Understanding the role of service innovation behavior on business customer performance and loyalty

Providing new services to customers gives firms a competitive advantage in the market. Consequently, firms strive to develop innovative service that delivers new value propositions to customers and leads to customer satisfaction and the acquisition of new customers. The authors investigate the relationship between the innovative behavior of service providers, business customer performance, and business customer loyalty in the safety industry. The study's results show that technology-oriented and co-creation-oriented innovative behavior leads to business customer performance. Business customer performance is closely related to recommendations and re-contracts. Moreover, the degree of safety involvement has a moderate effect between service innovation and business customer performance. The findings have important theoretical and managerial implications for service innovation for researchers as well as service providers.     

The transition from product to service in business markets: An agenda for academic inquiry

In recent years, industrial manufacturers around the world have deployed growing efforts in developing services in addition to their traditional product business in order to secure long-term growth and to remain competitive in the marketplace. Against this background, the present article introduces the reader to this special issue. It first recalls key aspects of the emerging service-dominant logic of marketing and examines how it relates to the business marketing field. It then illustrates the challenges faced by top executives of industrial companies in the transition from a product-centric to a service-centric business perspective through an interview with the managing director of ThyssenKrupp Service AG. After discussing how the articles included in this special issue advance the extant literature on industrial services marketing, the article finally develops a number of directions for future research on services in business markets.     

Open evaluation of new product concepts at the front end of innovation: objectives and contingency factors

The proliferation of innovation contests has fostered community-based idea evaluation as an alternative to expert juries to filter and select new product concepts at the fuzzy front end of corporate R&D innovation. We refer to this phenomenon as open evaluation, as all registered participants can engage in jury activities like voting, rating, and commenting. While previous research on innovation contests and user engagement includes participant-based evaluation, the investigative focus so far has not been on this phenomenon. Access to jury activities in open evaluation practice contradicts innovation theory, which recommends careful selection procedures to establish expert juries for assessing new product concepts. Additionally, little is known about contingency factors that influence the performance and acceptance of open evaluation's results. To address these two questions on the objectives and contingency factors for open evaluation of new product concepts, this study applies exploratory multiple-case research of open evaluation in nine innovation contests. Data collection encompassed expert interviews and complementary sources of evidence. Results indicate that firms pursue six distinct objectives to support participant-based generation and selection of new concepts. In addition, eight contingency factors influence the performance of open evaluation and the acceptance of its results. Finally, results showed open evaluation output to efficiently complement jury decisions in filtering and selecting ideas for new product development.     

The effects of knowledge interaction for business innovation

The objective of this paper is to examine the effects of knowledge interaction on different types of business innovation. We first identified three indicators that reflect on the quality of the interaction between customers and technological knowledge, and then classified business innovations as product innovation, problem-solving innovation, or general innovation capability. Hypotheses about the impact of different qualities of knowledge interaction on business innovations were tested by collecting data from 178 high-technology firms in Taiwan. The results revealed that product innovation requires both wide-ranging and deep interaction between customers and technological knowledge, that problem-solving innovation requires either wide-ranging or deeper interaction between customers and technological knowledge, and that wide-ranging knowledge interaction is the most important driver for building general innovation capability. The research results enhance our understanding of knowledge interaction, with a special focus on the content and quality of the knowledge interactions within an enterprise. It also helps business managers in allocating resources and facilitating interorganizational communications for different situations related to innovation.     

The role of institutional arbitrage in the search for product innovation: Firm level evidence from Norway

Evolutionary theorizing conceptualizes the discovery of new products as a successful outcome from searching for innovation in which firms combine new and old knowledge and resources. Prior research has shown that the propensity for discovering new products is greatest when firms cross a technological and/or organizational boundary in the search for new knowledge. In this paper, we add a new dimension to this literature: we examine whether, and to what extent, crossing a national boundary, as when firms use knowledge from network partners in foreign countries, influences the likelihood that firms will introduce new products into the market. Drawing on theorizing on institutional arbitrage in the literature on national innovation systems (NIS) and varieties of capitalism (VOC), we propose that companies that cross a national boundary in searching for innovation are significantly more likely to introduce new products. Detailed survey data on firms; data on their network partners, including their location; and regression analysis show that the use of knowledge from actors in foreign NIS has a positive influence on product innovation.     

