Turning values into value: the role of ethical climate and CAPS mediated and moderated mechanisms in fostering service innovation in hospitality

Purpose This study investigates how ethical climate influences frontline service innovative behavior (SIB) through dual cognitive–affective personality system (CAPS) pathways: creative self-efficacy (CSE) and sense of belonging (SOB). Obsessive–compulsive tendencies (OCT) are examined as a boundary condition. Design/methodology/approach Two multi-wave, time-lagged studies were conducted with Malaysian hospitality employees (Study 1: N = 370; Study 2: N = 352), analyzed using PLS-SEM. Findings Across both studies, ethical climate positively predicted SIB directly and indirectly through CSE and SOB. In Study 2, OCT differentially moderated the two pathways: it strengthened the CSE–SIB relationship but weakened the SOB–SIB relationship. Evidence for conditional indirect effects was more limited and is therefore interpreted cautiously. Practical implications The findings show that hospitality organizations can encourage service innovation by supporting fairness, transparency and inclusion. It is also important to consider that employees' personalities may affect how they use their psychological resources to be innovative. Originality/value The present research advances the fields of hospitality ethics and innovation by examining dual cognitive and affective pathways through two time-lagged studies and presenting evidence from a non-Western service context.