Fostering Service Innovation and Enhancing Firm Performance through a Nexus of Strategic Orientations: The Moderating Effect of Transformational Leadership

Purpose

Drawing on the resource-based view (RBV) theory, this paper examines how market orientation (MO), learning orientation (LO), and technology orientation (TO) drive service innovation (SI) and enhance the performance of service firms. Additionally, it investigates how transformational leadership (TL) moderates the interplay among these strategic orientations in fostering SI.

Design/methodology/approach

This paper employs a quantitative research design to propose a research framework, which has been empirically tested through multiple regression analysis of survey data collected from 199 bank managers in first-, second-, and third-line positions in Jordan.

Findings

The findings reveal that MO, TO, and LO positively influence SI, which, in turn, enhances both the financial and non-financial performance of service firms. Additionally, TL strengthens the relationships between MO, LO, and SI, serving as a moderator. However, contrary to expectations, TL did not moderate the relationship between TO and SI. Research limitations/approach – The cross-sectional research design employed in this study precluded causal inferences. Further, the research setting of this study is confined to the Jordanian banking sector, which may limit the generalizability of the findings.

Practical implications

The research highlights the importance of developing TL qualities in bank managers to effectively foster an organizational culture that integrates and harmonizes various strategic orientations, thus promoting SI.

Originality/value

Grounded in the RBV, this study widens SI literature by investigating the collective impact of MO, LO, and TO on fostering SI, as well as the moderating effect of TL on these interrelationships—an area that has not been previously examined in a single study