Extending Lead‐User Theory: Antecedents and Consequences of Consumers' Lead Userness*

Lead users are found to come up with commercially attractive user innovations and have been shown to be a highly promising source of innovation for new product development tasks. According to lead‐user theory, these users are defined as being ahead of an important market trend and experiencing high benefits from innovating. The present article extends lead‐user theory by exploring the antecedents and consequences of consumers' lead userness in the course of three studies on extreme sports communities. Regarding antecedents, it uncovers that field‐related variables (consumer knowledge and use experience) as well as field‐independent personality variables (locus of control and innovativeness) help explain an individual's lead userness. These variables might therefore be used as a proxy to identify the rare species of lead users. With regard to consequences, it uncovers that lead users demonstrate innovative behavior not only by creating new product ideas but also by adopting new commercial products more heavily and faster than ordinary users. This highlights the idea that lead users might not only be valuable to idea‐generation processes for radically new concepts; instead, they might also be relevant to more general issues in the marketing of new products.     

Championship Behaviors and Innovations Success: An Empirical Investigation of University Spin‐Offs*

Despite the flurry of scholarly research on champions, no prior article has explicitly addressed how different dimensions of championship behavior actually contribute to innovation success. In this article, based on an extensive literature review, the authors argue that champions display four behaviors, namely (1) pursuing innovative ideas, (2) network building, (3) persisting under adversity, and (4) taking responsibility for the idea. The authors use data from 123 university spin‐offs to test proposed linear and curvilinear relationships between the four behaviors and an objective measure of innovation success, namely a longitudinal measure of sales growth. The results indicate that network building has the desired positive relationship with sales performance. Surprisingly, pursuing the innovative idea is not related to sales growth. Furthermore, the present study also reveals some dysfunctional effects of champion behaviors. Persisting under adversity and taking responsibility have the hypothesized inverted‐U relationship with sales growth. The present study provides a more refined discussion of the benefits and dangers of championing behaviors. Our results show that linking technology to markets can be planned and controlled only to a very limited extent even if champions are working hard to sell the idea to potential customers. Moreover, any new idea is often competing with existing products and pursuing such ideas may result in opposition to the idea. In contrast, network building has the desired positive relationship with innovation success. Effective championing behavior keeps an innovative idea alive by mobilizing support and building coalitions around the idea with critical individuals or important third parties. Moreover, this study challenges the widespread “heroic” discussion of championing as fundamentally positive “across the board.” The results show that persisting under adversity and taking responsibility are desirable up to some levels. Beyond such critical levels, these two champion behaviors may actually become detrimental to the innovation process. Being too persistent in the face of adversity or taking too much responsibility for the innovative idea might undermine the power of the champion's justifications for an innovation and thereby increase resistance to change. An “over‐performing” champion may interpret opposing communications as an unwarranted and injurious response. By taking overmuch responsibility for the innovative undertaking, the champion is likely to discourage contributions from other team members who see no valuable opportunity to bring their expertise and knowledge to the idea.     

Fact‐Finding Effectiveness: Evidence from New York State Fact‐Finding Effectiveness

In a collective‐bargaining environment characterized by increasing fiscal and taxpayer pressures, this article examines the continued viability of fact‐finding as a dispute‐resolution mechanism in New York State's public sector. This is an important question because fact‐finding is the final dispute‐resolution procedure for most unionized employees in New York and many other states. Whether fact‐finding effectiveness was measured by the proximity of fact‐finder recommendations to the final settlement or by outright acceptance of the fact‐finder report, regression results show that New York fact‐finding has successfully met the challenges of the intensified environmental pressures in the 1990s. No significant decline was found in its ability to move parties toward the compromise outcome. Part of the fact‐finding's continued success can be attributed to the policy shift by New York's Public Employment Relations Board (PERB) in 1991 in the role of the fact‐finder from an accommodative to a more adjudicative function. The well‐reasoned adjudicative fact‐finding report has more potential to bring public pressure to bear on the extreme positions of the parties. Mediation was better left to the professional PERB mediators. Finally, it also was found that fact‐finders who were full‐time neutrals were more effective under this more adjudicative style.     

