Performance within emerging markets : innovative service ventures

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Master Thesis

Performance within Emerging Markets: Innovative Service Ventures

MSc Business Administration: Entrepreneurship and Innovation

Student: Cristescu Constantin-Daniel [11373563]

Supervisor: Dr. Alexander Alexiev

Date of submission: 21

st

of June 2017

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STATEMENT OF ORIGINALITY

This document is written by student Cristescu Constantin-Daniel who declares to

take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that

no sources other than those mentioned in the text and its references have been used

in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of

completion of the work, not for the contents.

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ACKNOWLEDGEMENT

First of all, I would like to express my sincere gratefulness to Dr. Alexander

Alexiev, Lecturer at the University of Amsterdam and my thesis supervisor for the

valuable guidance, enthusiasm and promptitude in providing feedback during the

entire research process.

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LIST OF FIGURES

FIGURE 1: FOUR STAGES OF INNOVATIVE WORK BEHAVIOR ... 12

FIGURE 2: CONCEPTUAL MODEL ... 25

LIST OF TABLES

TABLE 1: FACTOR ANALYSIS – AMBIDEXTERITY AND INNOVATIVE WORK BEHAVIOR ... 34

TABLE 2: FACTOR ANALYSIS – SERVICE VENTURE PERFORMANCE AND ENVIRONMENTAL DYNAMISM ... 36

TABLE 2: MEANS, STANDARD DEVIATIONS, CORRELATIONS ... 38

TABLE 3: HIERARCHICAL REGRESSION MODEL OF SERVICE VENTURE PERFORMANCE .. 39

TABLE 4: SIMPLE MEDIATION ... 41

TABLE 5: BOOTSTRAP ANALYSIS OF SIMPLE MEDIATION ... 42

TABLE 6: MODERATED MEDIATION ... 43

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1. ABSTRACT

Whileorganizational ambidexterity and its effects on performance have been extensively studied in large companies, researchers have left a disproportionate gap in literature about how exploratory and exploitative innovation can be simultaneously balanced towards obtaining performance in small ventures. This study focuses directly on the relationship between organizational ambidexterity and innovative ventures performance in service industries, but also indirectly through the mediation effect of employees innovative work behavior. Taking advantage of prior studies, which considered service quality as a performance indicator, this thesis provides a better understanding about how scarce resourced ventures ambidextrously innovate and manage to survive in the market. Further, including environmental dynamism as a moderator, the research reveals how this study is contingent upon changing conditions. Using a sample of 113 small firms operating in the Romanian service industries, it is suggested that a significantly higher performance and customer satisfaction can be achieved by those firms which ambidextrously innovate. A solid argument to support this idea might be that small firms capitalize on their dynamism in developing strategies or changing internal processes, and therefore create more quality for the providing services. The study also reveals that through an ambidextrous approach, employees tend to behave more innovative and assume a direct contribution to the business development. However, according to the findings, rapid changes within the business environment do not have a significant influence on both company’s innovation process and performance achievement.

KEYWORDS: Ambidexterity, Innovative Work Behavior, Service Venture Performance, Environmental Dynamism

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2. INTRODUCTION

Substantially reflected in large companies, the recent growth of the service industry has encouraged entrepreneurs to develop new service ventures and compete with them. However, it turns out to be created an imbalance between the position power of corporations and start-ups due to the existing resources disparity (Salunke, 2011). Within a context where corporations could be viewed as a threat, service ventures encounter a low survival rate (Shook, Priem, & McGee, 2003).

Widely regarded as a source of competitive advantage, innovation upholds the firm’s performance within a changing environment (Dess and Picken, 2000). Thereby, the adoption of innovative strategies has been viewed as a method for companies to stay competitive (Damanpour, 2009). Referred to organizational ambidexterity as a means to develop innovative strategies, small ventures attempt to simultaneously find a balance between exploring new ideas and exploiting existing paradigms (March, 1991). However, while a representative body of literature addressed ambidexterity in the context of large established organizations (Uotila et al., 2009), just few research has been dedicated to study exploitative and exploratory innovation in smaller firms.

Some researchers suggest the lack of resources or solid internal structures being a reason for existing limited research in this field (Dai et al., 2017). Baron (2006) acknowledges the resource issues ventures often encounter and provides a solution by suggesting an ambidextrous strategy. According to his view, ventures would increase their short-time survival by exploiting existing resources and would achieve more competitive advantage in the market by capitalizing on their limited inertia and rigidity through exploring new paths. Thereby, whether small ventures reinforce their market position by capitalizing on ambidexterity and whether

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8 | P a g e ambidexterity consists of a means to achieve performance in small firms’ case would represent a relevant aspect to be studied.

According to Verhees and Meulenberg (2004), innovation has been related to the owner’s eagerness to learn and adopt an innovative approach. Ramamoorthy et al. (2005) made references to managers who capitalize on existing resources, encourage employees to perform their job more efficiently and thereby enhance the firm performance. Janssen (2000) mentioned the lack of an extensive research with regard to the role of employees innovative work behavior in achieving performance. Consequently, Caniëls et al. (2016) conducted a research on this topic and found a positive relation between employees innovative work behavior and firm performance. Moreover, their findings also suggest a positive influence generated by ambidexterity in the innovative approach of employees. As service literature assigns a substantial importance in achieving performance through the interaction between customers and employees, the study determines whether or not ambidexterity could indirectly influence the service venture performance by stimulating employees innovative work behavior.

Performance within firms has been often measured through financial indicators. Translating the paradigm of performance in the case of vulnerable service ventures, a notable measure of performance is survival. Therefore, Zhao (2013) renders the quality of services as an important performance parameter and suggests quality as a powerful predictor of survival. This study concentrates on the service venture outcome by assessing the quality of their providing services.

Being concentrated on emerging markets, the proposed theoretical framework has been tested through the moderating effects of environmental dynamism in Romania. According to the literature, a consensus with regard to environmental dynamism effect on performance has not

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9 | P a g e been agreed. Some researchers associated it with firm performance positively and others negatively. However, environmental dynamism has been emphasized as an important concern for small companies which choose to implement innovation.

Consequently, the purpose of this thesis is to define what impact has ambidexterity on service ventures performance as well as if service quality could be viewed as a predictor for survival. Employees innovative work behavior has been hypothesized as an additional factor for achieving performance and the study has been conducted upon dynamic environmental conditions.

