S-D Logic as a Foundation for Service Science

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S-D Logic as a Foundation for Service Science

• Frontiers in Service Conference
• Panel on Service Science
• Brisbane, Queensland Australia
• June 30 2006
• Stephen L. Vargo, University of Hawaii at Manoa

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• What is needed isa marketing interpretation of
  the whole process of creating utility
• Wroe Alderson
• The greatest danger in times of turbulence is not
  the turbulence it is to act with yesterdays
  logic.
• Peter F. Drucker

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Service-Dominant Logic

• Views service, rather than goods, as the focus of
  economic exchange and the foundation of society
• i.e., Service is exchanged for service
• Vargo and Lusch (2004) Lusch and Vargo 2006
• Service the application of competences for the
  benefit of another entity
• Represents superordination of service to goods
• Implies all businesses (economies) are service
  businesses (economies)
• Manufacturing, etc. is just a special type

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Service-Dominant Logic (2)

• Essential shift is from units of output to
  processes
• Implies that Service Science requires a change in
  foundational logic
• a services focus using a manufacturing logic is
  inadequate
• Transformations and superordinations, rather than
  substitutions

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Service Science Logic Foundational
Transformations and Superordinations

• From operand to operant Resources
• Vargo and Lusch (2004)
• From units of output to processes
• to value-in-exchange to value-in-use
• From embedded value to co-creation of value
• From resource depletion to resource creation
• From production to resource integration

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Service Science Logic Foundational
Transformations and Superordinations

• From microeconomic models (quantity demanded) to
  relational models (experiences and reciprocal
  satisfaction)
• From consumer vs. producer dichotomy to economic
  actors (consumer-producers)
• Smith (1776, chapts 1-5)
• Inframarginal analysis (Yang and Ng 1993)
• From equilibrium and homogeneity to
  disequilibrium and heterogeneity
• Hunt (2000),
• From transaction to relationships
• Berry (1983) Gronroos (1989)

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Service Science Logic Foundational
Transformations and Superordinations

• From Newtonian models to complex adaptive systems
  
• From deterministic relationships to emergent
  properties
• Langton (1989) Kaufman (1993)
• From macro structures to micro processes and
  fractals
• Mandelbrot (1982)
• From acting on to interactivity with
• Gummesson (2006), Gronroos (2006),
• From dyads and supply chains to networks and
  value constellations
• Hakansson (1982), Normann and Ramirez (1988), etc

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In Brief

• Service Science
• should be built on
• a Logic of Service

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Thank You! For More Information on S-D Logic
visit sdlogic.org We encourage your comments
and input. If you would like your working papers
or teaching material and/or links to your
research displayed on the website, please e-mail
us Steve Vargo svargo_at_sdlogic.net Bob Lusch
rlusch_at_sdlogic.net
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The Overall Transformation

• From a foundational logic of exchange based on
  manufactured goods (and services)
• To a foundational logic exchange based on
  service--using resources for the benefit of
  another partyfor service
• A SERVICE SCIENCE