The first chapter is written by Robert F. Lusch and Stephen L. Vargo and titled
âAn 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 âServices 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 âEvolving to a New Dominant Logic for Marketingâ
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
âWhy Service-Dominant Logic?â 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.
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 â 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 firmsâ 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 â 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 â i.e., wouldn't most economic activity prior to the Industrial Revolution be considered service based â 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 goodsâservices 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) â the process of using one's resources for the benefit of another actor â 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 â service through mass production.
This distinction represents much more than just a semantic manipulation or the replacement of âgoodsâ with âservices'. It represents a shift from a focus on firm output with some sort of embedded âgoodnessâ (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 â 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 â 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...
