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Entrepreneurship and service innovation

Nelson Oly Ndubisi
Helsinki Business School, Espoo, Finland

Purpose – The purpose of this paper is to introduce a special issue on entrepreneurship and service innovation, and to conceptualize the link
between entrepreneurial orientation, innovation and entrepreneurship or new entry.
Design/methodology/approach – Analysis of secondary data.
Findings – Entrepreneurial orientation (EO), innovation (IN) and entrepreneurship are in a vital “triadic connect”, where EO supports innovation
in organizations and innovation promotes new entry or new venture creation – a vehicle for commercialization of innovations.
Research limitations/implications – There is a need for empirical validation of the linkages proposed in this conceptual paper.
Practical implications – This “triadic connect” between EO, IN and entrepreneurship or new entry is a source of or key driver of organizational
performance (OP) and competitive advantage (CA).
Originality/value – The theorization and schematization of the “triadic connect” (i.e. EO–IN–NE link) and outcomes (namely, OP and CA) is
Keywords Organizational performance, Innovation, Entrepreneurship, competitive advantage, Entrepreneurial orientation, Triadic connect
Paper type Editorial

Introduction to the special issue and Dess, 1996) or an organizational culture of enhancing
wealth through innovation and exploitation of opportunities
Business marketing reflects a broader concept that includes
(Nasution et al., 2011) – have important implications for
emergence and greater attention given to services (Malhotra
innovation. EO supports innovation in organizations, and
et al., 2008; Ndubisi, 2013). Service “as the application of
innovation promotes new entry or new venture creation – a
specialized competences (knowledge and skills) through
vehicle for commercialization of innovations (Figure 1).
deeds, processes, and performances for the benefit of another
EO, IN and entrepreneurship are in a vital “triadic
entity or the entity itself” (Vargo and Lusch, 2004, p. 2)
connect”, which plausibly explains why they are often seen as
contributes significantly to the growth of every economic
“hand-in-glove”. This “triadic connect” between EO, IN and
system. In today’s increasingly dynamic, complex and
entrepreneurship or NE is a source of or key driver of OP and
unpredictable business environment, service organizations/
competitive advantage (CA) (Figure 2).
industries, value-added service providers and non-tangible
In their strategy typology, Miles and Snows (1978)
goods providers (Malhotra et al., 2008; Ndubisi, 2012; Vargo
considered entrepreneurship as a key dimension. Based on the
and Lusch, 2004) try to renew themselves and add value
degree of product–market innovation, they classified firms
through entrepreneurial activities and innovation. Innovation
into prospectors, analyzers and reactors, and argued that all
is the adoption of an idea or behavior new to the adopting
three firm types must deal with the entrepreneurial problem
organization, which involves all dimensions of organizational
effectively to be successful. Prospectors seek to identify and
activities, such as a new product or service, a new production
exploit new opportunities through both product (including
process technology, a new structure or administrative system
service) and market development (Miles and Snows, 1978),
and a new plan or program within the organization
and Defenders try to create a stable domain by protecting their
(Damanpour, 1991).
product–market innovation and thrive through stability,
Entrepreneurship or new entry (NE), and entrepreneurial
reliability and efficiency (Slater and Narver, 1995). Analyzers,
orientation (EO) – the processes, practices and
on the other hand, flourish through more purposeful product–
decision-making activities that lead to new entry (Lumpkin
market innovation than defenders, but use a more cautious
and selective approach than Prospectors (Hambrick, 2003).
The current issue and full text archive of this journal is available at Entrepreneurship and innovation are concepts often linked with improved firm performance and regarded as primary
sources of competitive advantage. Zahra (1991) and Wiklund
(1999) argued that firms demonstrating more entrepreneurial
strategic orientation perform better, whereas Prajogo and
Journal of Business & Industrial Marketing Ahmed (2006) claimed that right from the genesis of the
29/6 (2014) 449 –453
© Emerald Group Publishing Limited [ISSN 0885-8624]
industrial revolution, innovation has been a key source of
[DOI 10.1108/JBIM-07-2013-0148] competitive advantage. The link between entrepreneurship

Editorial Journal of Business & Industrial Marketing
Nelson Oly Ndubisi Volume 29 · Number 6 · 2014 · 449 –453

Figure 1 The link between EO, innovation and entrepreneurship

Entrepreneurial Innovation Entrepreneurship

Orientation (New Entry)

