The role of servitization in turbulent markets: evidence from Malaysian manufacturing companies

This study explores the role of servitization in turbulent business environments by examining the antecedent and moderating effects of environmental turbulence (i.e., market turbulence, technological turbulence, and competitive intensity) on the relationship between servitization and firm performance. Data was gathered from 180 senior managers of Malaysian manufacturing companies. The results revealed that environmental turbulence affects servitization and firm performance. Interestingly, the moderating effects of environmental turbulence and competitive intensity on the relationship between servitization and firm performance were not significant, suggesting that servitization plays a vital role in turbulent environments and can perhaps mitigate the negative effects of such environments on firm performance. Furthermore, the results show that environmental turbulence increases absorptive capacity, and servitization mediates the relationship between absorptive capacity and firm performance. Manufacturing firms, especially those in developing countries with limited resources, are advised to undertake servitization to increase firm performance in turbulent environments. They are also encouraged to enhance their absorptive capacity, aiming at facilitating the servitization strategy. Limitations and directions for future research are also discussed.