Development and return on execution of product innovation capabilities: The role of organizational structure

This paper conceptualizes and tests an integrated model that combines the dual-core and ambidextrous models of product innovation. The integrated model distinguishes the development and return on execution of radical and incremental product innovation capabilities. The authors argue that organizational structure plays an important dual role as an (a) antecedent to the development of radical and incremental product innovation capabilities and (b) as a moderator in determining the new product performance returns from executing such capabilities. Using a sample of high-tech firms, the study finds that organizational structure is more consistent in predicting the execution of product innovation capabilities into new product performance than in predicting the development of such capabilities. For example, the effect of radical product innovation capability on new product performance is negative but nonsignificant under a formal structure, while the same effect is positive under an informal structure. Conversely, the effect of incremental product innovation capability on new product performance is positive under a formal structure, while the same effect is negative under an informal structure. The implications for managing different types of product innovation capabilities under formal versus informal structures and their effects on new product performance are discussed.     

知识密集型服务业的知识转移与创新

在详细分析集群企业间知识转移的方式、路径的基础上,提炼出知识转移过程的概念模型,并进一步讨论知识转移是如何推动创新活动的。     

The intermediator role in value co-creation within a triadic business service relationship

This study aims to enhance the knowledge of the roles played in value co-creation adopted by parties to triadic service business relationships. We approach the research issue through theoretical considerations and explore it empirically with a qualitative case study of triadic service relationships in the property maintenance business.     

The adoption of agency business activity,product innovation,and performance in Chinese technology ventures

This study examines the roles of firm characteristics and environmental factors in the formation of interfirm alliances. Specifically, we examine the dual role of these groups of factors as inducements and opportunities for Chinese high‐technology new ventures (HTNVs) in their adoption of agency business activity, a downstream type of alliance involving marketing and distribution of the products of foreign firms. Results suggest that both internal and external factors are related to the adoption of agency business activity but the inducement and opportunity value of environmental uncertainty may be dampened by institutional support provided to HTNVs. Further, we find that successful agency business activity is positively related to new venture performance but negatively related to its product innovation efforts. Theoretical and managerial implications are discussed. Copyright © 2002 John Wiley & Sons, Ltd.     

The mediating role of organizational complexity between enterprise resource planning and business model innovation

Almost any firm faces a change during its life that requires a redefinition of the business model to be more innovative, namely business model innovation (BMI) that designs an architecture to create, capture and deliver value to customers in the marketplace and society. These changes are a great opportunity to improve revenue and costs, but the associated organizational complexity also has drawbacks, due to the set of interrelationships and linkages within the firm. This situation could be even more relevant for firms that implement Enterprise Resource Planning (ERP), due to the complexity of the software and also the difficult implementation process in the organization. In order to fill this gap, this study analyses 104 firms that have implemented ERP and deal simultaneously with BMI. The research objective is therefore to test the role of organizational complexity between ERP and BMI. Specifically, the aim is to test the mediating role of organizational complexity between ERP and BMI. Our findings reveal that organizational complexity mediates between ERP and BMI. Important implications for researchers and managers are provided to optimize ERP implementation so as to obtain a higher return on the costs and revenue associated with BMI.     

