BREVIS Latin American Business & Economic Report
Year II, Issue. 9 | May 22, 2017
Dr. Javier Reynoso Professor of Service Administration EGADE Business School Tecnológico de Monterrey jreynoso@itesm.mx
TOWARD A SERVICE-DOMINANT LOGIC IN LATIN AMERICA
O
n any given day, we use a wide range of services, in transportation, communications, information, lodging, food, finance, trade, education, entertainment, and more.
However, we are seeing the winds of change. The first steps toward developing a service-based outlook in organizations were taken in Finland and Sweden more than three decades ago, and the service-dominant logic has now spread to many other countries.
Besides these lifestyle services, organizations are also demanding more and more business-to-business (B2B) services: logistics, maintenance, couriers, financial, trade, legal, design, professional, and other services, all implying very complex service networks in different business ecosystems. Organizations and governments also build service networks.
Under a service-dominant logic, actors do not exchange goods but specialized competences (knowledge and skills). Goods are not final products that are transformed and traded, but rather are transmitters of resources with intrinsic expertise; there are intermediate products that other actors use as devices in the value-creation process. According to this logic, the client is not a passive recipient of these goods whom we segment, inform, tend to, and so on. The client is an active co-producer of the service. The producer does not determine the value, and it is not intrinsic to goods; it is not defined in terms of value exchange.
Today, people, organizations, and institutions take part in recently emerging business models where value co-creation takes place among different actors through shared resources and needs. As obvious as it may sound, some people are still unaware of it. Today, we live in a service society and economy: 63% of Mexico’s GDP is from service activities, and more than 60% of the workforce is in this sector; furthermore, a large part of the population earns a living in the informal economy. Still, Mexico has a product-based logic. Language is still directed by tangible goods related to an organization’s activities and performance, and products and services are still considered as independent concepts.
According to this logic, the beneficiary perceives and determines value in terms of use value; value is the result of the beneficial uses of resources. Businesses do not create or add value; they only make value propositions. In the service-dominant logic, interactions with clients are not merely transactional; they are relational. The client is an active resource who participates in the co-production and in exchanges.
Wealth is obtained by exchanging specialized knowledge and skills”
Therefore, wealth is not obtained and does not lie in tangible resources and surplus goods; it does not mean having, controlling, and producing passive resources. Wealth is obtained by applying and exchanging specialized knowledge and skills. According to this idea, all businesses are service businesses. ❚ 1 BREVIS