"Network Service Innovation: Mobile Broadband, Clustering and Organization Performance"

Abstract

In this paper, we examine the effects of network service innovations, such as new telecommunication services, social media, and other internet-based communication services on organizational internal and external structure and organization performance. We argue that such innovations enhance organizational performance directly by improving the efficiency of coordination and indirectly by improving the structure of the organization’s internal and external networks. We test the argument in the context of the adoption of mobile broadband by a sample of 245 Norwegian business organizations collected over three years (2008-2010). We find support for the hypothesized direct effect of network service innovation on organization performance and a mediating effect through the effects of the clustering of internal relationships but not for a mediating effect of the external network. The findings contribute the understanding of the effects of network service innovations on organizational structure and performance and have important implications for organizational design and innovation.