Introducing goods innovation, service innovation, or both? Investigating the tension in managing innovation revenue streams for manufacturing and service firms

Author(s):  
Adrian Choo ◽  
Sriram Narayanan ◽  
Ravi Srinivasan ◽  
Soumodip Sarkar
2018 ◽  
Vol 21 (1) ◽  
pp. 2-19 ◽  
Author(s):  
Ingela Sölvell

Purpose The task of leading innovation is predominantly pictured as a supportive role vis-à-vis employees. Motivation is a crucial aspect of this task. To better understand the practice of this change-oriented leadership task, the actual behavior and activities of managers are investigated. The purpose of this paper is to reflect through practice and self-reports how this leadership challenge is executed. Design/methodology/approach In this longitudinal multi-method investigation, the service innovation literature constitutes the main theoretical framework. The investigation draws additionally on leadership literature about how to understand leadership through practice. The methodological design facilitated the drawing of causal inferences in the dynamics of service innovation. Findings The investigation enhances our understanding of managers’ particular context of innovation, and particularly the initiation context. It provides empirically grounded descriptions of what managers identify as potential opportunities, and how they take them further in the ideation stage. The results develop the suggestion that leadership roles, and specifically change-oriented roles, are not restricted to initiating or enabling activities related to the employees. Instead the much downplayed leadership role, i.e. the active practice-based involvement in innovation, is theorized as a role that is continuously activated, but tends to be set aside for contingency reasons. Research limitations/implications Further research is needed to assess the importance of managers’ involvement in the practice of innovation, both through systematic mapping of ideas on a larger scale, and through the employee perspective. This paper provides useful insights on managers’ cognition and involvement in innovation for further investigations of innovation management. Practical implications The results provide awareness for managers regarding their diverse leadership roles related to innovation. First, the study embraces heterogeneous ideas that are useful to evaluate and constitute role-modeling. Second, it highlights how managers’ execution of innovation creates awareness about the challenges involved. Finally, but maybe most important, the results alert managers of the discontinuity, even in strategically anchored intentional innovation. Social implications In a changing innovation landscape, individual firms need to draw on other firms to achieve their innovation strategies. In pursuit of this goal, this paper enhances the understanding of the role-modeling leadership task. It is a novel way of guiding individuals that are exposed to new and uncertain innovation contexts, and rethinking how innovation eventually can be achieved. Originality/value While earlier research has identified the multifaceted leadership behavior to support innovation, this paper outlines the contextual conditions and the practice of executing the suggested powerful role of being a role-model for others.


2015 ◽  
Vol 33 (6) ◽  
pp. 823-839 ◽  
Author(s):  
Ying-Pin Yeh

Purpose – Customer loyalty is crucial for firms to generate positive returns. Creation of customer loyalty is a challenge for service firms because switching service firms can represent a risk. The purpose of this paper is to examine how wealth managers select and implement corporate social responsibility (CSR) and service innovation strategies to influence customer loyalty. Design/methodology/approach – A review of the related literature indicated that scant studies have determined the meanings and outcomes of CSR and service innovation. Therefore, the roles of CSR and innovation were examined in this study to evaluate how these factors affect customer loyalty in a wealth management context. The authors evaluated customer advocacy, relationship quality, and relationship value as mediating variables, and formulated six hypotheses. Data were collected using a questionnaire survey distributed to wealth management customers in Taiwan. All the hypotheses were verified using a structural equation model and data collected from the respondents. Findings – The results indicated that relationship quality and value are positively related to customer loyalty, and customer advocacy is positively related to both relationship quality and value. In addition, CSR and service innovation are positively related to customer advocacy. Research limitations/implications – This research was limited to collecting data related to specific service providers, and therefore consumers in other countries should be examined to test the robustness of the theoretical model. The results of analyses conducted on other industries and in other countries might differ. Practical implications – In the wealth management service context, CSR and service innovation capabilities contribute to customer advocacy, which can achieve superior relationship quality, relationship value, and customer loyalty. Originality/value – This paper contributes to investigations on the effect of CSR and service innovation on customer loyalty by adopting customer advocacy, relationship quality, and relationship value as mediators.


2016 ◽  
Vol 20 (07) ◽  
pp. 1650064 ◽  
Author(s):  
THOMAS ANNING-DORSON

It has become imperative for researchers to mark out the institutional limits and conditions within which innovation is the most useful strategy and to establish the extent to which its efficacy is conditioned by innovative culture and leadership of the service firm. This paper makes contribution to the service innovation literature by showing the internal boundary conditions under which service innovation can effectively enhance the competitiveness of the service firm. An empirical research design comprised two sets of data collected from service managers; the first for validation and the second for structural analysis of our framework. Five service innovation dimensions were found and that innovation leadership partially mediated the relationship between the service innovations and a service firm’s competitiveness. Innovative culture also mediates the service innovations and competitiveness. In contrast to previous studies which examined the direct effect of innovation on competitiveness, our study found that the mediating role of internal conditions brings about complementarity of strategic assets which produces sustainable competitive advantage to the service firm. The practical implication is that service firms must be equally interested in creating a fundamental service philosophy through their culture and leadership to build competitive advantages.


