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Journal of Service Science Research (2016) 8:95-129
DOI 10.1007/s12927-016-0006-7
Terje Slåtten (), corresponding author
Lillehammer University College, Norway
e-mail: Terje.slatten@hil.no
Gudbrand Lien
Lillehammer University College, Norway
e-mail: Gudbrand.lien@hil.no
Consequences of Employees’ Collective Engagement in
Knowledge-Based Service Firms
Terje Slåtten, Gudbrand Lien
Received: 7 July 2016 / Accepted: 10 October 2016 / Published: 31 December 2016
© The Society of Service Science and Springer 2016
ABSTRACT
This study focuses on employees’ collective engagement (CE) in knowledge-based service
firms. CE is a climate-related construct that refers to how employees collectively express them-
selves psychically, cognitively, and emotionally in their work role. Moreover, the study ex-
plores the consequences of CE, specifically, these that are linked to relationship learning (RL)
in intrafirm professional service teams (IPSTs), employee commitment (EC), firms’ innova-
tive capability (FIC), and customers’ creative strategy generation (CCSG). The suggested con-
ceptual model was tested in a survey. All survey participants were employed in consultancy
firms and represent the population of employees within the domain of knowledge-based
service firms. The findings give support to the conceptual model of consequences of CE.
Specifically, the findings reveal that CE plays an imperative role especially for EC and RL in
IPSTs. This study contributes to deepen and extend research on employee engagement, which
is a relatively new concept. Specifically, the study contributes to reveal how CE is linked to
several outcomes critical for service firms. No previous research has examined these aspects.
Therefore, this unique study enriches our understanding of knowledge-based service firms
with the finding that CE is a key factor to orchestrate successfully to trigger RL in IPSTs,
strengthen EC, generate customers’ creative strategies in their service offerings, and boost the
knowledge-based service firms’ overall capability to innovate.
KEYWORDS
Collective Engagement, Relationship learning, Innovation, Knowledge-Based Service Firms.
96 Terje Slåtten, Gudbrand Lien
© The Society of Service Science and Springer
1. INTRODUCTION
“The challenge today is not just retaining talented people, but fully engaging them,
capturing their minds and hearts at each stage of their work lives” (Kaye & Jordan-Evans
2003).
“Employee engagement has emerged as a critical driver of business success in today’s
competitive marketplace” (Lockwood 2007: 2). For more than a decade, several academic,
business executive, practitioner, and consultancy areas have highlighted employee engage-
ment as a key factor for firms to achieve competitive advantages and above-normal perfor-
mance. The value that engaged employees bring to firms is exemplified in the quote from
Kaye & Jordan-Evans (2003) above that introduces this study. Another example that illus-
trates the importance and value of having an engaged workforce is the statement by Robinson
et al. (2004), “an engaged employee is aware of business context, and works with colleagues
to improve performance with the job for the benefit of the organization. The organization
must work to nurture, maintain, and grow the engagement” (p. 9). Following these highly
positive descriptions and recommendations, employee engagement is sometimes promoted as
the “only solution” and the “holy grail” for firms to achieve competitive advantages, increase
firm performance, and improve firm employees’ individual work performance. Interestingly,
empirical research has indicated that employee engagement has positive con-sequences for
firms, which implies that managers must handle employee engagement seriously as part of
their leadership role. For example, Baumruk (2004) described a large-scale study using data
from more than 4 million employees in 1,500 companies to compare employee engagement
with business outcomes. The study identified a strong, positive relationship between the level
of engagement and actual organizational performance (e.g., terms of sales growth and total
shareholder return). Moreover, recent research has shown that differences in employee
engagement explain individual work performance levels (c.f. Rich et al. 2010), and generally
engagement has been positively associated with such as individual morale, task performance,
extra-role performance, and organizational performance (Bailey et al. 2015). To emphasize
and stress the importance of employee engagement, Baumruk (2004) called it the “missing
Consequences of Employees’ Collective Engagement in Knowledge-Based Service Firms 97
Journal of Service Science Research (2016) 8:95-129
link” (p. 48) of factors for businesses to survive and be successful.
However, employee engagement is a relatively new concept with a short history (Rich et
al. 2010). In terms of this history, Kim et al. (2009) observed that despite the growing interest
in work engagement, employee engagement studies are limited. Clearly, there is need for
more extensive research into several new areas and aspects related to this interesting and
seemingly important construct. A review of the recent literature found that previous research
on employee engagement limited its focus to one single level. For example, a recently
published collection of recently published articles entitled New Perspectives in Employee
Engagement in Human Resources (Emerald Gems 2015) reveals that research into employee
engagement alone narrowed its focus to the individual level. As Barrick et al. (2015) noted
recently, “virtually all prior research on engagement has been conducted at the individual
level” (p. 111). Consequently, previous research has neglected to study employee engage-
ment at a collective level, such as studying collective engagement (CE) at the organizational
level. This narrow focus is surprising and paradoxical, considering that much of the organiza-
tional literature emphasizes or stresses the importance of the overall or collective culture and
climate in organizations because of its criticality for diverse aspects related to firm outcomes
(e.g., work performance, productivity, or service quality). Collective culture and climate are
often mentioned as fundamental cornerstones for firms’ sustained competitive advantage.
There is a need to study the concept of engagement at the collective organizational level. As
Barrick et al. (2015) noted “practitioners have long asserted that organizational-level engage-
ment may be one way organizations are able to impact performance at the firm level …
despite … very little research examines engagement at the organization level” (p. 111).
Similarly, Bailey et al. (2015) suggests that “future studies that investigate engagement at …
organizational [level] would shed additional light on the experience of engagement” (p. 16).
Clearly, there is a need for more research into engagement at the collective organizational
level.
The aim of this study is to study engagement at the collective organizational level. Based
on limitations in previous research, this study has three unique contributions to the literature.
First and foremost, the study opens up a relatively new “landscape” or perspective within
98 Terje Slåtten, Gudbrand Lien
© The Society of Service Science and Springer
engagement research by studying the concept of engagement at the collective level. Second,
the study examines the consequences of employees’ CE on a variety of outcomes essential for
service firms. Specifically, the study examines consequences of employees’ CE at a (i) custo-
mer level, (ii) employee level, (iii) team level, and (iv) firms’ overall level (see Figure 1 for
more details). Third, this study linked CE to another relatively new concept, i.e., relationship
learning (RL). In this study, the RL is related to teamwork in service teams in knowledge-
based service firms, which we call intrafirm professional service teams (IPSTs). Specifically,
IPSTs comprise highly experienced people or specialists from different knowledge-based
disciplines working for the same service firm, but who belong to different departments
cooperating in a so-called IPST to find solutions to complex issues and create value for their
business clients (or customers) (Bele & Glasø 2010). Linking CE to RL in IPSTs contri-butes
to our understanding of an often-used working methodology in today’s business world
because firms use teamwork to solve work tasks. Thus, this paper contributes to extend and
deepen aspects related to engagement and learning theory. Moreover, this study simulta-
neously increases our insight into knowledge-based service firms where the human factor is
of fundamental importance for success. This study contributes generally to a better under-
standing of service sector firms, which have increased their dominance in recent years
(Furseth 2008; Skoglund 2013). Accordingly, this study contributes distinctively to both
theory and practice.