The effects of complementarity of knowledge and capabilities on joint innovation capabilities and service innovation: The role of competitive intensity and demand uncertainty

Service innovation has become increasingly important for the growth of developed and developing countries. Despite an extensive body of literature on the role of joint innovation capabilities in improving a firm's innovativeness, the multivariate influences of operant resources and joint innovation capabilities, as well as the interplay among these in the prediction of service innovation have not been scrutinized in the context of B2B SMEs in a developing country. This study aims to fill this gap by testing a model that shows the relationships among complementarity of knowledge and capabilities as operant resources, joint innovation capabilities, and service innovation. We derive hypotheses about these relationships and test them using data from a sample of 302 respondents from 151 firms operating in the UAE. The results show that the relationships between complementarity of knowledge and joint innovation capabilities, and between joint innovation capabilities and service innovation, are significant and positive. They also show that the mediation effect of joint innovation capabilities on the relationship between complementarity of knowledge and service innovation is positive and full. This study also tests the moderating roles of competitive intensity and demand uncertainty in the relationship between joint innovative capabilities and service innovation and finds that their connection is stronger when competitive intensity is high.     

Implementing radical innovation in the business: the role of transition modes in large firms

Extensive research has emphasized the relevance and importance of separating explorative from exploitative activities within firms. Recently, several scholars have argued that, in order to be successful, the outcomes of such structurally separated explorative activities need to be integrated in the operational business units of the firm. Nevertheless, detailed research on how such integration can be realized is lacking. Based on in‐depth case studies of seven large multinational, technology intensive companies, we find five transition modes on how interfaces between radical innovation units and operational business are managed effectively as a means to implement radical innovation on a company level: (1) external validating; (2) liaison channeling; (3) showcasing innovation; (4) network building; and (5) integrative innovation planning.     

An evolutionary framework for service innovation: Insights of complexity theory for service science

There is an increasing need for a theory-based and industry-oriented framework for service innovation in both research and practice. However the study of service innovation has been somewhat limited. This paper applies two models of complexity theory (Kauffman's NK model in biology and organizational ambidexterity in organization science) for service innovation and proposes a novel perspective on service innovation as an evolutionary process, which is interactive, local, unpredictable, and emergent. The paper also proposes a typology of service innovation that includes eight different strategic orientations of service innovation; also included are illustrations from a knowledge-intensive service industry, particularly the IT-based consulting and service industry sector. Drawing from this complexity theory perspective, the paper discusses numerous implications for future conceptualization of service, multidimensionality of service innovation, and service innovation strategies.     

Coopetition and product innovation performance: The role of internal knowledge sharing mechanisms and formal knowledge protection mechanisms

Coopetition is an important new product development strategy; yet, studies addressing the impact of collaboration with competitors on product innovation performance provide mixed evidence. Conducting Tobit analyses on a sample of 627 manufacturing firms that responded to the fifth wave of the Flemish Community Innovation Survey, we find that the innovation performance implications of competitor collaboration depend on fine-grained intra-organizational design characteristics. In particular, our results show that competitor collaboration has a significant positive impact on product innovation performance only when internal knowledge sharing mechanisms and formal knowledge protection mechanisms are present. These findings contribute to the emerging contingency perspective on coopetition and provide specific recommendations to managers that are involved in coopetitive endeavors.     

Analysis on product rollover strategies: The innovation level perspective

We focus on the firm's decision on product rollover strategies from the view of innovation level. Consider an innovative firm produces and sells durable goods to strategic consumers over two periods. In period one, the firm offers a product with a low innovation level. During that period, the firm continues to innovate such that a product with a high innovation level can be offered in period two. The analysis is separated into two parts: minor-to-moderate innovation and major innovation. We find that the rollover decision is considerably different when the innovation is minor-to-moderate from when the innovation is major. In the former case, the optimality of each rollover strategy is fully determined by the innovation level of the product introduced in period two and the customers' discounter factor; whereas in the latter case, the single rollover strategy always dominates the dual rollover strategy. Moreover, the firm's pricing policy under single rollover is strongly dependent on the innovation level of the product introduced in period two. Whereas under dual rollover, the firm's pricing decision is independent of the innovation level. Finally, it is to be noted that the findings in this research are mainly contingent on the model framework.     