This thesis concentrates on the service industry and particularly on service ventures which have less than ten employees and which might encounter various hardships in achieving performance as well as survive in a market dominated by highly resourced corporations. In this sense, the research is even more relevant and more specific whereas quite often they were addressed larger companies which operate in various industries. A sample which consists of 113 small ventures operating in Romanian service industry has been used to conduct this study.

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3. LITRERATURE REVIEW

3.1 AMBIDEXTERITY

Ambidexterity has been defined as the firm’s capability to pursue at the same time both exploration and exploitation in innovative activities (Gupta, Smith and Shalley, 2006; Raisch, Birkinshaw). With regard to new ventures, the concept is relatively new. However, research showed that by increasing operational efficiency through exploiting existing resources, small ventures can consolidate their survival chances. Moreover, at the same time they should explore new opportunities and overcome organizational inertia (Baron, 2006).

In small ventures, entrepreneurs are the main decision makers and have a crucial influence in creating and implementing innovative strategies (Huang, Ding and Chen, 2014). According to the strategic entrepreneurship view, efficient entrepreneurs develop the ability to manage existing resources including the duality of advantage-seeking and opportunity-seeking (Harms, Walsh and Groen, 2012). This means that striving to obtain competitive advantage within the market, small firms exploit existing opportunities, reinforce acquired skills, improve processes and structures and make distribution channels more efficient (Jansen, Van den Bosch and Volberda, 2006). However, in order to differentiate themselves in the market, ventures assume more risks, develop novelty with regard to service design, change the way how they operate or improve their distribution channels (Jansen, Van den Bosch and Volberda, 2006).

Studies with regard to ambidexterity emergence in large companies suggested the implementation of two main mechanisms (Nosella, Cantarello and Filippini, 2012; O’Reilly and Tushman, 2013). First is represented by differentiation, which entails a temporal and structural segregation between exploratory and exploitative actions. The second consists of an integration among mechanisms such as leadership, vision and functional interfaces. However, comparing to

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11 | P a g e large companies, small ventures lack resources, experience and internal processes. As such, the same tools might not be suitable for them (Boumgarden, Nickerson and Zenger, 2012).

Literature acknowledges the importance of both types of innovation within entrepreneurial sector and mentions the critical link with firm growth (Ireland and Webb, 2007). However, apart from organizational innovation, the individual innovative behavior of employees could also influence the outcome of small ventures. The next section is devoted to innovative work behavior.

3.2 INNOVATIVE WORK BEHAVIOR

Identifying niches, making decisions and exploiting opportunities in the process of setting up a business have been assigned to the entrepreneur’s level of commitment (Shane and Venkataraman 2000). According to Davidsson and Honig (2003), industry experience and general education represent two characteristics which underlie the successful identification and exploitation of opportunities. In fact, by using founder’s skills, aptitude, knowledge and creativity, small service start-ups manage to compete with large companies (Camison and Villar-Lopez, 2012). Given the higher importance of market share growth related to innovative activities (Verhees and Meulenberg, 2004), the founder’s ability to develop new services and processes leads to competitive advantage (Makadok, 2001).

Previous research acknowledged that innovation represents a complex process. Axtel et al. (2000) described innovation at an individual level as a process which entails both creativity and implementation. Although the founder could be considered the main driver within a start-up, more flexibility in generating and implementing new ideas as well as obtaining higher performance could be achieved with the employees’ commitment. Thereby, the employees innovative work behavior might trigger change within the whole firm.

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12 | P a g e In general, the theory addressing innovative work behavior mentioned the concept as being equally distributed in two phases, creativity and implementation. Lately, the concept has been simplified and described through four interrelated stages: problem recognition, idea generation, idea promotion and idea realization. (Janssen, Schoonebeek and van Looy, 1997; Dorenbosch et al., 2005).

FIGURE 1: FOUR STAGES OF INNOVATIVE WORK BEHAVIOR

Source: Janssen et al. (1997) As the figure depicts, first two stages have been associated to the creativity oriented behavior. Within this phase, the individual assesses the current situation, recognizes existing problems and generates suitable solutions for the current work context. The subsequent two stages are related to the implementation oriented process. Within this phase, it has been included the promotion of new generated ideas to different internal stakeholders, followed by the proper implementation. The exertion of these ideas can be viewed as a pilot and applied in a small part of the organization or spread from the starting point within the entire firm (Dorenbosch et al., 2005).

Prior research acknowledged the importance of innovative work behavior as a means of obtaining innovative outcome in companies. Later, de Jong and den Hartog (2010) confirmed the positive relation between innovative work behavior and innovative output. Output is precisely determined by using the input for obtaining innovation (Kemp et al, 2003). Moreover, innovative

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13 | P a g e output has been categorized in different types based on various characteristics and implementation alternatives might come across (Jansen et al., 2006). Nonetheless, the most recognized distinction has been emphasized between process and product innovation (Tornatzky and Fleischer, 1990).

3.3 INNOVATION IN SERVICE INDUSTRY

Each industry where a company unfolds its activity encounters particular characteristics. For instance, a distinction between manufacturing and service has always been salient.

With the main objective to produce qualitative goods that strive to fulfill customer expectations, manufacturing companies often preserve a difference between product and internal process innovation (Kemp and de Jong, 2003). Similar to product innovation, the drivers of service innovation are divided in two different categories, the clients demand for novelty and the managers’ eagerness to obtain new services or discover new niches for existing markets (Matthews and Shulman, 2005). However, according to de Jong et al. (2003), due to the existence of time simultaneity between production and consumption, within the service industry, a distinction between process and service innovation has not been identified.

Previous studies present four dimensions that characterize the innovative output within service firms: the service concept, client interface, delivery systems and technological options (de Jong et al., 2003). A short description of these dimensions comes as follows.

The service concept represents a main concern in service innovation. According to Van der Aa and Elfring (2002), a new service concept may also be implemented through a combination of existing service operations. However, service firms usually choose to imitate and adapt competitors’ innovative strategies.

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14 | P a g e to develop their offers and establish a deeper communication with their clients. The innovative approach based on client interface has been achieved through offering customized services for clients as well as specific pricing policies.

Treating the innovative output from the internal perspective, the service delivery system entails a proper arrangement of the employees in order to perform their jobs adequately and deliver qualitative results (Den Hartog, 2000). A decisive role for the emergence of this dimensions has the level of capabilities, skills or attitudes co-workers possess.

Although technological options have not always been assimilated with an innovative service dimension, changes in technology may also be necessary. Van der Aa and Elfring (2002) describe the technological options in innovation as a reconfiguration of service capabilities and processes.