With the abovementioned contribution in mind, this article first briefly explains the sugge-
sted conceptual model for this study. Next, a literature review and discussion elaborates on
the content of different constructs, and the connections between constructs are hypothesized.
The methodology is then described and followed by the empirical study findings. The article
concludes with a discussion and suggestions for future research.
1.1 Conceptual Model of the Study
The study aim is to examine the consequences of professional service employees’ CE.
Figure 1 shows the conceptual model of this study to facilitate and enhance the readability of
the paper. As seen in Figure 1, there are several consequences related to employees’ CE.
Consequences of Employees’ Collective Engagement in Knowledge-Based Service Firms 99
Journal of Service Science Research (2016) 8:95-129
Relationship
learning
(RL)
Collective
engagement
(CE)
Firms’ innovative
capability
(FIC)
Employee
commitment
(EC)
Customers’
creative strategy
generation
(CCSG)
Figure 1. Consequences of Employees’ Collective Engagement
Specifically, the study examines four levels of consequences of employees’ CE: (i) customer
level, (ii) employee level, (iii) team level, and (iv) overall firm level. The consequences
related to the customer level are represented by customers’ creative strategy generation
(CCSG). The employee level is represented by employee commitment (EC). The team level
is represented by RL in IPSTs. Finally, overall firm level is represented by FIC.
In the following, both the rationale and content of each conceptual construct in Figure 1 are
clarified in more detail. The discussion begins by giving a brief overview of the historic
background and development of the engagement construct in general and then more speci-
fically how CE is defined in this study. The discussion then elaborates on each specific
consequence suggested in Figure 1 and hypothesizes linkages.
2. LITERATURE REVIEW
2.1 Collective Engagement
The definition of engagement developed by Goffman (1961) and Kahn (1990) is the inspi-
ration for the theoretical foundation and forms the basis of the content related to the concept
100 Terje Slåtten, Gudbrand Lien
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of CE. In his early work, Goffman (1961) used a theatrical metaphor to show his assumption
that people demonstrate variations in their role performance depending on their level of
attachment to their actual role. According to this idea, Goffman claimed that the level of role
performance is a function of a continuum ranging from a person’s attachment at one end to a
person’s detachment at the other end. Following this line of reasoning, in its purest form, this
continuum implies two different types of outcomes or extremities on a scale labeled as role
embracement at one extremity and role distance at the other extremity. First, if a person is
exceptionally attached to their role, this attachment can be described as role embracement.
This implies that there is little or minor separation between the person and the role he or she
performs, which means that the person has fully absorbed their role (role embracement).
Moreover, in this situation, the person does not imitate a given role because he or she is
obligated to do so, similarly to an actor who undertakes a specific role in a play. In contrast to
this, a person who is fully absorbed in their role (role embracement) may evaluate their role
as being so important and so central to her or himself that it becomes a significant part of the
person’s self, identity, and life. Second, if a person is exceptionally detached from their role,
this detachment can be described as role distance. This implies the person’s resistance to their
role, which is not considered a part of their self, identity, and life (role distance). As indicated
above, naturally there are variations where persons could be located or categorized between
the two extremities of role embracement and role distance. Consequently, Goffman (1961)
implicitly indicated that there would be variation from one person to another person in his or
her engagement or attachment to role performance.
Kahn (1990) developed the idea of personal engagement based on the work of Goffman
(1961). Specifically, Kahn (1990) focused on how workers to a varying degree are psycho-
logically present at work in their role performance. Based on the degree of “match” or
congruity between work role and the self, there is a continuum from personal engagement on
one end to personal disengagement on the other. When employees are engaged, they “express
themselves psychically, cognitively and emotionally during role performance (Kahn 1990:
694). Kahn (1990) suggests that there are three conditions associated with either engagement
or disengagement: (i) meaningfulness, (ii) safety, and (iii) availability. Accordingly, engage-
ment is the function of the degree of presence of these three conditions, which means that
Consequences of Employees’ Collective Engagement in Knowledge-Based Service Firms 101
Journal of Service Science Research (2016) 8:95-129
individuals are more engaged in situations when their work role offers a greater meaning.
Workers have a feeling of psychological safety and are more psychologically available.
Based on this reasoning, Kahn (1990) defines personal engagement as “harnessing of organi-
zation members selves to their work roles” (p. 694).
According to Slåtten & Mehmetoglu (2011), “there are a number of definitions of the
construct of engagement in the literature” (p. 90). Bailey et al. (2015) reported the results of a
wide-ranging review of the literature involving 214 studies (including conceptual, empirical,
and meta-analysis articles) focusing on the concept of engagement. One aim of the review
was to reveal how engagement has been studied and defined in the literature. The findings
reveal that definitions of engagement can be divided into six distinct categories: (i) personal
role engagement, (ii) work task or job engagement, (iii) multidimensional engagement, (iv)
engagement as a composite attitudinal and behavioral construct, (v) engagement as manage-
ment practice, and (vi) self-engagement with performance. Totally, 86% of studies involved
in the literature review viewed engagement as “work engagement” (p. 5). Work engagement
is associated with individual engagement and not engagement at the collective (climate)
level. (For more insight into the content of these six definitions of engagement, see Bailey et
al. (2015)).
As indicated in the Introduction, it seems that previous research has neglected to study
engagement at the collective level. As Barrick et al. (2015) remarks, “the overwhelming
majority of research [into the concept of engagement] has focused on individual-level
engagement” (p. 112). None of the 214 studies included in Bailey et al.’s (2015) literature
review studied or defined engagement at the collective level. Therefore, engagement at the
collective level cannot be categorized into any of the six definition categories mentioned in
Bailey et al. (2015). Consequently, CE is a new category and a new approach to the study and
definition of engagement.
Naturally, the construct of engagement at the collective level could be defined and framed
differently than that for engagement at the individual level. This difference implies a shift in
focus and definition of the engagement construct from defining it as an evaluation of an
individual or “own” personal engagement to defining it as an evaluation of the collective or
“we” engagement. Following this line of reasoning, the level and boundary of evaluation and
102 Terje Slåtten, Gudbrand Lien
© The Society of Service Science and Springer
perception of CE is the organization. Therefore, two aspects contribute to form the content of
the definition of the CE construct. First, based on the former discussion, it is reasonable to
assume that CE is a climate-related construct. According to Schneider (1990), climate embraces
three aspects of organizations: (i) processes, (ii) practices, and (iii) behaviors. Climate often
refers to a person’s perceptions of the whole organization (Zhou & Shalley 2008). Thus, CE
is a holistic perception of the organization’s overall processes, practices, and behaviors.
