Corporate Customers' Resistance to Industrial Service Innovations

Abstract

This paper examines the reasons for corporate customers' resistance to adopt industrial service innovations provided by their supplier companies. It is based on work with nine Finnish suppliers of industrial services and their potential customers. We view organizations as networks of individual adopters. We find that organizational sentiment towards adopting an innovation is often ambivalent and that resisting views reveal important drawbacks of an innovation that need to be addressed. The results clarify the effects of utility, cost, emotion and risk aversion in organizational service decisions emphasizing the fit of the service for the customer.

Frontline employees’ collaboration in industrial service innovation: routes of co-creation’s effects on new service performance

“…Finally, FLE co-creation favors FLEs' adoption of the service innovation, leading to a much stronger commitment to the service provision process (Korhonen and Kaarela 2011). In sum, FLE co-creation is expected to have a favorable impact on customer-related performance indicators such as customer satisfaction, loyalty, and other perceived benefits, which are designated in this research as customer outcomes.…”

“…However, in analyzing the effect of FLE co-creation on customer outcomes, the expected causal relationship was not significant (H3: path coefficient=0.079; tstatistic=1.027). This was so even though the literature states that FLE co-creation allows incorporating into the NSDP valuable market information, which has a positive effect on the service innovation performance among customers (Cadwallader et al 2010;Korhonen and Kaarela 2011). In the resources route, H4 was confirmed; thus, FLE outcomes positively influence customer outcomes (path coefficient= 0.402; t-statistic=4.355; p<0.01).…”

“…Thus, as service innovation affects FLEs' roles, requiring in many cases changes in behavior and the development of new knowledge (Cadwallader et al 2010), the collaboration of FLEs in the NSDP allows a strong involvement with service innovation from its initial stages and helps reduce resistance to the Bunknown^ (Nijhof et al 2002). In this way, the firm can achieve ready internal adoption of service innovation due to FLEs' favorable perceptions of the innovation process and the service innovation (Korhonen and Kaarela 2011).…”

“…FLE co-creation can also help to attract and retain the best human talent, due to the satisfaction created by the possibility of collaborating in the firm's innovative activities (Kesting and Ulhøi 2010;Melton and Hartline 2013;Umashankar et al 2011). Such reasoning may be especially true in advanced business services that are characterized by a high proportion of professionally qualified staff (Korhonen and Kaarela 2011;Rubalcaba et al 2008).…”

Customer familiarity with new industrial product technology and its influence on adoption: The case of De Beers diamond extraction equipment

“…That this remains a challenge is evidenced by a study, reported as recently as 2011, on customers' information needs during innovation adoption (Talke & Colarelli O'Connor [19]). Similar resistance to technology innovations led to recent research in the industrial project [13] and industrial service [12] domains. A discontinuous (radically innovative) product is less likely to succeed because of insufficient understanding of the complex qualitative reasoning that the customer tends to pursue in arriving at the decision to procure it.…”