(Group 2) EXAMINING THE RELATIONSHIP BETWEEN SUSTAINABLE SERVICE, SERVICE INNOVATION, AND PERFORMANCE IN THE RESTAURANT INDUSTRY

EXAMINING THE RELATIONSHIP BETWEEN SUSTAINABLE SERVICE, SERVICE
INNOVATION, AND PERFORMANCE IN THE RESTAURANT INDUSTRY
Abstract
Purpose - Present research intends to investigate the connection between sustainable service,
service innovation, and restaurant industry performance. The objective is to provide empirical
evidence and expand the understanding of how sustainability and innovation interact to affect
performance in the hospitality sector.
Design/methodology/approach - The variables were examined using a design for quantitative
research and a scale based on a seven-point Likert. A representative sample of restaurants was
surveyed to collect data, which was subsequently reviewed with confirmatory factor analysis (CFA)
and structural equation modeling (SEM). The dependability and validity of the constructs were
evaluated, and several alternative models were compared to identify the optimal model for testing
hypotheses.
Findings - The results show a statistically significant positive relationship between sustainable
service and service innovation, as well as service innovation and performance. It was found that
service innovation mediates the relationship between sustainable service and performance. The
study also reveals how the image functions as a mediator between satisfaction and benefit. These
findings contribute to understanding sustainable service, service innovation, and hospitality
industry performance.
Practical implications - The findings have direct contributions to restaurant industry
administrators and professionals. Managers should prioritize implementing sustainable practices
and cultivating a culture of innovation within their organizations to enhance performance.
Additionally, organizational image enhancement should be emphasized to increase consumer
satisfaction.
Originality/value - This research offers valuable insights into the link between sustainable service,
service innovation, and restaurant industry performance. The empirical evidence and theoretical
implications contribute to understanding how sustainability and innovation can be leveraged to
improve performance in the hospitality sector. The practical implications guide managers in
implementing sustainable practices, fostering innovation, and enhancing organizational image.
This study provides the existing studies and sets an outline for future research.
Keywords: sustainable service, service quality, customer satisfaction
Introduction
Over the years, human services have tremendously impacted various service contexts (Jang,
2021). Most individuals rely on human services to preserve, protect, and improve their lives.
Interest in sustainable services, service innovation, the impact of image and benefits on consumer
happiness, and the importance of image and benefits has increased recently (Teng, 2019). As a
result, businesses in the tourism sector must offer excellent customer service that promotes
sustainability and innovation.
In responding to the effects of climate change and other issues related to the environment,
consumers have demanded that the hospitality and tourism sectors alter their service model to
provide sustainable services that strike a balance between environmental, social, and economic
needs (Sigala, 2013; Sims, 2009). The mining industry is facing more high manufacturing costs
and environmental damage fees; consequently, offering food that is sustainable and exercising
responsible service through creative technology and management is essential for restaurants' future
growth (Gossling, 2002; Gossling et al., 2011; Chou et al., 2016). The organizational environment
is crucial to production (Shin, 2022).
Currently, many people's eating habits have been altered to some extent by modern life;
lunch and supper are increasingly consumed outside to enjoy a new lifestyle, a change of ambiance,
a varied menu, and free time after work. Restaurants are frequently selected for business and social
interactions (Majid et al., 2018). The dining industry is regarded as a highly lucrative and rapidly
expanding industry, requiring each restaurant to prioritize customer satisfaction for sustainable
development. To compete and generate sustainable revenue, restaurant management must
prioritize service, pricing, and environmental standards. According to Ryu and Jang (2010),
consumer satisfaction is significantly influenced by a welcoming atmosphere and competitive
pricing. These aspects play a vital role in determining the level of satisfaction experienced by
customers (Ryu and Han, 2010), ensuring customer loyalty and pleasant dining experiences.
Considered a highly profitable industry, the culinary industry is expanding significantly in breadth
and depth. To develop sustainably, every restaurant in the culinary industry must prioritize
customer gratification due to the industry's intense competition. To compete and generate
sustainable revenue, restaurant management must prioritize service quality, pricing, and the
atmosphere. (Ryu and Jang, 2010) Customer contentment is strongly influenced by a pleasant
atmosphere and affordable prices. These factors ensure customer loyalty, increase sales (Gao et
al., 2014; Ryu et al., 2012), and are agents of customer satisfaction (Ryu and Han, 2010). From
acquiring new consumers to retaining existing ones, restaurant administrators must always focus
on strategy.
