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In today's networked service economy, it becomes essential for service firms to continuously innovate their service offering to remain competitive in constantly changing market conditions. Many successful firms collaborate with external partners and utilize contemporary Information Technology (IT) support to integrate dispersed service innovation capacity and knowledge. In this paper, the authors develop and test a theoretical framework that explains how IT and collaboration can contribute to developing service innovation capability. Drawing on dynamic capability theory, they differentiate between sensing, seizing, and transformation abilities in service innovation.
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