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Institutions and axioms: an extension and update of service-dominant logic

Abstract

Service-dominant logic continues its evolution, facilitated by an active community of scholars throughout the world. Along its evolutionary path, there has been increased recognition of the need for a crisper and more precise delineation of the foundational premises and specification of the axioms of S-D logic. It also has become apparent that a limitation of the current foundational premises/axioms is the absence of a clearly articulated specification of the mechanisms of (often massive-scale) coordination and cooperation involved in the cocreation of value through markets and, more broadly, in society. This is especially important because markets are even more about cooperation than about the competition that is more frequently discussed. To alleviate this limitation and facilitate a better understanding of cooperation (and coordination), an eleventh foundational premise (fifth axiom) is introduced, focusing on the role of institutions and institutional arrangements in systems of value cocreation: service ecosystems. Literature on institutions across multiple social disciplines, including marketing, is briefly reviewed and offered as further support for this fifth axiom.

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Fig. 1

Notes

  1. 1.

    In Lusch and Vargo (2014), we use the term “logics” rather than “arrangements.” Since the former term tends to be specifically associated with the organizational institutionalization literature, we have begun using the latter term.

  2. 2.

    It is interesting that this manuscript predates Smith’s work on the wealth of nations and his ideas on economics. Also of the many unpublished manuscripts in his files upon his death all were to be destroyed except the “History of Astronomy,” subsequently published in 1980 by Oxford University Press in a collection of articles.

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Acknowledgments

The authors would like to thank Heiko Wieland, Kaisa Koskela-Huotari and Zhen Tang for their assistance with the drafting of this article.

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Vargo, S.L., Lusch, R.F. Institutions and axioms: an extension and update of service-dominant logic. J. of the Acad. Mark. Sci. 44, 5–23 (2016). https://doi.org/10.1007/s11747-015-0456-3

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Keywords

  • S-D logic
  • Theory
  • Institutions
  • Service-dominant logic
  • Ecosystems