The Influence of Temporal Distance on Consumer Preferences for Technology‐Based Innovations*

Rapid technological developments in the computer and the telecommunications industries have spurred the introduction of technology‐based products. An important feature of these products is that they can be characterized based on improvements in the functionality and the interface. When consumers evaluate a technology‐based product, they face a trade‐off: How should they choose between a product that offers a superior functionality and another product that offers a superior interface? The present research focuses on how temporal distance (i.e., time) from the purchase or use occasion of a technology‐based innovation influences consumers' evaluations of the new product. Specifically, the present study examines how temporal distance affects the trade‐offs consumers make between improvements in the interface and improvements in the functionality of a new product. This research demonstrates that the weight consumers place on the functionality and the interface of a new product is a function of the temporal distance. Specifically, the functionality of the product is valued more in distant future events. In contrast, the interface of the product is more important in the near future. This research has direct implications for various aspects of the new product development process such as customer‐product research methods used, communication strategies, and product preannouncements.     

An Illustration of Potential Sources of Concept‐Test Error*

A critical step in prelaunch market analysis needing improvement is concept testing. This article reviews the literature on the three basic design decisions inherent to concept testing: (1) stimuli design; (2) respondent selection; and (3) response measurement. By incorporating findings from diffusion theory, the current review identifies a number of potential sources of concept‐test error (e.g., failing to account for adoption orientation could unintentionally mask the response of earlier adopters). Through an exploratory study that replicates in many ways a typical concept test, the present study illustrates how results of conventional concept testing can be sensitive to respondents' adoption orientation and the response measure used. This study offers implications for NPD practice that include accounting for the adoption orientation of respondents, using appropriate response measures such as affective questions for later adopters, and incorporating more product‐related information and repeat exposure for later adopters.     

Complementing Mass Customization Toolkits with User Communities: How Peer Input Improves Customer Self‐Design*

In this paper, the authors propose that the canonical customer–toolkit dyad in mass customization (MC) should be complemented with user communities. Many companies in various industries have begun to offer their customers the opportunity to design their own products online. The companies provide Web‐based MC toolkits that allow customers who prefer individualized products to tailor items such as sneakers, personal computers (PCs), cars, kitchens, cereals, or skis to their specific preferences. Most existing MC toolkits are based on the underlying concept of an isolated, dyadic interaction process between the individual customer and the MC toolkit. Information from external sources is not provided. As a result, most academic research on MC toolkits has focused on this dyadic perspective. The main premise of this paper is that novice MC toolkit users in particular might largely benefit from information given by other customers. Pioneering research shows that customers in the computer gaming and digital music instruments industries are willing to support each other for the sake of efficient toolkit use (e.g., how certain toolkit functions work). Expanding on their work, the present paper provides evidence that peer assistance appears also extremely useful in the two other major phases of the customer's individual self‐design process, namely, the development of an initial idea and the evaluation of a preliminary design solution. Two controlled experiments were conducted in which 191 subjects used an MC toolkit to design their own individual skis. The authors found that during the phase of developing an initial idea, having access to other users' designs as potential starting points stimulates the integration of existing solution chunks into the problem‐solving process, which indicates more systematic problem‐solving behavior. Peer customer input also turned out to have positive effects on the evaluation of preliminary design solutions. Providing other customers' opinions on interim design solutions stimulated favorable problem‐solving behavior, namely, the integration of external feedback. The use of these two problem‐solving heuristics in turn leads to an improved process outcome—that is, self‐designed products that meet the preferences of the customers more effectively (measured in terms of perceived preference fit, purchase intention, and willingness to pay). These findings have important theoretical and managerial implications.     

