Achieving service quality through service innovation exploration-exploitation: The critical role of employee empowerment and slack resources

Sok, Phyra & O'Cass, Aron (2015) Achieving service quality through service innovation exploration-exploitation: The critical role of employee empowerment and slack resources. Journal of Services Marketing, 29(2), pp. 137-149.

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Abstract

Purpose

  • This study investigates the effects of service innovation exploration-exploitation on financial performance through the delivery of quality services. Additional emphasis is also given to examining the extent to which employee empowerment and slack resources enhance or suppress the performance benefits of service firms engaging in service innovation exploration versus exploitation.

Design/methodology/approach

  • Data were drawn from a multi-informant survey of service firms using a drop-and-collect approach. The survey gathered data from managers, customer service employees and customers to test the hypotheses.

Findings

  • The results show that excelling at both exploitative and exploratory innovation helps enhance the quality of services, which in turn yield superior financial performance. Further, empowering employees enhances the relationship between exploratory and exploitative service innovation and service quality. We also show that the extent managers’ perceived their market to be competitive influences in the pursuit of high levels of both service innovation exploration and exploitation and that this relationship is impacted by the extent they believe they have available slack resources.

Practical implications

  • The findings suggest that service firms need to pursue both exploitation and exploration at high levels simultaneously and empower their employees to stay ahead of competitors in delivering quality services, which ultimately contribute to the achievement of superior financial outcomes. Also, the findings highlight the importance of employee empowerment, market competitiveness and slack resources in the pursuit of high levels of both service innovation exploration and exploitation.

Originality/value

  • These findings and our theory indicate that this study is the first to empirically examine organizational ambidexterity in the context of service innovation exploration – exploitation adopting the principles of combined and balanced innovation. The study provides insights into the critical role of customers’ perceptions of service quality in contributing to firms’ financial performance. Our insights are unique in that the study incorporates managers, employees and customers in an integrated service innovation model.

Impact and interest:

1 citations in Scopus
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1 citations in Web of Science®

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ID Code: 82879
Item Type: Journal Article
Refereed: Yes
Keywords: Service Quality, Service Innovation, Exploration-exploitation, Employee Empowerment, Slack Resources
DOI: 10.1108/JSM-03-2014-0085
ISSN: 0887-6045
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > MARKETING (150500) > Consumer-Oriented Product or Service Development (150501)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Advertising, Marketing & Public Relations
Deposited On: 30 Mar 2015 01:34
Last Modified: 08 Jun 2016 00:35

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