Sustainable service in restaurants is an approach that considers the food industry's
environmental, social, and economic impacts when serving clients. Today, dining out has become
a lifestyle choice for many individuals who desire a diverse menu, a change of scenery, and social
interaction. The restaurant is a venue for exchanging ideas, interacting with others, and an
opportunity to experience sustainable service and promote environmental protection, social
responsibility, and economic growth. It has been argued that sustainable tourism must be
conceptualized more comprehensively to assess meaningfully and critically its interconnectedness
with natural, social, and economic factors of varying sizes and periods (Nunkoo, 2023; Shirazi,
2017). Therefore, sustainable tourism is best understood as an "adaptation model" or as "adaptive
management" that addresses the issues of the unpredictability of events, ambiguity regarding the
outcome of events, and complexity of scale and timing (Lu, 2009; Streimikiene,2021; Craig, 2011;
Cajiao, 2021). These industry-specific factors may moderate or mediate the effects of sustainable
service and service innovation on restaurant performance, highlighting the need for targeted
research in this area. This study will investigate the impact of sustainable service, service creativity,
benefits, and image on consumer satisfaction in the tourism and lodging industries (Streimikiene
et al., 2021). The case study method will be used to determine how these factors affect restaurant
customer satisfaction. The study will assess customer satisfaction with the hospitality restaurant's
client satisfaction and service quality based on customer feedback. Consumer satisfaction is a
prerequisite for consumer loyalty (Choi, 2016; McDougall and Levesque, 2000; Dam, 2021). Past
investigations have shown that standards of service, consumer approval, and service impact the
environment and customer loyalty in different services such as medical care (Yeşilada and
Direktouml, 2010), hotels, and resorts (Ali et al., 2016; Dedeoğlu and Demirer, 2015), travel
tourism (Debata et al., 2015; Kanwel et al., 2019), transport services (Kumar, 2012; Rahim, 2016),
banking (Mohsan et al., 2011), investiture (Bartels et al., 2006). This research void must be
addressed for both academic and practical reasons. Sustainable service, service innovation, and
hospitality industry performance in the restaurant industry can help academics develop relevant
theories and frameworks. Additionally, it can demonstrate how restaurant enterprises can benefit
from sustainability and innovation. This research can assist restaurant proprietors, managers, and
policymakers make better operational and strategic decisions. Understanding the relationship
between sustainable service, service innovation, and restaurant performance can aid in identifying
best practices, identifying potential barriers or facilitators, and developing interventions designed
to enhance restaurant sustainability, innovation, and performance. Nonetheless, little study has
been done on this topic in the local culinary industry, particularly regarding the mediation function
of client satisfaction following the Covid-19 pandemic. Tourism, accommodation, and restaurant
companies will better understand the role of sustainable services, innovative services, benefits, and
images in enhancing consumer satisfaction in the tourism, lodging, and restaurant industries. The
study's findings will shed light on the significance of these factors for customer satisfaction and
guide tourism and lodging businesses in their efforts to enhance service quality and customer
experience. Additionally, research can contribute to formulating policies and regulations that
promote the sustainable growth of the tourism and lodging industries.
Theory background and hypothesis development
Perceptions of sustainable service positively affect service innovation
In recent years, sustainable restaurants have become increasingly essential due to a greater
awareness of environmental and social issues. In addition, sustainable service and sustainable
produce have been identified as critical factors for achieving sustainable restaurant operations
(Namkung and Jang, 2013). This literature review investigates the connection between
environmentally responsible restaurant practices and service innovation. Sustainable restaurant
practices are ecologically and socially responsible practices that aim to reduce the adverse effects
of restaurant operations (Jacobs and Klosse, 2016). Sustainable restaurant operations involve
reducing energy consumption, water consumption and refuse production. Sustainable restaurant
operations also include using sustainable ingredients, such as organic and locally sourced produce
(Cantele and Cassia, 2020).
The creation of new or enhanced services that are tailored to the ever-changing needs of
consumers is what is meant by "service innovation"(Jin et al., 2016). According to Ching-Shu
(2010) and Naehyun (2016), service Innovation is crucial to a restaurant's long-term viability
because it enables the business to differentiate itself from competitors and satisfy customers' ever-
changing needs (Jin et al., 2016; Su, 2010). Creating new menu items that reflect changing
consumer preferences is one method that can be utilized in the service innovation process (Mifli
et al., 2017; Narimawati and Pangestu, 2020). Another option is technology, such as mobile
payment and ordering systems (Ottenbacher and Harrington, 2009). It is common knowledge that
environmentally responsible activities improve the efficacy of a service as a whole. Several
research studies have examined the relationship between sustainability and service quality,
shedding light on sustainable business practices' numerous advantages to the service sector.
