Organizational learning, innovation, and performance in KIBS

Abstract There is widespread agreement that organizational learning (OL) and firms' innovative culture (innovativeness) positively influence organizational innovation (OI), which ultimately fosters long-term competitiveness. However, there is more limited empirical evidence on the role of OL as a forerunner of innovativeness, or on the combined effects of OL and innovativeness on OI and how performance is ultimately improved. In this research, OI is evaluated as a firm's actual ability to regularly adopt and implement more technical and administrative innovations with a greater degree of incorporated novelty relative to their main competitors. The aim is to approach innovation from a comprehensive viewpoint and to assess the attainment of superior competitive advantage in the innovation field. Effects on performance are evaluated at both the organizational level and in the commercialization of new services by means of two different conceptual model. These models are tested on a sample of 246 knowledge intensive business services (KIBS) located in Spain. We used polychoric correlations (Lee, Poon, & Bentler, 1995), together with a robust methodological approach, to analyze categorical variables in structural equation systems in EQS. The empirical results show that OL is an important antecedent for innovativeness, and that the latter plays a key role in the adoption of more technical and administrative innovations with a greater degree of incorporated novelty. Organizational learning exerts a direct effect on administrative innovation efforts although, contrary to previous research, the mediating role of innovativeness is required for the former to affect technical innovation. The research also supports the influence of OI on the attainment of competitive advantages at the business level and in the performance of new services. The greater ability of KIBS to innovate thus constitutes an invaluable resource to foster customer performance and profitability at the business level and in the commercialization of new service offerings.