Creating University Spin‐Offs: A Science‐Based Design Perspective*

Academic entrepreneurship by means of university spin‐offs commercializes technological breakthroughs, which may otherwise remain unexploited. However, many universities face difficulties in creating spin‐offs. This article adopts a science‐based design approach to connect scholarly research with the pragmatics of effectively creating university spin‐offs. This approach serves to link the practice of university spin‐off creation, via design principles, to the scholarly knowledge in this area. As such, science‐based design promotes the interplay between emergent and deliberate design processes. This framework is used to develop a set of design principles that are practice based as well as grounded in the existing body of research on university spin‐offs. A case‐study of spin‐off creation at a Dutch university illustrates the interplay between initial processes characterized by emergent design and the subsequent process that was more deliberate in nature. This case study also suggests there are two fundamentally different phases in building capacity for university spin‐off creation. First, an infrastructure for spin‐off creation (including a collaborative network of investors, managers and advisors) is developed that then enables support activities to individual spin‐off ventures. This study concludes that to build and increase capacity for creating spin‐offs, universities should do the following: (1) create university‐wide awareness of entrepreneurship opportunities, stimulate the development of entrepreneurial ideas, and subsequently screen entrepreneurs and ideas by programs targeted at students and academic staff; (2) support start‐up teams in composing and learning the right mix of venturing skills and knowledge by providing access to advice, coaching, and training; (3) help starters in obtaining access to resources and developing their social capital by creating a collaborative network organization of investors, managers, and advisors; (4) set clear and supportive rules and procedures that regulate the university spin‐off process, enhance fair treatment of involved parties, and separate spin‐off processes from academic research and teaching; and (5) shape a university culture that reinforces academic entrepreneurship by creating norms and exemplars that motivate entrepreneurial behavior. These and other results of this study illustrate how science‐based design can connect scholarly research to the pragmatics of actually creating spin‐offs in academic institutions.     

Learning from Postproject Reviews: A Cross‐Case Analysis*

Every new product development (NPD) project should not only deliver a successful new product but also should generate learning for the organization. Postproject reviews (PPRs) are recognized by both practitioners and academics as an appropriate mechanism to stimulate and capture learning in NPD teams. However, relatively few companies use PPRs, and those that do use them often fail to do so effectively. Although they are widely perceived to be a useful tool, empirical research on how PPRs are typically organized and the learning that results is limited. The present article addresses this gap in the extant knowledge and describes five in‐depth case studies, which were conducted at leading companies in Germany. A detailed investigation was made of how PPRs are conducted and of the type of learning that can result. Three main sources of data were used for each case: company documentation, in‐depth interviews with managers responsible for NPD, and observation of an actual PPR. The different data sources enabled extensive triangulation of data to be conducted and a high degree of reliability and validity to be achieved. The analysis enabled a number of key characteristics of the way PPRs are managed to be identified. Various characteristics of PPRs influence their utility, such as the time at which they take place and the way discussions are moderated. In addition, the data show that participants in the discussions at PPRs often use metaphors and stories, which indicates that PPRs have the potential to generate tacit knowledge. Interestingly, the data also show that there are various different ways in which metaphors and stories appear to stimulate discussions on NPD projects. Based on the cross‐case analysis, a wide range of implications are identified. Researchers need to investigate PPRs further to identify how they can generate tacit and explicit knowledge and support project‐to‐project learning. The generation of tacit knowledge in NPD is a topic that particularly needs further investigation. The research also led to a range of recommendations for practitioners. Companies need to strongly communicate the purpose and value of PPRs, to run them effectively to stimulate the maximum possible learning, and to disseminate the findings widely. PPRs have the potential to create and transfer knowledge amongst NPD professionals, but, as they are seldom currently used, many companies are missing an important opportunity.     

Success Factors in New Ventures: A Meta‐analysis*

Technology entrepreneurship is key to economic development. New technology ventures (NTVs) can have positive effects on employment and could rejuvenate industries with disruptive technologies. However, NTVs have a limited survival rate. In our most recent empirical study of 11,259 NTVs established between 1991 and 2000 in the United States, we found that after four years only 36 percent, or 4,062, of companies with more than five full‐time employees, had survived. After five years, the survival rate fell to 21.9 percent, leaving only 2,471 firms still in operation with more than five full‐time employees. Thus, it is important to examine how new technology ventures can better survive. In the academic literature, a number of studies focus on success factors for NTVs. Unfortunately, empirical results are often controversial and fragmented. To get a more integrated picture of what factors lead to the success or failure of new technology ventures, we conducted a meta‐analysis to examine the success factors in NTVs. We culled the academic literature to collect data from existing empirical studies. Using Pearson correlations as effect size statistics, we conducted a meta‐analysis to analyze the findings of 31 studies and identified the 24 most widely researched success factors for NTVs. After correcting for artifacts and sample size effects, we found that among the 24 possible success factors identified in the literature, 8 are homogeneous significant success factors for NTVs (i.e., they are homogeneous positive significant metafactors that are correlated to venture performance): (1) supply chain integration; (2) market scope; (3) firm age; (4) size of founding team; (5) financial resources; (6) founders' marketing experience; (7) founders' industry experience; and (8) existence of patent protection. Of the original 24 success factors, 5 were not significant: (1) founders' research and development (R&D) experience; (2) founders' experience with start‐ups; (3) environmental dynamism; (4) environmental heterogeneity; and (5) competition intensity. The remaining 11 success factors are heterogeneous. For those heterogeneous success factors, we conducted a moderator analysis. Of this set, three appeared to be success factors, and two were failure factors for subgroups within the NTVs' population. To facilitate the development of a body of knowledge in technology entrepreneurship, this study also identifies high‐quality measurement scales for future research. The article concludes with future research directions.     

