Service providers' willingness to change as innovation inductor in services: Validating a scale.

AutorMoreira, Marina Figueiredo
CargoReport

Abstract

This study explores the willingness of service providers to incorporate changes suggested by clients altering previously planned services during its delivery, hereby named Willingness to Change in Services [WCS]. We apply qualitative research techniques to map seven dimensions related to this phenomenon: Client relationship management; Organizational conditions for change; Software characteristics and development; Conditions affecting teams; Administrative procedures and decision-making conditions; Entrepreneurial behavior; Interaction with supporting organizations. These dimensions have been converted into variables composing a WCS scale later submitted to theoretical and semantic validations. A scale with 26 variables resulted from such procedures was applied on a large survey carried out with 351 typical Brazilian software development service companies operating all over the country. Data from our sample have been submitted to multivariate statistical analysis to provide validation for the scale. After factorial analysis procedures, 24 items have been validated and assigned to three factors representative of WCS: Organizational Routines and Values--12 variables; Organizational Structure for Change--6 variables; and Service Specificities--6 variables. As future contributions, we expect to see further testing for the WCS scale on alternative service activities to provide evidence about its limits and contributions to general service innovation theory.

Key words: change; services; service innovation; change in services; scale development.

Introduction

Service sector has gained prominence among economic and managerial studies since the 1950's as a result of its upward trajectory in developed economies since post-Fordism period (Buera & Kaboski, 2012), bringing us to contemporary service economies, highly dependent in terms of innovation and knowledge (Gallouj, 2002; Gallouj & Savona, 2009). As services continuously increase their majority share in world top economies year after year, they also consolidate as top research lines in innovation and management studies, bringing new research questions to light (Kim, Lee, Geum, & Park, 2012; Mansury & Love, 2008; Toivonen & Tuominen, 2009; Vence & Trigo, 2009). Themes traditionally exploited on researches on innovation subjects are revisited in the light of new production logic associated to services. Innovation determinants, for instance, have been largely explored on industrial economics under multiple theoretical approaches such as science-push or demand-pull since the 1950's (Cainelli, Evangelista, & Savona, 2006; Di Stefano, Gambardella, & Verona, 2012; Peters, Schneider, Griesshaber, & Hoffmann, 2012), but remain blurry when it comes to services. Therefore, mapping the determinants of service innovation remains as a topic still to be addressed by researches.

To identify the determinants for innovation in services one should first focus on the dynamics of service innovation itself in order to establish what service components may be subject to innovation induction. After a couple of decades debating, first of all, the suitability of original industrial innovation theory to analyze innovation on services (and theory quickly learned that it did fill this gap); later, the appropriateness of using exclusive theoretical approaches to study innovation in service activities, recent authors have defended the integrated analysis of innovation for goods as for services (Droege, Hildebrand, & Forcada, 2009; Morrar, 2014). Such approach has been named integrative and admits that innovation should be taken as a unique phenomenon for both industrial and service activities (Gallouj & Weinstein, 1997; Gallouj & Windrum, 2009), although particular service characteristics may impact the innovation's form of occurrence. But what services peculiarities should be taken into account to map a service innovation determinant and to what extent?

The service interaction is admitted to be the very constitutive element of services and consists of an exchange of competencies between the service provider and the client. It has gradually been recognized as a locus of innovation (Gallouj, 2002) and gained prominence among researches focusing on phenomena such as co-production or service encounters. Admitting that the interaction is a place for service innovation to occur highlights to active roles played by both provider and client. It allows us to take the client as an inductor of innovation by attributing to him the role of a market consumer, in accordance to the demand-pull approach (Kline & Rosenberg, 1986). More than that, current literature on service innovation admits the client to act as a co-creator of value (Gronroos, 2011) whose readiness, technologization and connectivity affect the experience for service development (Verleye, 2015). While some works focus on explaining how clients act during service delivery to co-create innovation with service providers through measuring the customers' willingness to co-create (such as Handrich & Heidenreich, 2013; Heidenreich & Handrich, 2015), on this paper, we focus on the role played by the actors in charge of dealing with clients' inputs for innovation on service development. In this sense, we believe that the service provider also plays an active role as vector for innovation in mobilizing his personal and organizational skills to transform the prior customer's reality (Gadrey, 2000).

Provider's and client's roles as agents for innovation are well explored in the economics of innovation literature and have been transposed to the study of innovation in services. One peculiarity, however, draws our attention. In industrial activities, customers commonly act as sources of ideas for new products (or for improvement of existing ones) later taken to the producer's organization. The contributions of customers and producers are clearly defined and sequential, but such logic does not remain when it comes to services, where the service interaction represents not only the locus for innovation, but also the key to understand clients' and providers' roles on innovation. Thus, a customer feedback may change the provider's actions during the service interaction and vice-versa, emphasizing the dynamic and reformulative character of service delivery.

The present research explores the reformulative nature of service provision (sometimes referred to as service delivery) as a result of the exchange and combination of competences (Gallouj & Weinstein, 1997) from providers and clients to address the provider's role as a service innovation determinant (or vector). We explore the provider's role by admitting him to act as facilitator (or barrier, depending on his attitude) to the incorporation of suggestions and changes proposed by clients during the service interaction. Service providers have active roles on accepting, modifying or refusing changes on the service provision. We therefore assume that such particular attitude impacts the final service delivery as well as the generation of innovations. In this study, the willingness of the service provider to incorporate changes suggested by clients regarding the planned characteristics of service to be delivered constitutes a construct therefore referred as Willingness to Change in Services [WCS].

Establishing WCS as a construct leads to two questions: what is its nature? And what variables can explain it? Aiming to answer both questions, this paper aims to identify explicative dimensions for WCS and to develop and validate a measurement scale for it. To achieve such objective, we have selected Brazilian software development services as a research field due to its main characteristics. Software development industry refers to a wide scope of activities that include standardized ready-made software solutions, which resemble goods, as well as custom made software programs that are known to be highly specific to the particular needs of a client--software development services. Following the arguments of Steinmueller (1995, p. 3), we admit that a "particular software program that is only produced once should be viewed as a service output, while a program that is reproduced dozens or millions of times has development and marketing characteristics closer to those of manufactured goods". Such software programs are particularly valuable in terms of service research for three reasons: (a) they are delivered through well-defined development projects--therefore, they are very feasible for analysis; (b) demand high levels of customer involvement in its production; (c) it is common to have change of requirements from customers during service delivering (Staats, Brunner, & Upton, 2011).

On second section, we describe the theoretical basis we have mobilized to propose the Willingness to Change in Services construct. On third section, we present the proceeding we have adopted to map the Explicative Dimensions for WCS through qualitative research. On fourth section, we present our definition for the idea of change in services. On fifth section, we describe the development and validation for our Willingness to Change in Services scale. Finally, on final section, we present our conclusions.

Willingness to Change in Services: Theoretical Basis for the Construct

There is a narrow connection between service activities and change. Such link has been accounted for since the introductory studies on services, such as Hill (1977), and has kept its place until present days. Hill's work constitutes one of the first attempts to analyze services as a provision process rather than as part of a sector. The author suggested that services constitute "a change in the condition of a person, or an asset belonging to an economic unit, which occurs as a result of an activity of another economic unit which willing accepts the first person or economic unit" (Hill, 1977, p. 318). This understanding of services as transformative of...

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