The SAGE Handbook of Service-Dominant Logic

Stephen L. Vargo, Robert F. Lusch, Stephen L. Vargo, Robert F. Lusch, Author

• Publisher: SAGE Publications Ltd
• Year: 2018
• Print ISBN: 9781526402837
• eBook ISBN: 9781526455505
• Edition: 1
• Topic: Business
• Subtopic: Marketing
• Index: Business

Service-Dominant Logic presents a major paradigm shift in thinking about value creation and markets, moving from a 'goods/product' logic to a logic that treats the process of service provision as the basis of all exchange, both commercial and social. This timely Handbook brings together chapters written by a stellar cast of expert authors from around the globe, arranged around eleven core themes, to provide a comprehensive overview of key issues, developments, debates and potential future directions for this dynamic field of study:

Part 1: Introduction and Background

Part 2: Value Cocreation

Part 3: Service Exchange

Part 4: Service Ecosystems

Part 5: Institutions and Institutional Arrangements

Part 6: Resources and Resource Integration    

Part 7: Actors and Practices

Part 8: Innovation  

Part 9: Midrange Theory

Part 10: Selected Applications  

Part 11: Reflections and Prospects

This Handbook is an essential reference text for scholars, students, consultants and advanced practitioners across a wide range of business & management practices and academic disciplines.

Part I Introduction and Background

Stephen L. Vargo

The first section of the Handbook provides the reader an introduction to the metatheoretical framework of S-D logic by discussing its key concepts and axiomatic assumptions. It also sheds light on how S-D logic came to be and how its narrative of value cocreation within human societies has evolved, not just over the last 15 years, but also through diverging and converging scholarly thought dating back thousands of years. The section also discusses the transcending, accommodating, unifying, and transformative nature of S-D logic and how these qualities enable scholars and practitioners to understand both business and society in a fundamentally different way from before. The section comprises three chapters that are each introduced here briefly.

The first chapter is written by Robert F. Lusch and Stephen L. Vargo and titled ‘An Overview of Service-Dominant Logic'. The chapter highlights the development of S-D logic and its core axioms and foundational premises. Some of this will be quite familiar to seasoned S-D logic supporters but should be especially useful for those less familiar with S-D logic's metatheoretical framework.

The second chapter is a reprint of an article by Stephen L. Vargo and Fred W. Morgan from 2005, titled ‘Services in Society and Academic Thought: An Historical Analysis'. The article was originally published in the Journal of Macromarketing almost immediately after the publication of the initial ‘Evolving to a New Dominant Logic for Marketing’ article in Journal of Marketing. It provides a deep background and justification for the service-based understanding of exchange and value cocreation by tracing the development of economic activity and the sociopolitical, philosophical, and scientific agenda from which the often still prevailing goods-centered paradigm of marketing emanated. The authors suggest that the several services-centered models of exchange, with some similarities to S-D logic, that were abandoned during the development of economic philosophy and science, provide a confirmatory backdrop for the advancement of S-D logic today. It should be noted that even though the original article discusses these themes within the context of marketing, the same insights are also applicable to much broader fields of social sciences.

The third chapter is by Stephen L. Vargo and Kaisa Koskela-Huotari, and is titled ‘Why Service-Dominant Logic?’ The aim of this chapter is to explore some of the scholarly and practical benefits that might be realized if one takes the time to shift from a G-D logic to an S-D logic frame of reference. To do this, the authors suggest several key characteristics of S-D logic that contribute to its applicability, generalizability, and robustness. They further suggest that these characteristics, along with the specifics of S-D logic, can inform a series of conceptual inversions that might be particularly useful to scholars, as well as a series of counterintuitive strategic insights that might be useful to managers. Together, these contributions set the scene for the more detailed elaborations of the fundamental aspects of S-D logic provided in the subsequent ten sections. It is highly recommended that Chapter 41 is read in conjunction with this section, as it digs deeper into both the development and the future directions of S-D logic.