Secondly, perception of CE also includes the three aspects mentioned and rooted in Kahn’s
(1990) original work on personal engagement. According to Kahn (1990), engagement is
about people expressing “themselves psychically, cognitively, and emotionally” (p. 694). CE
is about individual perceptions of how “we” collectively, referring to employees generally in
the organizations, involve our “hands, head, and heart” (Ashforth & Humphrey 1995: 110) in
the working life of the organization. Consequently, CE is about work engagement on the
collective (organizational) level and NOT to work engagement on the individual level as has
been focused in previous research. CE embraces these three aspects. For the purpose of this
study, CE refers to how an individual employee perceives how “we” (referring to employees
generally in the organizations), collectively (i) are concerned about each other’s needs and
challenges (cognitive aspect), (ii) express cohesiveness (physical aspect), and (iii) feel that
we constitute a completeness in our commonality (emotional aspect). Consequently, CE mir-
rors and forms how psychologically present firm members collectively are when performing
their work role. It is reasonable to assume that from a management perspective, CE is
normally appreciated, evaluated, and considered as something desirable or a “good” posses-
sion or resource for an organization to capitalize on to both create value and compe-titive
advantage for the firm. Consultants and practitioners have long suggested or advocated CE as
something that firms should strive to achieve. In their conclusion, Bailey et al. (2015) noted
that “how engagement may manifest at … organizational levels … is important, as it con-
nects with the broader debates around the practical utility of engagement” (p. 18). In a similar
vein, Albdour & Altarawneh (2014) described “engagement [as a] … critical organizational
requirement” (p. 193). Therefore, there is need for more research on engagement at the
collective organizational level (Bailey et al. 2015; Barrick et al. 2015) and specifically the
Consequences of Employees’ Collective Engagement in Knowledge-Based Service Firms 103
Journal of Service Science Research (2016) 8:95-129
consequences of employees’ CE.
The following sections elaborate on the rationale of the chosen consequences in Figure 1 in
more detail. The discussion is divided into two sections based on Figure 1 and discusses the
direct and indirect consequences of CE.
2.2 Direct Consequences of Collective Engagement
Employee commitment. In this study, EC is suggested as a direct consequence of CE. EC is
represented by the employee level in Figure 1. EC is often mentioned and considered as a
critical factor related to retaining staff in organizations. According to Stanley et al. (2013)
“commitment plays an important role in the turnover process” (p. 176). Moreover, commitment
is also commonly used and linked, not only to the turnover process, but also to the actual
turnover intention and behavior (Bentein et al. 2005). Consequently, it is valuable to link CE
with EC, which can take many forms. Meyer & Allen (1991) suggest that there are three
forms of commitment: (i) affective commitment, (ii) continuance commitment, and (iii) nor-
mative commitment. According to these authors, affective commitment refers to “employees’
emotional attachment to, identification with, and involvement in the organization” (p. 67).
Employees in this situation (when affective committed) continue their employment because
they “want to do so” (p. 67). Moreover, continuance commitment is about the “awareness of
the costs associated with leaving the organization.” Employees who are committed to
continuing their employment do so because they “need to do so” (p. 67). Finally, normative
commitment “reflects a feeling of obligation to continue employment.” Employees who are
committed to maintain the normative situation continue their employment because they
“ought to remain with the organization” (p. 67).
In this study, the suggested commitment types are considered as components of commit-
ment, rather than as types that examine different forms of commitment separately. Following
this line of reasoning, the three types of commitment described in this study are not perceived
and studied as mutually exclusive, but are viewed holistically and as a global psychological
state where different commitment components are interweaved. This view is in line with
Stanley et al. (2013), who noted that “commitment is … characterized by varying levels of
all forms of commitment” (p. 176). Our perspective is also supported by the original work of
104 Terje Slåtten, Gudbrand Lien
© The Society of Service Science and Springer
Meyer & Allen (1991), where the authors suggest, “it seems reasonable to expect that an
employee can experience all three forms of commitment (e.g., affective, continuance, and
normative) to varying degrees” (p. 68). No previous study has examined the linkage between
CE and EC. Therefore, the study of this relationship is a unique contribution to the literature.
In this study, CE is seen as a climate-related construct and concerns “those aspects of the
social environment that are consciously perceived” (Denison 1996: 624). According to
Slåtten et al. (2011), “the climate construct (parallel to its methodological metaphor) relies on
the organizational member reporting how they experience the ‘climatic conditions’ in their
organizations” (p. 273). In this study, the climatic conditions are about perceptions about how
“we” in an organization express ourselves physically, cognitively, and emotionally during the
performance of our work role, and as such they constitute what this study labels as CE.
Naturally, there will be variations in individual employee perceptions about how psycholo-
gically present “we” are in this organization. This variation will vary between organizations
forming a continuum from collective disengagement at one end to collective engagement on
the other end. Naturally, depending on how the “we” CE climate condition is perceived and
mentally placed on the “engagement continuum,” the condition positively or negatively triggers
individual employees’ thoughts, emotions, and evaluations about continuing their employment
at their organization. Following this reasoning, collective engagement is related to EC by
forming and reflecting perceptions about to what “extent an employee [are] fond of the
organization, [see] their future tied to [this] organization, and [are] willing to make personal
sacrifices for [this] business” (Jaworski & Kohli 1993: 60). Consequently, it is reasonable to
assume that the more favorably an individual perceives the level of collective engagement,
the more committed the individual is towards the entire organization. Although no previous
research has studied the relationship between CE and EC, previous research has revealed a
positive relationship between employee engagement at the individual level and organizational
commitment (c.f. Albdour & Altarawneh 2014; Simsons & Buitendach 2013). Based on this
discussion, it is assumed that there is a positive relationship between CE and EC, and we
propose our first hypothesis as follows:
H1: Collective engagement is positively related to employee commitment.
Consequences of Employees’ Collective Engagement in Knowledge-Based Service Firms 105
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Firms’ innovative capability. This study suggests FIC as a direct consequence of CE. FIC
represents the overall firm level in Figure 1. Innovation is widely recognized as of funda-
mental or essential importance for business within the service and manufacturing industries
(Goktan & Miles 2011). This study limits its focus to study innovation within service indu-
stries. There are two reasons for this choice. First, according to Lin (2013), “service inno-
vation is … a new emerging research field” (p. 1599). Secondly, according to Snyder et al.
(2016), “service innovation operates as the engine of economic growth and pervades all
service sectors” (p. 2401). Accordingly, this study contributes to this imperative and growing
service research area. Generally, innovation can take many forms. In his original work, Schum-
peter (1934) suggests four types of innovation: (i) product, (ii) process, (iii) organizational,
and (iv) marketing innovations. Much of the previous research within service innovation was
based on or inspired by Schumpeter’s work (now called the Schumpeterian view of service
innovation) and focused on one or more of the types of innovation mentioned by Schumpeter.
