The role of technological intensity in services on the capability to performance relationships – An examination in the Australian context

This study examines the direct effect of operational capabilities (quality and low cost) on firm performance among Australian service firms, and the extent to which these relationships are influenced by varying levels of technological intensity. The findings show that technological intensity strengthens the relationship between quality capabilities and business performance, while it weakens the relationship between low cost capabilities and business performance. Theoretically, this study reinforces the contingency effect of technological intensity on the capability–performance relationships. From a practical perspective, this study suggests the need to consider technical intensity and desired capabilities in an integrated fashion to enhance business performance.