Table 1 Opposing effects on... | Emerald Publishing

Table 1

Opposing effects on servitization success postulated by TCE

Conditions	Postulated theoretical mechanism
	Negative effect on servitization success	Positive effect on servitization success
Service offering (SSP and SSC)	Offering services incurs transaction costs, which can offset profitability effects. (Zhang et al., 2019) Offering services, particularly SSC, transfers risks to the provider, increasing transaction costs. (Worm et al., 2017)	Offering services fosters long-term cooperation with customers, reducing the frequency of transactions and transaction costs. (Boehmer et al., 2020)
Specific investments	Offering services requires specific investments, more so for advanced services (SSC) than for basic services (SSP). (Worm et al., 2017; Kamalaldin et al., 2020), increasing transaction costs	Specific investments lead to improved cooperation and trust between the partners, reducing transaction costs (Palmatier et al., 2007)
Customer opportunism	Specific investments expose providers to opportunism, increasing transaction costs (Worm et al., 2017)
Customer integration	High levels of customer integration increase transaction costs (Li et al. (2021)	The customers’ willingness for integration serves as a safeguard against opportunism, as a mutual reliance relation is formed (Williamson, 1996)
Demand uncertainty (Complexity of customer needs)	Demand uncertainty increases the risk of specific investments, increasing transaction costs, (Williamson, 1996) Demand uncertainty increases the risk of opportunism (Mungra and Yadav, 2023)	Under demand uncertainty, the presence of crucial information shared within a partnership becomes more valuable and amplifies the positive impact of specific investments on performance (Palmatier et al., 2007)

Conditions	Postulated theoretical mechanism
	Negative effect on servitization success	Positive effect on servitization success
Service offering (SSP and SSC)	Offering services incurs transaction costs, which can offset profitability effects. (Zhang et al., 2019)Offering services, particularly SSC, transfers risks to the provider, increasing transaction costs. (Worm et al., 2017)	Offering services fosters long-term cooperation with customers, reducing the frequency of transactions and transaction costs. (Boehmer et al., 2020)
Specific investments	Offering services requires specific investments, more so for advanced services (SSC) than for basic services (SSP). (Worm et al., 2017; Kamalaldin et al., 2020), increasing transaction costs	Specific investments lead to improved cooperation and trust between the partners, reducing transaction costs (Palmatier et al., 2007)
Customer opportunism	Specific investments expose providers to opportunism, increasing transaction costs (Worm et al., 2017)
Customer integration	High levels of customer integration increase transaction costs (Li et al. (2021)	The customers’ willingness for integration serves as a safeguard against opportunism, as a mutual reliance relation is formed (Williamson, 1996)
Demand uncertainty (Complexity of customer needs)	Demand uncertainty increases the risk of specific investments, increasing transaction costs, (Williamson, 1996)Demand uncertainty increases the risk of opportunism (Mungra and Yadav, 2023)	Under demand uncertainty, the presence of crucial information shared within a partnership becomes more valuable and amplifies the positive impact of specific investments on performance (Palmatier et al., 2007)

Source(s): The above table was created by the author