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The 2011 Naples Forum on Service - Service Dominant logic, Network & System Theory and Service Science: integrating three perspectives for a new service agenda.

THE 3 PILLARS OF THE NAPLES FORUM

The 2009 Naples Forum on Service was our first effort to address service development from novel theoretical, methodological and practical perspectives. We wanted to focus on urgent issues for the future and a renewal of the service mainstream. To our joy the Forum was very well received. When we now announce the 2011 Forum, its 3 Pillars are the same but we want to show what has happened between the two events and what is in the making for the next few years.

Cultural and behavioral changes of customers, globalization of systems and competition, developments of information technology and social media, and other changes require new management and marketing theories. Such theories have been brewing for the past decades. Still we are left with a fragmented and confusing view of service. The discipline has reached a turning point calling for more systemic and integrative theory. For example, service research has not visibly contributed to solving the recent global economic crisis. In the core of the crisis are malfunctioning and partially corrupt financial service systems, and health care service is a costly headache for every nation; no pill has managed to cure it. The 3 Forum Pillars, the themes of the 2011 Naples Forum, are catching the imagination of scholars and practitioners worldwide as viable efforts to improve service and service systems to the benefit of companies, government and non-government organizations, consumers and citizens, in brief: be beneficial to every nation. The 3 Pillars are:

Service-Dominant (S-D) logic. Itpresents its message through 10 foundational premises which are a synthesis of the best contributions of the past decades of service research and the exclusion of the non-relevant parts. In brief, these premises put the following to the fore. Service is the fundamental basis of exchange and all social and economic actors (firms, customers, etc.) are resource integrators that interact through mutual service provision to co-create value. “Service” refers to the process of one actor’s resources for another actor’s benefit, and should not be confused with “services” – traditionally referred to as “intangibles” as opposed to tangible goods; goods are merely distribution mechanisms of service provision. Both firms and customers are viewed as active participants in the value-creation process as opposed to the mainstream marketing idea that firms create and deliver value and customers just react and consume it. That is, the customer is always a co-creator of value. Thus, firms can only offer a value proposition; value actualization is performed by customers idiosyncratically, in the context of their own lives. The network aspect is implicit through the statement that all social and economic actors are resource integrators, implying that value creation takes place through interaction in complex networks. S-D logic is intended to capture evolutionary thinking about value creation and exchange and is subject to ongoing, open development. A large number of articles and book chapters are continuously being published. For an overview of S-D logic, see especially two articles by Vargo, S.L. and Lusch, R.F. in the Journal of the Academy of Marketing Science (vol. 36, no. 1, 2008): “Service-dominant logic: continuing the evolution” (pp.1-10), and “Why ‘service’?” (pp.25-38); and further based on the 2009 Naples Forum on Service: Gummesson, E., Lusch, R.F. and Vargo, S.L. (2010), “Transitioning from service management to service-dominant logic: observations and recommendations”, International Journal of Quality and Service Sciences, vol. 2, no.1, pp. 8-22.

Network and Systems Theory. These approaches are not new but so far their potential is little exploited in service research. They are especially helpful in addressing complexity and context; they contribute to a better systemic and holistic understanding of the service-based society. These theoriesoffer both ways of thinking in terms of relationships and interaction, and research techniques. They can be used with different degrees of sophistication: as a basis for verbal treatise (discussion or text), graphics (from simple sketches of nodes and links to unlimited computer generated diagrams), or mathematical applications. Network theory is a systems approach which in marketing has mainly been applied to B2B (business-to-business) marketing but has equal potential for B2C/C2B (business-to-consumer/consumer-to-business) marketing and consequently to marketing in general. Marketing is part of or a perspective on management and to become efficient marketing should be seen in a management context; marketing-oriented management rather than marketing management. Two systems and network approaches are currently the object of growing scholarly and practitioner interest. One is the Viable System Approach (VSA), grounded in systems theory and postulating that every business and its service is a system immersed in a relational context looking for competitive profiles (viability) through interaction with other actors and stakeholders. The other is Many-to-Many Marketing which is a general marketing approach that describes, analyzes and utilizes the network properties of marketing. It applies to marketing in general and recognizes that both suppliers and customers operate in complex network contexts. Other network and systems approaches are welcomed. See further two articles in Service Science (vol. 2, no. 1/2 Spring-Summer, 2010) by  Barile, S. and Polese, F., ”Smart Service Systems and Viable Service Systems”(pp. 21-40); and by Mele, C., Pels, J., and Polese, F., ”A Brief Review of Systems Theories and Their Managerial Applications” (pp. 126-135). See further the book by Golinelli, G.M. (2010), Viable Systems Approach: Governing Business Dynamics”, CEDAM-Kluwer; and Gummesson, E. (2007), “Exit Services Marketing – Enter Service Marketing”,  Journal of Customer Behaviour, vol. 6, no. 2, pp.113-141.

Service Science, Management, Engineering and Design (SSMED), usually just referred to as service science. It is a global development program run by IBM together with more than 250 universities, primarily schools of technology and business schools. It is a proposed academic discipline and research area that would complement – rather than replace – the many disciplines that contribute to knowledge about service. Its philosophy is in line with S-D logic, many-to-many marketing, and VSA. The ultimate goal of service science is to apply scientific knowledge on the design and improvements of service systems for business and societal purposes.IBM wants to utilise information technology to design a ”smarter planet” where people are better served in a wide range of endeavours such as water supplies, electricity distribution, public transport, education, and health care.The concern is that we do not master seamless and reliable service systems at a time when systems are becoming increasingly complex and global, making us increasingly vulnerable to systems sluggishness and failure. Every service system is both a provider and client of service that is connected by value propositions in value-creating networks and systems. Read more on service science on Google but stick to entries from the past six months; the program is developing fast and older entries may be misleading. For a recent and condensed update, see Maglio, P.P. and Spohrer, J., (2008), “Fundamentals of service science”, Journal of the Academy of Marketing Science, vol. 36, no.1, pp.18-20; and Maglio, P., Kieliszewski, C.; Spohrer, J., eds. (2010), Handbook of Service Science, Springer, with contributions from 67 authors.

Connecting the themes. As is already obvious from the above descriptions, the 3 Pillars are supportive to each other and the Forum treats them in this integrative spirit. S-D logic transforms the divides between goods/services and supplier/customer into value propositions, resource integration, and co-created service. Service science attempts to provide better and innovative service systems. They foster the development of a new theory of service, and require methodologies that address complexity and context and the whole and the parts, especially through network and systems theory. The integrative approach further attempts to bridge the gap between service theory and service practice.