Service, innovation and dynamic capabilities : from conceptualization to explanation
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The overall purpose of this dissertation is to investigate the role of dynamic capabilities in service innovation. However, I do not accept the notions of service innovation and dynamic capabilities as given, but instead I start with exploring their meanings. Next, due to the lack of an adequate instrument for measuring dynamic capabilities, I operationalize sensing, seizing, and transforming capabilities. Finally, I investigate how managerial dynamic capabilities can be developed and how they affect innovation and operational capability in a service organization. Thus, my research questions are as follows: 1) What is service innovation? 2) What are dynamic capabilities? 3) How can dynamic capabilities be operationalized? 4) How can dynamic capabilities be developed, and how do they affect service innovation and operational capability? I answer each question in a series of four articles. In Article 1, I demonstrate that service innovation is neither a well-established concept nor a commonly understood phenomenon. Instead, I outline six existing perspectives on what service and service innovation are: new service development (NSD), service engineering, service infusion, service design, service reconfiguration, and service integration. Each of these perspectives has its own research focus, logic, and vocabulary, but the NSD perspective creates a strong gravitational field that decelerates the real advancement of other perspectives. Moreover, NSD itself is under the influence of new product development research. As a result, perspectives suffer from lexical cross-contamination and parallelism in approaches that obstruct researchers from making novel and relevant contributions. To overcome these challenges, I encourage a more distinct pluralism of perspectives while not excluding the possibility of meaningful conversations across them. In Articles 2, 3, and 4, I take the NSD perspective, but I do so in an unconventional manner. I examine dynamic capabilities—a factor that, at least in theory, influences the success of changes in the bundle of the organization’s services, the latter defined as the organization’s core activities. In Article 2, I critically assess dynamic capabilities as a notion, concluding that the current interpretations of the term are unsustainable and unsatisfactory. I suggest a new definition of dynamic capabilities that specifies necessary and sufficient conditions for dynamic capabilities: the individual’s intention to change the status quo in the organization as well as the individual’s high level of influence in the organization. I further outline possible antecedents and outcomes of dynamic capabilities. In Article 3, I apply the original tripartite disaggregation of dynamic capabilities to managers. I clarify the notions of managerial sensing, seizing, and transforming capabilities by delineating what they are and what they are not. I then develop and empirically validate a brief measure of managerial sensing, seizing, and transforming capabilities. Using structural equation modeling, I provide evidence that transforming is dependent on seizing, and in turn, that seizing is dependent on sensing. Moreover, I demonstrate that managerial seizing capability is positively related to innovation, while managerial transforming capability is positively related to cost reduction. In Article 4, I theorize that training team leaders in design thinking principles and tools leads to the development of their managerial sensing, seizing, and transforming capabilities, which then influences their teams’ innovation and operational capability. Testing the model relies on a quasi-experimental field study with a control group and a four-month time lag. The intervention is presented randomly over time in six geographically isolated business units of a large multinational telecommunications company. The results show that the training program has a positive effect on the participants’ managerial sensing and seizing capabilities, which have a positive effect on managerial transforming capability, the teams’ innovation, and the teams’ operational capability. These positive effects are paralleled by a direct negative effect of the program on the operational capability of the participants’ teams. In addition, the effect of managerial transforming capability on the teams’ operational capability is non-significant. In this summary, I provide a general overview of the theoretical and methodological choices I made while working on my dissertation. I also present the key results, discuss implications and limitations of this work, and suggest future research opportunities.