2018 ◽  
Vol 22 (01) ◽  
pp. 1850010 ◽  
Author(s):  
BUNDIT THANASOPON ◽  
THANOS PAPADOPOULOS ◽  
RICHARD VIDGEN

This paper focusses on the openness in the front-end phase of service innovation and its impact on innovation success. The early stages of innovation are fuzzy and unstructured, thus often being called “fuzzy front-end” (FFE) by scholars. The FFE begins when an opportunity is considered worthy of further ideation, exploration, and assessment and ends when a firm decides to invest in — or terminate — an idea. Although openness has been identified as pivotal to innovation performance, little effort has been put into exploring its role in the early phase of innovation. By drawing on the data of a multiple case study in Thai online service firms, we are able to identify four key dimensions of FFE openness competence: prior related knowledge, top management support, the presence of workable prototype, and slack resource. Furthermore, we found three openness activities that often take place in the FFE phase of successful online service innovation, i.e., external search, inter-firm partnerships and customer experimentation. From a managerial perspective, our study provides useful insights to innovation managers aiming at enhancing front-end performance through openness.


Author(s):  
Tammy R. Parker ◽  
Brandon Griffin

The extant service innovation literature suggests the high cost of an information search, when evaluating a new service provider, creates switching costs that hold customers hostage, allowing first-movers to recoup their investments and sustain an advantage. We utilize Transaction Cost Economics as a theoretical foundation to expand the service innovation literature by examining the Internet’s impact on the cost of information. We propose that as a result of the Internet, experience services offered by service firms have largely become search services, with lower levels of information asymmetry. We also suggest that the Internet has had little impact on information costs related to firms that offer largely credence services. These services will continue to exhibit higher levels of information asymmetry. Finally, we present a moderated model of innovation vs. imitation strategies that suggests that firms offering search services will increase firm performance through imitation, while credence firms will increase firm performance through innovation strategies. The extant service innovation literature suggests the high cost of an information search, when evaluating a new service provider, creates switching costs that hold customers hostage, allowing first-movers to recoup their investments and sustain an advantage. We utilize Transaction Cost Economics as a theoretical foundation to expand the service innovation literature by examining the Internet’s impact on the cost of information. We propose that as a result of the Internet, experience services offered by service firms have largely become search services, with lower levels of information asymmetry. We also suggest that the Internet has had little impact on information costs related to firms that offer largely credence services. These services will continue to exhibit higher levels of information asymmetry. Finally, we present a moderated model of innovation vs. imitation strategies that suggests that firms offering search services will increase firm performance through imitation, while credence firms will increase firm performance through innovation strategies.


2015 ◽  
Vol 19 (04) ◽  
pp. 1550038 ◽  
Author(s):  
RALF PLATTFAUT ◽  
BJOERN NIEHAVES ◽  
MATTHIAS VOIGT ◽  
ANDREA MALSBENDER ◽  
KEVIN ORTBACH ◽  
...  

Service firms need to continuously innovate their service offerings in order to remain competitive in constantly changing market conditions. Successful innovators utilise current information technology (IT) to access service innovation capacity and knowledge which can be located internal or external to their organisation. In this paper, we develop and test a theoretical framework that explains how IT can contribute to service innovation performance, and finally, to service provision performance. Drawing on dynamic capability theory, we differentiate between sensing (SN), seizing (SZ), and transformation (TF) as the key abilities in service innovation. With our theoretical model, we can explain almost 40% of the variance in service innovation performance (SIP) (R2 = 0.3955) and provide evidence for the multi-faceted and significant effects of IT. In particular, we are able to show a significant influence of inter-organisational IT support on SN and SZ abilities while organisational IT support has a significant impact on TF abilities.


2016 ◽  
Vol 36 (9) ◽  
pp. 974-994 ◽  
Author(s):  
Daniel I. Prajogo ◽  
Adegoke Oke

Purpose The purpose of this paper is to examine the effect of human capital (HC) on service innovation advantage (SIA) and business performance (BP) in service sector firms, and how external environmental factors influence these relationships. Design/methodology/approach This study utilized a cross-sectional mail survey of a random sample of Australian service firms with the unit of analysis being at the firm level. In total, 228 usable responses were received. Findings The overall findings of this study show that HC is positively related to the creation of value or SIA which in turn results in rent generation for firms. The results further show that the effect of SIA on BP is influenced by environmental dynamism and competitiveness with dynamic environments enhancing the effect while competitive environments weakening it. Research limitations/implications The findings demonstrate the complementarity between the resource based theory and contingency theory as they clearly shows that the value of innovation as a firm’s capability is enhanced or weakened within a business environment that is more dynamic or competitive. Practical implications The findings demonstrate the importance of HC, and, thus, encourage managers to seek ways to harness and leverage HC for improving innovation and BP. In addition, the study also helps managers to understand the contingency effect of business environment on the effectiveness of innovation, hence, helping them in deliberating firms’ strategy in different business environments. Originality/value To the best of the authors’ knowledge, this is the first study which examines the effectiveness of HC as organizational resource for building SIA as a source of organizational competitive advantage.


2017 ◽  
Vol 33 (5) ◽  
pp. 999-1012
Author(s):  
Seng Ratny ◽  
Arif Mohammad Arshad ◽  
Tian Gaoliang

The aim of this paper is to analyse the literature regarding the association between service-driven market orientation and innovation in service organizations as well as create conceptual framework about this relationship. Scholars have suggested that the service firms implementing service-driven market orientation can perform significantly better than traditional market-orientation and become increasingly aware of market demands better than their competitors. The service firms need to react quickly and effectively to changing customers’ demands. Bring in the service-driven market orientation model for service sector leads to critical advantages and particularly their benefits on service innovation. The recent work examined the market orientation-innovation relationship regarding the service industries. An examination regarding the market orientation in service organization is presented along with the conceptual framework and conceptual model is recommended.


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