Innovation

Management, Policy & Practice

ISSN: 1447-9338 (Print) (Online) Journal homepage: http://www.tandfonline.com/loi/rimp20

Enhancing intellectual capital for e-service

innovation

Hung-Tai Tsou, Ja-Shen Chen & Shih-Wen (Jolie) Liao

To cite this article: Hung-Tai Tsou, Ja-Shen Chen & Shih-Wen (Jolie) Liao (2016) Enhancing
intellectual capital for e-service innovation, Innovation, 18:1, 30-53

To link to this article: http://dx.doi.org/10.1080/14479338.2016.1181527

Published online: 16 May 2016.

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 Innovation: Management, Policy & Practice, 2016
Vol. 18, No. 1, 30–53, http://dx.doi.org/10.1080/14479338.2016.1181527

Enhancing intellectual capital for e-service innovation

Hung-Tai Tsoua, Ja-Shen Chenb* and Shih-Wen (Jolie) Liaoc
a
Department of Marketing and Logistics, Ming Dao University, 369, Wen-Hua Rd., Peetow,
ChangHua 52345, Taiwan; bCollege of Management, Yuan Ze University, 135 Fareast Rd.,
Chungli Dist., Tao-yuan 320, Taiwan; cInternational Business Division, Rainbow Light
Technology Co., 192, Sec. 3, Jinling Rd., Pingzhen Dist., Taoyuan 324, Taiwan
(Received 13 June 2015; accepted 18 April 2016)
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The emergence of the knowledge-based economy has made intellectual capital a criti-
cal factor in assisting companies to obtain a competitive advantage in this fierce
environment. This study adopted the knowledge-based view and resource-based view
to explore and propose the influence of intellectual capital on e-service innovation
and further examines the mediating effects of cross-functional integration and
external collaborative competency on the relationship between intellectual capital and
e-service innovation. An empirical study was performed based on a survey of infor-
mation technology (IT) and marketing managers from financial and hotel industries
in Taiwan. There were 126 companies whose two departments both responded to the
questionnaires. The findings indicated that intellectual capital can promote the ability
of firms to develop e-service innovation. Furthermore, cross-functional integration
played a mediating role between intellectual capital and e-service innovation. This
study suggested that managers should enhance intellectual capital in developing
e-service innovation through cross-functional integration.
Keywords: intellectual capital; e-service innovation; cross-functional integration;
external collaborative competency

1. Introduction
In the twenty-first century, knowledge is becoming a key factor in creating business
wealth and is regarded as a critical resource with which firms create value and obtain a
competitive advantage. According to the resource-based view (RBV), firms focus on
obtaining, retaining and using potential strategic resources to attain a competitive advan-
tage and outstanding business performance (Barney, 1991). In addition, firms use their
own unique resources to develop and sustain a competitive advantage, including both
tangible and intangible assets. Due to knowledge as an agent of wealth production
(Bontis, 2004), intellectual capital1 is becoming one of the important commercial assets,
a way of describing a company’s intangible assets that are vital for company success
(Brooking, 1996). Enhancing intellectual capital can assist a company to use knowledge
to gain service innovation performance (Carmona-Lavado, Cuevas-Rodríguez, &
Cabello-Medina, 2013) and increase customer values (Chien & Chao, 2011). Moreover,
electronic linkages within and among organizations are proliferating, altering the ways
in which firms acquire factor inputs, convert them into products and services, and dis-
tribute the results to their customers (Straub & Watson, 2001). Electronic application

*Corresponding author. Email: jchen@saturn.yzu.edu.tw

© 2016 Informa UK Limited, trading as Taylor & Francis Group

 Innovation: Management, Policy & Practice 31

mainly assesses the extent of deployed new digital resources2 between new technologies
and various aspects of an organization and the situation in which innovative e-services
can be created or produced (Barrett et al., 2015).
E-service innovation is a type of service innovation using technical capabilities to
improve service delivery and tailor services through electronic technologies (Tsou &
Chen, 2012) and has significant impact on firm value (Chuang & Lin, 2015). An
increasingly growing stream of innovation studies has emerged that attempted to iden-
tify influence factors that are crucial to e-service innovation. Different from service
innovation, e-service innovation specifically emphasizes on creating innovative services
based on information and communication technology (ICT) applications. With regard to
e-service innovation research, relevant issues including co-creation (Chuang & Lin,
2015), interfirm codevelopment competency (Tsou & Chen, 2012), technology integra-
tion mechanism (Tsou, 2012b), and dichotomic approaches (Di Guardo & Cabiddu,
2015) have been examined and thoroughly developed. A few empirical studies (e.g.,
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Oliveira, Roth, & Gilland, 2002; Tsou, 2012a) have also examined the role of knowl-
edge as a driving force to e-service performance.
Following the knowledge-based view (KBV), an organization’s intellectual capital is
closely related to its innovative capability (Chen, James Lin, & Chang, 2006). The
effective exploitation of an organization’s intellectual capital is believed to facilitate
innovation in organizations (Damanpour, 1991). Organizations therefore, must leverage
the knowledge resources within the firm and from customers, and integrate the intangi-
bles of production, thus recognizing that knowledge resources (i.e., intellectual capital)
are key sources of e-service innovation (Carmona-Lavado et al., 2013). For example, in
electronic financial markets, the companies need to invest their intellectual capital to
provide more innovative “bundled” e-services to their clients, such as ad hoc real-time
news reports, real-time charting of stock price movements, the demand and supply of
stocks, stock analyst ratings, and research on the company’s financial health (Yap &
Synn, 2011). However, there is still a very limited understanding of the relationship
between intellectual capital and e-service innovation in general: the relevant theoretical
and empirical works are quite limited. Therefore, this study aims to fill this gap by dis-
cussing the relationship between intellectual capital and e-service innovation. We pro-
pose that intellectual capital plays an important role in accumulating and utilizing varied
knowledge resources to design and implement new e-services and ultimately enhancing
e-service innovation performance.
Further, previous studies have shown that maximizing service innovation requires
openness to external ideas and an effective internal organization of resources (Love,
Roper, & Bryson, 2011). Internal and external sourcing are complementary innovative
activities (Lokshin, Belderbos, & Carree, 2008) and firms can adapt the internal-external
driving forces to reconfigure resources and coordinate processes promptly and effec-
tively to meet new information technology environment (Gibson & Birkinshaw, 2004).
According to this conception, we assert that an internal driving force that combines dif-
ferent functional teams to develop an internal cross-functional integration, and an exter-
nal driving force that collaborates with suppliers and business partners to form an
external collaborative competency might play roles in developing e-service innovation.
Hence, this study considers internal cross-functional integration and external collabora-
tive competency as two mediators to investigate the influence of intellectual capital on
e-service innovation via internal cross-functional integration and external collaborative
competency. Accordingly, this study aims to explore how intellectual capital influences
companies in implementing e-service innovation. Therefore, intellectual capital, internal
 32 H.-T. Tsou et al.

