Effect of Service Culture on Service Innovation Capability in the Telecommunication Industry

The service sector has steadily become a key factor in the growth of an economy and the competitiveness has increasingly changed the business environment in which an organisation operates. This, however, has challenged organisations to improve their capability to innovate in order to stay ahead in the competitive business environment. However, most firms embed in a service culture that influences the service quality, customer’s expectation and employees’ delivery to customers. The purpose of this research is to investigate the influence of service culture on service innovation capability. A sample of 124 questionnaires from the employees in the telecommunication industry was collected. PLS-SEM analysis was used to determine the effect of service culture on service innovation capability. The result revealed that service culture has a strong and significant effect on service innovation capability. In addition, the result shows that clan culture has the most contributing effect on service innovation capability than other cultural types. The importance-performance matric analysis (IPMA) results further explained that market and hierarchy culture need to be given priority. The findings suggest that having the right service culture unifies its focus on excellent service, commitment to quality, improved employee behaviour and employees’ attention to details. This gives the organisation the ability to develop service innovation capability.