1 An Overview of Service-Dominant Logic1

Robert F. Lusch

Stephen L. Vargo

Introduction

Over the last several decades, there has been an explosion of interest in service(s). This is often at least partially attributed to an apparent increase in the role of services in developed countries – that is, the contention that the economies of developed countries are shifting from being manufacturing-based to services-based. Concomitant with this apparent shift, there has been an explosion in firms’ reorientation toward characterizing themselves in terms of services rather than manufacturing, as well as an exponential increase in service-oriented, academic literature in essentially all the business disciplines. In short, it appears that there has been a service revolution. Thus, on the surface, it might be assumed that the shift to a service economy is the compelling motivation for this service-oriented book. However, it is important to understand from the outset that this is not a book about a services revolution at all; in fact, it is not even about services, at least in the traditional sense of the word – essentially meaning intangible goods.

Rather, service-dominant (S-D) logic (Vargo and Lusch, 2004a, 2008, 2016) is a research stream that has emanated over the last 20 years from a concern with two related and problematic, if not intractable, issues associated with the traditional understanding of service(s): (1) does it really make sense that services only become economically important following industrialization – i.e., wouldn't most economic activity prior to the Industrial Revolution be considered service based – and (2) why, if goods are so uniquely foundational to economic activity, as has been assumed, has the problem of making a robust distinction between goods and services been so intractable? S-D logic addresses these and derivative issues and proposes an alternative orientation that transcends the goods–services divide by refocusing the purpose of economic activity on value cocreation through service exchange.

S-D logic offers a metatheoretical framework that identifies service (usually singular) – the process of using one's resources for the benefit of another actor – rather than goods, as the fundamental basis of economic (and social) exchange. In S-D logic, goods are service-delivery mechanisms. That is, S-D logic represents an emerging service realization rather than a reflection of a service revolution. Thus, in S-D logic, all economies are service economies and the Industrial Revolution represents a particular form of service provision – service through mass production.

This distinction represents much more than just a semantic manipulation or the replacement of ‘goods’ with ‘services'. It represents a shift from a focus on firm output with some sort of embedded ‘goodness’ (utility) to a focus on the process of actors reciprocally using their resources (e.g., applied knowledge and skills), with other actors, for mutual benefit – that is, for mutual value creation. Once this foundational shift is made, a whole host of auxiliary, value-related shifts in understanding come into focus, such as what value means, how value is created, and how value is assessed. This process orientation requires zooming out beyond the traditional unit of analysis of exchange, the dyad (e.g., firm and customer), and taking a wider, systems orientation on value creation, even to understand what is happening within the dyad. This reorientation informs both research and practice in profoundly different ways compared with the more linear, value creation and delivery model of a goods-centered orientation.

It is also important to recognize that, while S-D logic is often associated with the work of Vargo and Lusch (e.g., 2004a, 2008, 2016) and sometimes with the discipline of marketing, it is actually both much more deeply seated and more broadly applicable. S-D logic is an attempt to capture and synthesize reorientations in thinking about economic and social activity for tens if not hundreds of years. It has also been elaborated, since 2004, by a large and growing community of associated scholars and practitioners, and has had impact in a full range of business and non-business disciplines (for an overview see Vargo and Lusch, 2017).

The S-D logic narrative is a fairly simple one that is primarily informed by just a handful of concepts and five axioms. In fact, in addition to the issues stated above, it was motivated by a desire to simplify the conceptual models of economic, and, mostly, social exchange. Yet, to the novice reader, it can be a challenge to grasp, at least initially. This is because the lexicon used for discussing S-D logic is, necessarily, mostly the same lexicon associated with the traditional understandings – usually referred to as goods-dominant (G-D) logic. However, some of these concepts have connotations that are different from the G-D logic meanings.

