ASU Center for Organization Research and Design

A Case Study of Servicizing in the Farming-Livestock Sector: Organisational Change and Potential Environmental Improvement

by Ángeles Pereira; Adolfo Carballo-Penela; Manuel González-López; Xavier Vence

Jun 15, 2016

Servicizing has been identified as a business strategy that may contribute to the improvement of the environmental performance of economic activities. This paper analyses the organisational and environmental effects of servicizing in the farming sector. In particular, a case study of three Galician dairy farms which become members of cooperatives that provide them with farm machinery, heifer breeding and feeding services is carried out.The paper begins by building upon existing theoretical literature concerning servicizing and its contribution to sustainability. Then, the Compound Method Based on Financial Accounts (MC3) is used to assess the changes in the carbon footprint (CF) of the farms included in the study both before and after their integration into cooperatives.By means of servicizing the farms are released from the burden of having to make certain major investments and from having to undertake several specialised activities; in consequence they have more time and more resources to devote to their focal activity. In addition to products, the farms receive high quality services that help them to improve their efficiency and competitiveness. The paper shows a positive association between the shift to servicizing and the farms' improvement of eco-efficiency. In particular, the carbon footprint measured in relation to the number of litres of raw milk produced by each farm decreases in all three cases (within the range 16%–28%) for the period 2002–2011.

A Case Study of Servicizing in the Farming-Livestock Sector: Organisational Change and Potential Environmental Improvement