The impact of network and environmental factors on service innovativeness

Purpose – This paper aims to examine, specifically, how competition, networks (alliances) and both formal and informal institutional forces affect service innovativeness within the not‐for‐profit dominated industry. Design/methodology/approach – Utilizing data from 1,428 acute healthcare hospitals in the USA OLS regression was used to examine the antecedents to service innovativeness. Findings – The results reveal that organizations in large networks (alliances) limit providers' service innovation. Whereas competition increased service innovativeness, regulatory forces (formal institutional pressure) and informal regulatory forces stifled it. Practical implications – Is regulation good for service innovativeness? The results suggest otherwise. It was found that regulation (formal institutional pressures) limited service innovativeness. Another important practical implication is the finding that large network (alliances) also limited service innovation. Any condition that limits service innovativeness is going to hurt the very people that were meant to be served. While the questions were answered within the context of the acute care hospital industry, the results may be relevant to both for‐profit and not‐for‐profits service providers operating within a competitive environment. Varying informal and formal institutional pressures affect a wide range of both for‐profit and not‐for‐profit service providers. Originality/value – The research goes further than previous literature's study of antecedents of service innovativeness to examine how external factors influence service providers' innovativeness strategies. It also adds to the literature which examines how marketing strategies can aid not‐for‐profit marketers.