Information technologies and product-service innovation: The moderating role of service R&D team structure

Abstract

Drawing on the ambidexterity and organizational design theoretical lenses this article analyzes the interplay between R&D team structure, firm’s Information Technology (IT) processes deployment and innovation outcomes. The evidence presented herein upholds the importance of IT and R&D team structure for strategic decisions and to better exploiting firm’s innovation capabilities. Concretely, we argue that R&D team structure (centralized vs formalized vs autonomous) moderates the relationship between IT processes and innovation because it influences the way in which IT is utilized. Considering these facts, we focus on a specific type of innovation, Product-Service Innovation (PSI), largely underexplored despite being increasingly important in modern manufacturing companies. PSI differs from other technological innovations in that it involves continuous engagement with customers and logistics. Through estimation of a Multiple-Indicators Multiple-Causes (MIMIC) model with a unique sample of 352 Manufacturing Multinational Enterprises (MMNEs), we find that customer and logistics IT processes are positively linked to higher levels of PSI and that, as hypothesized, service R&D team structure moderates this relationship. In firms with autonomous R&D teams, customer-based IT processes lead to higher PSI levels, whereas in firms with formalized R&D teams, logistics-based IT processes is conducive to higher PSI levels. IT processes are not an input of PSI in centralized service R&D teams.