New Service Development Performance Research Articles

Customer participation in manufacturing firms’ new service development: the moderating role of CRM technology

PurposeThis paper aims to examine how customer participation in new service development (NSD) and customer relationship management (CRM) technology can improve the NSD performance of manufacturing firms. Additionally, the paper examines CRM technology usage to understand how it impacts new service performance both individually and jointly with customer participation in NSD.Design/methodology/approachThis study is a survey of 216 manufacturing managers who are overseeing the development of new services at their organizations. For the analysis, structural equation modeling is used with Amos 22.0. Measures of all latent variables in the analysis pass the traditional tests for reliability, convergent validity and discriminant validity. Furthermore, the results of a common latent factor test for common method variance and Harman’s one-factor test indicate that common method bias is not a source of endogeneity in the model.FindingsCustomer participation has a positive effect on NSD performance. CRM technology usage also has a positive effect on NSD performance. The effect of customer participation on NSD performance is enhanced by CRM technology. The results of a post hoc analysis suggest that the usage of CRM technology has the most benefit for managing the technical aspects of customer participation.Research limitations/implicationsThis study has methodological limitations that may impact the generalizability of results. For instance, it is based on cross-sectional self-reported survey data, which is more subjective than longitudinal secondary data. Survey research lacks the depth and nuance of qualitative research designs, which are commonly employed to study NSD. In addition, this study focuses on large US manufacturing firms. The authors do not include small firms or international organizations in the sample. Despite these limitations, they believe the findings can provide significant contributions to the NSD literature.Practical implicationsAlthough prior research has shown that customer participation and CRM technology can individually influence new product development (NPD) performance, the results indicate they are equally effective factors in the development of new services. Furthermore, the authors show that customer participation can be enhanced via the use of CRM technologies. The interaction is more pronounced within the technical aspects of NSD.Originality/valueThis study contributes to the NSD literature, and it also has implications for managers leading NSD efforts in traditional tangible-product industries. The findings provide additional evidence that customer participation is an effective NSD strategy for manufacturing firms (Morgan et al., 2019). Furthermore, CRM technology is integral to NSD performance. CRM technology not only has a direct effect on NSD performance, but the interaction term of customer participation by CRM technology also has a positive effect on NSD performance.

Does service modularity enhance new service development performance in supply chains: an empirical study

PurposeCustomer firms and suppliers are valuable knowledge resources that can be used for achieving superior new service development (NSD) performance. This study aims to investigate how supply chain relationship quality (SCRQ) and knowledge sharing promote the success of NSD, and examines service modularity as an important contingency factor that enhances NSD performance in supply chains.Design/methodology/approachBased on service-dominant logic, this study builds a conceptual model to empirically explore the impacts of SCRQ and knowledge sharing on NSD performance, and highlights the moderating effect of service modularity by means of survey methodology of 295 Chinese service firms to test the research hypotheses.FindingsRegression analysis results show that SCRQ has significant positive effects on knowledge sharing and NSD performance; knowledge sharing plays a partial intermediary role between SCRQ and NSD performance; and service modularity partially moderates the relationships between SCRQ, knowledge sharing and NSD performance.Research limitations/implicationsGeneralizations here are limited to Chinese service firms. Service modularity in manufacturing firms experimenting with servitization has yet to be examined and provides a good avenue for future research.Originality/valueThis study contributes to service management literature by providing empirical understanding of how service modularity affects NSD performance in multiprovider contexts. Furthermore, this study offers novel insights on the impacts of inter-firm relationship quality and knowledge sharing in modular collaborative innovation.

