The Skills and Cultural Implications in Managing the Institutional Response to the Emergence of a Services Dominant Economy: A South African Perspective

Abstract

The Global and South African economy in particular has moved from a manufacturing (product) to a services dominant orientation. As a consequence many South African engineering enterprises are implementing a “servitization” strategy in order to increase the institution’s revenue stream. The global services economy is also extremely competitive and very volatile in nature and gaining a competitive advantage within this marketplace has very definite skills and cultural implications. This paper focuses on the skills and organisational culture implications in managing the transition from a manufacturing to a services dominant operational setting. The methodology used in conducting the research study, in the first instance, entailed the undertaking of a literature research to gain an understanding of the skills and cultural aspects involved in managing such a transition. In the second instance use was made of a case study undertaken at a South African enterprise that had undergone a servitization process. A correlation between theory and practice was undertaken and the skills implications involved were then also analysed with reference to the prevailing South African business environment to evaluate the consequences of the research findings from a national skills development perspective. The methodology use is consequently analyticaldescriptive and thus qualitative in nature. Important findings emanating from the research is that the servitization process has a very definite organizational culture implication and the skills set required by managers and staff needs to be extended in scope to capture the multi-disciplinary nature of the services economy. KeywordsServitization; South African dual manufacturing and services economy; organizational culture; and T-shaped people skills.