Corporate responsibility for employees and service innovation performance in manufacturing transformation: The mediation role of employee innovative behavior

The purpose of this paper is to examine, within a context of manufacturing transformation, whether corporate responsibility for employees (CRE) promotes the service innovation performance (SIP) of the firm; whether this effect is mediated by employee innovative behavior (EIB), and how two control mechanisms (process-control (PC) and outcome-control mechanism) moderate the relationship.

Drawing on social exchange and control mechanism theory, this paper establishes a conceptual model and adopts a hierarchical regression analysis to examine the model with a sample of 110 manufacturing firms from China.

The study finds that CRE positively affects SIP. EIB mediates such effect. Output-control weakens the effect of CRE on EIB, and PC does not impact on the relationship.

The findings suggest that, facing tremendous pressure in manufacturing transformation, firms must be cautious in treating their employees. Given that EIB is crucial to improving the SIP, and in turn to meet the ever upgrading customer demands, firms ought to actively take responsibilities to protect employees’ interests, and cautiously adopt control mechanisms. Thus employees could be motivated to involve in service innovation actively. This effect not only benefits employees with a sustainable career but also help the firm survive in this tough transformation period.

This study is one of the first (if any) research that examining the impact of CRE on SIP and EIB. The findings are an extension of the existing research, and show the explanation potential of corporate social responsibility on EIB and SIP in a difficult time such as manufacturing transformation.