1. S-D Logic 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

2. S-D Logic What is needed is…a 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

3. S-D Logic 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

4. S-D Logic 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

5. S-D Logic 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

6. S-D Logic 6 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)

7. S-D Logic 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

8. S-D Logic In Brief… Service Science should be built on a Logic of Service

9. S-D Logic 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@sdlogic.netBob Lusch: rlusch@sdlogic.net

10. S-D Logic 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