Effect of Service Firm’s Sustainability Orientation on New Service Development Competence and Performance: An Abstract

The purpose of the study is to examine the influence of sustainability orientation of service organizations on new service development (NSD) competence and NSD performance. The study also investigates the mediating effect of NSD competence on the relationship between sustainability orientation and NSD performance. As NSD programs continue over a long period and are susceptible to technology changes and market competition, this study aims to examine the moderating influence of technology turbulence and competitive intensity on the relationship between NSD competence and NSD performance. The conceptual model of the paper is based on the source-position-performance (SPP) framework of Day and Wensley (1988) and the natural resource-based view (NRBV) perspective of Hart (1995). While the SPP framework offers a guide for attaining competitive superiority, the NRBV perspective proposes that competitive advantage can be rooted in organization’s capabilities that facilitate environmentally sustainable economic activity (Hart 1995). The model of the study proposes hypotheses that would examine the relationship between sustainability orientation (Claudy et al. 2016; Roxas and Coetzer 2012), NSD competence (Menor and Roth 2008, 2007), and NSD performance in terms of financial and nonfinancial performance measures. The study proposes a cross-sectional, two-stage survey at the NSD program level in the Finnish hotel and resort industry context. In the first stage, the NSD program managers will provide data related to the organization’s sustainability orientation. In the next stage, senior managers of the NSD programs will provide data related to NSD competence and performance. The respondents will be drawn from a list of individuals linked to NSD programs of 1848 service organizations in the Finnish hotel and resort industry. The hypothesized relationships will be examined by structural equation modeling (SEM) method based on AMOS platform. The study constructs are proposed to be measured by existing measures. Sustainability orientation will be measured in terms of sustainability culture and sustainability practices (Claudy et al. 2016). NSD competence will be measured in terms of NSD process focus, market acuity, NSD culture, and IT experience (Menor and Roth 2008). The model of the study proposes firm size and firm age as control variables. The study is expected to contribute to the marketing literature by explaining the sustainability orientation-driven NSD performance in the presence of NSD competence. It can also explain the impact of organization’s orientation toward environmental sustainability on the competence needed to develop new services. Based on the expected contributions, the study offers several implications for researchers and practitioners.