A MULTI‐TASK PRINCIPAL‐AGENT APPROACH TO ORGANIZATIONAL FORM*

This paper studies the choice of organizational forms in a multi‐task principal‐agent model. We compare a functional organization in which the firm is organized into functional departments such as marketing and R&D to a product‐based organization in which the firm is organized into product lines. Managers' compensation can be based on noisy measures of product‐line profits. Measures of a functional area's contribution to total profits are not available, however. This effect favors the product organization. However, if there are significant asymmetries between functional area contributions to organizational success and cross‐product externalities within functions, organizing along functional lines may dominate the product organization. The functional organization can also dominate when a function is characterized by strong externalities while the other is not.     

A Dynamic Model of Auctions with Buy‐It‐Now: Theory and Evidence

In the ascending‐price auctions with Yahoo!‐type buy‐it‐now (BIN), we characterize and derive the closed‐form solution for the optimal bidding strategy of the bidders and the optimal BIN price of the seller when they are both risk‐averse. The seller is shown to be strictly better off with the BIN option, while the bidders are better off only when their valuation is high enough. The theory also implies that the expected transaction price is higher in an auction with an optimal BIN price than one without a BIN option. This prediction is confirmed by our data collected from Taiwan's Yahoo! auctions.     

Determinants of the Level of Knowledge Application: A Knowledge‐Based and Information‐Processing Perspective*

Knowledge application is of key importance in the development of successful new products. Knowledge application refers to an organization's timely response to technological change by utilizing the knowledge and technology generated into new products and processes. This study uses the knowledge‐based theory of the firm and considers its roots in the information‐processing approach to organization theory to identify and structure potential antecedents of knowledge application. This study develops four hypotheses concerning antecedents of knowledge application. The hypotheses are tested using data collected from 277 high‐technology firms. Empirical results indicate that a long‐term orientation supported by a research and development (R&D) budget, formal rewards, and information technology directly increases the level of knowledge application, while R&D co‐location indirectly increases the level of knowledge application. It is surprising to find that an increase in the level of organizational redundancy reduces the level of knowledge application. The findings also suggest that information technologies, lead‐user, and supplier networks do not appear to significantly influence organizational redundancy.     

Legitimacy‐Seeking Mechanisms in Product Innovation: A Qualitative Study*

Product innovation research adopts a rational choice perspective to examine resource allocation decisions for product innovation. This research emphasizes strategic alignment between the innovation and the organization as the key factor shaping these decisions. In contrast, organizational research suggests that to access resources, product innovations have to be perceived as legitimate by corporate sponsors. Legitimacy is rooted in alignment with the prevalent corporate norms, beliefs, and cultural model. Adopting an institutional perspective and relying on an in‐depth case study of three product innovations, this study explores legitimacy‐seeking behavior in product innovation. The findings indicate that the rational perspective emphasized in most product innovation research is complemented by efforts to seek both moral and cognitive legitimacy to resource product innovation. The study clarifies the critical role that the organizational context plays in triggering legitimacy‐seeking behavior. The analysis unpacks legitimacy‐seeking behavior, revealing patterns of legitimating mechanisms (lobbying, relationship building, and gathering feedback) that are deployed as part of legitimacy strategies (conforming, selecting, and manipulating) to achieve a range of legitimacy outcomes (pragmatic, moral, and cognitive). The analysis reveals the existence of a hierarchy of legitimacy outcomes as actors prioritize one type of legitimacy versus another. The study also finds interdependencies between mechanisms and strategies to reinforce particular outcomes as legitimacy‐seeking behavior evolves over time.     