Dynamic capabilities for service innovation: conceptualization and measurement

Although the development of new services is becoming a major concern for firms throughout the entire economy, there is only little insight in the organizational antecedents of service innovation. It is widely acknowledged that engaging in R&D is relatively uncommon for service providers, but there are also indications that the R&D concept is poorly applicable to service innovation in the first place. Therefore, attention is shifting toward the actual capabilities that allow a firm to source ideas and convert them into marketable service propositions. This paper provides the operationalization of a set of dynamic service innovation capabilities (DSICs) that is general enough to be relevant across different sectoral contexts. While the selected framework is found to consolidate earlier works on the specificities of service innovation, it also captures broad insights on the evolutionary properties of the creation of novel solutions. Thereby, it exemplifies how DSICs can be conceptualized according to the so‐called synthesis approach to service innovation. We operationalize a refined version of such DSICs and develop a measurement scale, using two multi‐industry subsamples from a dataset of 391 Dutch firms. The measured capabilities are found to correlate to different extents with performance measures. Our main contribution, a validated scale for five complementary DSICs, opens the way to comparative analyses regarding firm abilities for creating innovative services.     

The fit between product market strategy and business model: implications for firm performance

We examine the fit between a firm's product market strategy and its business model. We develop a formal model in order to analyze the contingent effects of product market strategy and business model choices on firm performance. We investigate a unique, manually collected dataset, and find that novelty‐centered business models—coupled with product market strategies that emphasize differentiation, cost leadership, or early market entry—can enhance firm performance. Our data suggest that business model and product market strategy are complements, not substitutes. Copyright © 2007 John Wiley & Sons, Ltd.     

Doing business in India: The role of jaan-pehchaan

The study seeks to further advance our understanding of the complexities and challenges facing international managers when conducting business in an Indian context. Drawing on survey data from managers in over 300 companies, the study suggests that in-order to enhance performance in a business-to-business context within India, there is a need to nurture satisfactory business relationships through the practice of Jaan – pehchaan. Specifically, the study revealed that relationship satisfaction and long-term orientation are driven by three behavioral constructs associated with Jaan – pehchaan, i.e., Pehchaan, Len-den and Bharosa and these serve to positively drive business performance. Several managerial and theoretical implications are extracted from the study along with directions for future research.     

The dynamics of product innovation and firm competences

This study examines how product innovation contributes to the renewal of the firm through its dynamic and reciprocal relation with the firm's competences. Field research in five high‐tech firms of varying age, size, and level of diversification is combined with analysis of existing theory to develop the findings of the study. Based on the notion that new products are created by linking competences relating to technologies and customers, a typology is derived that classifies new product projects based on whether a new product can draw on existing competences, or whether it requires competences the firm does not yet have. Following organizational learning theory, these options are conceptualized as exploitation and exploration. These organizational learning concepts are used to gain a dynamic and path‐dependent view of product innovation and firm development, and to reveal the unique nature and challenges of different types of product innovation. Copyright © 2002 John Wiley & Sons, Ltd.     

Using the crowd for business model innovation: the case of Digikala

On November 15, 2015, Digikala, one of the largest online stores in the Middle East, launched its first-ever crowdsourcing contest called ‘A glance at tomorrow’. What distinguishes this contest from common crowd-based initiatives is that it was aimed at Business Model Innovation (BMI) rather than product and process innovation. Although using the crowd has proven to be an effective way for firms to boost their product and process innovation, its use for BMI is challenging. Based on real large-scale data from the Digikala’s crowdsourcing contest, this research focuses on the application of crowd-powered solutions in BMI, which has rarely been investigated previously. Our exploratory case study indicates that the crowd could contribute to the BMI process. Our findings point to a new form of ‘division of innovation labor’ in BMI. Contribution of the crowd in BMI is more likely to be relevant to Value Proposition and Value Delivery, while it might be less relevant to Value Capture and Value Creation. The results also support the notion that crowd-contributor characteristics affect the quality of proposals for BMI. We argue that this line of research could help companies design and implement customized crowd-based initiatives to better support their BMI process.