cross-functional integration, external collaborative competency, and e-service innovation

are all captured in the research framework, as shown in Figure 1. This paper addresses
three specific questions: (1) Does intellectual capital impact e-service innovation, and, if
so, how? (2) Does intellectual capital impact cross-functional integration and external
collaborative competency, and, if so, how? (3) Do cross-functional integration and exter-
nal collaborative competency mediate the relationships between intellectual capital and
e-service innovation?
Our findings make three main contributions. First, literature about the relationship
between intellectual capital and e-service innovation is scarce. Our research provides
new insights for managers on how to properly allocate intellectual capital to implement
effective e-service innovation. Second, to our knowledge, mediating effects of internal
and external driving forces on the relationships between intellectual capital and e-service
innovation has not been well discussed in prior studies. The results of this study can be
a starting point for relevant research and establish basic understandings of knowledge
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resources in e-service innovation. This study also expands on the model proposed by
Chuang and Lin (2015), which only examined the effects of internal and external driv-
ing forces on e-service innovation. Third, based on RBV and KBV, we test the links
between intellectual capital, organization (internal and external), and e-service innova-
tion through an empirical survey with paired samples of information technology (IT)
and marketing managers from 126 financial and hotel firms in Taiwan. Financial and
hotel firms are able to sense changes, organize capital, knowledge, and relations as well
as meet changing customer needs in a timely manner and convert market change
challenges into e-service innovation opportunities.

2. Literature review
2.1. Intellectual capital
Intellectual capital refers to the difference in value between tangible assets (physical and
financial) and the aggregation of intangible assets owned by an organization (Bueno,
Salmador, & Rodríguez, 2004). Carmona-Lavado, Cuevas-Rodríguez, and Cabello-
Medina (2010) identified intellectual capital as the collective knowledge and knowing

H4

Cross-functional
integration
H2
Intellectual capital e-Serviceinnovation
Human capital H1 Process innovation
Organizational capital Technical capacity
Social capital Risk reduction
External
collaborative
H3 competency

H5

Figure 1. Research model.

 Innovation: Management, Policy & Practice 33

capability at the organizational level. Subramaniam and Youndt (2005) used three mea-
sures, human capital, organizational capital, and social capital, to represent intellectual
capital. Reed, Lubatkin, and Srinivasan (2006) likewise classified intellectual capital as
human capital, organizational capital, and social capital. Kang and Snell (2009) also
classified intellectual capital as human capital, social capital, and organizational capi-
tal. In a knowledge society setting, Ramezan (2011) used the three dimensions of intel-
lectual capital – human, organizational, and social – to examine their relationships with
organic structure. In Su’s (2014) study, the scope of intellectual capital again included
human capital, organizational capital, and social capital. Accordingly, we have used
human capital, organizational capital, and social capital as the three dimensions of
intellectual capital.
Human capital has been defined as the knowledge, skills, and abilities (KSAs)
embodied in people (Coff, 2002), and it refers to the capabilities, knowledge, skills, and
experiences of employees in an organization that can facilitate new ideas and the inno-
vativeness of a firm (Lu & Hung, 2011). Organizational capital, including databases,
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organizational charts, process manuals, practices, and routines, is the infrastructure of a

firm that can store knowledge and allow employees access to knowledge and necessary
resources (Lu & Hung, 2011). In addition, Subramaniam and Youndt (2005) stated that
“organizational capital is the institutionalized knowledge and codified experience
residing within and utilized through databases, patents, manuals, structures, systems,
and processes.” Social capital has been defined as “the resources accessible through the
network of relationships possessed by an individual or a social unit” (Hillman &
Dalziel, 2003). It can utilize the interactions among employee within a firm and the
firm’s relationship with its collaborators, such as government, customers, alliance
partners, suppliers, and technical collaborators (Hsu & Fang, 2009).

2.2. e-service innovation

Relatively few studies have empirically examined organizations’ e-service innovation.
E-service innovation can be defined as a type of service innovation that is created by a
service provider using technical capabilities involving interaction with partners to
improve and tailor the services to meet customer demands through electronic technolo-
gies (Chuang & Lin, 2015; Tsou & Chen, 2012). Following Tsou and Chen’s (2012)
work, we used three sub-constructs to develop the model of e-service innovation,
namely process innovation, technical capability and risk reduction. Process innovation
refers to a company’s improvement of organizational processes and service delivery.
Technical capability is defined as the capability of an organization to acquire new tech-
nologies and technical resources for e-innovation practices. Risk reduction refers to
reducing the possibility of an innovation failing, resulting in undesired effects, or not
functioning as originally conceived to measure risk mitigation.
Intellectual capital is regarded as the knowledge resources that organizations use to
attain sustainable success and is clearly related to a firm’s innovation capability
(Carmona-Lavado et al., 2010). Additionally, intellectual capital is a critical factor in the
process of innovation development and an intangible asset at the organizational level
that can stimulate a firm’s innovation capability (Chen et al., 2006). For human capital,
when a company possesses employees and managers with professional knowledge, plen-
tiful experience and outstanding capability, it will facilitate NPD performance. In addi-
tion, human capital is the primary resource for innovation (Alegre, Lapiedra, & Chiva,
2006). Organizational capital has a positive influence on innovation, as it allows a firm
 34 H.-T. Tsou et al.

to store knowledge and greatly stimulate the flows of relevant information among both
employees and units (Sørensen & Lundh-Snis, 2001). Specifically, organizations align-
ing investments in human and organizational capitals can transfer the non-financial per-
formances (e.g., e-service innovation) into financial performances (Kaplan & Norton,
2004). Social capital plays a critical factor in the process of innovation development
and practice (Carmona-Lavado et al., 2010). Several researchers have proposed that
social capital will influence the innovativeness of a firm by supporting creativity and
encouraging new knowledge and ideas (Aragón-Correa, García-Morales, &
Cordón-Pozo, 2007; Lu & Shyan, 2004; Song & Thieme, 2006) and positively affect
user satisfaction through e-service delivery (Sun, Fang, Lim, & Straub, 2012).
Therefore, we infer that a company can create successful e-service innovation through
intellectual capital and propose the following hypothesis:

Hypothesis 1: Intellectual capital has a positive effect on e-service innovation

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2.3. Cross-functional integration

Cross-functional integration is defined as “the magnitude of interaction and communica-
tion, the level of information sharing, the degree of coordination, and the extent of joint
involvement across functions in specific NPD tasks” (Hirunyawipada, Beyerlein, &
Blankson, 2010; Song & Montoya-Weiss, 2001). To exchange ideas of experts from var-
ious functional areas has been a key in new service development (NSD). Thus, the
investment in human capital to acquire more individual professional knowledge can be
a starting point of cross-functional integration (Chien & Chao, 2011). Likewise, organi-
zational capital is a type of organizational memory (e.g., the information system and
database of an enterprise). When companies utilize an information system well to inte-
grate individual intelligence and scattered information, it will make information and
knowledge exchange within the organization more efficient (Hurwitz, Lines,
Montgomery, & Schmidt, 2002). Also, social capital represents an organization’s
abilities in terms of interaction among employees (Lu & Hung, 2011). A good social
network in an organization can improve the efficiency of knowledge exchange among
various departments and can increase resource integration (Zaheer, McEvily, & Perrone,
1998) to facilitate coordination and collaboration within a company (Putnam, 1993).
Therefore, this study presents the following hypothesis:

Hypothesis 2: Intellectual capital has a positive effect on cross-functional integration

2.4. External collaborative competency

External collaborative competency can be defined as the core capability to bring cus-
tomers and business partners into the process and use as mechanisms to foster changes
(Lusch, Vargo, & O’Brien, 2007) and simultaneously involve key stakeholders in the
new service/product development process (Mishra & Shah, 2009). According to RBV, a
company must establish a collaborative relationship with its partners to constitute a
bridging strategy. As organizations are rarely self-sufficient, they must establish collabo-
rative relationships with other organizations to acquire critical resources. Additionally,
because one business does not hold all resources and capabilities, it must create value
by combining and exchanging resources with its collaborators (Penrose, 1959).
 Innovation: Management, Policy & Practice 35

However, there are still few studies addressing the relationship between intellectual
capital and collaboration competency. Chien and Chao (2011) have indicated that intel-
lectual capital has positive effects on co-production. In terms of human capital, a profes-
sional is an employee with expertise in their field of work, and expertise can increase
the degree of involvement in collaborative processes (Moorthy, Ratchford, & Talukdar,
1997). In terms of organizational capital, when a company has high operational effi-
ciency and can solve internal problems, it can increase its collaborative ability with
external partners (Lynn, 1999). In terms of social capital, a firm can utilize its relation-
ships with its business collaborators (Hsu & Fang, 2009). The better the extent of a
firm’s social capital, the better it is able to collaborate with its partners (Lu & Hung,
2011). Therefore, this study presents the following hypothesis:

Hypothesis 3: Intellectual capital has a positive effect on external collaborative competency

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2.5. Mediating effects of cross-functional integration and external collaborative

competency on e-service innovation
Cross-functional integration is viewed as a key success factor in NPD (Engelen, Brettel,
& Wiest, 2012). Because each functional area owns specific information and resources,
cross-functional integration plays an important role in assisting a company to integrate
different resources and information when developing a new product (Griffin & Hauser,
1996). Furthermore, several empirical studies have investigated the positive effect of
cross-functional integration on NPD success (e.g., Nijssen & Frambach, 2000; Song &
Parry, 1992; Troy, Hirunyawipada, & Paswan, 2008). From a NSD perspective, the
importance of cross-functional teams is their ability to maximize the process efficiency
of a new service (Melton & Hartline, 2013). Therefore, the cross-functional team is con-
sidered a key internal organizational resource that can stimulate the design, develop-
ment, and introduction of new services (Ordanini & Parasuraman, 2011). Accordingly,
by a combination of the arguments presented when discussing H2 above, this study can
make predictions regarding the mediating effect of cross-functional integration between
intellectual capital and e-service innovation. This discussion suggests the following
hypothesis:

Hypothesis 4: Cross-functional integration mediates the effect of intellectual capital on e-

service innovation

External collaborative competency has been seen as an imperative factor that significant
affects the innovation practices of a firm (Barrett et al., 2015). Previous research has
indicated that innovation practices are facilitated through inter-organizational collabora-
tion behaviors (Sarin & Mahajan, 2001). From the RBV, collaboration between firms
and their business partners is necessary to innovation, which means that businesses must
exchange information, resource and combined capabilities with other organizations to
provide innovation practices (Tsou, 2012a). Several existing studies have addressed the
relationship between collaboration and innovation practices and revealed that collabora-
tion can substantially advance the innovation practices of a firm (e.g., Ordanini &
Parasuraman, 2011; Tsou, 2012b). Moreover, de Vries (2006) mentioned that service
innovation arises not from any single source but instead from a collaborative network,
which includes partners, supplier collaboration and the competency of the combination
of companies and delivery technology. Accordingly, by combining the arguments
 36 H.-T. Tsou et al.

presented when discussing H3, this study can make predictions regarding the mediating
effect of external collaborative competency between intellectual capital and e-service
innovation. This discussion suggests the following hypothesis:

Hypothesis 5: External collaborative competency mediates the effect of intellectual capital

