Technological knowledge and performance in technology-intensive service firms

Purpose Service organizations are increasingly using technology to respond to consumer needs, necessitating the development of technological knowledge in their workforce, especially in technology-intensive service firms (TISFs). Technological knowledge is conceptualized as the technology-related specialized knowledge, expertise and skills possessed by the firm’s workforce. Research on technological knowledge has been sparse, and even less research has examined the technological knowledge–firm performance relationship in TISFs. Using the knowledge-based view (KBV) perspective, our study addresses this gap in the literature by investigating the role of technological knowledge as a driver of firm performance in TISFs. We also examine the moderating role of environmental hostility and employee autonomy on the above relationship. Design/methodology/approach Survey data are obtained using a questionnaire from a sample of 85 TISFs. We conduct statistical tests for common method bias and validity and reliability of our constructs and use hierarchical regression to test our hypotheses. Findings Our analysis shows that technological knowledge and employee autonomy are positively associated with TISF performance, while environmental hostility has a negative relationship with it. Further, environmental hostility enhances the relationship between technological knowledge and TISF performance. Research limitations/implications The relationship between technological knowledge and performance may not hold for other service sectors. However, there is a need to address different types of service firms in research studies. Hence, our focus on TISFs and our research findings add to our knowledge about an important service sector such as TISFs. Finally, a larger sample size, drawn from a nationwide or global TISF population, will provide additional validity to our results. Practical implications Managers need to manage the linkages between technological knowledge and performance in light of moderating factors such as environmental hostility and employee autonomy. Our results on the positive relationship between technological knowledge and employee autonomy with firm performance are consistent with the practitioner-oriented literature. Our research suggests that managers should go beyond measuring “hard” technology aspects of TISFs such as R&D spending, investment in technology, product upgrades, patents, etc. and assess the “soft” technology aspects that are more employee oriented (such as technological knowledge), as they can also enhance firm performance. Originality/value This study focuses on technological knowledge but conceptualizes this construct based on the perceptions of the service value chain’s members (the focal organization, vendors, suppliers and customers). Further, it contributes to the sparse research on technological knowledge and highlights the role of technological knowledge of the firm’s employees in driving performance in TISFs. Managers interested in enhancing TISF performance may consider going beyond an emphasis on “hard technology” and also focus on the “soft technology” aspects (such as employee autonomy), necessary for understanding and utilizing technology to better satisfy customer needs. They also need to manage the linkages between technological knowledge and performance in light of moderating factors such as environmental hostility and employee autonomy.