Managing Service Innovation and Interorganizational Relationships for Firm Performance To Commit or Diversify?

An increasing body of research suggests interorganizational relationships as being critical to the financial performance of firms. Similarly, innovation has been considered a key driver of the growth and success of firms. However, little work has examined how the extent firms' interorganizational relationship commitment and diversity influence their innovation focus and performance. In this article, the authors show that diverse interorganizational relationships reduce the positive impact of innovation focus on firm performance. In contrast, interorganizational relationship commitment increases service innovation focus and strengthens the innovation focus-firm performance relationship. The findings are based on multisource and longitudinal performance data and highlight the positive impact of relationship commitment on the effects of service innovation focus on firm performance. Implications for management and research are discussed.