From a practical point of view, a mixture of the abovementioned dimensions has been often used. Having the focus on fulfilling customer needs, the service innovation is in most of the cases described through its link to service users (de Jong, Burins, Dolfsma, Meijaard, 2003).

In addition to this, according to the research conducted by de Jong et al. (2003), the innovation process might be either radical or incremental. On the one hand it might consist of totally new products or processes reflected as a discontinuous innovation or, on the other hand it might be viewed as a small modification or simple line extension. However, de Jong et al. (2003) acknowledged that service industry often resorts to incremental changes in processes and procedures. Hence, the service deployment does not necessary entail a radical change and the innovation may also include a new small element that has not previously been viewed useful and asked by customers.

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15 | P a g e service industry, the latter requires less R&D and tends to invest less money in this field (Brouwer, 1997). Though, the riskiness appears due to the easier chance for the innovations in service industry to be imitated.

For a long time, innovation has been considered as having a marginal role in the strategies of firms operating in the services industry (Anderson & Mittal, 2000). Thereby, scarce research regarding innovation in services industry has been conducted. However, given the existence of some recently conducted studies that described innovation as a powerful instrument in achieving higher performance in service industry (Cantarello, Nosella, petroni, & Venturini, 2011; Hallenga-Brink & Brezet, 2003), the importance of the topic has grown more and more among researchers and practitioners.

3.4 SERVICE VENTURE PERFORMANCE

Throughout the years, theoreticians have provided different definitions to service as a concept. However, the one that manages to describe more accurately the notion has been offered by Kotler (1994) and it describes a service as an intangible act that is offered to a third party without changing the ownership.

In most developed economies, small service firms outnumber the companies operating within the manufacturing sector (Audretsch, 2002). The phenomenon is caused by the lower level of managerial skills required by management team and the lower cost of market entry for new service ventures.

Business performance, from a financial point of view is highly influenced by the customer’s perception on service quality and thus, many studies focus on small ventures performance by measuring financial outcome. However, growth achievement is more important than profitability (Roth & Jackson, 1995). Viability is supported by growth and has a relevant

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16 | P a g e impact on decreasing liability. In addition to this, growth represents the most common measure used in developed entrepreneurial firms as well as small firms research (Baum et al., 2001). Nonetheless, this thesis aims to measure ventures performance by the services’ level of quality firms provide.

Albeit this industry seems to be more attractive through the reduced number of required resources, an economic decline tends to have a greater effect on small service firms than large companies within the same industry (Philips, Volker, & Anderson, 2009). Therefore, small service firms foster imperatively their market position through cost minimization as well as an orientation toward qualitative services for customers (Koczynski, 2003).

A direct relation between quality and organizational performance has been described by numerous authors over time (Peters & Waterman, 1982; Phillips, Chang, & Buzzell, 1983). Recently, Zhao et al. (2013) acknowledged that new venture performance is highly related to the service quality implementation, which also upholds their survival in the marketplace. The study presents five service quality components: tangibles, reliability, responsiveness, assurance and empathy. The research results state that a higher impact on the survival process of the service venture exists due to only three of these dimensions. Assurance which represents the capability of front line employees to offer trust and confidence, empathy which entails individualized attention for customers and reliability which is linked to the venture’s capacity to perform accurate services. Therefore, the interaction with the customers represents a key element within the service sector and high quality services are influenced by human resource management practices as well as the founder’s ability to properly fulfill their expectations.

Prior research concerning firm performance revealed the influence service quality could have on it (Heskett et al., 1997). In addition to this, scholars have emphasized the impact of

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17 | P a g e service quality in the financial outcome on a long-term perspective. For instance, high quality services might lead to an increased customer loyalty or determine customers to recommend the services and, in this way, a growth of sales could be achieved.

According to Lin (2013), increased operating results are influenced by service innovation. As the ventures ambidextrous approach and their employees’ innovative work behavior represent two elements that reinforce innovation as a strategy and might increase ventures performance within a dynamic business environment, the research question to be studied in this thesis is: “What impact does organizational ambidexterity have on service

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4. THEORETICAL FRAMEWORK

4.1 AMBIDEXTERITY AND SERVICE VENTURE PERFORMANCE

A substantial part of theexisting research offers a broad perspective about how to capitalize on both exploitative and explorative innovative strategies in the case of large companies. According to O’Reilly and Tushman (2013) the mechanisms used to implement ambidexterity in developed companies differ from those used in ventures. However, just a few studies referred to SMEs (Lubatkin et al. 2006), and even less particularly to small ventures.

In a context of restrictive resources and limited experience, the issue of implementing innovation with the aim of maximizing performance becomes more and more acute. Few studies tested before the influence of ambidexterity strategies on SMEs performance. Among them, Auh and Menguc (2005) proved that a single innovative strategy which might be either extensive exploration or exploitation is unprofitable for new ventures. Chang and Hughes (2012) argued that only with a solid basement consisting of structure, proper context and powerful leadership emergence, both exploitative and exploratory innovation might generate higher performance. In general, existing studies treated ambidexterity at the firm level, providing an intra-company perspective (Mom et al., 2007). However, Dai et al (2017) conducted their research beyond the firm’s boundaries and assessed the relation between ambidexterity and new ventures performance through establishing alliances with other companies in the market.

Even though, recently, researchers have become more and more interested in how simultaneous exploratory and exploitative innovation could be framed in smaller firms, often they address both small and medium sized companies at the same time. Therefore, this study aims to address a very specific target, small ventures with less than ten employees. Moreover, as services represent a substantial part of the entire business environment, it may consist of a very

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19 | P a g e interesting aspect to find out if new ventures operating in service industries are likely to obtain a higher performance through capitalizing on simultaneously using exploitative and exploratory innovation. Based on existing research, the related hypothesis is as follows:

H1: Organizational Ambidexterity has a direct positive relationship with Service Venture Performance

4.2 AMBIDEXTERITY AND INNOVATIVE WORK BEHAVIOR

Prior research concerned about ambidexterity at the individual level and how it relates to innovative work behavior of employees (Caniëls et al., 2016). According to their study, employees who equally perform both exploration and exploitation will behave in an innovative way. Moreover, some researchers mentioned the existence of synergies between the company and their personnel generated by the employees’ use of a combination between exploitation and exploration (Rosing et al., 2011; Zacher et al., 2014). Further, Bledow et al. (2009) argued that existing challenges could occur during the exploitation phase and might emerge into a higher commitment of employees towards generating ideas in line with existing goals.

