CHAPTER 2 LITERATURE REVIEW, AND THEORETICAL AND
2.4 Innovation Towards Services
The concept of the SCARF model, based on neuroscience research, describes five basic social experiences of humans. Those five areas are status, certainty, authority, relatedness, and fairness. The study shows that the capacity to make decisions and collaborate with others substantially is affected by social threats and at the same time enhanced by rewards. It has been proved that when a person feels threatened, his “stress hormones” affect his creativity and productivity.
The objective of this model identifies how basic human social interactions work; thus, the threats can be minimized and rewards can be maximized.
This is how people can be motivated by working on their specific response against the domain of social interactions. Therefore, this model helps a leader to influence the behavior of the people. Clear understanding of how each domain drives a member in a team can also help the leader and the team function more effectively and productively.
This model incorporates all of the perception of the employees, and of the manager and the organization. Thus, this model can be applied in every situation where people are collaborating and working in the same group.
and development model” in contemporary service innovation theories (Tuominem &
Toivonen, 2009).
Most studies have concentrated on process and product innovation during the 1960s and also the 1970s. In the life cycle of the innovation model of Utterback and Abernathy (1978), it was recommended that “the character of innovation followed three phases with major changes in products, scaling of product volume and incremental process innovation”. The product innovation and process innovations rates varied in terms of steps of the progress of the organization (Damanpour &
Gopalkrishnan, 1997). According to them “process innovations are concerned with the tools, devices, and knowledge in throughout technology that mediates between the inputs and outputs and are new to an organization, product innovations are outputs that are introduced for the benefit of customers or clients” (Damanpour &
Gopalkrishnan, 1997).
Amabile (1988) and West (1990) expressed the following: “Recently there has been no significant theoretical development of organizational innovation models”.
There is a change from manufacturing industries to services as noticed by Miles (2000). Very recently interests have been increased in public service issues, specially innovation (Mulgan & Albury 2003; Osborne & Brown, 2013). Two hundred and fifty years ago, in classical economics Adam Smith distinguished between goods and services (Gallouj & Djellal 2010). A service is somewhat immaterial (Daniels &
Bryson, 1998). Hill (1977) clarified that -the characteristics of goods and services are different. Services are not similar to goods or products.
2.4.1 Characteristics of Services
Hill (1977) mentions the characteristics of services in the way that “they can be defined as a change. The process of producing service is often mistaken for the output. Services cannot be classified as immaterial goods. Cannot hold services in a stock” Hill (1977, pp. 317-318).
2.4.2 Service Innovation
Miles (2000) has conceptualized innovation in services, and he studies service firms, industries, and their innovation processes. There are some directions in the
currently published book “Handbook of Innovation in Public Services” (Osborne and Brown 2013). Some additions with depth to the subject were found concerning service innovation in the book “Innovation in public sector services: entrepreneurship, creativity, and management” by Koch and Windrum in 2008. For the study of public services innovation, Djellal in 2013 suggested to adopt the “integrative theoretical perspective”. Osborne and Brown (2011, 2013) and Hartley (2010) argued for a vigorous theory directly derived from public sector experiences.
2.4.3 Mulgan’s Service Innovation Model
Mulgan’s (2014) service innovation model is similar to Schroeder et al.
(1986). Mulgan proposed that “the process is spiral in nature across seven stages, with loops back, detours and jump” (Mulgan, 2010).
2.4.4 The 4Ps Model (Joe Tidd, John Bessant, and Keith Pavitt)
According to Tidd, Bessant, and Keith (2007) “Innovation may explain many forms but in a reduced form it has four directions to change and they are product innovation - to bring changes to the products or services that an organization offers, process innovation - to bring changes in the ways in which the organization created or delivered, position innovation - to bring changes in the context where the products or services are introduced and paradigm innovation - to bring changes in the underlying mental models that frame the organization is actually doing” (Tidd, Bessant, & Keith, 2007).
There are many theories, specially management theories, that have had a great influence on innovation (Kessler et al., 2013). The investment theory of innovation and the componential theory of innovation are closely related to creativity and innovation (Kessler et al., 2013). The two most important theories are presented here in detail as they have been used very often in the research. They are ‘the investment theory of innovation’ and ‘creativity and the componential theory of creativity and innovation’.
2.4.5 The Investment Theory of Innovation and Creativity
This theory was introduced by Sternberg and Lubart (1991, 1996). This is basically from economics. The rule of investment is ‘buy low and sell high’, and this rule is applicable to innovation. Buy low means tracking ideas that have potential, and selling high means increasing the value of the innovative product. Sternberg (1991) describes six determinants for this: thinking styles, intellectual abilities, personality, motivation, knowledge, and environment.
2.4.6 Componential Theory
This model includes individual factors and environmental factors. Expertise, intrinsic task motivation, and creative thinking are examples of individual factors.
Management practices, organizational motivation to innovate, and resources are the factors of the environment. Innovation is the combination of three elements:
individual, domain, and field. Csikszentmihalyi’s (1999) view was to present the system theory approach for creativity and innovation. Cagnazzo, Taticchi, and Botarelli (2008) distinguished all the models related with the process of innovation generation according to five groups. First is the technology-push model—in the 1950s, this model was developed emphasizing innovating products on the basis of available technologies. Second is the market pull model—in the mid-1960s and early 1970s the emphasis was on the market and the customer’s needs accordingly. Three is the coupling model, the 1970s was the period of the combination of the technology push model and market pull model. Four is the integrated model. Here, the business partners (e.g. suppliers) and the internal departments working integrity viewed as crucial determinants for innovation. Five is the functional integration innovation model, where the focus of this theory was to decrease both the cost and time of product development using computerized tools. Some researchers established their own conceptual models in the field of innovation, and these models have three main common phases. First is idea generation and selection; second is idea realization; and third is idea commercialization (Sattler, 2011).