According to Chiu (2016) and Choi (2007), sustainable practices have the potential to enhance
service quality by cultivating a sense of social responsibility and environmental stewardship (Chiu
and Hsieh, 2016; Choi and Parsa, 2007). Businesses have the opportunity to improve their
customers' overall service experience by instituting sustainable practices such as reducing their
overall energy consumption, enhancing the efficacy of their waste management, and contributing
to the communities in which they operate (Visser-Amundson, 2020; Del Mar Alonso-Almeida,
2013). Additionally, it has been discovered that more sustainable practices result in higher
consumer satisfaction (Yusof et al., 2017). According to research by Yusof (2017), consumers
perceive sustainable businesses as more dependable, trustworthy, and committed to providing
high-quality service (Yusof et al., 2017). This favorable impression increases client satisfaction
and brand loyalty (Chaturvedi et al., 2022). Moreover, adopting environmentally responsible
business practices can pave the way for innovation and differentiated service offerings (Maynard
et al., 2020). By balancing their operations' economic, environmental, and social elements,
businesses can establish new service offerings that adhere to sustainability principles (Willy
Legrand, 2022). According to Teng (2019), this enables them to differentiate themselves in a
competitive market while meeting the ever-changing needs of environmentally conscious
consumers (Teng and Wu, 2019).
Adopting sustainable business practices positively affects the level of service, client
satisfaction, and innovation in the service industry. Businesses can improve their environmental
and social performance and service delivery by implementing sustainable practices (Ahmed et al.,
2023; Park and Jeong, 2019). This enhances customer satisfaction and the company's competitive
advantage. This research proposed the following hypothesis in light of the prior discussion.
Hypotheses 1. Sustainable service positively affects service innovation
Perceptions of service innovation positively affect performance
Service innovation perceptions significantly impact performance outcomes across industries
(Liu and Tse, 2018). Wall and Berry (2007) explored the connection between consumer
impressions of service and performance indicators, shedding light on the significance of customer
perceptions in promoting organizational success. According to (Gagi et al., 2013), views on the
quality of service significantly impact customer loyalty and repurchase intentions. Positive
perceptions of service quality positively influence customer loyalty and financial performance
(Ahmed et al., 2023; César Gazzoli et al., 2010). Therefore, organizations prioritizing exceptional
service experiences can accomplish superior performance results.
Moreover, César Gazzoli et al (2010) discovered that staff thoughts about the quality of service
are crucial for organizational performance. According to Johnson (1996) and Marshall (2006),
there is a positive correlation between staff's opinions of the quality of service and client
satisfaction. When employees believe they are providing excellent service, client loyalty, recurrent
business, and recommendations from others increase. One conducted research on restaurants and
hospitality discovered that suppliers' Consumer satisfaction and loyalty are influenced by
perceptions of service quality. (Polyorat, 2010; Jiang, Zhang, and Han, 2013). Positive supplier
perceptions of service result in increased satisfaction among consumers, and this in turn
strengthens client loyalty and business performance (Y. K. Lee et al., 2008; Mahsyar and Surapati,
2020).
In conclusion, impressions of service substantially influence performance outcomes, such as
loyalty, client satisfaction, and financial performance. Customers and how employees feel about
service quality play critical roles in the success of an organization. Organizations can improve
consumer satisfaction, commitment, and overall performance by prioritizing and enhancing
positive perceptions of service. This research proposed the following hypothesis in light of the
prior discussion:
Hypotheses 2. Service innovation positively affects performance
Relationship between sustainable service and performance
Organizational service perceptions are important in mediating the connection between
sustainable business practices and performance outcomes (Cantele and Cassia, 2020; Hussain et
al., 2020). Understanding how customer perceptions of service function as a mediator can provide
invaluable insight into the processes by which sustainable practices affect performance. Many
research investigations have investigated the role of service perceptions as a facilitator in the
connection between sustainability and efficiency (Ahmed et al., 2023). Chou and Hambrick
examined the hospitality industry and concluded that customer service quality evaluations mitigate
the relationship between environmentally responsible business practices and their continued
patronage (S. F. Chou et al., 2018; Hambrick and Mason, 1984). They concluded that sustainable
business practices positively influence consumers' perceptions of the quality of the services offered,
subsequently increasing loyalty to customers and financial performance (Freeman, 2011; Higgins-
Desbiolles et al., 2017). Likewise, perceptions of service quality influence the relationship between
sustainable business practices and consumer satisfaction in the hospitality industry (Liat et al.,
2014). Numerous studies on the relationship between sustainability and performance in restaurants
have shed light on the positive impacts of sustainable practices on various performance indicators.
(Isnaini et al., 2020). Sustainable initiatives, such as waste reduction, energy efficiency, and
sustainable sourcing, positively influenced financial performance measures, such as revenue
growth and profitability (Isnaini et al., 2020; Jang and Zheng, 2019; Perramon et al., 2014; Raab
et al., 2017).
