Customer orientation and future market focus in NSD

Purpose – The aim of this paper is to investigate the differential effect of customer orientation and future market focus on organization inertia and firm innovativeness of small and medium‐sized enterprises (SMEs) in the business‐to‐business service industry. It is motivated by the observation that small and medium‐sized service firms' proxy to customers may lead to incremental service improvement in response to customer requests for customization and improvement, but may derail programs for more innovative services.Design/methodology/approach – A survey among 217 small and medium‐sized service firms is used to test the hypotheses developed. The data are analyzed using a path model and Lisrel software.Findings – The results show that customer orientation breeds inertia, whereas future market focus increases the willingness to cannibalize existing technology, service portfolio and routines, which in turn stimulates firm innovativeness.Research limitations/implications – The results suggest that it is impo...

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