Figure 2 The schema of the triadic connect (EO–IN–NE) and centered on manufacturing firms or physical products, with
outcomes (OP/CA) little attention to services. As such, this special edition aims to
bring together, cutting-edge research of international
standards on how (service) organizations add value, increase
performance and create competitive advantage through
NE entrepreneurship and/or innovation.
The special issue follows the tradition of JBIM of helping to
overcome shortages in business-to-business marketing theory
and research (Sheth and Sharma, 2006), and its foci on
business-to-business marketing and sales.
Business-to-business marketing and sales refer to one
company marketing and selling its products and services to
another organization such as a commercial enterprise,

government or not-for-profit organization. In 2012, a call was
made for articles which offer new insights into
entrepreneurship and service innovation in
business-to-business context which may be in the form of
conceptual, case-based or empirical papers that consider (but
EO IN not limited to) the following topics of interest:
● entrepreneurship, EO and firm performance;
● service innovation and value creation;
● measurement of IN;
● entrepreneurial marketing for services;
● IN in services management;
● IN characteristics and diffusion of services;
and innovation suggests that entrepreneurship when matched ● service organizations and CA;
with market-oriented culture contributes significantly to ● corporate entrepreneurship, IN and performance;
successful innovation (Slater, 1997). More recently, there is a ● IN in healthcare marketing;
growing belief among the service-dominant logic and ● IN in sports marketing and sponsorship;
servitization of the manufacturing sector schools that many of ● IN in higher education marketing;
the effects/contributions to firm performance and competitive ● outsourcing, offshoring and franchising;
edge are creditable to service innovation, leading to greater ● service dominant logic and value co-creation, servitization,
attention being paid to the concept of service innovation resources, capabilities and performance of service firms;
(Ndubisi and Iftikhar, 2012). Yet, despite the rapid growth of ● service quality, service failure and service recovery, IN in
the service sector and increasing servitization of the not-for-profit organizations;
manufacturing sector, past investigations of the role of ● environmental marketing IN; and
entrepreneurship and innovation in organizations have mostly ● mindfulness, and service quality and reliability.

Editorial Journal of Business & Industrial Marketing
Nelson Oly Ndubisi Volume 29 · Number 6 · 2014 · 449 –453

The overwhelming response from scholars and practitioners R&D-intensive firms perceive greater equity barriers.
in the overarching fields of entrepreneurship and service IN, in Moreover, firms that are relatively happy about the managerial
the form of quality submissions, testifies to the timeliness of competencies available to them, but who identify deficiencies
the subjects of this special issue. in marketing skills, and the availability of external debt finance
This issue is the result of a rigorous process of selection is shown to be “needy”. The study contributes to the
from many quality submissions from scholars interested in the improvement of sparse extant literature in the fields of venture
subject of entrepreneurship and service innovation in capital demand and innovative service firms.
for-profit and not-for-profit organizations. We would like to In the forth article, Yew Chong Tan and Nelson Oly
congratulate all the authors who have contributed to the Ndubisi evaluated the relationship between organizational
special issue and also thank all the reviewers for their hard resources, technological innovation, relationship quality (RQ)
work and for meticulously reading and appraising the and performance, as well as the mediating effect of firm–
submissions and resubmissions. In the following sections, we supplier relationship quality. A survey was conducted of the
present a summary of each of the six articles (four focusing on palm oil processing sector in Malaysia, consisting milling,
for-profit organizations and two not-for-profit organizations) refining and oleo-chemical companies. Data were gathered
accepted for the special issue after a rigorous blind review and used to statistically test hypotheses that underpinned a
process. proposed conceptual model. Findings are that organizational
Following this introductory article is the article by Nelson resources have a direct impact on RQ, which, in turn, has a
Oly Ndubisi and James Agarwal which analyzed the direct and direct effect on performance indicators such as financial
indirect effects of IN and entrepreneurial orientation on performance, market effectiveness and strategic objectives.
service performance of small and medium enterprises in a RQ is a mediator in some of the resource–performance
developing Asian economy. The authors draw from the relationships, which underpins the genesis of the research
strategic management literature in theorizing and modeling undertaken. The mediating role played by RQ in promoting
the relationships, which were tested in small information business performance in the palm oil processing sectors is
technology (IT) firms. Findings indicate a significant direct achieved through translating the effects of organizational
and indirect positive relationship between EO dimensions and resources into improved business performance. The results
three types of innovation and quality performance. Innovation offer some suggestions to top management, e.g. on the type of
mediates in the relationship of EO with quality performance. resources to invest in and exploring vital relational issues that
The article adds to extant strategic management literature, enhance performance outcomes and the impact of different
resource-based view and dynamic capabilities theories, as well sets of resources on relational dynamics.
as contributes to managerial practice by underscoring the need In the next article, Hung-Tai Tsou, Ja-Shen Chen and
for owner-managers of small enterprises to pursue Wen-Hsuan Liao examined the role of market and technology
EO-focused and innovation enhancement strategies in an orientations and innovative competence in service delivery
integrated manner. Furthermore, the combination of a innovation. Based on analyses of data collected through a field
developing country context and the significance of IT enhance study of IT firms in Taiwan, the authors found that proactive
the contextual contribution of the paper. market orientation and technology orientation affect
The next article by Rajan Nataraajan and Madhukar Angur exploratory and exploitative innovative competence, and
investigated the impact of aspects of knowledge economy exploitative innovative competence affects service delivery
covered by the knowledge economy index (KEI) and aspects innovation. By integrating innovative competence as a
of entrepreneurial activity covered by the global mediator in the relationship of market and technology
entrepreneurship index (GEI) on quality of life (QOL) in a orientations with service delivery innovation, the authors show
country. The authors gathered KEI, GEI and QOL data for how the benefits of market and technology orientations
different countries and analyzed them using correlation and translate into competencies that enhance IT services delivery.
regression analyses. The results of the analysis yielded two key Some organizations have benefited significantly from
findings: first, KEI and GEI have a significant effect on QOL. technological innovations as a result of their productivity
Second, the innovation index (a component of KEI) and the orientation, and others have failed to fully benefit from their
total early-stage entrepreneurship (a component of GEI) investments in new innovations due to under-utilization of
emerge as key factors that improve QOL. The authors argue such innovations (Ndubisi, 2005). Although some past studies
that by improving the innovative abilities of a nation’s (Landauer, 1995; Ndubisi and Jantan, 2003; Sichel, 1997)
population and fostering the early-stage entrepreneurial have linked under-utilization of innovations to the
activity, the quality of life in a country could be enhanced. productivity paradox, the outcome of these studies is
Mark Freel, Paul Robson and Sarah Jack, in their article on inconclusive. Addressing this gap, Namwoon Kim and Jae H.
“Risk capital constraints to innovation in services”, tried to Pae in the next article explored how intra-firm diffusion of
furnish a better understanding of the factors associated with innovation leads to inter-firm relationship benefits for both
perceptions of venture capital as a barrier to innovation in an providers and adopters of innovation. The study focuses on
important subset of knowledge-intensive service firms – understanding the causes and the effects associated with
technology-based business services. Data for the study were successful diffusion and utilization of innovation within a firm.
collected through a survey of 264 technology-based service Using data from business-to-business markets, the study
firms located in Scotland and Northern England, and found that adopters and the providers of innovation benefit
analyzed using bivariate and multivariate statistical when both proactively participate in the intra-firm diffusion
techniques. They found that smaller, faster growing and process. They explained that benefits are created for the