Caniëls et al. (2016) demonstrated through a polynomial regression the positive relation between a balanced amount of exploitation and exploration in ambidexterity at the level of employees and their innovative work behavior. Their findings were in line with prior research which suggested an equal amount of exploitation and exploration as being related to the highest level of innovative outcome (Rosing et al., 2011). However, Caniëls’s research went a bit further and another situation was taken into account. They looked at the results when an imbalance between the two components of ambidexterity exists. In the end, they demonstrated that both balanced and imbalanced amount of exploration and exploitation in the firm’s ambidextrous strategy were assimilated with high values of innovative work behavior. As such, striving to

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20 | P a g e obtain a higher level of innovative work behavior, employees can concentrate either on balancing the level of exploration and exploitation or focus on only one of them based on their expertise.

As in this thesis the focus is oriented towards small ventures which have a reduced number of personnel, each employee might be very important in the firm’s strategy implementation. Thereby, ambidexterity has been measured at the level of the entire firm. This approach has been suggested by Junni et al. (2013) who acknowledged equality in exploration and exploitation.

An ambidextrous innovative strategy would stimulate employees’ behavior towards innovation. They can create and implement new ideas in the firm which might consolidate the firm’s competitive advantage on the market. Therefore, based on previous existing research, the hypothesis can be stated as follows:

H2a: There is a positive relationship between organizational Ambidexterity and employees Innovative Work Behavior

4.3 INNOVATIVE WORK BEHAVIOR AND SERVICE VENTURE

PERFORMANCE

Scholars acknowledged the importance of innovation within firms as being often tied to a higher performance. Although innovation has been considered risky, two theoretical arguments uphold the positive relation with organizational performance. Firstly, firms strive for implementing innovation in order to obtain an early mover advantage that will capitalize on superior performance (Lieberman and Montgomery, 1988; Roberts and Amit, 2003). Secondly, researchers have exposed the performance gap theory, which entails the disparity between the potential of firms to obtain a valuable outcome and what they actually accomplish. Hence, a change within organizations through implementing innovative policies would emerge by

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21 | P a g e mitigating this gap (Wischnevsky and Damanpour, 2006).

Not only has innovation been reflected in the exploitation of existing resources, efficiency enhancement or potential value improvement, but also in new expertise development or customer needs fulfillment (Wang and Wang, 2012). According to de Jong, Bruins, Dofsma, Meijaard (2003), the outcome of innovation implementation within firms operating in service industry can be divided in three categories: financial benefits, increased customer value and strategic success. However, they should be aware that success manages to create imitation in the market and provides incentives for service firms to apply similar strategies.

Regarding the service sector, empirical research has shown a powerful relationship between innovation and firm performance irrespective of the way the latter has been assessed. A wide variety of measures starting from operational cost reduction, sales growth or firm profitability enhancement (Panesar & Markeset, 2008) have been used for measuring performance. However, this study has another approach with regard to gauging performance by assessing the providing services level of quality of studying companies.

Small and medium-sized enterprises (SMEs) oriented toward innovation describe the innovative work behavior as the voluntary willingness to create, implement and realize new useful ideas (Omri, 2015). Furthermore, the same study’s empirical results show that managers who are interested in the firm’s internal processes innovation are likely to achieve more success and obtain higher achievements. Given the flexible context of service firms, small innovative firms operating in services cannot be developed through a standardized approach as in manufacturing industry. Therefore, they are less likely to turn into a consistent and repetitive process (Prajogo et al., 2006). Moreover, service small firms rather than medium companies, often resort to incremental innovation and emphasize a stronger concern about performance

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22 | P a g e (Prajogo et al, 2006).

Although a remarkable body of literature concentrates on the importance of employees innovative work behavior within larger companies (Scott & Bruce, 1998; Janssen, 2006; Camison and Villar-Lopez, 2012), Omri’s empirical results (2015) support the direct effect of innovative work behavior on SMEs performance. However, the service industry and particularly small service ventures have not been extensively studied from this point of view. Therefore, given the empirical research that upholds the positive relationship between employee innovative work behavior and firm performance, this study asserts that the following hypothesis can be empirically tested:

H2b: There is a positive relationship between Innovative Work Behavior and Service Venture Performance

H2: The positive relationship between Ambidexterity and Service Venture Performance is mediated by Innovative Work Behavior

4.4 ENVIRONMENTAL DYNAMISM

In 2012, Cavazos et al. conducted a research through which assessed the relation between the three general categories of industry environments (munificence, dynamism and complexity) and the new venture perspective of growth.

Firstly, Dess and Beard (1984) defined environmental dynamism as the rating scale of change and unpredictability in the firm environment. Later, Cavazos et al (2012) acknowledged environmental dynamism as encountering the most rapid transition and as being frequently identified within developing countries.

Often, the lack of resources could be accompanied by environmental challenges which entail the decisions made by management team become difficult. In new venture’s case, dynamic

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23 | P a g e environments may create an unfavorable context for managers who should assess difficult decisions within a limited time frame. Therefore, they grapple with such difficulties by capitalizing on establishing dynamic capabilities based on a rapid diagnose (Jiao et al., 2010). Furthermore, previous research showed that companies’ position in terms of market competition could be affected by the enhanced uncertainties a dynamic environment could encounter (Sharfman and Dean, 1991).

On the other hand, according to Yang (2012), the continuous service renewal within rapid changing environments represents an essential condition. Business should comply with customers dynamic changing preferences as well as properly answer to the competitors’ challenges. Therefore, in the context of rapid technological development, competition and market conditions, ventures resort to new approaches in order to adapt to the unpredictable external setting so as to survive and perform in this environment. Moreover, empirical results revealed the positive impact of environmental dynamism toward obtaining performance in small and medium sized companies (Omri, 2015).

Environmental dynamism has also been studied in small ventures. Huang, Ding and Chen (2014) studied ambidexterity by treating exploration and exploitation independently. Their findings suggested an amplification in the strong relationship between entrepreneurial leadership and exploitative innovation when environmental dynamism is high, whereas between entrepreneurial leadership and exploratory innovation has been amplified when environmental dynamism was low.

Summarizing, there is a divergence in literature with regard to environmental dynamism. Some research considers it detrimental for companies and other beneficial. Thereby, this study aims to solve this gap. Moreover, due to the fact that in the SMEs case, the relationship between

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24 | P a g e ambidexterity, assessed by exploratory and exploitative innovation together, and firm performance has been stronger when dynamic environments were present (Jansen, Vera, Crossan, 2009), this study assumes positive effects facilitated by the moderation. Concentrating on the service industry, the conceptual model will be tested with the moderating effect of environmental dynamism.