The same focus is applied in this study. Three aspects shape our perspective and the content
of service innovation in this study. First, based on Schumpeter (1934), this study focuses on
product innovation and the type or category of innovation. Like Schumpeter (1934), we
distinguish between invention and (product) innovation, although it is assumed that they are
closely connected. Product innovation is the outcome or result of a former invention process
(e.g., creative process) and is linked to the actual and purposive commercialization of the
product in a market. However, it is important to notice that product innovation in this study
does not refer to any tangible or physical products. Considering this study’s focus on know-
ledge-based service industries, “product” innovation refers to intangible service products that
include innovative services offering solutions to problems and/or creating market value,
which is therefore called service innovation. Second, service innovation in a market refers to
and includes two market-related dimensions or domains: (i) new service innovations for
customers and clients in an existing market and (ii) new service innovations for customers
and clients in a new market. These two dimensions or domains of service innovations in a
market correspond to the notion of exploitative and exploratory innovations. Specifically,
106 Terje Slåtten, Gudbrand Lien
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“exploitative innovation … builds on existing knowledge resources and … services for
current markets. While exploratory innovation pursues new knowledge and … services for
emerging customers and markets” (Jansen et al. 2009: 5). In this study, the two innovation
dimensions are combined into one component when studying the concept of service inno-
vation. Third, according to Schumpeter (1934), economic development is driven by innova-
tion. Following this finding, business firms continuously seek (or should try) to introduce
innovations into markets (e.g., either into an existing or new market). It is reasonable to
assume that the innovation construct is implicitly not meant to be a static construct, but an
inherently dynamic construct. Interestingly, Schumpeter (1934) defines innovations as the
“carrying out of new combinations” (p. 66). One way to understand and interpret this defi-
nition is that firms should strive to be dynamic, which means that they have the capability to
introduce innovations into the market continuously. This idea is in line with Lawson &
Samson (2001), who noted that “innovation capability is … the ability to continuously tran-
sform knowledge and ideas into new products, processes and systems for the benefit of the
firm” (p. 384). This capability aspect is emphasized especially when focusing on service
innovation in knowledge-based service firms. According to Snyder et al. (2016), “in today’s
business landscape, service firms must continuously renew their … offerings to remain
competitive” (p. 2401). Based on the aforementioned discussion and for the purpose of this
study, a firm’s service innovation capability reflects a knowledge-based firm’s capability to
implement service offerings in the market that embrace both exploratory and exploitative
service innovations. As mentioned previously, the two dimensions of exploratory and exploit-
tative innovations constitute one single component of service innovation.
This study suggests that FIC is a consequence of CE. No previous study has examined this
linkage. The logic of this linkage is based on the “nature” of the engagement construct. As
mentioned previously, CE is about how psychologically present “we” are in an organization.
Moreover, CE concerns cognitively, physically, and emotionally positive expressions when
members of an organization perform their work role. This implicitly signals the climate of a
positive state of mind for “us” in the organization. Schaufeli et al. (2002) supports this
description of engagement “as a positive … state of mind” (p. 74). Similarly, Slåtten &
Consequences of Employees’ Collective Engagement in Knowledge-Based Service Firms 107
Journal of Service Science Research (2016) 8:95-129
Mehmetoglu (2011) suggest that engaged employees have higher levels of energy and are
enthusiastic about their work (p. 95). Clearly, this aspect implies that people experience
positive emotions in a climate of engagement. Consequently, CE is associated implicitly with
positive emotions or feelings. This positive state of mind is what drives a firm’s service
innovation capability through two closely interrelated mechanisms: (i) thoughts and (ii)
actions. First, thoughts are related to a person’s cognitive activity, mental information proces-
sing, and involvement. Second, actions describe a person’s actual behavior. Individuals’
positive (and of course negative) state of mind is able to trigger both their cognitions (thou-
ghts) and behavior (actions). For example, positive emotions are able to trigger a person’s
ability to think creatively, which is a necessary input or ingredient for innovation. Van de
Ven (1996) stressed the importance of creativity as an input for innovation by stating that the
“foundation of innovative ideas is creativity” (p. 592). Slåtten (2011) examined the linkage
between emotions and the observable manifestation of creativity, which is innovation. In this
study, Slåtten (2011) found that joy (as a discrete, positive emotion) was significantly positi-
vely related to innovative behavior. Similarly, Wright (2006) suggested that a positive state
(e.g., joy) is able to stimulate an individual’s thoughts and actions. This reasoning is also a
central hypothesis in Fredrickson’s (2001) broaden-and-build theory of positive emotions.
The theory states that “positive emotions broaden the scopes of attention, cognition, and
action, widening the array of percepts, thoughts, and actions presently in mind” (Fredrickson
& Branigan 2005: 2). Clearly, positive emotions that comprise part of the “nature” of enga-
gement should be associated with innovation. Although previous research has not studied the
relationship between CE and FIC, previous research has revealed a positive relationship
between engagement at an individual level and innovation and innovative behavior (c.f.
Bhatnagar 2012; Slåtten & Mehmetoglu 2011). Following this line of reasoning, it is reason-
able to assume that the “nature” inherent in CE is related to FIC. Based on this discussion, it
is assumed that there is a positive relationship between CE and FIC. We propose our second
hypothesis as follows:
H2: Collective engagement is positively related to firms’ innovative capability.
108 Terje Slåtten, Gudbrand Lien
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Relationship learning. In this study, RL is suggested as a direct consequence of CE. RL
represents the team level in Figure 1. Learning in firms is important in many ways. For
example, Ireland & Hitt (1999) stress that firms must have “the ability to build, share and
leverage knowledge” (p. 44). The process of building, sharing, and leveraging knowledge by
firms implies both the need and importance for firms to have a learning capability. Thus,
Vera & Crossan (2004) state that “learning has been proposed as … the only sustainable
competitive advantage of the future.” For decades, learning has been emphasized as central or
essential for firms (c.f. Barney 1991; Slater & Narver 1995; Slåtten 2014; Vargo & Lusch
2004). Consequently, it is valuable to include and examine the link to the concept of learning
between CEs. Learning can take many forms. It seems that two aspects or types of learning
have dominated past research: (i) organizational learning or (ii) individual learning (for some
examples, see Hamel 1991; Johnson & Sohi 2003; Lukas et al. 1996; Sinkula 1994; Slåtten
2014; Vera & Crossan 2004). Selnes & Sallis (2003) were among the first to introduce a third
aspect or type of learning, which is called RL. This third type of learning, RL, is a relatively
new learning concept compared with the aforementioned organizational and individual
learning. RL originally focused on how information was shared, interpreted, and integrated in
partnership between buyers and sellers in a buyer-seller relationship (Selnes & Sallis 2003).
Selnes & Sallis (2003) gave the theoretical basis for the definition of RL in this study.
However, the concept of RL originally was studied from an interfirm perspective (in refe-
rence to the relationship between a buyer and seller). In contrast, the concept of RL in this
study is explored from an intrafirm perspective. RL in an intrafirm perspective is about
people employed in the same company, but who belong to different departments, who colla-
borate in so-called IPSTs to solve problems and create value for their business clients or
customers. An IPST is a well-known arrangement when working to find solutions for complex
issues (Bele & Glasø 2010). An IPST can be described as a sort of “quasi-organization [that]
reflects a community of learning” (Selnes & Sallis 2003: 83) directed toward a specific
goal(s) for achievement (e.g., finding solutions to a problem for a client or customer). RL in
IPSTs simply means that team members are interdependent on each other’s specialized
knowledge and experience to solve task or assignments for external clients or customers.