on e-service innovation

3. Method
3.1. Sample and data collection
Our study context was the service industry in Taiwan. The service sector has gradually
become the main force of economic development. The world’s economy is dominated
by service, and in some advanced countries, more than 70% of GDP is generated by
service. According to Oke (2007), the service sector is comprised of the transport, gov-
ernment, education, health care, social and personal services, retail and wholesale, hotel
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and restaurant, telecommunication and financial sectors. The financial sector is a knowl-
edge-intensive industry and intellectual capital plays a very important role in financial
industry (Chien & Chao, 2011). The nature of financial markets in Taiwan is highly
competitive and turbulent, and it is necessary for firms to provide and develop better e-
services to sustain their competitive advantage by collaborating with partners. In addi-
tion, both the individual knowledge of the employees working in a financial institution
and the organizational knowledge of the financial institution (e.g., the customer data-
base, information system, business culture) are considered important elements in this
competitive environment. Thus, research attests to the importance of e-service innova-
tion in the financial industry and highlights the need to focus research on this area.
This study considers the hotel industry as another target industry. The hotel industry
is a fast growing industry involving with online/offline service interactions (de Ruyter,
Wetzels, & Kleijnen, 2001; Shahin, Khazaei Pool, & Poormostafa, 2014). Hotels in
Taiwan face rapid changes in the business environment, including globalization of the
hospitality and tourism market, greater service demands from customers, and the
ever-increasing role of new technologies in supporting service delivery such as Internet
of Things (IoT) applications in hotel (Guo, Liu, & Chai, 2014) . These changes exert
great pressures on hotels. To meet these challenges, e-service innovation is the key to
creating and maintaining a competitive advantage. Hotel managers in Taiwan work per-
sistently to develop new e-services to outperform their competitors. For example, one
important new e-service associated with the hotel industry is mobile hotel reservation
systems (MHRS). MHRS refer to hotel booking mobile apps. These apps offered by a
hotel for its customers to check hotel locations, room rates, promotions, or membership
information (e.g., membership points) and offered by a third-party organization that pro-
vides information on different hotels for the convenience of travelers (Wang, Li, Li, &
Zhang, 2016). In addition, previous researchers have suggested that hotel managers
should pay more attention to intellectual capital because end-customers care more about
intangible service (Rudež & Mihalič, 2007). Even though hotel industry is not primarily
considered knowledge intensive, both individual knowledge and organizational knowl-
edge expressed in routines, systems, customer databases etc., are considered important
elements of effectively running a hotel in a competitive environment (Engström, West-
nes, & Westnes, 2003). Hence, this study explores how e-service innovation is generated
in the hotel industry.
 Innovation: Management, Policy & Practice 37

The sample of the financial industry was selected from “the largest corporations in
Taiwan－Top 5,000 (2013)” published by China Credit Information Service, Ltd. The
sample of the hotel industry was selected from the Tourism Bureau, Ministry of Trans-
portation and Communication, Republic of China (Taiwan) and focused on star standard
hotel firms. All samples were filtered by performing a Google-check of whether the
companies’ websites are still active, and some firms were eliminated due to the special
properties of these businesses. The final samples include 759 companies, consisting of
367 financial companies and 392 hotel companies.
To enhance accuracy, we collected data from two major functional areas of a firm,
namely, the IT and marketing departments, and the respondents are the managers of
these two departments. We believe that both marketing and IT managers must have a
certain level of awareness about their organization’s service practices and innovation
performance. In addition to marketing managers, the choice of IT managers as respon-
dents seems reasonable because one of the main focuses of this study is about e-service
innovation. To be eligible, a firm’s most recently completed e-service innovation project
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must have introduced at least one e-service that was on the market from 2011 to 2013.
Following the suggestions of Churchill (1979), the questionnaire was designed,
modified, and adopted with reference to the literature. The data were secured by means
of a four-page self-administered questionnaire as part of a wider examination of intellec-
tual capital, cross-functional integration, external collaborative competency, and e-ser-
vice innovation. All constructs were measured using a minimum of four closed-ended
items. Responses were rated on 7-point Likert scales where 1 = strongly disagree and
7 = strongly agree. To gain insights into the IT and marketing managers’ experiences,
opinions, aspirations, and attitudes toward intellectual capital, cross-functional integra-
tion, external collaborative competency, and e-service innovation, interviews with four
scholars and six specialists (i.e., one general manager in the hotel industry, three branch
managers in the financial industry, and one assistant manager each in the financial and
hotel industries, respectively) were scheduled for 60–90 min. The interviewees’ average
tenure was between 5 years and 10 years. Afterwards, the interviewees were asked to
review and complete the draft version of the questionnaire to identify ambiguities and
suggest improvements. An examination of the feedback led to further refinement and
eventually a final version (see Appendix).
A total of 1,518 questionnaires in Mandarin Chinese were mailed to the IT and mar-
keting departments of selected financial and hotel firms in Taiwan. Each department
received one questionnaire and a self-addressed stamped return envelope. To encourage
response, we donated to The Eden Social Welfare Foundation for every returned ques-
tionnaire. In addition, a cover page described our research objectives and promised to
provide participants with a copy of the research findings in exchange for their response.
We also ensured participants that their responses would remain confidential. The respon-
dents were asked to reply to all questions based on their experience and actual collabo-
ration campaigns. Initially, we received the questionnaires from both departments of 18
firms. To increase the response rate, we continued to follow up by telephone, email, fax
and online questionnaire to contact the firms that did not respond or from which we
only received one questionnaire. After calling for replies for approximately three
months, the follow-up contacts resulted in a total of 252 questionnaires collected from
126 companies whose two departments both completed the questionnaires. The effective
response rate was thus 16.61%.
To examine non-response bias, we compared the early and late responders
(Armstrong & Overton, 1977). We classified the first received as early response (n = 18)
 38 H.-T. Tsou et al.

and the follow-up contacts as late response (n = 108). The results of an independent
samples t-test revealed no statistically significant difference between the two groups in
terms of human capital (p = 0.657), organizational capital (p = 0.240), social capital
(p = 0.084), cross-functional integration (p = 0.839), external collaborative competency
(p = 0.895), process innovation (p = 0.336), technical capability (p = 0.214), or risk
reduction (p = 0.104). Further, to prove that these questionnaires are representative of
actual situations, we used paired samples t-tests to examine whether there were signifi-
cant differences between the two departments. The results demonstrated that there were
no statically significant differences in any construct between the IT and marketing
departments. In other words, e-service innovation opinions from the two departments in
the same company were consistent.
There are two explanations for this. First, many new e-service development projects
are outsourced to or co-executed with outside consulting firms so that, compared to the
past, IT and marketing managers are now able to pay more attention to strategic-level
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issues and focus more on how IT and marketing functions can better be aligned with
business strategies and operations. Hence, when viewing e-service innovation practices,
managers from both IT and marketing departments are likely to form the same opinions.
Second, in this study, more than half firms owned capital from USD 3.3 million to 0.17
billion (62.7%). The bigger a company, the more mature its departments. Firms empha-
size agreement of cross-units on any business strategy. For these reasons, consistency in
the attitudes of IT and marketing departments toward e-service innovation strategies can
be expected.
Because the data were self-reported, we used Harmon’s one-factor test to check for
the presence of common method bias. The items used to measure the dependent and
independent variables were entered into a single exploratory factor analysis. However,
in our analysis of the IT and marketing departments, no single factor emerged, and the
first factor accounted for 29.7% of the total variance, while the eight extracted factors
accounted for 68.5% of the variance. These figures suggest that our results were not due
to a common method bias. The demographics of the firm surveyed are shown in Table 1.
Most of these sample firms have been established in Taiwan for over 20 years (49.2%).
More than half owned capital from USD 3.3 million to 0.17 billion (62.7%). Almost
half the firms have 101 to 500 employees (48.4%). There were 28.6% IT manager
respondents who have worked for 5 to 10 years, and 31.7% marketing manager
respondents have worked for 10 to 15 years. In terms of industry category, 52.4% of
respondents were from financial firms and 47.6% from hotel firms.