H3a: The positive relationship between Ambidexterity and Service Venture Performance is stronger for higher values of Environmental Dynamism

H3b: The positive relationship between Ambidexterity and Innovative Work Behavior is stronger

for higher values of Environmental Dynamism

H3c: The positive relationship between Innovative Work Behavior and Service Venture Performance is stronger for higher values of Environmental Dynamism

H3: Both direct and indirect relationships between Ambidexterity and Service Venture Performance are moderated by Environmental Dynamism

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25 | P a g e Service Venture

Performance FIGURE 2: CONCEPTUAL MODEL

H3(+)

H3a(+) H1(+) H3b(+) H3c(+) H2a(+) H2(+) H2b(+) Environmental Dynamism Ambidexterity

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5. RESEARCH DESIGN

5.1 METHOD

The study approach was drawn deductively through a quantitative research. An explanatory in nature and correlational research was conducted throughout this quantitative study. Primary data were collected through a cross-sectional survey sent to small firms operating in service industries. The survey administration was conducted online. A pre-test using a small sample was used to confirm the clarity and logic of questions as well as the attention grabbing and professionalism of the cover letter. Data collection was effectuated during three weeks and, in order to increase the response rate, two reminders were sent.

5.2 SAMPLE

Due to the unknown sampling frame, a non-probability sample of Romanian population rendered in a non-random manner was used. The population of interest for this study consists of entrepreneurs and employees involved in small service ventures with minimum 2 and maximum 10 employees. Respondents were addressed by personal e-mail. Prior study concerning similar topic, but including a more extended target in terms of company dimensions, gathered data from 162 companies (Omri, 2015). As such, even though the research aimed to collect as much data as possible, taking into account the very specific target group, reaching 113 respondents could be considered a representative sample size.

The targeted ventures perform activities within one of the following service sectors: advertising and market research, legal and accounting, engineering, computer and software related services, consultancy in real estate, retail trade, warehousing, land transport, travel agencies, financial services, restaurants and accommodation services. The data collection has been conducted from service ventures through an emailed questionnaire survey along with a

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27 | P a g e cover letter.

Based on the collected data, the number of employees ranged from 2 to 10. Although some public financial statements mentioned that some companies have the number of employees in this interval, a few of them did not have. Consequently, they were deleted from the database. Regarding the age of existence of the studied firms, the average age has been 12.3 years since the incorporation.

5.3 STUDY RELEVANCE

Statistics show a 9.4% demand growth within the service sector in Europe between 2008 and 2014 (Annual report on European SMEs) alongside with the significant decline of the enterprise death rate in 2014 for almost all the European countries.

The Romanian economic situation has recently registered substantial progress. According to the 2016 annual country report conducted by the European Commission, Romania obtained one of the highest economic growth (4.2%) in the European Union and maintained an above potential forecast for 2017. The Romanian small and medium-sized firms provide roughly two thirds of the existing jobs and to their performance has assigned a favorable fifth place in European enterprises survival rates ranking (Eurostat).

However, the percentage of service firms incorporated in 2008 with a survival rate higher than 3 years has been 50%. Given the European context which assigns the lowest percentage of 28% to Estonia and the biggest one of 78% to Sweden (Eurostat Business demography statistics), the Romanian service industry performance is not unsatisfactory, but might be improved.

Moreover, CNIPMMR (Consiliul Național al Întreprinderilor Private Mici și Mijlocii din România – National Council of Small and Medium Sized Private Enterprises) illustrates in 2012 through some statistics that most of innovation efforts are concentrated on creation of new

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28 | P a g e products (37.21%), followed by new management and marketing strategies (19,51%). However, 37.65% of small and medium firms do not have any innovation activities.

Therefore, given the figures describing innovation in the Romanian market and results of the survival rate of new service ventures, the aim of this empirical study is to gauge whether founder innovative behavior towards ambidexterity has a decisive role in the service ventures performance and whether a more innovative approach of their employees will enhance the results Romania obtains at this moment.

The general theory about innovation has been tested in the Romanian service market. Based on the abovementioned statistics evidence, Romania seems to consist of a very suitable context to conduct this academic research. Moreover, the thesis’s results might definitely contribute to the entrepreneurship development in this country.

5.4 MEASURES

For a better understanding as well as a higher response rate, the existing measures have been translated into Romanian. A back-translation has been conducted by an authorized translator to ensure the same meaning of the original English version has been kept.

AexploR- The exploratory part of innovative ambidexterity was measured using a six item

scale validated by Jansen, Vera and Crossan in 2009. Respondents were able to answer a five-point Likert scale. An example of questions might be “Our organizations accepts demands that go beyond existing products and services”. A .84 Cronbach coefficient was assigned to this scale by the authors’ previously conducted research.

AexploiT- The exploitative field of innovative ambidexterity was also gauged with a six

item scale validated by Jansen, Vera and Crossan in 2009. The same type of five-point Likert scale was used. A question as “We regularly implement small adaptations to existing services”

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29 | P a g e was incorporated in the survey. The alpha for this scale was .85.

The research conducted by Jansen, Vera and Crossan (2009) measured ambidexterity through exploration and exploitation as two different scales. In order to measure both of them, they adapted the measures from Jansen et al. (2006). However, Jansen, Vera and Crossan dedicated their research to large companies. As this thesis approaches smaller firms, it has been followed the path used by Chang and Hughes (2012) who also capitalized on the scales proposed by Jansen et al. (2006) and measured a balanced dimension of ambidexterity in SMEs by combining these two scales. Therefore, the two abovementioned measures were used together and equally balanced through ambidexterity as a single variable.

IwB- In order to measure innovative work behavior, an adapted six-item Likert scale,

ranging from “1” representing “never” to “5” representing “always”, adopted by de Jong and den Hartog (2010) was used (eg. “How often do your employees produce ideas to improve work practices?”). The Cronbach’s reliability coefficient was .82.

SvPerf- Performance in service ventures has been assimilated to service quality (Zhao,

2013), which leads to a higher survival rate on the marketplace. Given the fact that often venture performance is assimilated with its survival, the study predicts whether a venture is more likely to survive or not. As the literature states, service quality has an important effect on firm’s survival. Therefore, using the SERVQUAL scale (Parasuraman, 1991), the extent to which respondents implemented service quality strategies was measured. The dependent variable was measured by a shortened fourteen-item version of the SERVQUAL scale validated by Parasuraman in 1991. (Eg. “Employees have the knowledge to answer customer questions”). The Cronbach’s alpha is .74.