Therefore, solutions are the result of a combination of the knowledge and experiences of
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several team members (Bele & Glasø 2010) and is not based on a single team member. RL
implies learning both from and with someone. As such, RL constitutes an iterative transfer
process where individual members’ specialized knowledge, experiences, and reflections on
focal questions and issues are shared among IPST members, which molds, shapes, and reveals
new knowledge. Consequently, RL in IPSTs concerns collaborative learning where the (new)
knowledge can be considered as a “social construct, facilitated by peer interaction, evaluation
and cooperation” (Hiltz 1998: 4). Thus, an IPST can be described as a constellation of people
“where talent, energy and skills are integrated into a team and this collective capacity … [is]
… greater than the sum of individual contributions” (Chen 2007: 239). Based on the pre-
vious discussion and inspired by the work of Selnes & Sallis (2003), this study defines RL in
IPSTs as a jointly iterative activity in which team members share information that is then
jointly interpreted and integrated into a shared team-specific memory, which in turn changes
the range or likelihood of potential team-specific behavior. The last part of this definition,
“team-specific behavior,” refers to the outcome or “product” of RL in IPSTs; i.e., a specific
solution and value proposition to a principal or client. Although IPSTs can be described as a
community or quasi-organization with its own working environment (i.e., the team), it is still
a part of a larger community and the organization in its totality. Therefore, IPSTs both affect
and are affected by the level of CE. There are good reasons to believe that CE is able to
positively increase RL in IPSTs based on our previous discussion showing the explicit and
implicit content or “nature” of CE, which is characterized by people who: (i) are psy-
chologically present during their performance of their work role (Kahn 1990) and (ii) have a
positive state of mind (Schaufeli et al. 2002) that (iii) includes positive emotions (Fredrickson
& Branigan 2005). Previous research on engagement in general supports this argument. In
their comprehensive review of 214 research articles, Bailey et al. (2015) found that employee
engagement evidently “was [the] most robust [outcome factor] in relation to task
performance” (p. 1). Because RL is a necessary “task” in an IPST (see the discussion above),
it is assumed that CE is able to affect this (learning) task performance positively.
Consequently, a positive relationship between CE and RL is assumed, and our third hypo-
thesis is proposed as follows:
H3: Collective engagement is positively related to relationship learning.
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2.3 Direct Consequences of Collective Engagement
Figure 1 suggests that RL is a direct consequence of CE. In addition, Figure 1 suggests that
RL also has (i) an alternative “route” to two of the same variables that were proposed as a
direct consequence of CE (i.e., FIC and EC) in the previous discussion and furthermore has
(ii) a single “one-way-route” to the CCSG variable. Consequently, RL is assumed to have a
central role. The main reason for this is rooted our focus on knowledge-based service firms
that are represented by employees working in consultancy firms. Liedtka et al. (1997) catego-
rized this type of firm as belonging to “professional service firms” (p. 47). Moreover, Liedtka
et al. (2007) state that “nowhere is the … value of learning more evident than in profess-
sional services” (p. 48). Because of the (i) criticality of learning, particularly for professional
service firms and (ii) the way service firms often perform their work using RL in IPSTs, we
include three consequences of RL as shown in Figure 1.
Customers’ creative strategy generation and firms’ innovation capability. CCSG and FIC
represent two different levels of consequences related to RL in IPSTs: (i) customer level and
(ii) overall firm level. However, an outcome of this learning process is the identification of
the common element of CCSG and FIC, which is that they are both rooted in RL in IPSTs. As
such, this constitutes a value proposition for RL in IPSTs. However, this value proposition is
directed at two separate targets: (i) “other” (i.e., a firm’s clients or customers) and (ii) “our-
selves” (i.e., the service firm itself). In this study, CCSG is defined to match one of the core
domains of service offerings common to the consultancy firms included in this study; i.e.,
service firms support the development of their clients’ or customers’ future strategy. Based
on this, CCSG is defined as the IPSTs’ generation of creative and innovative ideas related to
strategic options proposed for service firms’ clients or customers. Considering that IPSTs are
a collection of people with differentiated and specialized knowledge, this implicitly means a
spectrum of options for the “correct” strategic roadmap to recommend to specific clients.
Although no previous study has focused on the linkage between RL in IPSTs and CCSG,
previous research has generally shown a positive relationship between learning and innova-
tion (c.f. Jean et al. 2010). Moreover, support for this argument can also be found in research
in decision processes (Eisenhardt 1989), which suggests that comprehensiveness is positively
associated with strategic creativity (Menon et al. 1999). Consequently, it is reasonable to
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assume a positive linkage between RL and CCSG. This leads to the fourth hypothesis of this
study:
H4: Relationship learning is positively related to customers’ creative strategy generation.
Moreover, there are reasons to assume that RL also has positive consequences not only for
“other” (e.g., customer level or CCSG), but also can have positive consequences for “our-
selves” (e.g., service overall firm level or FIC). As mentioned in the previous discussion, in
this study, FIC reflect knowledge-based firms’ capability to implement service offerings in
the market that embraces both exploratory and exploitative service innovations. Moreover,
RL is about learning from and with someone, and molds, shapes, and reveals new knowledge
from the IPST members. It is reasonable to assume that IPST processes will generate several
concrete innovative ideas that can considered as useful and valuable for service firms. These
innovative ideas can be considered valuable for the improvement of service offerings to their
present customer segments (exploitative innovations) and/or opens up service opportunities
for potentially new customer segments (exploratory innovation). Thus, these “residual ideas”
produced by RL in IPSTs are undoubtedly not worthless, but can be important input
ingredients and contribute to make the firms more attractive in the market and increase their
competitive advantage. Consequently, it is reasonable to assume a positive spin-off effect of
RL in IPSTs on FIC, which leads to the fifth hypothesis of this study:
H5: Relationship learning is positively related to firms’ innovative capability.
Employee commitment. As mentioned previously, EC represents consequences related to
the employee level. This study links RL in IPSTs to organizational commitment. To the best
of our knowledge, no previous study has examined this linkage. However, the literature
indicates that there is a relationship. For example, according to Joo (2010), “organizational
learning culture is one of the key contextual components to enhance organizational commit-
ment” (p. 72). While this study does not consider learning at an organizational level, it is
possible to assume that much of the same mechanisms are present in RL in IPSTs, which is
linked to organizational commitment. An IPST can be considered as what Selnes & Sallis
112 Terje Slåtten, Gudbrand Lien
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(2003) describe as a “quasi-organization … a community of learning” (p. 83). Moreover, it
is notable that there are “expectations” and concrete goals directed towards learning among
firm members participating in an IPST. Following this line of reasoning, Joo (2010) states
that “the more employees perceive … continuous learning … team learning … the higher
they are … attached to their organization” (p. 74). This is expected to be a positive link bet-
ween RL in IPSTs and organizational commitment. Specifically, the more learning that takes
place in IPSTs, the more it positively contributes to organizational commitment. This finding
leads to our final hypothesis:
H6: Relationship learning is positively related to employee commitment.
3. METHODOLOGY
3.1 Sample
This study focuses on the CE of professional service employees. The work by Liedtka et
al. (1997) was used as a guide to select an appropriate sample; i.e., the population of profess-
sional service employees. Liedtka et al. (1997) listed several examples of professional service
firms, including lawyers, accountants, doctors, consultants, and investment bankers. Consul-
tancy service firms were selected for the sample following discussions and workshops,
including academic experts. The appropriate consultancy firms relevant to this study were
contacted. Each person we contacted was provided with a detailed explanation about the aim
of the study, study process details, anonymity of respondents, how the questionnaire would
be distributed within the firm, and so on. Respondents were also asked to contribute by
providing feedback when pretesting the questionnaire.
