The effects of Organisational Ambidexterity and New Public Management on Public Sector Service Quality through Service Innovation

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The British University in Dubai (BUiD)
Public sector organisations in the Sultanate of Oman are still perceived to lag behind the private sector and are facing intense pressure to deliver the needed quality service. This sector is inflexible and lacks the dynamism to serve at its full extent. Moreover, the bureaucratic structure of the public sector hinders any initiative to improve, meet the demand for better products and services and operate without necessarily increasing its expenditures and disbursements. Hence, the need to reduce bureaucracy may give rise to the increasing demand for service innovation to attain service quality and enhance performance. Actual research and empirical studies testing service quality through service innovation combining organisational ambidexterity and new public management (NPM) within the context of the public sector in the Middle-East remains a gap in literature. This is because the government structure in the Middle East is fundamentally stemmed from highly bureaucratic institutions where decentralisation is highly questionable and can be subjected to numerous challenges. This research examines the influence of organisational ambidexterity and NPM on service quality through service innovation. The study follows a positivistic philosophy and focused on a deductive quantitative method. The survey questionnaire is based on pre-validated scales from literature and one self-developed scale for NPM as there is no such scale that has been found in literature. Non-probability sampling was used to recruit participants. One hundred and fifty-seven questionnaires were collected from twenty-two government service organisations using a self-administered online survey questionnaire that was completed by managers. By means of structural equation modelling, it was found that exploration, exploitation and NPM relate positively and significantly to service innovation. Also, the findings illustrate that exploitation and service innovation have a positive and significant correlation on service quality. However, this relationship was not significant with exploration and NPM. Furthermore, the post hoc analysis revealed that service innovation fully mediates the relationship between exploration, NPM and service quality. However, service innovation partly mediates the relationship between exploitation and service quality. This research has three main theoretical and empirical contributions. First, it contributes to the development of a measurement scale of NPM that relates specifically to the services provided by the government organisations those might be achieved through innovation. The services offered in the public service organisations can be achieved via innovation, although limited evidence exists about the ways to measure public performance. Specifically, it provides empirical support of the NPM-service innovation and NPM-service quality relationships. Second, this research advanced the understanding of the organisational ambidexterity theory by empirically testing the influence of both exploration and exploitation on service quality through service innovation in the public sector context. Several studies state that organisational ambidexterity applies to private organisations (e.g. industry and firm-level) to create positive outcomes for service quality. The thesis extends the previous literature on the organisational ambidexterity concept as this thesis focused on organisational level mainly operational and functional service unit in public service organisation. Third, this study contributes to the innovation literature by providing theoretical insight and empirical evidence that service innovation is important for public sector organisations. This research is one of a limited number of researches that have studied service innovation in the public sector organisation. The findings contribute to previous research literature about the mediating role of service innovation in government organisations. Overall, this thesis offers a new conceptualisation about the mediation role of service innovation in the relationship between organisational ambidexterity and NPM in the public sector to improve service quality. The thesis findings provide evidence to highlight the importance of ensuring that the customer gets the quality services they demand the organisation to convert their efforts to reflect organisation performance. Previous studies state that service innovation offers a perspective that facilitates the development of new services and refinement of existing services to improve the quality of service. A comparison of previous literature and thesis findings confirm that the delivery of quality service needs customer-oriented practices to improve the service quality domain in public service organisations.
organisational ambidexterity, new public management, service innovation, service quality, public sector, Middle East