Abstract: The manufacturing enterprises set foot in the service field for the purpose of innovating business models and getting a head start in the market competition. However, servitization is often difficult to bring substantial returns to enterprises in a short term, and the income of the executives and employees will change to varying degrees due to the implementation of the service strategy, thus changing the original income distribution structure of enterprises. This paper discusses the influence mechanism of servitization on the income level of executives and employees within enterprises and the income gap between the two groups. The empirical findings show that the degree of servitization of manufacturing enterprises is negatively correlated with the income of executives and employees, and the elastic coefficients of the income changes of employees and executives to the changed degrees of servitization are -2.3 and -1.7, respectively. It can be seen that the improvement of the degree of servitization will lead to the widening of the income gap between the two groups. The transmission mechanism, on the one hand, is that servitization causes fluctuations in enterprise performance, thus affecting the income of employees and executives; on the other hand, the implementation of serserization strategy urges enterprises to attract knowledgeable managers with high income, thus restraining the decline of senior executives’ income to a certain extent. In general, the negative impact of servitization on employees’ income will be reversed to a certain extent as enterprises gradually adapt to and control the information and resources in the service business field. The above conclusion reveals the issue of income distribution gap of different levels of personnel under the strategic changes of Chinese enterprises, which has enriched the relative theories of manufacturing services.

Key words: business model innovation, manufacturing servitization, income gap, shift-share method