The Impact of Service Innovation Culture on Employee Service Innovation Behavior and New Service Development: Evidence from North Cyprus Hotel Industry

The aim of this study is to focus on the service innovation culture in the formation of employees’ service innovation behavior and new service development based on two fit theories. More specifically, the research evaluates and examines the mediating role of challenge-oriented citizenship behavior, charged behavior and knowledge sharing in the aforementioned relationship. To test the hypotheses, two-step structural equation modeling with bootstrapping estimation was conducted in AMOS, using data from four-hundred full-time hotel employees over a one-month time period. This thesis establishes that the development of a service innovation culture is positively related to the employee service innovation behavior and new service development. In addition, the results indicate that there is a partially mediating role for the challenge-oriented citizenship behavior, expanded charged behavior (encompassing vitality and creative self-efficacy) and knowledge sharing of employees in the relationship among service innovation culture with employee service innovation behavior and new service development. Findings of this thesis highlight the need for managers to incorporate a secure and trusting work environment so hotel employees will eagerly participate in the service innovation process by voicing their novel ideas, and communicating through sharing their knowledge. Managers can also consider the significance of the employee selection procedures and take advantage of employing university graduate for service jobs. Keywords: Service innovation culture, employee service innovation behavior, new service development, challenge-oriented citizenship behavior, charged behavior, knowledge sharing.