PRODUCT IMPROVEMENT AND TECHNOLOGICAL TYING IN A WINNER‐TAKE‐ALL MARKET*

In a winner‐take‐all duopoly for systems in which firms invest to improve their products, a vertically integrated monopoly supplier of an essential system component may have an incentive to advantage itself by technological tying. If the vertically integrated firm is prevented from technologically tying, there is an equilibrium in which the more efficient firm invests and serves the entire market. However, another equilibrium may exist in which the less efficient firm wins the market. Technological tying enables a vertically integrated firm to foreclose its rival. The welfare implications of technological tying are ambiguous and depend on equilibrium selection.     

Toward A Theory on the Reproduction of Social Innovations in Subsistence Marketplaces

Social innovations and their diffusion are critical in bridging the multiplicity of deprivations experienced by those in subsistence contexts. Yet they often do not diffuse as expected. To better understand this prevalent problem, this article develops a theory of diffusion that explains the reproduction (duplication) of social innovations in subsistence contexts. The theory utilizes a bottom‐up perspective that considers what attributes of innovations and capacities of actors matter to reproduction, particularly for subsistence user‐producers. Adopting an inductive, case‐based approach, the authors draw on examples of social innovations in sub‐Saharan Africa. Based on the authors' research and extant literature, this article builds a typology that captures different modes of reproduction. The typology delineates three archetypes of reproduced social innovations: mimetic, facilitated, and complex, and notes how frugal innovations can emerge from these archetypes. These archetypes are based on the interactions of: (1) a product's resource and knowledge complexities, and (2) the knowledge capabilities or resources of various actors, including subsistence user‐producers and bridging agents. The typology thus illuminates the conditions under which subsistence user‐producers might independently reproduce a social innovation (mimetic innovations), when they need assistance from bridging agents (facilitated innovations), and when the mix of resources and knowledge are beyond their capacity (complex innovations). Moreover, by exploring reproduction experiences of subsistence users, this article recognizes the implications of low literary, close social networks, and physical limitations. By examining who controls the knowledge and resources imperative to reproduction, the authors go beyond a focus on the social benefits of innovations to consider how intellectual property and profits matter to different actors. This article pulls together these various insights and identifies key implications that social innovators and intermediaries should consider when working to reproduce social innovations in subsistence contexts and with subsistence user‐producers.     

Bargaining Theory Meets Interest‐Based Negotiations: A Case Study1

This is a case study of the 2005 national contract negotiations between Kaiser Permanente and the Coalition of Kaiser Permanente Unions. Given the scale and complexity of these negotiations, their successful completion provides an exemplar for collective bargaining in this country. In 1997 Kaiser Permanente and the Coalition of Kaiser Permanente Unions formed a labor management partnership, and negotiations were structured around the principles of interest‐based negotiation (IBN). Drawing on direct observation of all parts of the bargaining process, interviews with individuals from Kaiser and the Coalition of Unions, and surveys we conducted after bargaining was completed, we conclude that the parties employed a mix of interest‐based and traditional negotiation processes across an array of integrative and distributive issues. We find that IBN techniques were used extensively and successfully to reach mutually satisfying agreements when the parties shared interests. When interests were in greater conflict, the parties resorted to more traditional, positional tactics to reach resolution. Strong intraorganizational conflicts limited the use of IBN and favored the use of more traditional positional bargaining. While a high level of trust enabled and supported the use of IBN, tensions that developed limited the use of IBN and required surfacing and release before either IBN or more traditional positional processes could proceed effectively. The use of IBN tools helped the parties apply the principles underlying the partnership in which these negotiations were embedded. We conclude that IBN served as a way of applying or operationalizing integrative bargaining and affected the process dynamics in ways the Walton and McKersie theory predicted. As such we see IBN as techniques that neither displace nor render obsolete other aspects of bargaining theory or practice but that show considerable promise for helping collective bargaining to address the complex issues and challenges found in contemporary employment relationships.     

