The Moderating Role of Tangibility in Synchronous Innovation in Services

Abstract

A synchronous pattern of innovation as between technological and management innovation, for example, can help firms improve their performance. This article explores this idea with respect to servitizing companies that introduce service delivery innovation as a means of gaining competitive advantage. It finds that the degree of tangibility, an indicator of the firm's position on the product-service continuum, affects whether and how managers recognize the need for management innovation when introducing service delivery innovation. Using a socio-technical perspective in conjunction with insights from managerial cognition, the relationship between management innovation and two central types of service delivery innovation-technological and customer interface-is examined. Tangibility shapes the managerial cognitive structures that are related to the enterprise's technical and social subsystems in a paradigm that is capable of demonstrating contrasting effects. Technological delivery innovation is related to management innovation in firms with high tangibility. Customer interface delivery innovation, on the other hand, relates to management innovation in firms with low tangibility. This study uses a sample of diverse firms with varying degrees of tangibility to provide support for this theory.