| New service development (NSD) remains among the least studied and understood topics in the service management literature. As a result, current understanding of the critical processes to develop new services is inadequate given NSD's importance as a competitiveness driver. Two research questions are examined: (1) What are the dimensions related to NSD competence? and (2) What is the impact of NSD competence on NSD performance? To address these questions, an in-depth study of NSD practices and performance for retail banks, services commonly studied in NSD, was conducted. We hypothesized that it is the covariation amongst the "best practice" first-order factors of NSD process focus, market acuity, NSD strategy, NSD congruence, NSD culture, and information technology (IT) experience that determines a service firm's NSD competence. This NSD competence, in turn, drives NSD performance.; In addition to empirically identifying reliable and valid scales---through a rigorous exploratory item sorting exercise---measuring the research constructs of interest, we employed structural equations modeling to examine an NSD competence coalignment model. The logic behind this statistical modeling is that the pattern of covariation among the hypothesized first-order factors is captured by a separate second-order latent variable (i.e., NSD competence). We fitted a reduced set of the original first-order factors---excluding NSD congruence and NSD culture---to empirically validate our theoretically motivated coalignment model consistent with the retail banking data analyzed. We also found support for the positive relationship between NSD competence and NSD performance.; Two contributions of this research are worth noting. First, we advance knowledge on NSD by investigating, and finding support for viewing, best practices systemically and synergistically. Most of the research to date studying determinants of success or failure in NSD has focused almost exclusively on the effects of individual best practices. Second, we empirically address the NSD competence and NSD performance relationship using theoretically motivated models and measures. The extant NSD literature is largely descriptive and atheoretical in nature. Thus, the findings of this dissertation provide compelling empirical support for the intuitively appealing proposition that NSD success results from building a competence in deploying NSD related resources and routines. |