A NOVEL PERFORMANCE EVALUATION FRAMEWORK FOR NEW SERVICE DEVELOPMENT IN THE HEALTHCARE INDUSTRY USING HYBRID ISM AND ANP

Today, the innovative activities of companies in new service development (NSD) have an undeniable contribution to the economic development of countries. Given the recent advances in the healthcare industry, the issue of NSD and performance management of firms operating in this industry has received special attention of researchers and decision makers. A review of previous research shows that on the one hand there is no agreement among experts on NSD performance measurement criteria and on the other hand there has been no systematic framework that can measure and manage firm performance in this area. The proposed framework should allow for interaction between different decision makers, considering multiple and sometimes conflicting criteria. In this regard, this paper aimed to provide a framework to assess the NSD performance in healthcare industry using multiple-criteria-decision-making methods. The proposed model consists of 17 different criteria that have been identified and finalized based on previous studies as well as experts’ opinions. Then, the indicators are classified with the help of experts in the form of a balanced scorecard model and presented as an initial model. Due to internal relationships between criteria, this model was evaluated using interpretive structural modelling and modelled at 5 different levels. Then, the analytic network process approach was applied to determine criteria weights. Finally, new service development performance in Moheb hospital was evaluated through the framework proposed here.

The roles of NSD performance and standardized service development processes in the performance of micro, small, and medium-sized enterprises

Despite its importance, for micro, small, and, medium-sized enterprises (MSMEs), the impact of new service development performance (NSDP) on organizational performance (OP) and the significance of formal or standardized service development processes (SSDPs) remains unknown. This study proposes that NSDP is positively associated with OP and that SSDPs positively moderate this direct effect. These and other hypotheses are tested with data collected from 801 Irish service MSMEs using Partial Least Squares Structural Equation Modelling (PLS-SEM) and multigroup analysis. Our results reveal that a positive relationship exists between NSDP and OP and we report the magnitude of this relationship for micro, small, medium-sized organizations; while the moderating effect of SSDPs was not supported for each of these groups. We thus provide novel empirical insights into service development for MSMEs, where our findings suggest that SSDPs are of particular importance for small organizations.

A Knowledge Transfer Perspective on Front/Back-Office Structure and New Service Development Performance: An Empirical Study of Retail Banking in China

Aim/Purpose: The purpose of this study is to investigate the mechanism of the front/back-office structure affecting new service development (NSD) performance and examine the role of knowledge transfer in the relationship between front/back-office structure and NSD. Background: The separation of front and back-office has become the prevailing trend of the organizational transformation of modern service enterprises in the digital era. Yet, the influence of front and back-office separation dealing with new service development has not been widely researched. Methodology: Building on the internal social capital perspective, a multivariate regression analysis was conducted to investigate the impact of front/back-office structure on the NSD performance through knowledge transfer as an intermediate variable. The data was collected through a survey questionnaire from 198 project-level officers in the commercial banking industry of China. Contribution: This study advances the understanding of front/back-office structure’s influence mechanism on new service development activity. It reveals that knowledge transfer plays a critical role in bridging the impact of front and back-office separation to NSD performance under the trend of digitalization of service organizations. Findings: This study verified the positive effects of front/back-office social capital on NSD performance. Moreover, knowledge transfer predicted the variation in NSD performance and fully mediated the effect of front/back-office social capital on NSD performance. Recommendations for Practitioners: Service organizations should optimize knowledge transfer by promoting the social capital between front and back-office to overcome the negative effect organizational separation brings to NSD. Service and other organizations could explore developing an internal social network management platform, by which the internal social network could be visualized and dynamically managed. Recommendation for Researchers: The introduction of information and communications technology not only divides the organization into front and back-office, but also reduces the face-to-face customer contact. The impacts of new forms of customer contact to new service development and knowledge transfer between customer and service organizations call for further research. Along with the digital servitization, some manufacturing organizations also separate front and back-offices. The current model can be applied and assessed further in manufacturing and other service sectors. Impact on Society: The conclusion of this study guides us to pay attention to the construction of social capital inside organizations with front/back-office structure and implicates introducing and developing sociotechnical theory in front/back-office issue undergoing technological revolution. Future Research: As this study is based on the retail banking industry, similar studies are called upon in other service sectors to identify differences and draw more general conclusions. In addition, as the front and back-offices are being replaced increasingly by information technology such as artificial intelligence (AI), it is necessary to advance the research on front/back-office research with a new theoretical perspective, such as sociotechnical theory.