3.2 Questionnaire and Data Collection
Table 1 shows the items included in the final questionnaire related to each of the different
categories (CE, RL, FIC, CCSG, and EC). The subjects responded to a seven-point Likert
scale for all items, from (1) strongly disagree to (7) strongly agree. Selnes & Sallis (2003)
inspired the RL items (see Table 1). The items used to capture the CE elements were deve-
Consequences of Employees’ Collective Engagement in Knowledge-Based Service Firms 113
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loped for this study. The items used to capture the FIC elements were inspired by Jansen et
al. (2009) and adapted for this study. The items used to capture the CCSG elements were
motivated by Menon et al. (1999), but were modified and adapted for this study. The items
included in EC were inspired by Jaworski & Kohli (1993) and modified for this study. The
final questionnaire was distributed to employees using QuestBack. All employees who were
invited to participate in the survey were clearly informed about the aim and purpose of the
study, the anonymity of participants, expected time to fill out questionnaire, and given a
telephone number to contact the researchers if they had any questions regarding any aspects
of the survey.
4. FINDINGS
4.1 Sample Characteristics and Descriptive Statistics
In total, 210 usable answers were received; a response rate of 31.8%. The average age of
participants in the sample was 37 years. Participant ages ranged from 20 years (youngest) to
50 years (oldest). About 70% of participants in the study were men, which reflects the male-
dominated nature of the consulting industry. On average, respondents in the sample had been
employed in the same consultancy firm for about six years. Moreover, on average, respon-
dents had been working in their present department for approximately five years. Close to
95% of the total sample were employed fulltime.
We used partial least squares path modeling (PLS-PM) as our data analysis procedure,
which was implemented using the package “plspm” in R (for details on PLS-PM, see Hair et
al. 2014). In the first step, we assessed the reliability and validity of the unobserved mea-
surement model. In step two, we assessed the structural model as outlined in Figure 1. The
measurement model, which contained only reflective unobserved variables, was assessed by
looking at convergent validity (the size of the individual items’ loadings, average variance
extracted [AVE], and composite reliabilities) and discriminant validity.
4.2 Measurement Model
As shown in Table 1, all of the loadings were above 0.7 (except one loading at 0.66), as
114 Terje Slåtten, Gudbrand Lien
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suggested as a rule of thumb by Hair et al. (2014). The AVE values exceeded the recom-
mended level of 0.5, and the composite reliability values (i.e., Dillon-Goldstein’s rho values)
were above the suggested rule of thumb of 0.7. These results indicate convergent validity.
The examination of cross-loadings (the numbers are not reported here) clearly indicated
discriminant validity.
4.3 Structural Model
Figure 2 shows the results from the structural model tests of the different hypotheses. The
results found support for all hypotheses (H1-H6). When comparing the standardized β-
coefficients for all factors, we observe that CE has the strongest direct effect on EC, with a β-
coefficient of 0.566, second strongest on RL, and weakest on FIC. The direct effect of RL is
strongest on FIC (β = 0.653), second strongest on CCSG (β = 0.407), and weakest on EC (β
= 0.186).
In our model, RL mediates the relationship between CE and FIC. The indirect effect
between CE and FIC is 0.33 (0.653×0.505) and the total effect (direct effect+indirect effect)
between CE and FIC is 0.505 (0.175+0.33). The variance accounted for (VAF) determines
the size of the indirect effect in relation to the total effect, as is in this case 0.65 (0.33÷
0.505). Following Hair et al.’s (2014) rule of thumb, a situation in which the VAF is larger
than 0.20 and less than 0.80 can be characterized as partial mediation, as is the case for RL in
the relationship between CE and FIC. The mediator effect of RL on the relationship between
CE and EC is weaker. The indirect effect between CE and EC is 0.094 (0.566×0.186) and the
total effect is 0.660. The VAF is then 0.14 (0.094÷0.660), which implies that almost no
mediation effect of RL takes place (Hair et al. 2014).
Results of the structural model are shown in Figure 2. Standardized coefficients. CE =
collective engagement, RL = relationship learning, FIC = firms’ innovative capability, CCSG
= customers’ creative strategy generation, and EC = employee commitment. R2 is amount of
explained variance of endogenous latent variables.
(For information about relationships between EC → CCSG and CCSG → FIG in Figure
2, see separate note at the end of the paper).
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Table 1. Measurement Model of Results
Construct Indicator Loadings
Dillon-
Gold-
stein’s rho
AVE
Collective engagement 0.942 0.845
• We are concerned about each other’s needs and challenges. 0.905
• A team spirit pervades all ranks in this department. 0.932
• We feel that “we” in common are complete. 0.921
Relationship learning 0.929 0.621
• The departments represented in the team exchange information
related to successful and unsuccessful experiences with products/
services.
0.832
• The departments represented in the team exchange information
related to changes in end-user needs, preferences, and behavior. 0.833
• The departments represented in the team exchange information as
soon as possible if any unexpected problems occur. 0.788
• The departments represented in the team frequently evaluate and,
if required, adjust routines in order-delivery processes. 0.835
• The departments represented in the team frequently adjust their
common understanding of end-user needs, preferences, and beha-
vior.
0.835
• The team atmosphere stimulates discussion, which encompasses a
variety of opinions and thoughts. 0.771
• We have a great deal of face-to-face communication in our team. 0.731
• In our team, we frequently evaluate and, if required, update infor-
mation that is stored in our electronic databases. 0.663
Firms’ innovative capability 0.910 0.668
• Our organization accepts demands that go beyond existing pro-
ducts and services. 0.764
• We invent new products and services. 0.828
• We regularly search for and approach new clients in new markets. 0.798
• We frequently refine the provision of existing products and ser-
vic es. 0.851
• Our organization expands services for existing clients. 0.842
Customers’ creative strategy generation 0.817 0.691
• The chosen strategy was different from the strategy developed in
the past. 0.831
• The chosen strategy was innovative. 0.832
Employee commitment 0.890 0.730
• I feel that my future is intimately linked to this organization/
department. 0.823
• In general, I am proud to work for this organization/department. 0.912
• I often go above and beyond what is expected of me to ensure the
well-being of this organization/department. 0.825
116 Terje Slåtten, Gudbrand Lien
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RLCE
FIC
EC
CCSG
0.175***
0.505***
0.566***
0.653***
0.407***
0.186***
R2 = 0.17
R2 = 0.57
R2 = 0.46
R2 = 0.26
Figure 2. Results of the Structural Model
5. DISCUSSION AND IMPLICATIONS FOR MANAGEMENT
The aim of this paper is to enhance our understanding of CE. In this study, CE describes
how psychologically present employees are and refer to how they collectively express
themselves psychically, cognitively, and emotionally in their work role (Kahn 1990). Mor-
eover, CE is assumed to be a possession or a resource that knowledge-based service firms can
benefit from because it is expected to have several positive consequences at a variety of
levels for the service firm. This study was performed partly in response to the call for future
research mentioned by Bailey et al. (2015), who noted that “studies … [at the] organi-
zational [level] would shed additional light on the experience of engagement” (p. 16). This
study both deepens and extends our understanding of CE. To authors knowledge previous
research has neglected to study the effect of employee engagement at a collective level, refer-
ring to the effect-linkages included in this study. Thus, this study has four unique and sepa-
rate contributions to the literature. First, and most importantly, it extends the research on the
concept of engagement, which has been conducted in prior research most often at the
individual level (Barrick et al. 2015). Studying engagement at the collective level is a com-
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Journal of Service Science Research (2016) 8:95-129
pletely new perspective within engagement research. Specifically, this study contributes a
new shift in focus from individual or “own” personal engagement to a collective or “we”
engagement. Consequently, the study contributes significantly to engagement theory by broa-
dening the concept to include the “we” or collective aspect of engagement. Second, this study
also deepens our understanding of the potential consequences of CE. In total, the study
provides insight into four different levels of consequences: (i) customer level, (ii) employee
level, (iii) team level, and (iv) overall firm level. Third, this study also contributes to learning
theory. Specifically, the study broadens the RL concept, which has most often been con-
ducted from an interfirm perspective in prior research. In contrast, this study extends previous
research by focusing on RL from an intrafirm perspective. As such, the study broadens the
RL concept into a completely new domain. Furthermore, by studying RL from this new
perspective and examining both the direct and indirect consequences of CE, the study clearly
deepens our knowledge about the role of RL. Fourth, this study increases our knowledge and
insight into the role and impact of professional service employees’ CE in so-called know-
ledge-based service firms where human capital is often declared fundamentally important.
