Are service firms that enact strategies to manage their new service development (NSD) knowledge able to generate a sustainable competitive advantage (SCA)? Based on analysis of data from a large survey of service companies, the answer is yes. The authors find that companies employing the knowledge management strategies of codification and personalization reflect higher levels of NSD knowledge. However, the two strategies vary in their individual performance outcomes, with codification promoting NSD proficiency (an ability to execute NSD activities) and personalization promoting greater NSD innovativeness (market perception of the company as novel and as an innovator). When used together, the two strategies magnify NSD knowledge, which when combined with NSD proficiency and NSD innovativeness, promote an SCA. Therefore, companies planning to invest in a knowledge management system should heed the outcomes desired from their NSD process. A system based on documentation exemplifies a codification strategy and will drive NSD proficiency; a system emphasizing interpersonal communication exemplifies a personalization strategy and will drive NSD innovativeness. A system that blends the two strategies appears the most advantageous for service companies’ NSD efforts aiming to build a long-term sustainable competitive advantage.
Adler, Paul S., Henry E. Riggs, and Steve C. Wheelwright (1989), ‘‘Product Development Know-How: Trading Tactics for Strategy,’’Sloan Management Review, 31 (1), 7-17.
2.
Akgün, Ali E., Mumin Dayan, and Anthony Di Benedetto (2008), ‘‘New Product Development Team Intelligence: Antecedents and Consequences,’’Information and Management, 45 (4), 221-226.
3.
Armstrong, J. Scott and Terry S. Overton ( 1977), ‘‘Estimating Nonresponse Bias in Mail Surveys,’’Journal of Marketing Research, 14 (3), 396-403.
4.
Atuahene-Gima, Kwaku ( 2005), ‘‘Resolving the Capability-Rigidity Paradox in New Product Innovation,’’ Journal of Marketing , 69 (4), 61-83.
5.
Avlonitis, George J., Nikolaos G. Papastahopoulou, and Spiros P. Gounaris (2001), ‘‘An Empirically-Based Typology of Product Innovativeness for New Financial Services,’’Journal of Product Innovation Management, 18 (5), 324-342.
6.
Bagozzi, Richard P. and Youjae Yi ( 1988), ‘‘On the Evaluation of Structural Equation Models,’’Journal of the Academy of Marketing Science, 16 (1), 74-94.
7.
Bharadwaj, Sundar G., P. Rajan Varadarajan, and John Fahy ( 1993), ‘‘Sustainable Competitive Advantage in Service Industries: A Conceptual Model and Research,’’Journal of Marketing, 57 (4), 83-100.
8.
Boisot, Max H. ( 1995), ‘‘Is Your Firm a Creative Destroyer? Competitive Learning and Knowledge Flows in the Technological Strategies of Firms,’’Research Policy, 24 (4), 489-506.
9.
Brown, Shona L. and Kathleen M. Eisenhardt ( 1997), ‘‘The Art of Continuous Change: Linking Complexity Theory and Time-paced Evolution in Relentlessly Shifting Organizations,’’Administrative Science Quarterly, 42 (1), 34-40.
10.
Calantone, Roger J., S. Tamer Cavusgil, and Yushan Zhao ( 2002), ‘‘Learning Orientation, Firm Innovation Capability, and Firm Performance,’’Industrial Marketing Management , 31 (6), 515-525.
11.
Carlile, Paul R. and Eric S. Rebentisch ( 2003), ‘‘Into the Black Box: The Knowledge Transformation Cycle,’’Management Science, 49 (9), 1180-1195.
12.
Chin, Wynne W. ( 1998), ‘‘The Partial Least Squares Approach to Structural Equation Modeling,’’ in Modern Methods for Business Research, G. A. Marcoulides, ed. Hillsdale, NJ: Lawrence Erlbaum, 295-335.
13.
---, Barbara L. Marcolin, and Peter R. Newsted (2003), ‘‘A Partial Least Squares Latent Variable Approach for Measuring Interaction Effects,’’Information Systems Research, 14 (2), 189-217.
14.
Cohen, Jacob ( 1988), Statistical Power Analysis for the Behavioural Sciences . Hillsdale, NJ: Lawrence Erlbaum .
15.
