The doctoral dissertations of the former Helsinki University of Technology (TKK) and Aalto University Schools of Technology (CHEM, ELEC, ENG, SCI) published in electronic format are available in the electronic publications archive of Aalto University - Aaltodoc.

The Impact of Knowledge-Intensive Service Provision on SME Performance: A Study in Software Industry

Aku Valtakoski

Doctoral dissertation for the degree of Doctor of Philosophy to be presented with due permission of the School of Science for public examination and debate in Auditorium TU2 at the Aalto University School of Science (Espoo, Finland) on the 13th of May 2011 at 12 noon.

Dissertation in PDF format (ISBN 978-952-60-4096-7)   [17624 KB]
Dissertation is also available in print (ISBN 978-952-60-4095-0)


Manufacturing firms increasingly include services in their offerings. Despite growing scholarly research on this phenomenon, there are still significant gaps in the current knowledge, particularly regarding the impact of service provision on product firm performance.

This dissertation studies the impact of knowledge-intensive service provision and service capability on the performance of small and medium sized product firms in the context of software industry. Given the lack of prior theorizing about service provision, we used an inductive research design that consisted of three phases: an exploratory in-depth case study of one Finnish enterprise software firm; a comparative multiple case study of nine software firms; and a cross-sectional statistical study of 116 firms based on data from the Finnish software industry.

In the in-depth case study, we identified the knowledge-based view of the firm as a potential theoretical grounding for understanding the impact of service provision. Based on this grounding, and cross-case analysis of the nine case firms, we identified 20 propositions regarding the impact of professional and development service provision on revenue growth and firm profitability, with various organizational and organizational contingencies. The statistical analysis provided weak to moderately significant support for most of these propositions, with contradictory evidence against two propositions. This contradictory evidence lead us to review and revise these propositions, leading to a more coherent theoretical explanation of service provision impact.

The results of the study indicate that knowledge-intensive service provision does have an impact on product firm performance. However, the two types of service had opposite effects on performance. This impact was also moderated by state of competitive environment, offering characteristics, as well as internationalization. We also found that service capability has a significant positive impact on product firm performance if the firm has internationalized or uses service partners.

This dissertation contributes to research on the role of services in product firms by providing additional evidence on service provision in the ICT sector, as well as the impact on firm performance, by developing a theoretical framework for understanding the strategic impact of services, and by studying service provision in the context of small, entrepreneurial firms.

Keywords: integrated solutions, knowledge-intensive services, strategy, small and medium sized enterprises, software industry

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Last update 2011-09-22