3.2. Measures
Independent variable. This study modeled intellectual capital as a second-order con-
struct formed by three first-order factors: human capital, organizational capital, and
social capital. Human capital (HC) was adopted and modified from Subramaniam and
Youndt (2005) and Chien and Chao (2011) and measured the level of the employees’
overall skill, creativity, expertise, and knowledge of the organization. Organizational
capital (OC) was modified from Subramaniam and Youndt (2005) to measure the extent
to which a company uses software, databases and organization culture to accumulate
knowledge. Social capital (SC) was modified from Subramaniam and Youndt (2005) to
measure the firm’s ability to share knowledge and collaborate among networks of
employees, the government, customers, alliance partners, suppliers, and technical
collaborators.
 Innovation: Management, Policy & Practice 39

Table 1. Demographics of the sample firms

Variable Category N Rate (%)
Years of Firm Established in Taiwan 5 years and fewer 10 7.9
Over 6 years to 10 years 22 17.5
Over 10 years to 15 years 17 13.5
Over 15 years to 20 years 15 11.9
Over 20 years 62 49.2
Aggregate 126 100
Firm Capital (1US dollar≒30 NT USD 0.16 million and below 4 3.2
dollars) USD 0.16 million to 0.33 4 3.2
million
USD 0.33 million to 1.66 10 7.9
million
USD 1.66 million to 3.3 11 8.7
million
USD 3.3 million to 0.17 billion 79 62.7
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Over than 0.17 billion 18 14.3

Aggregate 126 100
Number of employees 50 and fewer 15 11.9
51 to 100 18 14.3
101 to 500 61 48.4
501 to 1,000 12 9.5
1,001 to 2,000 8 6.3
Over 2,000 12 9.5
Aggregate 126 100
Variable Category N Rate (%)

IT MKT IT MKT
Tenures of Informants 5 years and fewer 25 22 19.8 17.5
Over 6 years to 10 years 33 36 26.2 28.6
Over 10 years to 15 years 25 40 19.8 31.7
Over 15 years to 20 years 24 23 19.0 18.3
Over 20 years 19 5 15.1 4.0
Aggregate 126 126 100 100
Industry Financial 66 52.4
Hotel 60 47.6
Aggregate 126 100
Notes: 1) “N” represents the total frequency of the all respondents (firm level); “Rate” in % means the
frequency divided by the total valid response number; 2) IT for IT managers; MKT for marketing managers.

Mediating variables. Cross-functional integration (CFI) was measured by using six

items drawn from Brettel, Heinemann, Engelen, and Neubauer (2011), Turkulainen and
Ketokivi (2012), and Kahn (1996). These items measured the extent of collaboration,
resource exchange, interaction and information sharing across different departments
within a firm. External collaborative competency (ECC) was adopted and modified from
Ordanini and Parasuraman (2011) to measure the firm’s capability to collaborate with
external business partners to co-create knowledge through an interactive process.
Dependent variable. The item e-service innovation (ESI) was adopted from Tsou and
Chen (2012) and modeled as a second-order construct formed by three first-order
factors: process innovation, technical capability, and risk reduction. Process innovation
(PI) measured the extent to which a company improved organizational processes and
 40 H.-T. Tsou et al.

new e-service delivery. Technical capability (TC) measured the capability of an organi-
zation to acquire new technologies and technical resources for e-innovation practices.
Risk reduction (RR) was the reduction of the possibility of an innovation failing, result-
ing in undesired effects, or not functioning as originally conceived.
Control variables. Firm capital, firm size, firm age, and industry type were used as
control variables. Prior research has suggested that financial resources and firm size play
important roles in driving innovative practices (Sorescu, Chandy, & Prabhu, 2003;
Tellis, Prabhu, & Chandy, 2009; Yeoh & Roth, 1999). In particular, larger IT firms tend
to have more resources, including financial, personnel, and social capital resources and,
thus, are better able to undertake a greater number of innovation projects (Lee, Olson,
& Trimi, 2012). Further, following Chandler and Hanks (1998), firm age was also
included as a control variable, due to its potential influence on a firm’s growth rate and
innovation. Overall, firm capital was measured by the logarithm of the firm’s total capi-
tal, firm size was measured by the number of employees, firm age was measured by the
number of years since the firm was established, and industry type was classified as
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financial industries and hotel industries.

4. Data analysis and results

4.1. Measurement properties
We tested the measurement invariance of IT and marketing groups using AMOS 7.0.
Our results showed no significant differences between the IT and marketing departments
for factor loadings, Δχ2(32) = 48.57, p = 0.162; intercepts invariance, Δχ2(49) = 63.52,
p = 0.457; and testing simultaneously for factor loading and intercept invariance,
Δχ2(78) = 98.46, p = 0.985. Because the factor loadings and intercepts showed invari-
ance across the two groups, we were able to pool the data from the IT and marketing
samples. Thus, for each question, we combined and averaged the paired data into one
sample data value for each firm.
The reliability was assessed including Cronbach’s Alpha (α) and composite reliability
(CR). The values of Cronbach’s Alpha (α) for all variables in this study were higher than
the recommended level of 0.7, ranging from 0.880 to 0.947, which indicated a high inter-
nal consistency of measuring reliability (Majchrzak, Beath, Lim, & Chin, 2005). More-
over, the values of composite reliability (CR) all exceeded 0.7 (Fornell & Larcker, 1981;
Nambisan & Baron, 2010), ranging from 0.930 to 0.974, which indicated that the mea-
sures were reliable. The properties of the measurement model are summarized in Table 2.
The convergent validity of all constructs was examined through average variance
extracted (AVE). Table 3 shows the mean, standard deviation, AVE, and correlation coeffi-
cient of each construct. The AVE values of all variables are higher than the minimum
threshold of 0.5 (Fornell & Larcker, 1981; Majchrzak et al., 2005). The AVE values range
from 0.69 to 0.95, demonstrating convergent validity. Furthermore, the values of the
square root of AVE for each variable in the diagonal were higher than the value in the cor-
responding off-diagonal, which indicated that the discriminant validity was satisfactory.
Table 4 shows the multicollinearity test results for all dimensions. All Variance Infla-
tionary Factor (VIF) coefficients are less than 5. According to Berenson and Levine
(1996) “if a set of explanatory variables are uncorrelated, then VIF will be equal 1. If
the set were highly correlated, then VIF might even exceed 10”. Considering this
Berenson and Levine’s argument, which is a widely accepted argument in statistics and
management literature, it can be suggested that there is no interference between the
 Innovation: Management, Policy & Practice 41

Table 2. Results of measurement properties.