As visualized in Figure 2, CE is suggested to have several direct and indirect cones-
quences. No previous research has examined these relationships, which makes this study
unique. As mentioned in previous discussion all consequences of CE were statistically
supported. Clearly, a practical implication for managers is to take collective engagement in
their firm seriously. Clearly, it is a “driver of business success” (Lockwood 2007: 2).
Accordingly, managers should take notice of Robinson et al. (2004) statement: “organization
must work to nurture, maintain and grow the engagement” (p. 9). A fundamental step for
managers is to continuously “control” the level of firms’ employees’ collective engagement
and consider whether level of engagement is acceptable or within the zone of tolerance.
Following this line of reasoning it is necessary and critical for managers to obtain feedback
from of employees about how they experience and evaluates the level of collective engage-
ment (“climate”) in their firm. Manager could use several types of data collection tools
helping them to acquire information that help them to get insight about firms employees
collective engagement. For example, managers could use formal surveys to collect informa-
tion about employees perception of collective engagement. On the other hand, such infor-
118 Terje Slåtten, Gudbrand Lien
© The Society of Service Science and Springer
mation could also be collected more informally in managers day-to-day dialog and commi-
nation with employees or by performing specific goal-directed workshops, focus groups
and/or seminars focusing on the theme: “how to improve employees collective engagement.”
By analyzing and interpret the collected information managers can strengthen or redefine
firms organizational overall “climate strategies” followed by concrete practical actions (e.g.
managerial actions) for improvement of employees collective engagement. This study shows
that managers who are aware about employees collective engagement is able to achieve many
positive consequences (as shown in Figure 2) which all have in common that they are more or
less related to aspects of firms competitive advantage.
This study show that CE has positive consequences for EC. This finding underscore the
importance of building a CE climate because it is able to build bonds between individuals and
with their organization, such that “an individual identifies with an organization” (Joo 2010:
73). When comparing the three direct consequences it shows that CE is actually the most
influential driver for EC. Considering all of the expenditures associated with employees
leaving their job, hiring new people, and the imperative role of commitment in the turnover
process (Stanley et al. 2013), this finding signifies the necessity for managers to consider CE
as part of their leadership role. Specifically, based on the definition of CE in this study,
managers should focus on all three aspects that CE embraces (that is (i) cognitive, (ii)
physical and (iii) emotional) and how these aspects of “we” are summed and capable to
create a psychological contract of employee organizational commitment. Undoubtedly, CE is
one critical issue (among other) that managers should take into consideration in their effort to
retain employees and achieve employees that are committed to the organization. Consequently,
CE should be considered as a “frozen potential” that managers can capitalize on.
Furthermore, the positive impact CE on FIC emphasizes the importance of psychological
presence for employees to implement service offerings in the market that are related and
embrace both exploratory and exploitative service innovations. This finding indicates that CE
is a “positive state of mind” (Schaufeli et al. 2002) associated with positive emotions that
affect thoughts and actions, which are explicitly manifested in FIC. However, while the
relationship between CE and FIC were lowest of all the three direct consequences, it shows
that managers should remember that CE contributes positively to a firm’s overall perfor-
Consequences of Employees’ Collective Engagement in Knowledge-Based Service Firms 119
Journal of Service Science Research (2016) 8:95-129
mance as represented by FIC.
This study show that CE and RL are positively related. In comparison, the linkages between
CE and RL were the second most influential of all three direct consequences of CE. More-
over, CE explains a substantial percentage of all variance in RL. Liedtka et al. (1997) states
that “to learn … [will be] the foundation for competitive success” (p. 47). In this study, RL
was studied from an intrafirm perspective. Specifically, RL from an intrafirm perspective
refers to the internal teamwork in knowledge-based service firms, which comprises highly
experienced people working for different departments in the same firm that cooperate in a so-
called IPST. The findings in this study indicate that knowledge-based service firms in which
employees work under a CE climate are prone to learn more when collaborating in IPSTs.
Again, similar to the aforementioned two consequences, the fundamental importance for
managers to take initiative to build and maintain a CE in the organization is stressed because
it positively increases and boosts knowledge-based service firms’ “capability to learn”
(Liedtka et al. 1997: 47). Clearly, managers must recognize that CE lays is a one critical
foundation for firms’ competitive success.
RL has a central role as visualized in Figure 1. RL is particularly critical in professional
service firms. According to Liedtka et al. (1997), “the … value of learning [is] … more
evident than in professional services” (p. 48). Furthermore, RL in IPSTs is an often-used
working method. This study examined three indirect consequences of CE through RL on FIC,
CCSG, and EC. As shown in Figure 2, all three consequences were supported statistically. No
previous research has examined these relationships previously, which makes a unique con-
tribution that have important practical implications for managers.
In this study, CCSG concerns the IPSTs’ service offerings. Specifically, CCSG was limited
to match (only) one core domain of IPSTs’ service offerings, which is to support and develop
clients’ or customers’ future strategy. The linkages between RL and CCSG were the second
most influential. Clearly, RL is able to trigger service provision as represented by CCSG.
Although no previous studies have examined exact these relationships, the findings are
consistent with literature on the links between learning and creativity (c.f. Slåtten 2014) and
generally consistent with the literature on the role of frontline employees’ generation of ideas
120 Terje Slåtten, Gudbrand Lien
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for customer service improvement (c.f. Lages & Piercy 2012). The findings show that RL in
IPSTs is able to “tap into the creative potential of their teams” (Barczak et al. 2010: 332).
Because teamwork is an often-used method in knowledge-based service firms, it is essential
for managers to adopt the “team-service-profits” slogan, which expresses that the outcome
value for service offerings is a function of the interdependencies between all IPST members.
It is important for managers to keep in mind that it is the IPST that represents the frontline of
the firm, which means that the IPST represents the services, marketer, brand, and organiza-
tion in the eyes of the firm’s clients or customers. While RL is able to trigger service pro-
vision to “others” (i.e., a firm’s clients or customers), it simultaneously has positive cones-
quences for “ourselves” (i.e., overall firm level).