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30 | P a g e number of customers. Such as, rather than measuring customer perceptions of service quality, this aspect was determined using the characteristics of ventures described by the founders or employees of the company through a self-reported questionnaire.

As Zhao (2013) already acknowledged, the most important dimensions that lead to the survival of small ventures are assurance, empathy and reliability. Consequently, assurance was measured by the capacity of a venture to spread confidence, to promptly answer customer’s questions and their ability to provide safety. The empathy was gauged by the venture’s capability to offer particular attention for customers and to understand particular needs. Reliability resorts to the venture’s capacity to deliver what they promised on time using an honest interest in dealing with the customer’s problem and providing prompt responses.

EnvD – To study whether the market is unpredictable and frequently occurs changes, it

was used the validated scale provided by Dill (1958). Respondents were asked to fill in a five items Likert scale ranging from “1” representing “strongly disagree” to “5” representing “strongly agree”. An example of item might be “Environmental change in the local market is intense”. The Cronbach’s alpha assimilated to this scale was .91.

Age and Size- Duysters and Hagedoorn (2002) acknowledged that firm age and size

represent the most common control variables in the context of researches studying innovation. This aspect is caused by the existing resource difference between larger established business and limited resourced small companies. Firm age represents the number of years since the incorporation of a certain venture. Firm size gauges the number of employees who perform activities on a daily basis within that firm. Firms with less than 10 employees belonging to small firms category were considered.

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31 | P a g e

6. STATISTICAL ANALYSIS AND RESULTS

6.1 DATA PREPARATION, NORMALITY AND RELIABILITY TEST

Data were collected by an online administrated survey during May 2017 and was downloaded after three and half weeks since the first questionnaires’ distribution. To conduct the statistical analyses, it has been used the Statistical Software Package for Social Sciences (SPSS).

In order to detect the existence of missing data or errors, all the variables have been checked by running a frequency test. Errors have not been found and the amount of missing data were not significant. However, in order to deal with the values that were missing, the cases were excluded listwise. Only the complete data were analyzed.

The following step included re-coding the items that were designed to assimilate an agreement with a low level of the construct, known as counter-indicative items. As only the fourth item measuring environmental dynamism, rEnvD4, “In a year nothing has changed in the market” has been used in this way, it was re-coded accordingly.

The collected values distribution normality was checked and, in order to interpret it, the results were tested by their skewness and kurtosis values. For ambidexterity skewness is between -1 and -0.5 and kurtosis between 1.5 and 2. This shows that the distribution is moderately negative and pointy, with many scores found in the tails (leptokurtic). Environmental dynamism is also negatively skewed with a value between -0.5 and -1, but the positive value of kurtosis is between 0 and 0.5. Consequently, the distribution is moderately negative. However, for both innovative work behavior and service venture performance skewness is between -0.5 and 0 and kurtosis is also between -0.5 and 0. Therefore, skewness and kurtosis in these cases are close to 0, so these two variables are normally distributed.

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32 | P a g e consistent. Therefore, the reliability test was conducted and the results were mainly reported through the Cronbach’s coefficient. As the using scales were previously validated by other researchers, the expectations were to obtain variables with satisfying reliability.

The ambidexterity scale has excellent reliability (>.90), with Cronbach’s Alpha .902. The corrected item-total correlations show that all the items have a good correlation with the total score of the scale (>.30). Moreover, an eventual removal of one of the items would not substantially affect the result.

Innovative work behavior has also an excellent reliability (>.90), with the Cronbach’s coefficient .913. The corrected item-total correlations indicate that all the items have a good correlation with the total score obtained by the scale (all above .30). In this case also, none of the items would substantially affect reliability if they were deleted.

The scale used to measure service venture performance proved high reliability, with Cronbach’s alpha=.879. Similar with previously listed scales, the correct item-total correlation reveals that all the items have a good correlation with the total score of the scale (>0.30) and none of them would significantly affect reliability if they were deleted.

For environmental dynamism, the scale demonstrated a lower, but still acceptable

reliability with the Cronbach’s Alpha=.613. Most of the corrected item-total correlations indicate that those items have a good correlation with the total score of the scale (>.30). However, the fifth item, EnvD5, indicates a result of .219, thus below .30. Also the Cronbach’s Alpha if the item deleted showed a significant growth of the scale’s reliability (>.10) and therefore removing the question has been considered suitable. In the end, after proceeding the removal, the new Cronbach’s Alpha of the scale was .625 and all the corrected item-total correlation had a better correlation with the total score of the scale (all above .30).

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33 | P a g e 6.2 FACTOR ANALYSIS

The subsequently executed step was to examine the similarities between some variables that may share the same variance under certain unobservable factors (Bartholomew et al., 2011).

According to the theory, ambidexterity might influence employees innovative work behavior and therefore, by combining these two variables, it might explain a certain percentage of shared variance. Similar to these variables, service venture performance might consist of a direct consequence of environmental dynamism. An in-depth factor analysis for these two cases could be found in tables 1 and 2.

Table 1 shows in detail the existing similarities between ambidexterity and innovative work behavior. It has been conducted a principal axis factor analysis (PAF). The analysis has been implemented for each variable and the approach included the Kaiser-Meyer-Olkin analysis (KMO=.881), which registered a value higher than .60 and therefore the sampling adequacy was verified. Bartlett’s test of sphericity χ2

(113)= 1260.692, p<.001 shows that the correlation between items was large enough for implementing PAF. The secondly conducted analysis was run to obtain the eigenvalues for each component in the data. Kaiser’s criterion of 1 has been fulfilled by two elements which explained together 53.13% of the variance. Thus, two factors were rotated through Oblimin with Kaiser Normalization and table 1 depicts the loadings after rotation. As can be inferred from the table, factor 1 was assimilated with ambidexterity and factor 2 with innovative work behavior. Based on the results, almost all items were accordingly clustered on variables demonstrating the goodness of the scales, but the first item of exploration which had a lower loading (<.40). The reason of this less satisfying result for the first item might be assimilated to the content of the item which might has not been very clear.

