The Effects of Innovativeness on Effectiveness and Efficiency

Purpose Whilst researchers have explored the relationship between innovativeness and business performance in different organizations, such studies in services such as restaurants are scarce. The purpose of this paper is to examine potential influences of innovativeness on effectiveness and efficiency and their subsequent effects on restaurant business performance. Design/methodology/approach Data for this study were collected through personal interviews from 211 Iranian restaurants to examine the interrelationships between innovativeness, effectiveness and efficiency as well as service business performance dimensions (i.e. profit goal achievement, sales goal achievement and return on investment achievement). Findings The findings provide a fresh insight by exploring innovativeness, effectiveness and efficiency and how these determinants affect the business performance of restaurants. Research limitations/implications This study is limited to Iranian restaurants in a cross sectional manner, using self‐report measures indicating that the results might be idiosyncratic and subject to individual differences. Implications for future research in innovativeness in practice are discussed. This paper contributes to knowledge regarding the impact of innovativeness on effectiveness and efficiency and extends the findings of Chan et al. regarding the influences of effectiveness and efficiency on business performance. Practical implications Managers should consider the important roles that operating effectiveness and cost efficiency play in the innovativeness‐performance relationship. Originality/value The paper provides a good example of innovation, effectiveness and efficiency in the service industry.