Organizational structure and logistics service innovation

Purpose - The purpose of this paper is to examine how organizational structural factors (namely decentralization, formalization, and specialization) influence a firm's logistics service innovation capability and firm performance.Design methodology approach - A conceptual model is proposed combining the Strategy-Structure-Performance framework and the Resource-Based View of the firm. Empirical survey data were collected in the Chinese electronics manufacturing industry, and structural equation modeling is performed to assess measures and test the hypothesized relationships.Findings - In the current research context, both decentralization and formalization were found to be positively related to a firm's logistics service innovation capability, although the formalization was originally proposed to have negative impact on logistics service innovation capability. However, specialization was not a significant predictor according to our results. A positive relationship between logistics service innovation capability and market performance is also confirmed.Research limitations implications - In order to improve the validity of the study by eliminating external factors, the study was conducted in a single industry in one country. Therefore, study results should be interpreted and applied with caution, and future research should replicate the tests in different contexts or extend the current study by including other relevant factors.Practical implications - At a time when market environment is extremely competitive and unstable and service becomes a key differentiator, it is critical for firms to better understand and manage controllable internal factors, organizational structure in this context, to enhance service innovation capability, thus achieving better performance.Originality value - This study makes a contribution to the limited yet important knowledge base regarding logistics service innovation.