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34 | P a g e TABLE 1: FACTOR ANALYSIS – AMBIDEXTERITY AND INNOVATIVE WORK BEHAVIOR

Code Item

Rotated factor Loadings

Ambidexterity Innovative

Work Behavior

Ambidexterity - (1) Exploration and (2) Exploitation

(1) Our firm:

AexploR1 Accepts demands that go beyond existing products and services .33

AexploR2 Creates new services .70

AexploR3 Experiments new products and services in our local market .85

AexploR4 Commercializes products and services that are completely new .80

AexploR5 Frequently utilizes new opportunities in new markets .72

AexploR6 Regularly uses new distribution channels .66

(2) Within our firm takes place:

AexploiT1 Frequent refinement of the providing products and services .54

AexploiT2 Regular implementation of small adaptations to existing services .66 AexploiT3 Introduction of improved products and services for our local market .89

AexploiT4 Efficiency improvement to existing products and services .71

AexploiT5 Increase of economies of scales in existing markets .53

AexploiT6 Expansion of services for existing clients .55

Innovative Work Behavior

The firm's employees:

IwB1 Make suggestions to improve firm's products and services .91

IwB2 Produce ideas to improve work practices .92

IwB3 Frequently acquire new knowledge .65

IwB4 Actively contribute to new services and products development .78

IwB5 Acquire new customers .71

IwB6 Optimize the organization at work .76

Eigenvalues 7.58 2.78

% of variance 39.67 13.46

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35 | P a g e Table 2 presents the results of the variance examination between environmental dynamism and service venture performance. It has been also conducted a principal axis factor analysis. Based on the Kaiser-Meyer-Olkin analysis (KMO=.789, >.60), the sampling adequacy was proved. Bartlett’s test of sphericity indicated a χ2 (113)= 804.223, p<.001 and, as in the first case, it indicates that the correlation between items was large enough for implementing PAF. The subsequently conducted analysis was run to compute the eigenvalues for each component in the data. Kaiser’s criterion of 1 has been used and fulfilled by two elements which explained together 36.01% of the variance. Hence, two factors were rotated through Oblimin with Kaiser Normalization and table 2 depicts the loadings after rotation. As can be noticed in table 2, factor 1 was assimilated with service venture performance and factor 2 with environmental dynamism. Therefore, in the second factor analysis, all items were accordingly clustered on variables demonstrating the rightness of the scales.

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36 | P a g e TABLE 2: FACTOR ANALYSIS – SERVICE VENTURE PERFORMANCE AND ENVIRONMENTAL DYNAMISM

Note: Factor loadings over |0.40| appear in bold

Code Item

Rotated factor Loadings Service Venture

Performance

Environmental Dynamism

Service Venture Performance

The following questions are related to the customer relationship management:

SvPerf1 The employees behavior instills confidence in customers .55

SvPerf2 Customers feel safe in their transactions .43

SvPerf3 Employees are consistently courteous with customers .58

SvPerf4 Employees have the knowledge to answer customer's questions .46

SvPerf5 Firm gives customer individual attention .62

SvPerf6 Firm has operating hours convenient to all their customers .53

SvPerf7 Firm has employees who give customers personal attention .64

SvPerf8 Firm has customer's best interests at heart .58

SvPerf9 Employees understand specific needs of their customers .63

SvPerf10 When firm promises to do something by a certain time, they will do so .66

SvPerf11 When customers have a problem, firm will show sincere interest in solving it .60

SvPerf12 Firm performs the services right the first time .69

SvPerf13 Firm provides the services at the time it promises to do so .67

SvPerf14 Firm insists on error-free records .62

Environmental Dynamism

On the Romanian market:

EnvD1 Environmental Change is intense .56

EnvD2 Clients regularly ask for new products and services .42

EnvD3 Changes are taking place continuously .71

rEnvD4 In a year, nothing has changed in our market .46

Eigenvalues 5.63 2.10

% of variance 27.89 8.12

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37 | P a g e 6.3 DESCRIPTIVE STATISTICS

Information about descriptive statics of control, independent and dependent variables, mediator and moderator can be observed in table 2. Through the means computation, it can be inferred that the investigated firms in the sample have an age of 12.3 years on average and within these companies work roughly 6 employees.

For ambidexterity, innovative work behavior, service venture performance and environmental dynamism, in this study have been used 1 to 5 Likert scales, where 1 means total disagreement and 5 total agreement. Therefore, the computed means for the four variables tend to achieve agreement, registering values higher than 2.5 which would represent neither agreement nor disagreement.

6.4 CORRELATION MATRIX

Correlation matrix shows through Pearson Coefficients the relationships intensity and meaning between variables. The results are presented in table 2.

Innovative Work Behavior is the strongest predictor of service venture performance with a Pearson correlation coefficient r=.60 and a strong significance (p<.01). This result might indicate that the effect of ambidexterity on service venture performance is mediated by innovative wok behavior. However, a formal mediation test report can be read below. The second strongest predictor is represented by ambidexterity with r=.49, p<.01 and the third one is innovative work behavior, which is highly correlated with ambidexterity (r=.45, p<.01). The test results revealed also between ambidexterity and environmental dynamism a powerful correlation (r=.39, p <.01). As can be noticed in the results table, none of the predictors correlated very highly with a value above .70.

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38 | P a g e TABLE 2: MEANS, STANDARD DEVIATIONS, CORRELATIONS

Variables M SD 1 2 3 4 5 6

1 Age 12.3 7.36 -

2 Size 5.92 2.87 .22 -

3 Ambidexterity 3.78 0.59 -.12 .04 (.90)

4 Innovative Work Behavior 3.33 0.89 .04 .07 .45** (.91) 5 Service Venture Performance 4.14 0.48 -.12 -.09 .49** .60** (.88) 6 Environmental Dynamism 3.88 0.62 -.07 .09 .39** .18 .12 (.62)

Note: ** Correlation is significant at the .01 level (2-tailed)

6.5 HIERARCHICAL REGRESSION

In order to test the hypothesis 1, which examines the independent variable (ambidexterity) behavior in the interaction with the dependent variable (service venture performance), a hierarchical multiple regression was conducted.

In the first step of the hierarchical regression, the control variables were entered as the first possible predictors: age and size. In this step, the model was not statistically significant F(2, 110)= 1.06, p>.05 and the variance of 1.9% was not explained in service venture performance. Therefore, the variance of service venture performance may be explained by other variables. In the second step, ambidexterity was included as a possible predictor. The total variance explained by the model as a whole was 25.8% F(2, 110)=18.17, p<.001. However, as the first variance obtained was not statistically significant, only the additional variance of 23.7% obtained in the second step is explained in service venture performance (R2 change=0.23, F(1, 110)= 34.14, p<.001). Moreover, the prediction is even more salient as the higher correlation between ambidexterity and service venture performance (r=0.49, p<.01) accompanies the regression model result.

