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While acknowledging the importance of innovation capability and its potential for creating competitive advantage for firms, the purpose of this paper is to further explain how firms can gain the most from this potential. In the face of the low success rate of innovations and innovation activities in the hospitality sector, this study explains – through the dynamic capability perspective – that building a flexible organization is instrumental in creating competitive advantage out of innovation capabilities.

The study uses data from hospitality firms operating in an emerging economy with a fast-growing hospitality sector. As this study uses survey and statistical methods, the possibility of common method bias is addressed by partial least squares structural equation modeling to test the hypothesized relationships.

The study finds that organizational flexibility (OF) is an important mediator in the relationship between innovation capabilities and competitive advantage. The study explains that building a flexible organization is instrumental in creating competitive advantage out of innovation capabilities in hospitality firms.

This study suggests that relying only on innovation capability offers hospitality firms just a fraction of what would be gained if such capabilities are properly aligned with OF. This is because such alignment generates better response power to changing needs as the firm becomes more mobile, responsive and agile to rapidly identify market trends, adjust internal operations and respond quickly to new market demand.

The business landscapes in Asia and Africa are predominantly characterized by small and medium enterprises (SMEs) facing significant resource constraints. Understanding the capability dynamics of these enterprises in such contexts carries significant implications for theory and practice. This paper aims to addresses a crucial question of whether increasing customer involvement capability consistently yields the necessary rent for enterprises operating under resource constraints in emerging markets in Asia and Africa. By investigating this question, the paper offers SMEs a more nuanced approach to capability development, enabling them to achieve better returns on their investments.

To ensure the robustness of the findings, data were collected from SME service firms operating in two emerging economies: India (Asia) and Ghana (Africa). Data were collected in two waves to allow for catering to specific environmental conditions not accounted for in the study. Two-stage data analysis was then conducted to test the hypothesized relationships across the two countries.

The findings reveal that customer involvement capability does not always lead to an increase in firm-level competitiveness, and the effect follows an inverted U-shaped pattern. However, the nature of this relationship varies under different market conditions in both contexts. Specifically, in periods of low customer demand and intense competition, the relationship is linear and positive. On the other hand, in periods of high demand and competition, the relationship becomes inverted U-shaped, returning to a direct relationship with firm-level competitiveness.

This paper provides a resolution to the critical issue of whether customer involvement capability consistently delivers firm performance benefits, particularly for resource-constrained SMEs in emerging markets. By explaining how SMEs in emerging markets can fully capitalize on their capability development to optimize their resources, this paper makes a distinctive contribution. Moreover, it sheds light on the importance of aligning involvement capabilities with prevailing market conditions for SMEs to reap the maximum benefits.

The purpose of this paper is to assess the moderation effect of organizational leadership on the relationship between service firm’s innovation strategy and organizational development. The study argues that in Ghana where power distance is high, organizational leadership provides the needed impetus for strategies such as innovation to achieve enhanced firm performance.

Data were collected from different service firms across Ghana for this study. A confirmatory factor analysis was used for construct reliability and validity checks. Robust regression estimations were then performed to test the hypothesized relationships.

The results show that both product innovation as strategy and organizational leadership are positively related to organizational development (i.e. financial and non-financial performance). It was also found that organizational leadership does not only serve as a predictor of strategy formulation but provides the necessary strategic fit between a firm’s strategy and business environment to achieve organizational development.

This study has shown that in high-power distance cultures, firms that are able to align their leadership orientation with their institutional environment are able to create a better fit between their strategic orientation and business environment in order to enhance organizational development.

Because of the paucity of empirical research on firm-level capabilities of firms for effective customer involvement, the purpose of this study is to evaluate service firms’ capacity to coopt customers to enhance the innovativeness and firm performance relationship. This study conceptualizes involvement capabilities of service firms as a strategic driver that exploits their internal firm assets, which in turn facilitates the positive relationship between innovativeness and firm performance.

