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Businesses rely on knowledge interfaces to gather and integrate knowledge that drives innovation and builds competitive advantage. But key knowledge interfaces such as cross-functional teams (CFTs), frontline employees (FLEs), and learning orientation have not shown consistent effects on innovation outcomes in prior research. This study addresses that problem by testing a mediation model that extends the service-dominant logic service innovation framework developed by Ordanini and Parasuraman. Based on analyses of 160 new service development (NSD) projects, the authors find that CFTs, FLEs, and learning orientation consistently influence NSD sales and process efficiency outcomes when they first create a service having (1) superior attributes and expert frontline employee service delivery (service marketability) and/or (2) a well-targeted launch with formal promotion to internal and external markets (launch effectiveness). Those NSD project characteristics in turn yield favorable new service performance results. Specifically, service marketability and launch effectiveness mediate the influence of CFTs on NSD outcomes. Launch effectiveness mediates the influence of learning orientation, and service marketability mediates the impact of FLEs. In ranking the organizational resources, the study finds that CFTs and learning orientation have greater effect on NSD sales performance than do FLEs. The results highlight the importance of aligning CFTs, FLEs, and learning orientation with NSD project characteristics in order to maximize sales performance and process efficiency.

Service firms recognize the key role that product and process innovation play in building and sustaining competitive advantage in the marketplace. This empirical study tests a model of new service development (NSD) that enhances performance outcomes by prescribing specific roles for customers and frontline employees in the NSD process. Findings are based on in-depth managerial interviews and survey data collected from 160 organizations across a variety of service sectors. The results support hypotheses that customer and frontline employee participation in specific stages of the NSD process indirectly affects sales performance and project development efficiency outcomes. Positive effects are mediated by the new service success factors of service marketability and launch preparation. To produce successful new services, firms should involve customers in the design and development stages to help identify market opportunities, generate and evaluate new service ideas, define desired benefits and features of the potential service, and provide extensive feedback for product and market testing. Frontline employees are less effective than previously thought as a source of new service ideas. Firms should instead focus on incorporating those personnel in the full launch stage to effectively promote and deliver the new service.

Marketing control theory serves as the framework for the development and testing of a model that examines factors (code enforcement, ethical discussions, and punishment for ethical violations) involved in the internalization of ethical codes by customer-contact service employees. The authors argue that code internalization and perceived ethical climate serve as social and cultural control mechanisms that enhance the attitudinal responses (role stress, job satisfaction, and commitment to service quality) of service employees. The findings suggest that enforcing ethical codes and discussing ethical issues on the job enhance code internalization, which in turn enhances perceptions of the ethical climate, reduces role conflict, and increases commitment to service quality. Ethical climate increases job satisfaction and indirectly affects commitment to service quality by reducing role conflict. Implications for controlling code internalization and managing the firm's ethical climate are provided, along with suggested avenues for future research.