The organisational environment’s impact on the servitization of manufacturers

•Manufacturing companies are servitizing.•The dynamics of this transformation has not yet been well understood.•Servitization is seen as an applicable strategy for any manufacturer despite the operational environment.•We offer propositions to present the effects of six different environmental factors.

The transformation of product-centric businesses towards service provision is claimed to be a viable strategy for manufacturers across industries and sectors. However, previous research on servitization has not paid sufficient attention to explicitly investigating its suitability for manufacturers operating in different organizational environments. Accordingly, the purpose of this study is to establish propositions on the contingency factors in the organizational environment that affect the servitization of manufacturers at the industry level. Drawing on the theory of organisational ecology, the propositions include the effects of population density, competing populations, resource dependency, institutional linkages, technology, and political forces. Our study suggests that the operating environment explains at least part of the difficulties in the servitization process, which have been identified in previous studies, but whose causes have remained without full explanation. The study adds to the current understanding of the contingencies of transformation toward service provision and contributes to the managerial decision-making processes related to servitization.