Data were collected from 344 managers of service firms across different sub-sectors in an emerging economy. The study first confirmed the constructs through confirmatory factor analysis before analyzing hypothesized relationships. Regression models were specified with robust standard errors to test the hypothesized relationships.

The study found that involvement capability of service firms helps them to exploit their relational assets and create and manage strong customer participation. Additionally, it was found that involvement capabilities enable service firms to capitalize on the competencies of customers, which in turn improves the outcomes of their innovativeness. The results showed that the interaction between involvement capability and innovativeness enhances firm performance significantly.

Service firms can enhance customer participation in the value creation process by increasing their involvement capabilities. The increase in such capabilities will enhance the innovativeness of service firms, thereby improving their financial and non-financial performance.

This study offers guidance on how a firm’s innovativeness and customer involvement work together within the service operation to enhance firm performance.

This paper aims to examine the quadratic relationship between customer involvement capability and performance, and innovation of small- and medium-scale service firms. The study answers the critical question of how SMEs make the most benefit from their involvement capability.

Data from small and medium enterprises (SMEs) operating in the service sector of an emerging economy in sub-Saharan Africa were used. A two-stage data analysis with a quadratic estimation was used to assess the hypothesized relationships.

The study found that the influence of involvement capability over SME performance differs in terms of financial and non-financial. And that, while increasing customer involvement will improve non-financial performance such as customer satisfaction and service quality, it is only at the intermediate level that financial performance is optimized.

The relationships (involvement, and performance and innovation) are not linear, and that at some levels, the relationship with financial or non-financial performance is more positive than other levels. The findings also suggest that involvement capability influences both process and product innovations most at intermediate levels than at low and high levels.

This work proposes that a multi-national service company (MNSC) needs to develop dynamic customer-oriented relational capabilities (DCRC), constituting dynamic service customization (DySC), dynamic customer integration (DyCI) and dynamic timeliness of service delivery (DyTSD) capabilities, to gain competitive advantage and performance in its internationalization efforts.

For empirical validation of the framework, developed through qualitative interviews, this study includes multi-cross-sectional data from twelve countries, four each in the category of underdeveloped (Africa), developing (Asia) and developed economies (Europe). Covariance-based structural equation modelling is used to test the hypotheses.

The study supports that DySC, DyCI and DyTSD capabilities have a significant positive influence on firm competitive advantage and performance across economies. The levels of competition intensity and regulatory restrictions, an outcome of the type of economy, have negative intervening effects, with varying intensities across economies.

This work guides the internationalization service managers to leverage DCRC across national borders keeping the state of the economy into consideration.

This work proposes a model of DCRC, based on the Intangibility, Heterogeneity, Inseparability and Perishability (IHIP) service framework, that enables firms to derive competitive advantage and performance across economies with varying environmental conditions.

This study answers the question: “does the communication of environmental performance transmit positive overall firm performance?” The authors examine the influence of a company's environmental performance (EP) on its overall firm performance (FP) and the mediating role of integrated marketing communication (IMC) on the EP-FP relationship.

A survey of firms from the extractive, manufacturing and hospitality sectors of an emerging economy was used in testing our hypothesized relationships. Partial least square structural equation modelling (PLS-SEM) was used in analysing the data from 194 firms.

The study found that EP negatively and significantly influences FP directly. However, the introduction of IMC into the direct relationship changes this effect. IMC was, therefore, found to have a partial and complementary mediation effect on the relationship between EP and FP.

The negative influence of EP on FP found explains the reluctance of companies towards environmental protection. However, if companies can utilize their communication capacity well enough in creating the necessary awareness among their stakeholder audiences, a positive relationship is created between EP and FP.

The benefits of EP to companies and how companies can turn their EP into gains were not clearly established in the literature. The current study has explained one of the boundary conditions that convert EP, which appears to be a cost to the firm, into a positive influence on FP. This study has, therefore, established the mechanism through which EP affects FP.

