Abstract
Managers of small firms who adopted Service Dominant (S-D) logic will orient and align their businesses with this strategy. S-D orientation can be beneficial for small firms because it postulate value co-creation with its customers through cooperation.For that reason, we hypothesize, that S-D orientation of small firms will positively influence its growth. The empirical investigation is based on a sample of sixty-one small construction firm in Serbia. We test our hypothesis using partial least square (PLS) regression. The results show that S-D orientation has the significant negative influence on small firm growth. For that reason, we did not find enough empirical evidence to support our hypothesis. At the end, we draw some conclusion and set implication for further research and practice. Key words: Service dominant orientation, service dominant logic, small firm growth
Highlights
Service Dominant (S-D) orientation is an important strategic behavior of a firm that is a consequence of S-D strategic way of thinking
The results show that S-D orientation has the significant negative influence on small firm growth
This paper first gives a brief overview of literature, later we describe the research method and present the research results, and we discuss the findings and their implication in the practice
Summary
S-D orientation is an important strategic behavior of a firm that is a consequence of S-D strategic way of thinking. S-D logic is the novel view of economical exchange that shifts the focus of value-creation process from product to customer (Gronroos, 2006) This view emphasizes that customer is always a co-producer of value in service-provision process (Vargo and Lusch, 2004). An adoption of this strategic logic can be beneficial for small firms, because it improves their service capabilities and result in co-creation of values with customers. Because small firms are limited in their resources, they can integrate resources through service provision and cooperate with customers From these perspectives, goods are the instrument that transmits operant resources to customer, and starts the process of value co-creation. This paper first gives a brief overview of literature, later we describe the research method and present the research results, and we discuss the findings and their implication in the practice
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