The relative impact of culture, strategic orientation and capability on new service development performance

Purpose – This research attempts to understand the operant resources required for new service development (NSD). It aims to construct a more intricate understanding of how operant resources interact to drive NSD. Specifically, it aims to look at the impact of culture, strategic orientation and NSD capability for number of new services, the success rate of new services and the resulting financial contribution by NSD to overall firm performance. Design/methodology/approach – To investigate these relationships, data were collected from 105 leading UK-based service firms via a key informant survey. Regression analysis was employed to test the model presented. Findings – Analysis reveals that a different culture (entrepreneurial culture) is needed to drive the number of new services from that required for a higher success rate (learning culture). A NSD capability has an important role supporting both of these aspects of NSD performance. The quantity and quality of NSD go on to affect the financial contribution made by NSD. A firm's strategic orientation is also found to directly affect contribution. NSD performance is further enabled by the appropriate alignment of culture, capability and strategic orientation. Research limitations/implications – The results demonstrate that existing research only partially explains NSD performance. The impact of culture, capability and strategic orientation is contingent on how performance is measured. Understanding how different operant resources interweave to deliver NSD will facilitate more informed decision making leading to the effective use of organizational resources. Practical implications – The results show that there are different pathways to NSD performance depending on existing organizational conditions. Firms with an entrepreneurial culture should employ a Prospector orientation, whereas firms with a learning culture benefit from an Analyzer orientation. Defenders need to build on existing capabilities. Originality/value – To date no study has assessed the relative effect of culture, strategic orientation and capability on NSD performance. The complex contingency model presented here offers a timely contribution to the theory base underpinning the development of operant resources for NSD.