Construct Factor Cronbach’s Composite
Construct Identifier Items Loading Alpha Reliability
Human Capital HC HC1 0.795 0.937 0.950
HC2 0.887
HC3 0.875
HC4 0.907
HC5 0.877
HC6 0.893
Organizational Capital OC OC1 0.887 0.930 0.945
OC2 0.924
OC3 0.917
OC4 0.908
Social Capital SC SC2 0.908 0.930 0.950
SC3 0.894
SC4 0.907
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SC5 0.929
Cross-functional CFI CFI1 0.837 0.907 0.930
Integration CFI2 0.883
CFI3 0.812
CFI4 0.896
CFI5 0.839
External Collaborative ECC ECC1 0.818 0.911 0.931
Competency ECC2 0.798
ECC3 0.801
ECC4 0.857
ECC5 0.854
ECC6 0.864
ProcessInnovation PI PI1 0.914 0.916 0.941
PI2 0.946
PI3 0.890
PI4 0.826
Technical capability TC TC1 0.944 0.880 0.943
TC2 0.945
Risk Reduction RR RR1 0.974 0.947 0.974
RR2 0.976

Table 3. Mean, correlation and average variance extracted (AVE).

Variable Mean SD AVE ( a ) (b) (c) (d) (e) (f ) (g) (h)
HC ( a) 5.77 0.58 0.76 0.87
OC ( b) 5.61 0.77 0.82 .64** 0.90
SC ( c) 5.80 0.66 0.82 .67** .69** 0.90
CFI ( d) 5.71 0.56 0.72 .53** .55** .70** 0.85
ECC ( e) 5.59 0.58 0.69 .53** .55** .62** .64** 0.83
PI ( f ) 5.69 0.64 0.80 .51** .59** .52** .52** .45** 0.89
TC ( g) 5.47 0.70 0.89 .50** .57** .53** .56** .47** .79** 0.94
RR ( h) 5.36 0.76 0.95 .44** .48** .47** .51** .47** .63** .74** 0.97
Notes: a)**p < 0.01; b) Values in shaded diagonal are the square root of the AVE; c) HC = human capital,
OC = organizational capital, SC = social capital, CFI = cross-functional integration, ECC = external
collaborative competency, PI = process innovation, TC = technical capability, RR = risk reduction.
 42 H.-T. Tsou et al.

Table 4. Variance inflationary factor (VIF) coefficients.

Variable HC OC SC CFI ECC PI TC RR
HC -
OC 2.3 -
SC 2.8 2.3 -
CFI 2.5 2.5 2.0 -
ECC 1.9 1.9 1.8 1.3 -
PI 2.9 2.8 2.8 2.8 2.7 -
TC 3.8 3.8 3.8 3.7 3.7 2.2 -
RR 2.3 2.3 2.3 2.3 2.2 2.2 1.0 -
Notes: HC = human capital, OC = organizational capital, SC = social capital, CFI = cross-functional integra-
tion, ECC = external collaborative competency, PI = process innovation, TC = technical capability, RR = risk
reduction.

intellectual capital, cross-functional integration, external collaborative competency, and

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e-service innovation dimensions. Therefore, we can confirm that the all dimensions are
separable from each other.

4.2. Results for the direct effects

We used Partial Least Square (Smart PLS 2.0) to analyze the data. PLS was chosen for
this study for three reasons. First, this study has a relatively small to medium sample
size (n = 126) (Chin, Marcolin, & Newsted, 1996). Second, PLS is appropriate for
studies taking a formative construct components-based approach (Chin, Marcolin, &
Newsted, 2003). Third, PLS is appropriate for a research model in an early stage of
development (Teo, Wei, & Benbasat, 2003). Because few empirical studies have
explored the relationship of intellectual capital and e-service innovation, PLS was an
appropriate analytical tool for analyzing the research model.
The results for the direct effects of the structural model were demonstrated through
PLS examination and are shown in Figure 2. A bootstrapping approach was applied to
obtain the statistical significance of path coefficients in the structural model by using
200 bootstrapping technique interactions (Chin et al., 2003). The direct effect of intel-
lectual capital on e-service innovation was positive (β = 0.404, t = 3.328, p < 0.001).
Thus, H1 was supported. There was a significantly positive relationship between intel-
lectual capital and cross-functional integration (β = 0.676, t = 8.824, p < 0.001). Mean-
while, the positive relationship between intellectual capital and external collaborative
competency was significant (β = 0.645, t = 8.644, p < 0.001). Hence, H2 and H3 were
supported. With regard to R2, intellectual capital, cross-functional integration, and eter-
nal collaborative competency explained 48 percent of the variance in e-service innova-
tion, and intellectual capital explained 46 percent of the variance in cross-functional
integration. Meanwhile, intellectual capital explained 42 percent of the variance in exter-
nal collaborative competency. These values were significant at p < 0.001 and provide
considerable evidence for the high predictive power of the research model. Table 5 lists
the hypotheses and results.

4.3. Results for the mediating effects

To assess the extent of mediation in the model, the study followed Andrews, Netemeyer,
Burton, Moberg, and Christiansen (2004), who indicated that four specific criteria must be
met: (1) intellectual capital should significantly influence cross-functional integration and
 Innovation: Management, Policy & Practice 43

FY FS FC IT
Cross-functional
integration 0.035 0.041 0.079
0.077
R2 = 0.46 R2 = 0.48
0.676*** 0.243*
Intellectual 0.404*** e-Service
capital innovation
0.645***
0.071
External
0.896*** collaborative 0.924***
0.870*** 0.882*** competency 0.936*** 0.893***

HC OC SC PI TC RR
R2 = 0.42
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Figure 2. PLS Results for direct effects.