Innovation community and content providers' new service development performance in technology-based service ecosystem

PurposeThis paper investigates the paths through which innovation community affects content providers' new service development (NSD) performance in technology-based service ecosystem and contingency factors exist in the paths.Design/methodology/approachThe research model is built based on service-dominant (S-D) logic, exploring the relationship among innovation community, content providers' knowledge acquisition and content providers' NSD performance as well as the moderating role of content providers' technology readiness and content providers' complexity. Using survey data collected from 386 content providers of selected open network platforms in China, this study finds broad support for the proposed research model.FindingsThe findings of this paper reveal that content providers' tacit knowledge acquisition from users plays a mediating role between the innovation community and new service ratings. Content providers' technology readiness plays a positive moderating role in the relationship between innovation community and their explicit or tacit knowledge acquisition. Content providers' task complexity negatively moderates the effects of their explicit knowledge acquisition from users on new service volumes or ratings, but positively moderates the effects of tacit knowledge acquisition from users on new service volumes or ratings.Originality/valueThough extant literature highlights the importance of knowledge acquisition in NSD performance, few studies explore the antecedents of content providers' knowledge acquisition from users and the paths through which these antecedents affect content providers' NSD performance. Moreover, boundary conditions exist in the process of improving NSD performance are generally ignored in previous literature. With the lens of S-D logic, this paper explicates how content providers of different technology readiness and different task complexity enhance their new service volumes and ratings through acquiring explicit and tacit knowledge from users in innovation community. Adopting S-D logic from marketing area to NSD area, this paper not only enriches the theoretical accumulations of antecedents and boundary conditions of content providers' NSD performance but also offers insights for content providers and users on how to synergistically advance NSD activities and co-create value in the technology-based service ecosystem.

Cross-country differences in new service development

PurposeThe purpose of this paper is to test how national culture may help to explain cross-country differences in new service development (NSD) by comparing the impact of NSD success factors between Mexico and Sweden.Design/methodology/approachEight hypotheses based on prior literature on NSD and national culture were tested using covariance-based structural equation modeling and survey data from 210 Mexican and 173 Swedish firms.FindingsLaunch proficiency and customer interaction had a positive impact on NSD performance with no difference between the two cultures. NSD process formalization did not have clear positive impact on NSD performance but had a statistically significantly stronger impact in the structured culture (Mexico). Team empowerment affected NSD performance positively, but the difference between cultures was non-significant.Research limitations/implicationsThe impact of national culture depends on the type of NSD success factor. Some factors are unaffected by the cultural context, while factors congruent with the national culture enhance performance. Factors incongruent with national culture may even hurt NSD performance.Practical implicationsWhen choosing priorities in NSD improvement, managers need to consider the national culture environment.Originality/valuePaper directly tests how national culture moderates NSD performance using primary data. Findings suggest that the effects of NSD success factors are contingent on congruence with national culture.

Organizational Structures for New Service Development

Although previous research has demonstrated that many critical success factors for new service development (NSD) relate to how the NSD function is organized, few attempts have been made to examine the organizational arrangements for NSD in more detail. This study explores what kind of organization structures firms use for NSD, and what implications such structures have for NSD. To expand the previous research heavily focused on standardized services, a qualitative, in‐depth study of NSD in knowledge‐intensive business service firms was conducted. The study uses a multiple case comparative research strategy where empirical data was collected in nine companies. The study empirically identifies four key organizational arrangements for NSD: NSD in customer relationships, NSD in temporary project teams, NSD in business development units, and NSD in separate R&D units. These arrangements are conceptualized as organization structures characterized by their level and nature of specialization, standardization, formalization, and centralization. The study shows that these key NSD structures can coexist in organizations despite their different and even contradictory characteristics, and highlights the unique opportunities and challenges that each structure brings for NSD. Challenging extant research that has focused on examining particular structural characteristics as success factors for NSD, this study demonstrates that NSD performance may be driven by a configuration of several, simultaneously operating NSD structures rather than by one superior structure. Accordingly, firms should establish organizational approaches that support close connections between different NSD structures.