Editorial Journal of Business & Industrial Marketing
Nelson Oly Ndubisi Volume 29 · Number 6 · 2014 · 449 –453

adopter via improvement in efficiency, and for the provider ● Terry Wu, University of Ontario Institute of
through establishment of a long-term relationship with the Technology, Canada.
adopting organization and by creating high switching costs.
The penultimate and concluding articles take the discussion
to the not-for-profit context, and demonstrate that References
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I would like to conclude this introductory article with a entrepreneurs”, Journal of Business and Entrepreneurship,
special note of thanks to all the paper reviewers for their Vol. 17 No. 2, pp. 114-135.
Ndubisi, N.O. (2012), “Mindfulness, reliability, pre-emptive
high-quality service and professionalism without which this
conflict handling, customer orientation and outcomes in
special issue may not have materialized, and to the Chief
Malaysia’s healthcare sector”, Journal of Business Research,
Editor of JBIM, Professor Wes Johnston, for commissioning
Vol. 65 No. 4, pp. 537-546.
the special issue and for his support throughout the process. I
Ndubisi, N.O. (2013), “Role of gender in conflict handling in
would like to recognize the following reviewers and staff for a
the context of outsourcing service marketing”, Psychology &
job well done:
and Marketing, Vol. 30 No. 1, pp. 26-35.
● James Agarwal, University of Calgary, Canada.
Ndubisi, N.O. and Iftikhar, K. (2012), “Relationship
● Celine Capel, Noah’s Ark, Kings Christian College and between entrepreneurship, innovation and performance:
University of Southern Queensland, Australia. comparing small and medium-size enterprises”, Journal of
● Mark Freel, University of Ottawa, Canada. Research in Marketing and Entrepreneurship, Vol. 14 No. 2,
● Margaret Matanda, Monash University, Australia. pp. 214-236.
● Vik Naidoo, Curtin University, Australia. Ndubisi, N.O. and Jantan, M. (2003), “Evaluating IS usage in
● Rajan nataraajan, auburn university, USA Malaysian small and medium-sized firms using the
● Gibson Ndubisi, Anambra State University, Uli, technology acceptance model”, Logistics Information
Nigeria. Management, Vol. 16 No. 6, pp. 440-450.
● Saara Pekkarinen, University of Oulu, Finland. Prajogo, D.I. and Ahmed, P.K. (2006), “Relationships
● Hanna Salojärvi, Lappeenranta University of between innovation stimulus, innovation capacity, and
Technology, Finland. innovation performance”, R&D Management, Vol. 36
● Bengü Sevil, Izmır University of Economics, Turkey. No. 5, pp. 499-515.
● Ramanjeet Singh, Institute of Management and Sheth, J.N. and A. Sharma, A. (2006), “The surpluses and
Technology, UK. shortages in business-to-business marketing theory and
● Francois Therin, Curtin University, Malaysia. research”, Journal of Business & and Industrial Marketing,
● Can Uslay, Rutgers University, NJ, USA. Vol. 21 No. 7, pp. 422-427.

Editorial Journal of Business & Industrial Marketing
Nelson Oly Ndubisi Volume 29 · Number 6 · 2014 · 449 –453

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Corresponding author
Vargo, S.L. and Lusch, R.F. (2004), “Evolving to a new
dominant logic for marketing”, Journal of Marketing, Vol. 68 Nelson Oly Ndubisi can be contacted at: olynel@
No. January, pp. 1-17.

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