Notes: HC = human capital; OC = organizational capital; SC = social capital; PI = process inno-
vation; TC = technical capability; RR = risk reduction; FY = firm year; FS = firm size; FC = firm
capital; IT = industry type. *p < 0.05; ***p < 0.001.

external collaborative competency; (2) cross-functional integration and external

collaborative competency should significantly influence e-service innovation; (3)
intellectual capital should significantly influence e-service innovation; and (4) after cross-
functional integration and external collaborative competency are controlled, the impact of
intellectual capital on e-service innovation should either no longer be significant (for full
mediation) or should be reduced (for partial mediation).
This study tested the four conditions using PLS analysis. As Table 6 shows, Model
1 met the first condition. That is, intellectual capital affected both cross-functional inte-
gration and external collaborative competency. However, Model 2 did not meet the sec-
ond condition: external collaborative competency did not affect e-service innovation.
The model only fit the data reasonably well for cross-functional integration; thus, H5
was unsupported. Model 3 met the third criterion: intellectual capital affected e-service
innovation. The Model 4 results showed that including the mediator of cross-functional
integration did decrease the impact of intellectual capital on e-service innovation from
Model 3 to Model 4. In particular, the impact of intellectual capital on e-service innova-
tion remained significant (β = 0.441, p < 0.001), indicating partial mediation. Corre-
spondingly, cross-functional integration partially mediated the relationship between
intellectual capital and e-service innovation; thus, H4 was supported.

5. Discussion and conclusions

The primary objective of this study is to examine how a firm’s e-innovation practices
are influenced by the extent of intangible resources that a firm possesses. This paper
argues that incorporating intellectual capital into the analysis leads to a more compre-
hensive view of the strategic behavior of firms. The paper identifies the potential inte-
gration mechanism for IT and marketing managers: cross-functional integration. Using
data collected in the financial and hotel firms that have implemented e-service innova-
tion, the study provides evidence to suggest that the mediation effect of cross-functional
 Downloaded by [La Trobe University] at 00:54 09 July 2016

44
H.-T. Tsou et al.

Table 5. Standardized path coefficients.

Path/Hypothesis
Hypothesized Relationships Path Coefficient T-value Results
IntellectualCapital → e-Service Innovation H1 0.404 3.328*** Supported
IntellectualCapital → Cross-functional integration H2 0.676 8.824*** Supported
IntellectualCapital → ExternalCollaborativeCompetency H3 0.645 8.644*** Supported
Control Variables
Firm age → e-Service Innovation 0.035 0.422 -
Firm size → e-Service Innovation 0.041 0.420 -
Firm capital → e-Service Innovation 0.079 0.793 -
Industry type → e-Service Innovation 0.077 0.788 -
* ***
p < 0.05; p < 0.001; only the hypotheses tested based on individual path magnitudes (H1-H3) are listed here.
 Innovation: Management, Policy & Practice 45

Table 6. PLS results for mediation effects

Model 1 Model 2 Model 3 Model 4
(IV for (MV for (IV for (control for
Path/Hypothesis MV) DV) DV) MV)
Intellectual capital → e-Service - - 0.655*** 0.441***
innovation
Intellectual capital → CFI 0.679*** - - -
Intellectual capital → ECC 0.646*** - - -
CFI → e-Service innovation H4 - 0.243* - 0.249*
ECC → e-Service innovation H5 - 0.071 - 0.074
R2
CFI 0.46 - - -
ECC 0.42 - - -
e-Service innovation - 0.38 0.43 0.47
Notes: a) *p < 0.05; ***p < 0.001; b) IV for independent variable, MV for mediating variable, DV for depen-
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dent variable; c) Model 3 (IV for DV) does not include the mediator of CFI and ECC; Model 4 (control for
MV) includes the mediators of CFI and ECC.

integration on e-service innovation is real. The results support the main premises of the
proposed research model:
(1) intellectual capital exerts a positive influence on cross-functional integration,
external collaborative competency, and e-service innovation; and (2) cross-functional
integration partially mediates the influence of intellectual capital on e-service innovation.

5.1. Research contributions

This study makes five contributions. First, the findings of this study contribute to the
development of a conceptual model to explain the interrelationships among intellectual
capital, cross-functional integration, external collaboration competency, and e-service
innovation. Little research has examined these interrelationships, which are significant
in light of the increasing importance of e-service innovation for a firm’s competitive
advantage. This study, based on the RBV and KBV, presented a conceptual model and
hypothesized the mediating role of cross-functional integration in the relationship of
intellectual capital and e-service innovation. We have filled this gap by studying how to
achieve successful e-service innovation through intellectual capital. Second, intellectual
capital in the service industries was rarely discussed in previous studies. We have inves-
tigated the relationships between intellectual capital and e-service innovation in service
industries, namely, the financial and hotel industries.
Third, at the service innovation level, we contribute to the identification of addi-
tional critical success factors for e-service innovation. At the intellectual capital level,
we contribute to the ongoing research regarding an intellectual capital-based view of the
firm by highlighting the impacts of intellectual capital on critical business activities. Fur-
thermore, this study stresses the relevance of intellectual capital management to enhance
service innovation, particularly regarding intangible elements, which were found to be
more significant in the collaboration process. As argued before, intellectual capital is
under-researched in regard to service industries, and, to the best of our knowledge, very
few studies have addressed the importance of intellectual capital to e-service innovation
in the service firms. This research contributes to filling that gap, identifying the most
relevant intellectual capital in regard to e-service innovation and thus highlighting the
potential benefits of intellectual capital management for this type of firm.
 46 H.-T. Tsou et al.

Fourth, the intellectual capital-based approach developed throughout this research

confronts each of these common characteristics, often sustained in a strong cultural iner-
tia, by stressing the importance of human, organizational, and social capital and hope-
fully encouraging top managers to fight this ‘inevitable karma’ and pay more attention
to the deployment of their company’s intellectual capital. Service firms most likely lack
the individual ability to have an impact on their industry. However, their strategic vision
is under their managers’ control, as is the choice to incorporate an intellectual capital-
based view into their NSD processes. This study contends that measuring, managing
and having an integrated vision of the role of intellectual capital can represent the
difference between failing and excelling in service firms’ e-service innovation efforts.
Fifth, this study shows that the role of intellectual capital in stimulating cross-functional
integration and external collaborative competency in the e-service development process
was not discussed in prior research.
Downloaded by [La Trobe University] at 00:54 09 July 2016