Continuous improvement competence, employee creativity, and new service development performance: A frontline employee perspective

As an important source of competitive advantage, new service development (NSD) is widely used by service firms for new developments. Since creative ideas are crucial to NSD and service firms commonly involve frontline employees in the process of NSD, we argue that frontline employees’ creativity can enhance NSD performance. In addition, since the implementation of continuous improvement practices necessitates frontline employees to make changes and solve problems consistently, we argue that frontline employees’ operational improvement competence (OIC) (i.e., skills in implementing continuous improvement practices) can enhance their creativity. Furthermore, we draw on the contingency theory and argue that the relationships between OIC, employee creativity, and NSD performance are contingent on six relevant contextual factors. Based on the data collected from 146 frontline teams in the banking sector of China, we test our theory-driven model and the posited hypotheses. Our findings serve to advance the knowledge of multiple disciplines by showing the linkages among their core concepts (i.e., OIC, employee creativity, and NSD performance) and also ascertain the factors (i.e., OIC and employee creativity) that enhance NSD performance and the circumstances under which these factors are particularly effective.

Mixing rich and asynchronous communication for new service development performance

This article explores the nature of relationships between internal communication modes, new service development (NSD) competencies (specifically learning and development competencies) and NSD performance. To do so, it draws on and advances communication theory by comparing and contrasting the contingent approach, favoured by media richness theory and media synchronicity theory, with the multiplicative manner of dual coding theory. Antecedent roles of rich and asynchronous communication modes for two NSD competencies are investigated, and their function as critical contingency variables affecting the competencies–performance link is unravelled. An empirical quantitative study of senior managers of leading service firms was conducted, with a survey‐based methodology. Results show that a learning competency drives development competency which in turn drives NSD performance. Asynchronous communication is essential for learning competency but not for development competency. In contrast, rich communication underpins development but has no direct effect on learning competency. Rich communication is essential for NSD performance when a firm has a low development competency. The interaction between asynchronous and rich communication is shown to be positive for learning, whereas surprisingly it is negative for development competency.

The relative impact of culture, strategic orientation and capability on new service development performance

Purpose – This research attempts to understand the operant resources required for new service development (NSD). It aims to construct a more intricate understanding of how operant resources interact to drive NSD. Specifically, it aims to look at the impact of culture, strategic orientation and NSD capability for number of new services, the success rate of new services and the resulting financial contribution by NSD to overall firm performance.Design/methodology/approach – To investigate these relationships, data were collected from 105 leading UK‐based service firms via a key informant survey. Regression analysis was employed to test the model presented.Findings – Analysis reveals that a different culture (entrepreneurial culture) is needed to drive the number of new services from that required for a higher success rate (learning culture). A NSD capability has an important role supporting both of these aspects of NSD performance. The quantity and quality of NSD go on to affect the financial contribution m...

Having a strategy for new service development – does it really matter?

PurposeThe aim of this study is to investigate the role of key strategic factors in new service development (NSD). In particular, the role of service development strategy, a formalised development process, integrated development teams and customer co‐creation were investigated and the results were compared with managers' beliefs.Design/methodology/approachThe study used a sample of more than 500 service development projects to test a NSD conceptual model. Regression analysis was used to test the relative importance of the key strategic factors, and the results were compared with managers' beliefs.FindingsThe results show that managers believe that customer co‐creation is most important in order to succeed with NSD. However, contrary to management belief, a service development strategy is the “missing link” in improving NSD performance. In addition, the research highlighted an interaction effect between integrated development teams and customer co‐creation, which means that project managers should focus on individual competencies on the development team and how they interact with customers throughout the NSD process.Originality/valueFor a long time, NSD has failed to receive the attention it deserves, not just in practice but also in service research. This study shows that the number of new services put on the market and then withdrawn because of low sales remains as high as 43 per cent. This paper contributes knowledge on how to reduce the number of failures in NSD by pointing out the key strategic factors that influence NSD performance.