The linkages between RL and FIC were the most influential of all three indirect cones-
quences. As mentioned previously, RL can be characterized as a partial mediator between CE
and FIC, which indicates that there are two different “routes” to increase FIC. As shown in
Figure 2, the sum of the direct and indirect consequences of CE through RL explains a
substantial of all variance in FIC. These results suggest that RL in IPSTs is an essential input
to develop new or creative ideas necessary for FIC and to implement service offerings into
the market that embraces both exploratory and exploitative service innovation. CE has an
important role because it relates to both RL and FIC and enables workers to tap into their
creativity or increase their creative thinking skills, which is a necessary ingredient for
innovation. Barczak et al. (2010) described the importance of this role of CE: “The future
success of many businesses relies on their ability to tap into the creative potential” (p. 332).
The findings are generally supported in previous research identifying a link between indivi-
dual frontline employees’ generation of ideas and service improvement (c.f. Lages & Piercy
2012) or using service team employees to generate new ideas (c.f. Heracleous et al. 2004).
Accordingly, our findings agree with Lovelock & Wirtz’s (2007) statement that it is essential
to include “people [e.g., IPSTs] who are close to the actual processes” (p. 345). Clearly, there
are good reasons to assume that professional service employees’ CE is directly and indirectly
able to boost FIC.
Finally, the linkage between RL and EC had the lowest impact of all three indirect cones-
quences. However, the links were significant, which indicates that RL positively contributes
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Journal of Service Science Research (2016) 8:95-129
to organizational EC. Figure 1 suggests that the relationship between CE and EC is mediated
through RL. As mentioned previously, the results showed that there was almost no mediating
effect of RL. This indicates that there are two distinct and separate “routes” to EC: one direct
consequence from CE and one direct consequence from RL. According to Figure 2, the sum
of these routes explains almost half of all variance in EC, which can described as substantial.
As mentioned in the previous discussion, managers should be aware that CE has an essential
role in enabling EC. Nevertheless, although there are no mediating effects from CE on EC
using RL, the findings show that RL in itself positively contributes to EC. Consequently, the
findings support that the more “team learning … the higher … [employees] are attached to
their organization” (Joo 2010: 74). One strong practical managerial implication of this
finding is the importance of having a “support leadership … centered on learning” (Montes
et al. 2005: 1161) that positively “influences the climate for learning” (Marsick 2009: 273).
6. LIMITATIONS AND FURTHER RESEACH
This paper contributes to our understanding of the consequences of professional service
employees’ CE, which is a relatively new aspect within engagement theory. Thus, this paper
has four unique and separate contributions. Clearly, several areas related to collective engage-
ment could (and should) be focused on in future research. We suggest three areas of the CE
domain that could be included in future research.
First, future research on CE should identify how and in what way organizational culture
and climate enables and/or hinders employees’ CE. For example, future research could focus
on how trust is related to employees’ CE. Trust could be studied as a holistic construct. Another
way to study trust is to examine one or several dimensions of trust. For example, future re-
search could study the impact of types of trust, such as affective and cognitive trust. Dividing
trust into its different dimensions would contribute to revealing which types of trust best
enables employees’ CE. Previous research has revealed that affective trust is a promising
factor for collaborative culture (c.f. Barczak et al. 2010). Moreover, other culture and climate
factors could also be considered. Future research could include the ten team climate dimen-
sions suggested by Ekvall (1996), including humor, freedom, playfulness, and idea support.
122 Terje Slåtten, Gudbrand Lien
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Previous research shows that humor is an important aspect of a working climate. For example,
Slåtten et al. (2011) found that a work climate that encourages humor is an important driver
of employee creativity. They concluded, “an important managerial implication from this
study is to take humor seriously” (p. 279). Consequently, we emphasize that including more
aspects of organizational climate (e.g., humor) in future research will contribute to providing
a more nuanced answer about the optimal organizational climate to enable employees’ CE
and consequently give important and practical suggestions for how to orchestrate an organi-
zational culture and climate to enable employees’ CE.
Second, this study limited its focus to study the effects of employees’ CE exclusively.
Future research should also strive to explore the enabling factors for employees’ CE. Spe-
cifically, future research could look into the individual levels of factors such as these aspects
related to firms’ employees, leadership, or management, and how these factors enable CE.
Aspects related to firms’ employees, such as employees’ emotions (Slåtten 2009; Slåtten 2011)
and empowering leadership (Slåtten et al. 2011) are two examples that could be included as
enabling factors for CE. Moreover, future research could include leadership styles such as
transformational leadership (TFL) (c.f. Slåtten & Mehmetoglu 2015), transactional leadership
(TRL), servant leadership, authentic leadership and/or empowering leadership, and their
respective abilities to enable employees’ CE. Two or more leadership styles and their impacts
could be examined in future research to determine, e.g., whether TRL is more effective
leadership style or appropriate than TFL in enabling employees’ CE. One could also study a
specific type of leadership style in more depth. One such of leadership style that should be
elaborated in more depth is TFL. Jung et al. (2003) supported this perspective by stating that
a “particularly promising direction for studying leadership … seems to be the effects of
transformational leadership” (p. 528). Such a focus would contribute to revealing whether
TFL leadership and its four dimensions enable employees’ CE. There are also possible to
include other factors as enabling factors for CE. One such enabling factor could be psy-
chological capital (psycap) that is comprised of self-efficacy, hope, optimism and resilience.
Psycap could be studied both on (for example) individual level, team level collective level.
We encourage future research to examine the role of psychological capital for CE and other
relevant and related variables to CE.
Consequences of Employees’ Collective Engagement in Knowledge-Based Service Firms 123
Journal of Service Science Research (2016) 8:95-129
Third, although this study explored the effect of several outcome variables, future research
could include direct or indirect consequences of employees’ CE. We suggest that future
research could include consequences such as employee turnover intentions and employee
perceived service quality (c.f. Slåtten et al. 2011). Other possible consequences of CE are
team spirit, firms’ competitive power, firms’ entrepreneurial orientation, employee branding,
employee ownership, employee satisfaction, IPST creativity, and IPSTs’ creative self-efficacy,
among other potential consequences of CE. It is reasonable to assume that other outcome
variables could be included depending on the aim and the chosen perspective of employees’
CE. The inclusion of broad consequences will give deeper insights and enrich our under-
standing of this relatively new and emerging area of research into CE.
Note
Although not part of focus and aim of this paper, but helps to a better understanding of the
framework in Figure 2, this paper (for information only) reports relationship between EC →
CCSG and CCSG → FIG. The effect between EC → CCSG is significant positive (β = 0.208;
p < 0.01). Moreover, the effect between CCSG → FIG is significant positive (β = 0.230; p <
0.01).
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AUTHOR BIOGRAPHIES
Terje Slåtten is an associate professor at Lillehammer University
College in Norway. Terje Slåtten holds a PhD in Business adminis-
tration from Karlstad University, Sweden. His research interests in-
clude service quality, employee engagement, innovative behavior,
leadership, sponsorship, creativity and experiential marketing.
Gudbrand Lien is a professor at Lillehammer University College in
Norway. Gudbrand Lien has a dr. oecon (PhD) degree (within finance)
from Norwegian School of Economics (NHH). Gudbrand Lien’s main
field of research has been within energy finance, energy economics,
quantitative innovation studies and agricultural economics.
