Elsevier

Research Policy

Volume 42, Issue 8, September 2013, Pages 1446-1456
Research Policy

Organisational conditions for service encounter-based innovation

https://doi.org/10.1016/j.respol.2013.04.003Get rights and content

Highlights

  • We investigate organisational conditions for service encounter-based innovation.

  • We find that service encounter-based innovation vary among service organisations.

  • We find a number of organisational conditions for such variations.

  • We suggest how service organisations can induce service encounter-based innovation.

Abstract

This article investigates the organisational conditions for service encounter-based innovation. Its focus is on the initial crucial part of the innovation process during which ideas/new practises are developed by front-line employees and integrated in the organisation. The article argues that service encounter-based innovation varies among service organisations because of different organisational conditions. This is illustrated in a multiple comparative case study of 11 Scandinavian service organisations. A model of conditions for service encounter-based innovation is developed based on the theoretical discussions and the case study. The model suggests how and why some service organisations derive innovation benefits from service-encounters while others do not. Thus, the article provides new and important knowledge concerning user-driven innovation in services.

Introduction

In recent years there has been an increased emphasis on the important role of users in innovation processes (Morrison et al., 2004, Baldwin et al., 2006, Alam, 2002, Kristensson et al., 2008), and in relation to this we have seen the concept of user-driven innovation gaining a central place in the innovation discourse (e.g. von Hippel, 2005, Heiskanen and Repo, 2007). User-driven innovation seems particularly relevant in the service sector because the production and delivery of services are often based on service encounters between service organisations’ employees and their users or customers (Gallouj and Weinstein, 1997, Edvardsson et al., 2000, Sundbo and Toivonen, 2011). Such encounters have received attention in the service marketing literature in which it is often stated that innovation is based on customer relations (Danaher and Mattsson, 1994, De Ruyter et al., 1997), and is frequently linked to service delivery processes (Toivonen and Tuominen, 2009). Nevertheless, we still lack in depth studies of how service encounters can facilitate innovation processes and hence support service encounter-based innovation, which we define as innovation that develops from ideas, knowledge, or practices derived (one way or another) from frontline service employees’ meetings with users in the service delivery process (Sørensen and Jensen, 2012). The existing literature does not say how such innovation actually occurs and how service encounters and front-line employees become successfully involved in service innovation processes (Alam, 2006). This article is an attempt to fill this knowledge-gap.

While the importance of service encounters for user-driven innovation seems an intuitively logical consequence of how services are produced, delivered and consumed (Eiglier and Langeard, 1987), case studies we have made of service organisations provide little evidence that service encounters always support user-driven innovation. On the contrary, the studies suggest that there are as many unsuccessful cases as there are successful ones. But the cases also illustrate how service encounters have a potential for supporting various types of innovation processes which can lead to different service innovations. Nevertheless, many service organisations are not capable of utilising this potential. Both users and the nature of service encounters have an important role to play in determining this potential. However, in this article, we argue that exploitation of the potential for service encounter-based innovation is conditioned, first of all, by a number of organisational conditions. In particular, we focus on organisational conditions that are relevant in the initial idea-generating phase of the innovation process; those that must be in place in order to ‘ignite’ service encounter-based innovation. A cross case synthesis of a multiple case study of 11 Scandinavian service organisations provides the basis for developing a model of the conditions for service encounter-based innovation. In this way the article provides an important contribution to the literature dealing with user-driven innovation.

We begin with a theoretical discussion of the characteristics of different service encounter-based innovation processes and how organisational features may facilitate such processes. This leads us to a general model of organisational conditions for service encounter-based innovation. Following the methodological considerations the model is further developed and detailed on the basis of the multiple case study. In the final section, the conclusions and the implications of the study are summarised.

Section snippets

Service encounter-based innovation processes

Various types of innovation processes have been observed in service organisations. These involve different actors, have different trajectories (Sundbo, 2010), and lead to different types of innovations (Orfila-Sintes and Mattsson, 2009). Based on these observations, several categorisations of service innovations have been suggested (e.g. Gadrey and Gallouj, 1998, Toivonen and Tuominen, 2009, Fuglsang and Sørensen, 2011). Some of these have – implicitly or explicitly – dealt with innovation in

Method

The following analysis is based on a multiple comparative case study of 11 Scandinavian service organisations. The cases were chosen with the purpose of maximising the diversity of cases in terms of service sector belonging, size, professionalism and public–private nature. They were furthermore selected in order to include both business-to-customer (B-to-C) and business-to-business (B-to-B) service encounters as well as various types of ICT or face-to-face based service encounters (the general

Service encounter-based innovation processes in 11 service organisations

The theoretical section of the article suggested that the existence of practise based changes and directed innovation processes is determined by three core dimensions (facilitation, creativity and integration), and that these dimensions are influenced by two organisational elements: the front-office innovation climate and the organisational support system. Thus, it has been suggested that these organisational elements determine whether or not the two types of service encounter-based innovation

Conclusions

This article has discussed the organisational conditions for service encounter-based innovation. Two types of relevant innovation processes have been defined and discussed: practice-based change processes and directed innovation. The analysis has been based on a comparative multiple case study of 11 service companies that are different, for example in terms of type, size, and encounters. The analysis indicates how service encounter-based innovation depends on how well organisations facilitate

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