The impact of customer knowledge capability and relational capability on new service development performance: The case of health service

AbstractThis study intends to explore the impact of the customer knowledge integration capability, customer knowledge absorptive capability, customer knowledge creation capability, and customer relationship capability on new service development (NSD) performance for Taiwan's hospitals from customer knowledge and customer relationship perspectives. We employ the self-administered mail survey to collect research data and select self-pay medical service managers or top managers as key informants. After testing the fitness of sample representativeness, non-response error, common method variance, reliability, and validity, we adopt structure equation model to test the research model. Empirical results indicate the customer knowledge absorptive capability of a hospital is positively associated with NSD performance, and the customer knowledge integration capability of a hospital fully mediates the relationship between customer knowledge absorptive capability and NSD performance. However, customer relationship capability and customer knowledge absorptive capability both have positive influence on customer knowledge creation capability. Managerial and theoretical implications are discussed.

The impact of customer knowledge capability and relational capability on new service development performance: The case of health service

AbstractThis study intends to explore the impact of the customer knowledge integration capability, customer knowledge absorptive capability, customer knowledge creation capability, and customer relationship capability on new service development (NSD) performance for Taiwan's hospitals from customer knowledge and customer relationship perspectives. We employ the self-administered mail survey to collect research data and select self-pay medical service managers or top managers as key informants. After testing the fitness of sample representativeness, non-response error, common method variance, reliability, and validity, we adopt structure equation model to test the research model. Empirical results indicate the customer knowledge absorptive capability of a hospital is positively associated with NSD performance, and the customer knowledge integration capability of a hospital fully mediates the relationship between customer knowledge absorptive capability and NSD performance. However, customer relationship capability and customer knowledge absorptive capability both have positive influence on customer knowledge creation capability. Managerial and theoretical implications are discussed.

A Comparison of New Service versus New Product Development: Configurations of Collaborative Intensity as Predictors of Performance

Collaboration among firms for innovation has received considerable attention. However, little is known about how firm-to-firm collaboration is configured in new service development (NSD) versus new product development (NPD). This study takes a multidimensional approach and measures firm-to-firm collaboration on different intensity dimensions of (1) processes (mutual communication, joint engagement, sharing responsibilities) and (2) ownership (relationship commitment and mutual trust). By showing that the phenomenon of collaboration is multifaceted, this study is able to knit a more comprehensive and cohesive understanding of the differences between NSD and NPD success as the result of different patterns of collaboration. Specifically, it utilizes survey data collected from 194 alliances to substantiate how NSD and NPD differ on these collaborative dimensions and then explores their impact on NSD versus NPD performance. The findings suggest that collaboration between firms in NSD is configured and works differently than collaboration between firms in NPD. The results further show that there is a stronger, positive relationship of intensity levels of joint engagement among firms involved in product development and performance than when a new service is developed. However, the intensity of mutual trust has a stronger, positive relationship with development performance when a new service is developed than when a new product is developed. Implications are discussed, and suggestions for future research are given.

The development and validity of new service development scale: using a balanced scorecard approach

New Service Development (NSD) management has emerged as an important topic for service managers and researchers. In achieving long-term NSD success, it is vital that a firm have effective mechanisms for assessing success. This paper, focusing on the performance at programme level, aims to develop a measurement scale for NSD performance within balanced scorecard framework which includes financial performance, customer performance, internal performance, and learning and growth performance. We conduct a scale analysis using survey data collected from a sample of key informants in knowledge-intensive business services and confirm the reliability and validity of the proposed four multi-item scales. The NSD performance scales developed in this research may be used to advance scholarly understanding theory in NSD. Further, these NSD scales may provide a useful diagnostic and benchmarking tool for managers seeking to assess and/or improve their firm's service innovation expertise.

The determinants of new service development: Service characteristics, market orientation, and actualizing innovation effort

This study aims to understand how service characteristics, market orientation, and efforts in innovation together drive new service development (NSD) performance. Both qualitative and quantitative (mixed methods) research are used in researching these relationships: first, in-depth interviews from six service managers are taken to support the conceptual framework and investigative measures. Then, a survey research from Top 500 service firms and Top 100 financial firms in Taiwan is used to examine the research hypotheses. The results indicate that service characteristics of heterogeneity and perishability and market orientation positively influence a firm’s resources and reward in innovation. Also, efforts in innovation and market orientation positively impact NSD performance. These understandings benefit the development of the innovative advantages of service firms in contrast to physical goods. Unlike prior research limited to a single service case, the empirical evidence here is supported by various service industries to develop a generalized model.

