price (agreed to in the PPA), the OBS provider operating the power generation process practically guarantees sales revenues for the customer.

Moreover, since unforeseeable downtimes are penalized by liquidated damages clauses relative to the revenues lost, such contracts are evidently based on economic outcomes.

The second OBS literature stream identified by Schaefers et al. (2021) is related to the consequences of OBS offerings. The authors divide the literature into positive and negative consequences. For example, OBS offerings guarantee long-lasting sales revenues for providers (Visnjic et al., 2018) but increase their risk (Caldwell

& Howard, 2014). The current dissertation contributes to the given stream by highlighting both positive and negative consequences. First, Article 2 finds that OBS offerings positively affect manufacturer profitability. This extends the external validity of the positive case findings with respect to profits in different industries (e.g., mining; Patra et al., 2019). On the other hand, because industrial OBS offerings are complex wholes customized to suit different customer needs (Kohtamäki, Parida, et al., 2019), they may be cumbersome to scale up. Indeed, Article 2 also found that scale negatively affects OBS provider profitability. Article 3 also contributes to knowledge on the negative consequences of OBS offerings.

That is, the findings posit that if the customer remains the owner of the system operated, he or she may leverage the relationship for learning purposes and terminate the OBS relationship once he or she has managed to develop the operational capabilities needed to internalize the outcome production processes.

This result contrasts with earlier positive findings pertaining to participant learning in OBS relationships (see, e.g., Visnjic et al., 2017). Lastly, Article 4 reveals some sources of plausible legitimacy struggles emerging during an OBS

relationship. These struggles must be managed; otherwise, the inherently high contract specificity makes dissolving OBS arrangements relatively effortless for a customer who ceases to consider the provider’s participation to be legitimate.

The third and final OBS literature stream considers the requirements for successful OBS deliveries (Schaefers et al., 2021). For instance, OBS deliveries are more potentially successful when the relationship between the partners is well grounded and complemented by relational assets (Ng et al., 2013). Building on previous findings suggesting that OBS deliveries are more likely to be effective when providers have a strong investment culture, Article 2 shows that the R&D investments of providers do indeed moderate the previously mentioned negative effect of scale on OBS provider profitability. It is suggested in the article that investments in digital servitization technologies and solution modularization may explain the mitigating effect, as they help manage scale-induced issues. Article 4, on the other hand, stresses the importance of legitimacy as a requirement for OBS relationship continuity. Furthermore, it unpacks four discursive legitimation strategies that a provider may utilize to defend, preserve and redeem legitimacy.

Moreover, by combining the concepts of trust and legitimacy, the paper contributes to the discursive legitimation literature (Erkama & Vaara, 2010; Vaara

& Monin, 2010; Vaara & Tienari, 2008) by discovering a new strategy named trustification.

Beyond the contributions to the core literature on OBS offerings, the current dissertation also offers multiple contributions to the servitization literature in general. First, Article 1 contributes to the servitization literature aiming to provide terminological clarity in the field (e.g., (Brax & Visintin, 2017; Kowalkowski, Gebauer, Kamp, et al., 2017). This is important because, as Rabetino et al. put it,

“the coexistence of multidisciplinary viewpoints, methods, and terminologies has increased complexity, which limits knowledge accumulation” (2018, p. 351).

Moreover, servitization-related terminology has begun to appear in like-minded literature that does not make use of the core term itself (Kamp & Parry, 2017). On the one hand, similar services appear under varying names in different studies, and on the other hand, the same names are used to denote structurally different services (Brax & Visintin, 2017, p. 29). Therefore, there is a clear demand for contributions that aim to clarify/unify the conceptual and/or terminological base of the servitization literature. Article 1 responds to this demand by arguing that the

“outcome-based” prefix should be preferred over the “performance-based” prefix when describing service contracts in which provider remuneration is primarily based not on the required time and materials but on the consequent results of activities. In conclusion, it is in the common interest of the servitization community to strive towards a unified lexicon because the resulting coherency will

make schools of thought more acceptable among fellow scholars and academic editors (for a good example, one may refer to service-dominant logic; Kohtamäki

& Rajala, 2016; Lusch & Vargo, 2014).

Article 2, on the other hand, contributes to a branch of the servitization literature focusing on the financial consequences of servitization (e.g., Eggert et al., 2011, 2014; Fang et al., 2008; Kohtamäki, Partanen, Parida, et al., 2013). While other studies often report nonlinear relationships between different industrial service offerings and manufacturer profits (e.g., R&D services; Kohtamäki et al., 2013), Article 2 shows a direct effect in the case of OBS offerings. On the other hand, the results align with earlier findings that posit that large manufacturers generate lower profits from services than smaller manufacturers (Neely, 2008). The results of Article 2 confirm that this is also the case for OBS provider firms. However, building on the Schumpeterian argument that firm size positively correlates with R&D investments (Shefer & Frenkel, 2005), it is shown that R&D investments do indeed mitigate the negative effect of scale on profitability in the case of OBS provider firms. This contribution also addresses the literature that considers the types of resources and capabilities that firms engaging in servitization in general (Forkmann et al., 2017; Theoharakis et al., 2009) and advanced services in particular (Baines & Lightfoot, 2013; Sjödin, Parida, & Kohtamäki, 2016; Story et al., 2017) need to be successful. Particular notions of digital servitization (Coreynen et al., 2017; Linde et al., 2020; Schroeder et al., 2020; Sklyar et al., 2019) and modular service design (Hellström, 2014; Rajala et al., 2019; Salonen et al., 2018) as potential targets for investment are presented in Article 2.

Lastly, Articles 3 and 4 both contribute to a strand of the servitization literature that focuses on the relational aspects between service providers, customers and other ecosystem actors (Gebauer & Kowalkowski, 2012; Sjödin et al., 2019; Sjödin, Parida, & Wincent, 2016; Tuli et al., 2007). The relational aspects are arguably crucial for service “enthusiastic” firms (Raddats & Kowalkowski, 2014) because active participation in customers’ processes will inevitably increase the collaborative interactions with customers, suppliers and even competitors (Raza-Ullah, 2020). By mapping an ecosystem of a specific OBS offering, Article 3 elaborates how system ownership may induce opportunistic customer behaviors and thus cause a legitimation crisis with respect to provider participation in the long term. Thus, the findings explain how the social structure may influence interactions. Article 4, in turn, places more emphasis on social construction. That is, providers are not just spectators in legitimation crises. They can employ discursive legitimation strategies to reconstruct their legitimacy as a value-adding partner. The legitimation discourse not only reflects the current activities of the provider but also contains the potential for innovating them. As legitimacy is a

social factor that, to date, has not received attention in the servitization literature, Article 4 makes a unique contribution to understanding the relational aspects of servitization.