Transforming Leadership for Service Business

Doctoral Thesis / Dissertation from the year 2014 in the subject Business economics - Business Management, Corporate Governance, grade: A, Japan Advanced Institute of Science and Technology, language: English, abstract: Customers are increasingly becoming active participants and co-creators of value in the mobile Internet era. With this trend, employees are encouraged to engage in active dialogue with customers, effectively manage customer diversity and co-create personalized experiences. Such changes challenge the leadership. The relevant literature reveals that the significance to leadership of shared vision has attracted attention and become widely acceptable. However, there is a large gap in the literature regarding how to model the building of shared vision in service business.

Our study represents a first attempt to shed light on how vision co- creation between leaders and employees can affect the leadership in corporate transformation. Based on comparisons of the leadership literature regarding product-oriented and service-oriented companies, we hypothesised about vision co-creation with employees. Then, we conducted an in-depth case study in a leading software company in China and interviews in four multinational IT companies in Japan. This study suggests that vision co-creation with employees is imperative for leaders in today's service-dominant business. In the co-creation process, six relevant working states of employees are defined: non-engagement, expectation, satisfaction, engagement, loyalty and creativity. As a firm creates a new vision, or makes the existing corporate vision into a shared vision, it goes through these phases. We propose specific implications of the issues and focus on each phase to address the concerns.

This research makes a contribution by addressing concerns that many companies are over-managed and under-led. Traditional management systems, such as management rules, PDCA, performance appraisals and incentive systems, are still indispensable but are not enough to lead employees to work in the high-tier state. The co-creation process makes the new vision come alive so that it can be imagined, experienced, pursued and worked hard for.

In the final chapter, we provide suggestions for future research. The position-centred, one-person leadership described in the previous literature leaves the substantial talents of employees largely untapped.