The Effect of Dynamic Service Innovation Capabilities on Firm Performance: The Moderating Role of Perceived Environmental Dynamism and the Mediating Role of Service Innovation and Competitive Advantage

Document Type : Research Paper

Authors

1 MSc., Department of Business Management, Faculty of Management, Kharazmi University, Tehran, Iran.

2 Assistant Prof., Department of Management, Shahid Sattari Aeronautical University, Tehran, Iran.

3 MSc., Department of MBA, Faculty of Management, Kharazmi University, Tehran, Iran.

4 Ph.D. Candidate, Department of MBA, Faculty of Business Management, College of Management, University of Tehran, Tehran, Iran.

Abstract

Objective
In the last decade, the role of hotels in the economic development of countries has become more apparent, and it has caused the tourism industry-especially hotel management - to be given a lot of attention in developing countries. However, the industry faces increasing competition as the market is flooded with many related services that are often easily interchangeable. The recent extension of the resource-based view (RBV) into dynamic capability has urged firms to focus on developing new capabilities to cope with shifting markets. This dynamic capability perspective posits that firms need to integrate, build, and reconfigure internal and external competence to address a rapidly changing environment. Due to the dynamic changing environment, firms have to continuously promote novelty and variety. Particularly in the service sector, the concept of dynamic service innovation capability has garnered significant attention. Four major dimensions including sensing customer needs, conceptualizing, coproducing, and scaling, have been identified as some of the most important factors to win competitive advantages. However, empirical validations regarding the generalizability of dynamic service innovation capabilities constructs and their influences on service innovation, competitive advantage, and organizational performance are still limited. Therefore, this research aims to investigate the impact of dynamic service innovation capabilities on firm performance by explaining the moderating role of perceived environmental dynamics and the mediating role of service innovation and competitive advantage.
Methodology
The research employs an applied purpose and a descriptive-correlational nature. The statistical population for this research comprises hotel managers. The sample size, determined using G-POWER 3 software, consists of 222 individuals. A total of 218 responses were collected through a standard questionnaire using an available sampling method during an online survey. The data were analyzed using SPSS 26 and Smart PLS 3 software.
 
Findings
The results of the model analysis showed that the dynamic service innovation capabilities of hotels have a significant effect on their performance. The findings also confirmed the mediating role of service innovation and competitive advantage. In addition, the moderating effect of perceived environmental dynamics on the relationship between dynamic service innovation capabilities and service innovation was confirmed. However, the moderating effect of this variable on the impact of dynamic service innovation capabilities on competitive advantage and firm performance was rejected. The study also confirmed the moderating role of perceived environmental dynamics on the relationship between service innovation and competitive advantage, as well as firm performance.
 
Conclusion
The results of this study show that dynamic service innovation capabilities can increase the competitive advantage and performance of hotels through service innovation. Therefore, first, hotel managers should try to create strategic alignment to adapt to customer needs and interact with value network partners. After understanding the needs and demands of customers, a hotel needs to create and strengthen the ability to conceptualize new service ideas or values. With effective management of dynamic service innovation capability, firms can implement effective management of their resources by providing what customers want and thereby reaching sustainable competitive advantage. Moreover, if firms are more heterogeneously competing in the marketplace, dynamic service innovation capability will play a significant role in organizational performance. Policymakers in the hospitality sector should prioritize enhancing capabilities aligned with evolving traveler preferences. By delivering positive experiences through the development and ongoing refinement of innovative services, they can establish mutual value.

Keywords

Main Subjects

References

 
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Journal of Business Management
Volume 16, Issue 1
2024
Pages 137-166

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