Service-Dominant Logic: Theoretical Foundations and Directions

Service-dominant (S-D) logic is a metatheoretical framework for understanding economic activity. It depicts value creation as a collaborative process in which resource-integrating actors perform service-for-service exchange in nested and overlapping service ecosystems enabled and constrained by actor-generated institutions. It is a counter-logic to the conventional goods-dominant, firm-centric, linear perspective to exchange that emphasizes the production and distribution of value-laden goods. S-D logic offers a holistic, dynamic, and systemic understanding of value cocreation across a wide configuration of actors. S-D logic is identified as the theoretical basis of human-to-human (H2H) marketing, a new framework in marketing that emphasizes humanism in efforts to address existential human problems while mutually benefiting customers and marketers, as well as upholding ethical commitment among stakeholders. S-D logic provides a broader view of collaborative value creation that emphasizes the need for firms to maintain quality relationships with multiple stakeholders for long-term benefits. By promoting business decisions mutually beneficial for customers, employees, and society in general, S-D logic offers a perspective that can potentially reduce tensions and narrow the gap between business and ethical decisions, therefore accommodating a humanistic approach to marketing. In this chapter, we provide a brief introduction to the basic principles of service-dominant (S-D) logic, explain the foundational concepts in S-D logic, i.e., service, resources, actors, value, and institutions as well as depict the conceptual turns that S-D logic has undergone since its inception, including the utilization of an actor-to-actor designationActor-to-actor designation A2A, increased emphasis on institutions, institutional arrangements, and service ecosystems, as well as the consideration of a multi-level approach in analyzing theories and empirical observations. The diffusion of S-D logic within and beyond the marketing discipline can partly be attributed to its associated unifying, transcending, accommodating, and transformative nature. Consequently, scholars increasingly identify S-D logic as a metatheoretical framework that can facilitate the development of a general theory of markets on which normative theories of marketing can rest. This chapter briefly outlines pathways toward S-D logic’s progress toward theory formalization by identifying the accomplishment of lexicon building and axiomatization and underlining the ongoing need to pursue theory interpretation, which requires more exploration of emerging areas of inquiry, development of marketing-born mid-range theories, and theory cocreation involving a broad range of market actors.