Purpose -This research contributes to the ongoing debate about the effectiveness of lean practices in the service sector. Design/methodology/approach -This paper examines the impact of lean service on firm operational and financial performance. Exploratory factor analysis is used to reduce the data and identify the underlying dimensions of lean service, and partial least squares structural equation modelling (PLS-SEM) is used to test the developed model. Findings -The results indicate that the social bundles of lean service had an independent positive impact on firm operational and financial performance. Furthermore, while the technical bundles had an independent positive effect on only the operational performance, they interacted with the social bundles to improve both the operational and financial performance. The findings suggest that service managers must follow a systematic approach when implementing lean service practices without focusing on one side of the system at the expense of the other. Practical implications -The paper highlights the importance of implementing lean service as a socio-technical system if service firms are to achieve the best possible benefits from their implementation. The motivation factor (social side) and the customer value factor (technical side) are capable of improving all operational performance dimensions and profit margin even if implemented alone. Therefore, service managers with limited resources are encouraged to start lean service implementation with practices within these factors. However, they can also expect improved operational and financial performance from implementing other factors as they positively interact to further improve performance. Originality/value -Viewing lean service as a socio-technical system, this paper incorporates a larger set of lean practices than previous studies and demonstrates empirically their capability of improving service firms' operational and financial performance. It contributes significantly to the emerging literature on lean service by empirically testing the mechanism through which lean service affects firm performance.
Purpose-The extant literature on lean service reveals a noticeable lack of theoretical models establishing the core constructs of lean service, their interrelation and impact on organizational performance. The purpose of this paper is to address this gap by proposing a theoretical model in which lean constructs are identified and operationalized to establish their interrelation and impact on organizational performance. Design/methodology/approach-This paper synthesizes information drawing on a systematic review of the literature on lean service, other relevant academic literature to develop a theoretical model and a set of propositions. Drawing on the universal theory, socio-technical systems theory and contingency theory (CT), the paper highlights and clarifies the potential impact of lean service on operational and financial performance. Findings-This study identifies a comprehensive set of lean technical practices, lean supportive practices, inhibitors and expected outcome of lean service. Expected relationships among those constructs are established by developing a conceptual framework with several propositions based on the relevant literature and the socio-technical system theory, the universal perspective and the CT, when relevant. Moreover, six influential contextual variables on the lean-performance relation are identified based on a review of the management accounting literature, organizational strategy literature and diversification literature to overcome limitations of previous studies. Originality/value-This paper covers a gap in the literature by identifying and operationalizing lean service constructs and offering a theoretical model with several propositions that establish relationships between lean constructs and overcome limitations in previous studies by identifying six contextual variables that are important factors in the lean-performance associations.
This paper aims to address an underdeveloped area in the lean system literature by developing and testing a model which clarifies the current confusion on the role of different costing systems and business strategies in the implementation of lean service practices and their impact on financial performance. Using data from UK service firms, the proposed positive effect of lean service on financial performance is supported. Further, ABC has a positive impact on lean service, and therefore to indirectly on financial performance. Interestingly and in contrast to previous studies, both the differentiation and cost leadership strategies are directly and positively related to lean service. However, whilst ABC positively intervenes in the lean-differentiation relationship it suppresses the lean-cost leadership one resulting in a situation of inconsistent mediation.
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