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39 | P a g e statistically significant (β=0.49, p<.001). In other words, if ambidexterity increases for one, the service venture performance will increase for 0.49. Therefore, the Hypothesis 1 was accepted. Ambidexterity has a direct positive relation with service venture performance.

TABLE 3: HIERARCHICAL REGRESSION MODEL OF SERVICE VENTURE PERFORMANCE R R2 R2 Change B SE β t Step 1 .13 .02 Age -.01 .01 -.10 -1.12 Size -.01 .02 -.07 -0.67 Step 2 .5 .26*** .24*** Age .00 .01 -.04 -0.49 Size -.02 .01 -.1 -1.19 Ambidexterity .4 .07 .49 5.93 Note: ***p<.001

6.6 SIMPLE MEDIATION EFFECT

For testing the hypothesis 2, a simple mediation process theorized by Preacher & Hayes (2004) as a SPSS macro has been used. According to the results of the simple mediation shown in Table 4, innovative work behavior partially mediates the relationship between ambidexterity and service venture performance.

The effect of ambidexterity on innovative work behavior is significant (coeff=.686, t=5.566, p<.001) with a 95% confidence interval from .441 to .930. Two organizations which differ by one unit in ambidexterity are estimated to differ by .686 on employees innovative work behavior. Hence, an ambidextrous strategy would lead to a more innovative behavior from employees.

Innovative work behavior has also a significant influence on service venture performance and is statistically different from zero (coeff=.265, t=6.407, p<.001) with a 95% confidence interval

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40 | P a g e from .183 to .347. Therefore, if two companies register the same level of ambidexterity, but differ by one unit in their employees innovative work behavior, they are estimated to achieve a higher performance (.265 units higher in service venture performance).

The indirect effect of .182, suggests that two organizations who differ by one unit in their level of innovative ambidexterity are predicted to differ by .182 units in their venture performance as a result of the situation for those organizations who have an ambidextrous strategy to instill more innovative behavior in their employees, which finally results in a higher performance. The indirect effect is statistically different from zero, as suggested by a 95% BC bootstrap confidence interval that is entirely above zero, BC=(.104,.289). Therefore the mediation is supported.

The direct effect (table 5) represents the estimation of the difference in service venture performance based on two employees having the same level of innovative work behavior but who work in organizations that differ by one unit in their ambidexterity. This positive result displays that companies who innovate through ambidexterity, but their employees have the same innovative work behavior, are predicted to be with .222 units higher in its performance. This effect is statistically different from zero, t=3.197 and has a 95% confidence interval from .085 to .360.

Regarding the total effect, the result is .404 and this means that two ventures who differ by one unit in their ambidexterity are estimated to increase their performance with .404 units. Overall, the company encounters a higher performance if ambidexterity is present. Significance has been also found, t=5.621, p=.000 between .262 and .547 interval with 95% confidence.

The variance of 44.79% (R2=.447) of the dependent variable, service venture performance, is explained by the overall model. This solution is statistically significant (p<.001).

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41 | P a g e According to the normality check, innovative work behavior and service venture performance were normally distributed. However, in ambidexterity’s case, it has been found being slightly negative, leptokurtic. Based on the Preacher and Hayes (2004), a bootstrapped sampling distribution might consist of a more suitable approach for testing the hypothesis without making assumptions with regard to the variables shape of values distribution. As table 5 indicates positive values for both confidence interval limits of the direct effect (.085, .360), this effect is significant. Thus, the effect of ambidexterity on service venture performance does not decrease to zero when innovative work behavior has been included as a mediator. In this case, the relationship between the independent and dependent variables has been partially mediated

Based on the abovementioned analysis, partial mediation exists and the second hypothesis is accepted.

TABLE 4: SIMPLE MEDIATION

INNOVATIVE WORK BEHAVIOR (M) SERVICE VENTURE PERFORMANCE (Y) COEFF. SE p COEFF. SE p AMBIDEXTERITY (X) a1 .686 .123 .000 c1' .222 .069 .002 INNOVATIVE WORK BEHAVIOR(M) - - - b1 .265 .041 .000 R2=.209 R2=.447 F(3,109)=11.209, p<.001 F(4,108)=28.1817, p<.001

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42 | P a g e TABLE 5: BOOTSTRAP ANALYSIS OF SIMPLE MEDIATION

EFFECT SE p LLCI ULCI

DIRECT EFFECT c1' .222 .070 .002 .085 .360 TOTAL EFFECT c1 .404 .072 .000 .262 .547 BOOT SE BOOT LLCI BOOT ULCI INDIRECT EFFECT a1b1 .182 .046 .104 .289

6.7 MODERATED MEDIATION EFFECT

The third hypothesis includes three sub-hypotheses and represents a more complex model which studies the interaction among the indirect variable, direct variable, mediator and moderator. For testing this hypothesis, it was computed in SPSS the model 59 proposed by Preacher & Hayes. According to the results, the interaction is not statistically significant (p=.138) and therefore, the analysis would not continue to the next phase. The third hypothesis has been rejected and as such, according to the providing findings of this study, environmental dynamism does not have a positive effect on the three relations between the independent and dependent variables, independent and mediator, mediator and dependent. The model test results have been synthesized in tables 6 and 7.

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43 | P a g e TABLE 6: MODERATED MEDIATION

INNOVATIVE WORK BEHAVIOR (M) SERVICE VENTURE PERFORMANCE (Y) COEFF. SE P COEFF. SE p AMBIDEXTERITY (X) a1 -.425 .875 .628 c1' .523 .804 .52 INNOVATIVE WORK BEHAVIOR (M) - - - b1 .504 .397 .21 ENVIRONMENTAL DYNAMISM (W) a2 c'2 AMBIDEXTERITY X INNOVATIVE WORK BEHAVIOR a3 R2=.225 c'3 R2=.461 F(5,107)=7.400, p=.000 F(7,105)=15.166, p=.000

TABLE 7: BOOTSTRAP ANALYSIS OF MODERATED MEDIATION

ENVIRONMENTAL DYNAMISM

UNSTANDARDIZED

BOOT EFFECTS BOOT SE BOOT LLCI BOOT ULCI CONDITIONAL INDIRECT EFFECT OF THE MODERATOR .167 .073 .057 .344 .198 .053 .109 .320 .216 .073 .01 .397

Performance within emerging markets : innovative service ventures

Master Thesis