Quality management as a driver of innovation in the service industry

This study identifies the combination of factors that lead to quality management reinforcing innovation capability as an organization’s strength. The results from 133 Spanish service organizations show that competitive strategy, manager’s motivation to adopt quality management, and customer orientation are the key factors that explain the presence of innovation capability as a firm’s strength. As some pioneering research points out, the impact of quality management on innovation depends mainly on managers’ interpretation of this management philosophy. When quality management focuses on discovering new customer needs and even new markets, it contributes to strengthen the organization’s innovation capability.