Title: Service innovation and firm performance: operational experiences in uncertain environments

Authors: Morteza Akbari; Hossein Mokhtari; Afsaneh Moradi; Afsaneh Pourjam; Ala Khosravani

Addresses: Faculty of Entrepreneurship, University of Tehran, 1439813141 Tehran, Iran ' Faculty of Entrepreneurship, University of Tehran, 1439813141 Tehran, Iran ' School of Business and Economics (SBE), Maastricht University, Netherlands ' Tourism Science Department, University of Science and Culture, 1461968151 Tehran, Iran ' Faculty of Management, University of Tehran, 1439813141, Tehran, Iran

Abstract: Innovation is one of the main factors affecting the firms' performance; however, it is less investigated in service firms. This study aims to assess the effect of service innovation on firms' performance in uncertain environments when the market orientation capabilities can help firms to operate more efficiently. Data was collected from travel agency managers in Iran. The results revealed that in stable environments, service innovation affects firm performance indirectly via quality of service and customer satisfaction. But having considered environmental uncertainties, service innovation showed a direct effect on firm performance in addition to indirect effects. Moreover, market sensing and customer linking capabilities are moderating the relationship between service innovation and firm performance in uncertain environments.

Keywords: service innovation; firm performance; environmental uncertainty; tourism industry.

DOI: 10.1504/IJSEM.2020.111932

International Journal of Services, Economics and Management, 2020 Vol.11 No.4, pp.347 - 370

Received: 26 Dec 2019
Accepted: 31 May 2020
Published online: 21 Dec 2020 *

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