Cohen, Wesley M. and Daniel A. Levinthal. (1990), ‘‘Absorptive Capacity: A New Perspective on Learning and Innovation,’’Administrative Science Quarterly, 35, 128-152.
16.
Cooper, Robert G., Christopher J. Easingwood, Scott Edgett, Elko Kleinschmidt, and Chris D. Storey (1994), ‘‘What Distinguishes the Top Performing New Products in Financial Services,’’Journal of Product Innovation Management, 11 (4), 281-299.
17.
Corso, Mariano, Antonella Martini, Emilio Paolucci, and Luisa Pellegrini (2001). ‘‘Knowledge Management in Product Innovation: An Interpretative Review,’’International Journal of Management Reviews, 3 (4), 341-352.
18.
Day, George S. and Robin Wensley ( 1988), ‘‘Assessing Advantage: A Framework for Diagnosing Competitive Superiority,’’Journal of Marketing , 52 (2), 1-21.
19.
De Luca, Luigi and Kwaku Atuahene-Gima ( 2007), ‘‘Market Knowledge Dimensions and Cross-Functional Collaboration,’’ Journal of Marketing, 71 (1), 95-112.
20.
Diamantopoulos, Adamantios and Heidi M. Winklhofer ( 2001), ‘‘Index Construction with Formative Indicators: An Alternative to Scale Development,’’Journal of Marketing Research, 38 (2), 269-277.
21.
Dougherty, Deborah ( 2004), ‘‘Organizing Practices in Services: Capturing Practice-Based Knowledge for Innovation,’’ Strategic Organization, 2 (1), 35-64.
22.
Edvardsson, B.o and Jan Olsson ( 1996), ‘‘Key Concepts in New Service Development,’’Service Industries Journal, 16 (2), 140-164.
23.
Eisenhardt, Kathleen M. and Jeffrey A. Martin ( 2000), ‘‘Dynamic Capabilities,’’Strategic Management Journal, 21, 1105-1121.
24.
--- and Behnam Tabrizi ( 1995), ‘‘Accelerating Adaptive Processes: Product Innovation in the Global Computer Industry,’’Administrative Science Quarterly, 40 (1), 84-111.
25.
Fornell, Claes and Fred L. Bookstein (1982), ‘‘Two Structural Equation Models: LISREL and PLS Applied to Consumer Exit-Voice Theory,’’Journal of Marketing Research, 19 (4), 440-452.
26.
--- and David F. Larcker ( 1981), ‘‘Evaluating Structural Equation Models with Unobseravble Variables and Measurement Error,’’Journal of Marketing Research, 18 (3), 382-388.
27.
Froehle, Craig M., Aleda V. Roth, Richard B. Chase, and Christopher A. Voss (2000), ‘‘Antecedents of New Service Development Effectiveness: An Exploratory Examination of Strategic Operations Choices,’’Journal of Service Research , 3 (1), 3-18.
28.
Garud, Raghu and Praveen R. Nayyar ( 1994), ‘‘Transformative Capacity: Continual Structuring by Intertemporal Technology Transfer,’’Strategic Management Journal, 15 (5), 365-385.
29.
Goh, Swee and Gregory Richards ( 1997), ‘‘Benchmarking the Learning Capability of Organizations,’’ European Managment Journal, 15 (5), 575-583.
30.
Grant, Robert M. ( 1996), ‘‘Toward a Knowledge-Based Theory of the Firm,’’Strategic Management Journal, 17 (Winter Special Issue), 109-122.
31.
Green, Samuel B. ( 1991), ‘‘How Many Subjects Does It Take To Do a Regression Analysis?’’Multivariate Behavioural Research, 26 (3), 499-510.
32.
Groth, Markus, Thorsten Hennig-Thurau, and Gianfranco Walsh(2009), ‘‘Customer Reactions to Emotional Labor: The Roles of Employee Acting Strategies and Customer Detection Accuracy ,’’ Academy of Management Journal, 52 (5), 958-974.
33.
Hair, Joseph, William Black, Barry Babin, Rolph Anderson, and Ronald Tatham ( 2007), Multivariate Data Analysis, 6e, Englewood Cliffs, NJ: Prentice Hall.
34.
Hansen, Morten T., Nitin Nohria, and Thomas Tierney ( 1999), ‘‘What’s Your Strategy for Managing Knowledge,’’Harvard Business Review, 77 (2), 106-114.