The purpose of this chapter is to provide an introduction to the core framework of S-D logic. To accomplish this purpose, we (1) outline the historical roots and development of S-D logic, (2) introduce its core c...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Acknowledgements
• Contents
• List of Figures
• List of Tables
• Notes on the Editors and Contributors
• Service Economy, Service Ecology, and Service Morality
• Preface
• Part I Introduction and Background
• 1 An Overview of Service-Dominant Logic1
• 2 Services in Society and Academic Thought: An Historical Analysis1
• 3 Why Service-Dominant Logic?
• Part II Value Cocreation
• 4 Value Cocreation: Conceptualizations, Origins, and Developments
• 5 Value Cocreation: An Ecosystem Perspective
• 6 The Cocreation of Brands
• 7 The Contextual Nature of Value and Value Cocreation
• Part III Service Exchange
• 8 Reframing Exchange: A Service-Ecosystems Perspective
• 9 Ethical Foundations for Exchange in Service Ecosystems
• 10 The Dynamic Context of Service Exchange: Rethinking Service Context from a Performativity Lens
• 11 How Service Exchange Drives Market (Re)formation
• Part IV Service Ecosystems
• 12 Service Ecosystems: A Timely Worldview for a Connected, Digital and Data-Driven Economy
• 13 Systems Behaviour and Implications for Service-Dominant Logic
• 14 The Study of Service: From Systems to Ecosystems to Ecology
• 15 Service Systems, Networks, and Ecosystems: Connecting the Dots Concisely from a Systems Perspective1
• Part V Institutions and Institutional Arrangements
• 16 Institutions and Institutionalization
• 17 Coordinating Resource Integration and Value Cocreation through Institutional Arrangements: A Phenomenological Perspective
• 18 Institutional Change in Service Ecosystems
• 19 Institutional Work for Value Co-Creation: Navigating amid Power and Persistence
• Title
• 20 Resource Integration: Concepts and Processes
• 21 The Sustainability of Service Ecosystems
• 22 Emergence of Novel Resources in Service Ecosystems
• 23 Resource Integration Processes: The Dialectic of Presence and Absence
• Part VII Actors and Practices
• 24 Analyzing Service Processes at the Micro Level: Actors and Practices
• 25 Untangling the a priori Differentiation of Service-Exchanging Actors
• 26 Using Practice Theory for Understanding Resource Integration in S-D Logic: A Multinational Study of Leading-Edge Consumers
• 27 Attending to Actors and Practices: Implications for Service-Dominant Logic
• Part VIII Innovation
• 28 The Need for a New Innovation Paradigm and the Contribution of Service-Dominant Logic
• 29 A Unifying Perspective for the Technological, Business Model, and Market Aspects of Innovation
• 30 Enhancing the Understanding of Processes and Outcomes of Innovation: The Contribution of Effectuation to S-D Logic
• 31 A Dynamic Alternative to Linear Views on Innovation: Combining Innovating in Practice with Expansive Learning
• Part IX Midrange Theory
• 32 Advancing Knowledge about Service-Dominant Logic: The Role of Midrange Theory
• 33 Tracking the Evolution of Engagement Research: Illustration of Midrange Theory in the Service-Dominant Paradigm
• 34 Developing Midrange Theory for Emerging Markets: A Service-Dominant Logic Perspective
• 35 Bridging S-D Logic and Business Practice with Midrange Theory: From Dichotomies to Relational Dualities and Beyond, in Central Marketing Concepts
• Part X Extending Service-Dominant Logic
• 36 Extending Service-Dominant Logic – Outside Marketing and Inside Managerial Practice
• 37 Extending Innovation – from Business Model Innovation to Innovation in Service Ecosystems
• 38 Designing for Service: From Service-Dominant Logic to Design Practice (and Vice Versa)
• 39 On the Impact of Autonomous Technologies on Human-centered Service Systems
• Part XI Reflections and Prospects
• 40 Toward a Grand View of Service: The Role of Service-Dominant Logic
• 41 Service-Dominant Logic: Backward and Forward
• Glossary
• Index