This study aims to assess how innovative organizational culture and innovative leadership generate market flexibility for small and medium enterprises (SMEs) in the service sector to enhance their competitiveness. Both organizational culture and leadership are seen as firm-level resources capable of influencing the flexibility of the firm in periods of market turbulence. The study argues that SME service firms must use their internal resources to develop their flexibility capability which is more valuable, rare, inimitable and not substitutable.

SME service firms from Ghana are used to test the study’s hypotheses through robust standard regression analysis. A sampling frame was developed from an online database of small and medium enterprises operating in the service sector.

The findings suggest that although organizational culture and leadership may influence a service firm’s competitiveness, it is more viable to use these firm-level resources to create market flexibility capability to amplify the effect. This means, when culture and leadership propel the flexibility drive, the service firm is able to connect, coordinate and synchronize functional units to take advantage of new product and market opportunities. Additionally, market flexibility emanating from organizational culture and leadership wields enough power and resource support to tackle the turbulent market conditions better than firms with less support.

The managerial implication from this study is that firms should use their organizational culture and leadership to create flexible organizations that afford them the opportunity to adapt to the environmental dynamics. If both leadership and culture work together, they are able to create strong market capabilities such as flexibility which determines how well the firm will respond to the competition, customer demand and all other external pressures. It is, therefore, the view of this paper that SMEs should use their organizational culture and leadership to build a market-flexible organization to create a competitive advantage.

This paper shows how internal resources/assets such as culture and leadership generate the needed flexibility to create a competitive advantage for SMEs. This paper explains the two dimensions of Volberda’s flexibility from a firm-level resource perspective and highlights flexibility as a second-order capability whose cultivation and effectiveness are dependent on a firm’s culture and leadership. Evidence of how a firm’s market flexibility is fuelled by organizational leadership and culture is demonstrated. Finally, this paper shows how resource-poor SMEs in emerging African economies can enhance their market competitiveness through internal systems and processes.

The purpose of this paper is to examine the effect of market demand on innovation-firm performance relationship in service firms. The paper further analyzes the extent to which market demand influences the effect of product innovation on firm performance and how such effect could be managed by a specific type of cultural orientation that is critical to strategic management.

Data were collected from different service sub-sectors of an emerging economy with a fast-growing services sector. Causal modeling methods through different model comparisons are used in analyzing the relationship between innovation and service firm performance and environmental mediating and moderating effects.

The findings suggest that though product innovation has a positive effect on firm performance, high market demand dampens and negate this effect. However, a service firm’s ability to build an innovative culture, that supports strategy implementation, assuages this negative effect and restores the positive relationship between product innovation and firm performance, even in the face of environmental coercion.

This paper shows that market demand will dampen the effect of product innovation on performance and as such must be managed in a way that mitigates this negative effect. The building of an organizational culture that is innovative is therefore recommended to mitigate this negative effect to render product innovation still relevant even in periods where market conditions prevent favorable performance effects.

The purpose of this paper is to investigate how service firms across two different cultural contexts use their customer involvement capabilities to create competitive advantage. The study further assesses the possible complementarity effect of innovation and involvement capabilities in enhancing firm competitiveness. Lastly, the study draws on the complementarity of capabilities and social institutions to examine whether different cultural contexts explain the use of involvement capability among service firms.

The study sampled service firms from an emerging economy (India) and high-income economy (The UK), which have different cultural contexts (collectivism/individualist) to assess the hypothesized relationship. Data collection processes were adapted to the contexts to optimize reliability and relevance. Multi-group structural equation modeling was used in analyzing the data.

The study finds that cultural contexts explain the positive relationship between customer involvement capability and firm competitiveness such that in collectivist cultures, involvement capability is more positively related to competitiveness but negative in individualistic contexts. However, in both contexts, service firms can through capability bundling increase firm competitiveness. The study found that the complementarity effects of innovation and involvement capabilities were found to be positive in both contexts.

This study departs from previous studies by arguing that customer involvement is a complementary capability that helps exploit the potential of innovation capability of service firms. This study further demonstrates that cultural context defines the effectiveness of involvement capability in achieving firm competitiveness.