35.
Hargadon, Andrew and Robert I. Sutton ( 2000), ‘‘Building an Innovation Factory,’’Harvard Business Review, 78 (3), 157-166.
36.
Hindi, Nitham, Donald Miller, and Stephen Catt ( 2004), ‘‘Communication and Miscommunication in Corporate America: Evidence from Fortune 200 Firms,’’ Journal of Organizational Culture, Communications and Conflict, 8 (2), 13-26.
37.
Huber, George P. ( 1991), ‘‘Organizational Learning: The Contributing Processes and the Literatures,’’Organization Science, 2 (1), 88-115.
38.
Im, Subin and John P Workman Jr. (2004), ‘‘Market Orientation, Creativity, and New Product Performance in High-Technology Firms,’’Journal of Marketing, 68 (2), 114-132.
39.
Jassawalla, Avan R. and Hemant C. Sashittal ( 2002), ‘‘Cultures That Support Product Innovation Processes,’’Academy of Management Executive, 16 (3), 42-54.
40.
Johne, Axel and Chris Storey ( 1998), ‘‘New Service Development: A Review of the Literature and Annotated Bibliography,’’ European Journal of Marketing, 32 (3), 184-251.
41.
Kelly, David T. and Chris Storey ( 2000), ‘‘New Service Development: Initiation Strategies,’’International Journal of Service Industry Management, 11 (1), 45-62.
42.
Kilne, Rex B. ( 2001), Principles and Practice of Structural Equation Modeling , New York, NY: Guilford Press.
43.
Kusunoki, Ken, Ikujiro Nonaka, and Akiya Nagata ( 1998) ‘‘Organizational Capabilities in Product Development of Japanese Firms: A Conceptual Framework and Empirical Findings, ’’ Organization Science, 9 (6), 699-718.
44.
Kyriakopoulos, Kyriakos and Ko de Ruyter ( 2004), ‘‘Knowledge Stocks and Information Flows in New Product Development,’’Journal of Management Studies, 41 (8), 1469-1499.
45.
Lance, Charles E. ( 1988), ‘‘Residual Centering, Exploratory and Confirmatory Moderator Analysis, and Decomposition of Effects in Path Models Containing Interactions,’’Applied Psychological Measurement , 12 (2), 163-175.
46.
Leonard-Barton, Dorothy A. ( 1992). ‘‘Core Capabilities and Core Rigidities: A Paradox in Managing New Product Development.’’Strategic Management Journal13 (Summer), 111-125.
47.
Lieberman, Marvin B. ( 1987), ‘‘The Learning Curve, Diffusion, and Competitive Strategy,’’Strategic Management Journal, 8 (5), 441-457.
48.
Lynn, Gary S., James Simpson, and William Souder ( 1997), ‘‘Effects of Organizational Learning and Information-Processing Behaviors on New Product Success,’’Marketing Letters, 8 (1), 33-39.
49.
Lyons, Richard K., Jennifer A. Chatman, and Caneel K. Joyce (2007), ‘‘Innovation in Services: Corporate Culture and Investment Banking,’’California Management Review, 50 (1), 174-191.
50.
Madhavaram, Sreedhar and Shelby D. Hunt ( 2008), ‘‘The Service-Dominant Logic and a Hierarchy of Operant Resources: Developing Masterful Operant Resources and Implications for Marketing Strategy,’’Journal of the Academy of Marketing Science, 36 (1), 67-82.
51.
March, James G. ( 1991), ‘‘Exploration and Exploitation in Organizational Learning,’’Organization Science, 2 (1), 71-87.
52.
Marsh, Sarah J. and Gregory N. Stock ( 2003), ‘‘Building Dynamic Capabilities in New Product Development through Intertemporal Integration,’’Journal of Product Innovation Management, 20 (2), 136-169.
53.
Marsh, Sarah J. and Gregory N. Stock ( 2006), ‘‘Creating Dynamic Capability: The Role of Intertemporal Integration, Knowledge Retention and Interpretation,’’Journal of Product Innovation Management, 23 (5), 422-436.
54.
Mohrman, Susan Albers, David Finegold, and Allan M. Mohrman Jr. (2003), ‘‘An Empirical Model of the Organization Knowledge System in New Product Development Firms,’’Journal of Engineering and Technology Management, 20 (1/2), 32-39.
