Making Sense of Servitization

Sammanfattning: As many companies are making strategic shifts towards servitization business models, there has been increasing requests for research on accounting for servitization. Firms that are pursuing such a shift serve as a good starting point to study how accounting is affected. This thesis aims to investigate how managers in an automotive case company make sense of their servitization business model using accounting information. Building on business models as guiding, legitimizing devices consisting of narratives and calculations (Doganova & Eyquem-Renault, 2009), the thesis sheds light on how managers use sensemaking in the process of understanding a servitization business model. While previous research has focused on firms adding services to existing products, this thesis studies a firm that shifts to selling their whole product assortment as a service. The empirical findings suggest that the business model is useful for sensemaking if actors perceive it as strong, even though it is not internally crafted or fits the context perfectly. Furthermore, we suggest that creating a separate business unit and utilizing non-financial customer data can facilitate a shift towards servitization. Moreover, in the sensemaking process, the business model as a narrative guided managers in their choice and usage of accounting numbers, which in turn reassessed the narrative and facilitated an understanding of what subscription for cars would imply.