The Role of Hybrid Organizations in Scaling Social Innovations in Bottom‐of‐the‐Pyramid Markets: Insights from Microfinance in India

While social innovations that solve financial exclusion have gained increasing attention as a means of helping the poor in developing markets, little research has empirically investigated the types of organizations that drive these innovations to achieve scale. Hybrids, a type of organization that exist in between traditional organizational forms, are said to have rapidly gained prevalence, especially in bottom‐of‐the‐pyramid markets. Some scholars claim that hybrids are largely responsible for the spread of established social innovations, yet hybrids do not constitute a homogenous group; instead each hybrid form exists on a spectrum between pure for‐profit and not‐for‐profit organizational forms. It is important that empirical research investigates the role that various hybrid forms play in scaling established social innovations, especially under various bottom‐of‐the‐pyramid market conditions. To this end, using two market‐level outcome measures of scale achieved (prevalence and usage), the authors pursue two research objectives: to study (1) the extent to which, alternative hybrid forms (not‐for‐profit, quasi‐profit, and for‐profit hybrids) drive social innovation; and (2) the relative propensity of these hybrid forms to drive social innovation under varying bottom‐of‐the‐pyramid market conditions, specifically varying levels of development and social diversity. By theorizing how different organizational forms act given their degree of hybridity, the authors develop and test six hypotheses using data sets on microfinance organizations in India. Accordingly, they find that (1) compared with not‐for‐profit and for‐profit hybrids, quasi‐profit hybrids have a propensity to become more prevalent and achieve greater usage in bottom‐of‐the‐pyramid markets overall. Yet, within the spectrum of hybrid forms, (2) not‐for‐profit hybrids are more likely to become more prevalent and achieve greater usage in markets with lower development levels, whereas (3) for‐profit hybrids are more likely to become more prevalent and achieve greater usage in markets with lower social diversity when compared with other hybrid forms.     

Managing Supplier Involvement in New Product Development: A Multiple‐Case Study*

Existing studies of supplier involvement in new product development have mainly focused on project‐related short‐term processes and success factors. This study validates and extends an existing exploratory framework, which comprises both long‐term strategic processes and short‐term operational processes that are related to supplier involvement. The empirical validation is based on a multiple‐case study of supplier collaborations at a manufacturer in the copier and printer industry. The analysis of eight cases of supplier involvement reveals that the results of supplier–manufacturer collaborations and the associated issues and problems can best be explained by the patterns in the extent to which the manufacturer manages supplier involvement in the short term and the long term. The results of this study reveal that the initial framework is helpful in understanding why certain collaborations are not effectively managed yet conclude that the existing analytical distinction among four different management areas does not sufficiently reflect empirical reality. This leads to the reconceptualization and further detailing of the framework. Instead of four managerial areas, this study proposes to distinguish between the strategic management arena and the operational management arena. The strategic management arena contains processes that together provide long‐term, strategic direction and operational support for project teams adopting supplier involvement. These processes also contribute to building up a supplier base that can meet current and future technology and capability needs. The operational management arena contains processes that are aimed at planning, managing, and evaluating the actual collaborations in a specific development project. The results of this study suggest that success of involving suppliers in product development is reflected by the firm's ability to capture both short‐ and long‐term benefits. If companies spend most of their time on operational management in development projects, they will fail to use the leverage effect of planning and preparing such involvement through strategic management activities. Also, they will not be sufficiently able to capture possible long‐term technology and learning benefits that may spin off from individual projects. Long‐term collaboration benefits can only be captured if a company can build long‐term relationships with key suppliers, with which it builds learning routines and ensures that the capability sets of both parties are aligned and remain useful for future joint projects.     

Managing Knowledge for Innovation: The Case of Business‐to‐Business Services*

The present study builds a typology of organizational knowledge in business services and empirically examines the effects of knowledge on innovation performance. It is suggested that firms differ with respect to their knowledge creation approaches and that these approaches have implications for firms' innovation activities. A conceptual framework of knowledge assets with degrees of tacitness and collectiveness as the principal axes is used to ground the empirical analysis. The organizational knowledge framework is empirically operationalized using survey data from 167 business service firms and supplementary case study evidence from 16 other firms. It is found that business service improvements and new service introductions are significantly associated with collectively held knowledge, such as codified service solutions or team‐based competences and procedures. In contrast, relying solely on tacit knowledge held by individuals may hamper innovation. The results also suggest that tacit collective knowledge is more closely associated with new service introductions, whereas explicit collective knowledge is associated with service improvements. Tacit collective knowledge is thus conducive. A managerial implication is that new service introductions necessitate team competences and routines, whereas incremental service improvements are more likely if procedures are in place to codify services into explicit solutions or technologies. Thus, the knowledge management approach should depend on the strategic orientation of the service firm toward continuous improvement of existing services or development of completely new services.