5.2. Managerial implications

This study provides insights for understanding significant managerial implications. First,
the results suggest that managers should enhance intellectual capital in developing e-ser-
vice innovation, which means that importance should be attached to human capital,
organizational capital, and social capital in process of developing new e-services. Man-
agers should know what type of intellectual capital factors they may be lacking and then
strengthen those specific areas to improve their intellectual capital. In other words, man-
agers should pay attention to all of these three types of capital to ensure a successful
intellectual capital outcome rather than selecting only one of them.
Second, managers could reinforce intellectual capital in e-service innovation through
cross-functional integration. When financial and hotel firms consider developing new e-
services, they should develop a strong foundation of intellectual capital first. Then, firms
should achieve cross-functional integration through the use of intellectual capital and
link the types of capital to develop e-service innovation. Furthermore, a noteworthy
implication of this finding was that cross-functional integration is more important than
external collaborative competency. This finding suggested that collaboration among
different departments is more important than external collaboration when firms develop
new e-services; hence, the different departments within a firm should collaborate with
each other to achieve work efficiency first, and then pursue external partner
collaboration.
Third, no one best strategy exists or is suitable for managing e-service innovation in
every organization. However, any meaningful e-service innovation strategy should have
unequivocal support from the top management. Its objectives must be communicated
and must be accepted by the rank and file within the organization. An e-service innova-
tion strategy should sit naturally within the overall strategy of the organization. In addi-
tion, it is important that it is monitored and reviewed regularly. Some of the critical
success factors for successful e-service innovations include having a vision and a tech-
nological innovation strategy, a service innovation-supporting culture (including sales
forces issues, NSD performance management, reward, risk management) and a service
innovation champion (including process innovation and product innovation). Other fac-
tors are the ability to manage organizational knowledge (tacit and explicit) and build
knowledge-enhancing approaches, systems and technology, integrating the person and
the team around the product and service.
 Innovation: Management, Policy & Practice 47

5.3. Limitation and future research

This study exhibited some limitations that provide potential avenues for further research.
First, due to time constraints and data availability, longitudinal research was not viable
for this study. Hence, we adopted a cross-industry research design and examined firms
at a single point in time. Future research may consider using longitudinal research to
ascertain our findings. Second, the target industries chosen in this study are financial
and hotel industries in Taiwan. Even though the degree of importance for the intellectual
property in hotel industry is relatively lower than other knowledge-intensive sectors, the
increasing innovative business models, such as reverse auction proposed by the Priceline
and big data mining, pose a great deal of opportunities for many traditional industries
such as the hotel industry to upgrade and transform into the knowledge-intensive sec-
tors. Future research may focus on the study for companies in knowledge intensive
business services (KIBS).
Third, different results might be obtained by applying the same research model to
Downloaded by [La Trobe University] at 00:54 09 July 2016

other industries. Thus, we suggest that future researchers can extend this research model
to different industries, and it would be useful to compare the same industries in different
countries. We focused only on Taiwanese enterprises without regard to international or
foreign companies. By including international companies, future research can focus
attention on intellectual capital, cross-functional integration, and e-service innovation
among organizational members with diverse cultures or nationalities. Fourth, most
research on intellectual capital has focused on manufacturing (i.e., tangible products),
while fewer studies have discussed intellectual capital in service industries (i.e., intangi-
ble products). We suggest that further research can focus on comparing different service
industries to learn more about intellectual capital in services. Fifth, past research has
mentioned several intellectual capital factors, but this study chose only three factors. We
suggest that further research can devote more attention to how intellectual capital is
formed and consider a more comprehensive set of factors within intellectual capital.

Funding
This work was supported by Ministry of Science and Technology, Taiwan [grant number NSC
101-2410-H-155 -051 -MY3].

Notes
1. The term intellectual capital can be used interchangeably with intangibles, knowledge or
knowledge resources (Fletcher, Guthrie, Steane, Roos, & Pike, 2003).
2. Based on Sambamurthy, Bharadwaj, and Grover (2003), digital resources were defined as a
set of IT-enabled resources in the form of digitized enterprise work processes and knowledge
systems.

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Appendix
Human capital
HC1 Our employees are creative and bright.
HC2 Our employees are highly skilled.
HC3 Our employees possess relevant knowledge and technology.
HC4 Our employees are widely considered the best in our industry.
HC5 Our employees are experts in their particular jobs and functions.
HC6 Staffs have high reactive ability towards changes in the industrial environment.

Organizational capital
OC1 Our organization uses databases as a way to store knowledge.
OC2 Much of our organization’s knowledge is contained in manuals, databases, etc.
OC3 Our organization’s culture (stories, rituals) contains valuable ideas, ways of doing business,
etc.
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OC4 Our organization embeds much of its knowledge and information in structures, systems, and
processes.

Social capital
SC1 Our employees are skilled at collaborating with each other to solve problems.
SC2 Our employees share information and learn from one another.
SC3 Our employees interact and exchange ideas with people from different areas of the
company.
SC4 Our employees partner with suppliers, alliance partners, etc., to develop solutions.
SC5 Our employees apply knowledge from one area of the company to problems and
opportunities that arise in another.

Cross-functional integration
CFI1 Information is very frequently exchanged among different departments.
CFI2 Our employees share collective goals to a large extent among the different departments.
CFI3 The functions in our company work well together.
CFI4 There is good interaction among the different departments.
CFI5 There is clear communication among the different departments.
CFI6 Decision-making is efficient across the different departments.

External collaborative competency

ECC1 The perceived intensity of partner interaction is high.
ECC2 The frequency of meetings with partners is high.
ECC3 The number of partners with whom we interact is high.
ECC4 We have used cross-functional interfaces (e.g., liaison personnel, taskforces, and teams) to
communicate with partners.
ECC5 Our employees can participate in partners’ decision-making processes.
ECC6 We have laterally transferred employees to or from partners.
ECC7 We have combined with partners’ complementary, but scarce, resources or capabilities.
 Innovation: Management, Policy & Practice 53

e-Service innovation
eSI1 We have used electronic technologies to facilitate new service development processes.
eSI2 We have used electronic technologies to improve already existing new service development
processes.
eSI3 We have used electronic technologies to improve the efficiency and effectiveness of service
delivery based on organizational demand.
eSI4 We have used electronic technologies to improve the efficiency and effectiveness of service
delivery based on customer demand.
eSI5 Our company acquired technologies and skills for service innovation through electronic
technologies.
eSI6 Our company acquired technical resources for service innovation through electronic
technologies.
eSI7 We have used Internet technologies to reduce the possibility of any new services failing.
eSI8 We have used Internet technologies to reduce the possibility that new services will not
function as originally conceived.
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