The Role of External Relationships for LSP Innovativeness: A Contingency Approach

• DOI: http://doi.org/10.1111/jbl.12020
• Author: Silvia Bellingkrodt,Carl Marcus Wallenburg
• Date: 01 September 2013
• Published date: 01 September 2013

The Role of External Relationships for LSP Innovativeness:

A Contingency Approach

Silvia Bellingkrodt

1

and Carl Marcus Wallenburg

2

1

Technische Universit€

at Berlin

2

WHU —Otto Beisheim School of Management, Germany

Innovativeness is key to the success of logistics service providers (LSPs) and as LSPs often lack competencies for innovation internally,

external relations as sources to acquire knowledge relevant for innovation are important. To the authors’knowledge, there is no research

identifying the relevant knowledge sources for LSP innovativeness. Based on contingency theory, we develop a conceptual model on the rele-

vance of different external relations in the context of the innovation focus of the LSP. Thus, we extend insights from previous studies that have

only discussed the benefits of external knowledge acquisition in general and outline how to use existing business relations of an LSP to facili-

tate different types of innovation. The hypothesized model is tested based on survey data from 201 LSPs using structural equation modeling.

The findings support the model and outline that better relationships with external service firms or other LSPs are not important for internal pro-

cess improvements and innovations for existing customers, but very valuable for innovations targeting new customer business, while good rela-

tions to customers even show a slight tendency to hamper the development of innovations for new customer business. In addition, it is shown

that innovativeness is a strong driver of LSP firm performance.

Keywords: logistics service provider; innovativeness; relationship quality; focus of innovation; performance

INTRODUCTION

Innovation is a major contributor to firm success in the logistics

service industry (Chapman et al. 2003). As logistics service

providers (LSPs) —companies that perform any logistics activi-

ties on behalf of other companies (Delfmann et al. 2002) —face

a more and more competitive environment (Langley 2010),

future firm success of LSPs will be determined even more by

their adaptability to the challenges of their industry environment

(Daugherty et al. 2011). Consequently, and as already pointed

out by Flint et al. (2005), the improvement of current processes

and the development of new services for their customers will

help and often even will be necessary for LSPs to stay competi-

tive.

Despite this need, LSPs are not very innovative; latest research

reveals that the logistics service industry is at the low end of

innovativeness compared with other industries (Tether and Tajar

2008; Busse 2010). Regarding this, several reasons have been

identified that hinder LSPs from being innovative, such as the

lack of internal competencies (Chapman et al. 2003) and a strong

focus on their current customers, which does not allow them to

put much resources on the development of new services or the

acquisition of new customers (Busse and Wallenburg 2011). In

particular, the close relationship with customers helps LSPs to

identify current needs and expectations (Hofer et al. 2009). Yet,

it hinders them to take a broad perspective on overall market

trends or new technologies (Wagner 2008). This results in the

development of rather small improvements —internally and for

current customers —without targeting the potential of larger

innovations and acquiring new customers.

To overcome these limitations, aside from strengthening the

internal capabilities that determine the innovativeness of a com-

pany (Jansen et al. 2005; Lichtenthaler and Lichtenthaler 2009),

innovation literature identified the relevance of external knowl-

edge as a main lever for the development of innovation (Sundbo

1997; Calantone et al. 2002; Faems et al. 2005). Taking the

same line, LSP research has started to understand the relevance

of external relations and collaboration for the innovativeness of

LSPs (Grawe 2009). Such external relations include, in addition

to the relation to customers, also relations to suppliers and to

other LSPs (Chapman et al. 2003; Cruijssen et al. 2007; Ritala

et al. 2009).

External input is of particular importance when —based on the

prior understanding of current customer needs —aiming at devel-

oping new services with which to serve potential new customers

(Flint et al. 2005; Wagner 2008). In consequence, this leads to the

assumption that the value of external relations will be contingent

upon the focus of the innovation, be it (1) improvements related

to existing customer business, or (2) the development of new or

enhanced services for potential new customer business. However,

so far no clear picture has been developed on how the different

external sources foster LSP innovativeness (Soosay and Hyland

2004; Panayides 2006; Grawe et al. 2011). Indeed, the need for

further research in the field of LSP innovation and external rela-

tions has been expressed by Flint et al. (2005, 2008) as well as by

Soosay and Hyland (2004). Furthermore, Wagner (2008) calls for

more LSP research on contextual factors of innovation. Regarding

this, it will be helpful to differentiate knowledge sources depend-

ing on the focus of innovation.

Against this background, the central question motivating this

article is: Which external relations help in fostering LSP inno-

vativeness —depending on the focus of innovation the LSP

has? To answer this question, we apply a contingency approach

and develop a conceptual framework by hypothesizing the

effects relationship quality in these relations has on innovative-

ness, depending on the focus of innovation (i.e., focusing on

Corresponding author:

Carl Marcus Wallenburg, WHU –Otto Beisheim School of Manage-

ment, The K€

uhne-Foundation Chair of Logistics and Services

Management, Vallendar 56179, Germany; E-mail: wallenburg@whu.edu

Journal of Business Logistics, 2013, 34(3): 209–221

© Council of Supply Chain Management Professionals