Antecedents of demand-side search in servitization of manufacturing firms : the critical role of service-oriented HRM practices and market capability

Purpose: The purpose of this paper is to explore the antecedents of demand-side search in service strategy of manufacturing firms. In particular, this study examines whether service-oriented human resource management (HRM) practices promote demand-side search by enhancing firms’ market capability as well as how top management service commitment and service organizing moderates this relationship in manufacturing firms. Design/methodology/approach: To test this research model, this study obtains survey data from two distinct informants of 279 manufacturing firms in China. Data were collected applying a standard questionnaire in a five-point Likert scale. The hypotheses are tested using hierarchical regression analysis and partial least squares. Findings: Results show that service-oriented HRM practices can promote demand-side search by enhancing firms’ market capability. Furthermore, it is found that top management service commitment negatively moderates the relationship between service-orientated HRM practices and demand-side search, while service organizing positively moderates this relationship. Research limitations/implications: Depending on cross-sectional subjective data for the core variables and the choice of Chinese manufacturing firms limit the capacity to generalize the findings. Practical implications: This research suggests that service-oriented HRM practices are important drivers of demand-side search activities and to take advantage of service-oriented HRM practices, firms should commit to market capability development. In addition, it is better to match service-oriented HRM practices with other service-oriented organizational parameters such as top management service commitment and service organizing. Originality/value: The study highlights the crucial role of service-oriented HRM practices in demand-side search, the mediating role of market capability and the moderating role of other service-oriented organizational parameters such as top management service commitment and service organizing. This study advances research on knowledge search, servitization and strategic HRM.