The impact of learning orientation on NSD and hotel performance

PurposeAlthough the significance of the learning organization concept is recognised in innovation management, there are only a few studies on the way in which a learning orientation affects new service development (NSD) in the hotel industry in Iran. This paper aims to fill that gap.Design/methodology/approachA questionnaire is designed to ask hotel managers and owners for their thoughts on a range of organizational variables including the nature of learning orientation, NSD and the link with hotel business performance.FindingsUsing 129 hotels in Iran, it was found that NSD can be driven by higher levels of commitment to learning, shared vision and open‐mindedness. Furthermore, a regression analysis suggests that the effect of NSD on performance is positive.Research limitations/implicationsThis paper focuses on senior managers and owners of Iranian hotels who have a specific culture, history and experience. It would be useful to take a similar approach in other established industries with different cultural and environmental characteristics and experience, so that comparisons can be made.Practical implicationsThe findings reinforce the argument that a learning approach, coupled with organizational creativity, is the main prescription for a creative quality process. It also provides a quantum leap in an organization in terms of innovation. Evidence from this paper also shows the importance of managerial emphasis on creating an internal business environment conducive to innovative activities.Originality/valueThe paper shows how learning deficiency is one of the main reasons that companies find it difficult to remain successful in the market.

ORGANIZATIONAL CULTURE AND NEW SERVICE DEVELOPMENT PERFORMANCE: INSIGHTS FROM KNOWLEDGE INTENSIVE BUSINESS SERVICE

Current research on new service development (NSD) management has resulted in an impressive amount of literature on the success factors of new service development, but there is little literature on NSD organizational culture. The purpose of this study was to assess the relationship between organization culture and NSD performance. Data were collected via questionnaires through face-to-face interviews with KIBS managers knowledgeable about NSD in their organization (sample size 192). The set correlation analysis was chosen to assess and evaluate the relationship between organization culture and NSD performance. Research results indicate that there exist strongly complementary relationships among innovative supportive culture, market orientation culture, learning culture and customer communication culture. This study outlines that the NSD management should perform to foster the different NSD organizational culture together and thereby enhance the performance of new service development activities.

The impact of market orientation on NSD and financial performance of hospital industry

PurposeThe principal aim of this study is to determine the critical factors of market orientation (MO) and to measure its effect on new service development (NSD) and financial performance of hospital industry in Turkey.Design/methodology/approachDrawing on a self‐administered questionnaire, the data were collected from a sample of privately‐held general hospitals within the city of Istanbul in Turkey. Based on theoretical considerations, a model was proposed to examine the interrelationships among MO, NSD‐performance and financial performance.FindingsData analysis reveals that while MO has a strong and positive effect on NSD‐performance, it has no significant effect on financial performance. Also a strong and positive relationship was noted between NSD‐performance and financial performance. Finally, the findings also provided evidence for the mediating role of NSD‐performance in the relationship between MO and financial performance in the hospital industry.Research limitations/implicationsFirst, due to relatively small sample size, a caution should be exercised when interpreting the results. Second, the data were collected from hospitals in Turkey, which may restrict to some extent generalizability of findings. Third, we relied on the subjective evaluations of senior executives. It would therefore be useful to replicate the results with objective measures of performance indicators.Practical implicationsAlthough there is compelling evidence that MO has a positive effect on business performance, it alone may not be able to produce superior performance. Many hospitals are committed to MO and new services development. The framework clearly indicates that a strong commitment to both the NSD‐performance and marketing areas is essential for improving the financial performance of hospitals. Also, to remain competitive in today's healthcare industry, hospital managers should all keep pace with the daily changes in the market place and stay attuned to NSD activities and quality management practices.Originality/valueThe main thrust of this study is to investigate whether the relationship between MO and financial performance is mediated by NSD‐performance in hospital industry. This constitutes the novelty of this research as most prior empirical research investigating a mediating mechanism through which MO affects firm performance largely focused on other factors with no or little emphasis being placed on NSD activities or NSD‐performance in healthcare context.