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Organizing for Service Innovation: Best-Practice or Configurations?




In this paper we contrast the notions of best-practice and configurations contingent on environmental conditions. The analysis draws upon our study of 38 UK and 70 US service firms which includes an assessment of the organization, processes, tools and systems used, and how these factors influence variation in the development and delivery of new services. The best-practice framework is found to be predictive of performance improvement in samples in both the UK and USA, but the model better fits the USA than UK data. We analyze the UK data to identify alternative configurations. Four system configurations are identified: project-based; mass customization; cellular; and organic-technical. Each has a different combination of organization, processes, tools and systems which offer different performance advantages. The results provide an opportunity for updating the typologies of operations and adapting them to include services, and begin to challenge the notion of any universal 'best practice' management or organization of new product or service development.

Suggested Citation

  • Joe Tidd & Frank Hull, 2002. "Organizing for Service Innovation: Best-Practice or Configurations?," SPRU Working Paper Series 77, SPRU - Science and Technology Policy Research, University of Sussex.
  • Handle: RePEc:sru:ssewps:77

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    References listed on IDEAS

    1. Robert D. Dewar & Jane E. Dutton, 1986. "The Adoption of Radical and Incremental Innovations: An Empirical Analysis," Management Science, INFORMS, vol. 32(11), pages 1422-1433, November.
    2. Davies, Andrew & Brady, Tim, 2000. "Organisational capabilities and learning in complex product systems: towards repeatable solutions," Research Policy, Elsevier, vol. 29(7-8), pages 931-953, August.
    3. Richard L. Daft & Robert H. Lengel, 1986. "Organizational Information Requirements, Media Richness and Structural Design," Management Science, INFORMS, vol. 32(5), pages 554-571, May.
    4. Hobday, Mike & Rush, Howard & Tidd, Joe, 2000. "Innovation in complex products and system," Research Policy, Elsevier, vol. 29(7-8), pages 793-804, August.
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    Cited by:

    1. Sluismans, Raf, 2003. "Looking for synergy in organizations: The role of the concept of configuration in contemporary theory," Research Memorandum 014, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    2. Jeremiah, Rupin, 2017. "DO FIRMS INNOVATE ABROAD? - The Case of Swedish R&D in India," SSE Working Paper Series in Business Administration 2017:4, Stockholm School of Economics, revised 07 Dec 2017.

    More about this item


    service industry; performance improvement; best-practice; alternative system configurations;

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L8 - Industrial Organization - - Industry Studies: Services
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy


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