55.
Montoya-Weiss, Mitzi M. and Roger Calantone ( 1994), ‘‘Determinants of New Product Performance: A Review and Meta-Analysis,’’Journal of Product Innovation Management, 11 (5), 397-418.
56.
Moorman, Christine and S. Anne Miner ( 1997), ‘‘The Impact of Organizational Memory on New Product Performance and Creativity,’’Journal of Marketing Research, 34 (1), 91-106.
57.
--- and ---(1998), ‘‘The Convergence of Planning and Execution: Improvisation in New Product Development,’’Journal of Marketing, 62 (3), 1-20.
58.
Nijssen, Edwin J., Bas Hillebrand, Patrick A. M. Vermeulen, and Ron G. M. Kemp (2006), ‘‘Exploring Product and Service Innovation Similarities and Differences,’’International Journal of Research in Marketing, 23 (3), 241-251.
59.
Nonaka, Ikujiro ( 1994), ‘‘A Dynamic Theory of Organizational Knowledge Creation,’’ Organization Science, 5 (1), 14-37.
60.
Oke, Adegoke ( 2002), ‘‘Making it Happen: How to Improve Innovative Capability in a Service Company,’’ Journal of Change Management, 2 (3), 272-281.
61.
Olson, Eric M., Orville C. Jr. Walker, Robert W. Ruekert, and Joseph M. Bonner (2001), ‘‘Patterns of Cooperation During New Product Development Among Marketing, Operations and R&D: Implications for Project Performance,’’Journal of Product Innovation Management, 18 (4), 258-271.
62.
Podsakoff, Philip M. and Dennis W. Organ ( 1986), ‘‘Self-Reports in Organizational Research: Problems and Prospects,’’Journal of Management , 12 (4), 531-545.
63.
Ringle, Christian M., Sven Wende, and Alexander Will ( 2005). Smart PLS 2.0 M3. www.smartpls.de .
64.
Sherman, J. Daniel, David Berkowitz, and William E. Souder (2005), ‘‘New Product Development Performance and the Cross-Functional Integration and Knowledge Management,’’Journal of Product Innovation Management , 22 (5), 399-411.
65.
Smith, Ken G., Christopher J. Collins, and Kevin D. Clark (2005), ‘‘Existing Knowledge, Knowledge Creation Capability and the Rate of New Product Introduction in High-Technology Firms,’’Academy of Management Journal, 48 (2), 346-357.
66.
Storey, Chris D. and Christopher J. Easingwood ( 1999), ‘‘Types of New Product Performance: Evidence from the Consumer Financial Services Sector,’’Journal of Business Research, 46 (2), 193-203.
67.
Subramaniam, Mohan and N. Venkatraman ( 2001), ‘‘Determinants of Transnational New Product Development Capability: Testing the Influence of Transferring and Deploying Tacit Overseas Knowledge,’’ Strategic Management Journal, 22 (4), 359-378.
68.
---and Mark A. Youndt ( 2005), ‘‘The Influence of Intellectual Capital on the Types of Innovative Capabilities,’’Academy of Management Journal, 48 (3), 450-463.
69.
Szulanski, Gabriel ( 1996), ‘‘Exploring Internal Stickiness: Impediments to the Transfer of Best Practice Within the Firm,’’Strategic Management Journal, 17 (Special Issue), 27-43.
70.
Tenenhaus, Michel, Vincenzo E. Vinzi, Yves-Marie Chatelin, and Carlo Lauro ( 2005), ‘‘PLS Path Modeling,’’Computational Statistics and Data Analysis, 48 (1), 159-205.
71.
Thomke, Stefan ( 2003), ‘‘R&D Comes to Services,’’Harvard Business Review, 81 (4), 70-80.
72.
Weerawardena, Jay and Aron O’Cass ( 2004), ‘‘Exploring the Characteristics of the Market-Driven Firms and Antecedents to Sustained Competitive Advantage,’’Industrial Marketing Management, 33 (5), 419-428.
73.
Zahra, Shaker A. and Anders P. Nielsen ( 2002), ‘‘Sources of Capabilities, Integration and Technology Commercialization,’’Strategic Management Journal, 23 (5), 377-398.