Similarly, the connection among sustainable service behaviors and restaurant effectiveness
in terms of consumer loyalty and satisfaction. Sustainable practices, such as organic food offerings
and environmentally responsible operations, had a positive effect on client satisfaction, leading to
increased customer loyalty and repeat business, according to their research (M. J. Lee et al., 2019;
O’Connor, 2021; Simon-Rojo et al., 2017). Kim (2020) investigated the manufacturing industry
and concluded that sustainable practices positively impact employee perceptions of service quality
(Kim and Hall, 2020). This improves organizational performance outcomes such as profitability
and productivity (Arshad et al., 2022; Kim and Hall, 2020). These results illuminate the crucial
role that service perceptions mediate between sustainable business practices and performance
outcomes. When these practices are implemented, organizations can positively affect what
consumers think of the level of excellence of their services, thereby enhancing customer loyalty,
satisfaction, and organizational success (Moslehpour et al., 2022).
It is impossible to overstate the significance of service quality perceptions as an essential
mediator in the relationship between environmentally friendly company practices and performance
outcomes (Ahmad et al., 2021; Moise et al., 2021). Several research investigations have shown
that service perceptions influence the positive effects of sustainable business practices on customer
loyalty, happiness, and organizations' performance (Bahja and Hancer, 2021; Zhang et al., 2021).
In order to enhance their client's perceptions of the quality of their services and, consequently,
their overall performance, organizations should prioritize implementing sustainable practices.
Hypotheses 3. Service innovation mediates the relationship between sustainable service and
performance
Benefit promoting sustainable innovation positively affects the image.
In the larger scheme of fostering sustainable innovation services within the restaurant
industry, benefit positively affects the image. (Chou et al., 2012a; Huang, 2021).
Sustainable innovation services offer several advantages that contribute to a positive image
for restaurants, such as cost savings, increased employee productivity, decreased operational
expenses, and increased revenue (Bohdanowicz et al., 2001; Dibene, 2021; Llach et al., 2013).
One of the primary advantages of promoting sustainable innovation services is the opportunity to
reduce labor expenses (Chou et al., 2012; Munjal and Sharma, 2012). According to (Elias, 2019),
implementing environmentally friendly measures such as energy-efficient technologies and waste-
reduction strategies may result in substantial cost reductions by decreasing the need for manual
labor. By employing these ecologically friendly innovations, restaurants can streamline their
operations, reduce the need for excessive staffing, and ultimately reduce labor expenses, thereby
increasing their profitability.
Sustainable innovation services have also increased employee productivity (Chou et al.,
2012; Dang and Wang, 2022). Research conducted by (Dang and Wang, 2022) indicates that
instituting sustainable practices, such as providing employee training on sustainability and
utilizing technology to streamline processes, can increase employee productivity and effectiveness.
When employees are equipped with the knowledge and resources necessary to contribute to
sustainability efforts, they can do so more effectively, and they become more engaged and
motivated, resulting in enhanced performance and, ultimately, a positive image for the restaurant
(Cho and Yoo, 2021; Munawar et al., 2022). Additionally, fostering sustainable innovation
services can reduce operating expenses. By adopting energy-efficient equipment, optimizing
resource utilization, and implementing waste management strategies, restaurants can
simultaneously reduce operational costs and their environmental impact (Gürlek and Tuna, 2017).
According to Chou (2012) and Schubert et al. (2010), sustainable practices contribute to restaurant
cost reductions by reducing energy consumption, minimizing refuse disposal costs, and increasing
supply chain efficiency (Chou et al., 2012; Schubert et al., 2010). These cost-cutting measures
contribute to the restaurant's financial success and enhance its reputation as an environmentally
conscious establishment (Chou et al., 2012; Gürlek and Tuna, 2017). Lastly, fostering sustainable
innovation services may increase restaurant revenue (Chou, 2018; Gürle,2021). When making
dining decisions, consumers increasingly search out sustainable and socially responsible options
(Rodríguez,2020; Coşkun,2020). Restaurants can attract customers and differentiate themselves in
the marketplace by aligning their offerings with sustainable practices (Schubert,2010). According
to research conducted by Kim (2020), customers are ready to shell out higher prices for sustainable
products and services, such as culinary experiences. By promoting sustainable innovation services,
restaurants can capitalize on this developing market demand, bolster customer loyalty, and
ultimately increase revenue. The literature indicates that fostering sustainable innovation services
within the restaurant industry positively affects the restaurant's image (Munir,2022; Chou,2022).
Benefits such as cost savings, increased employee productivity, decreased operational expenses,
and increased revenue contribute to a positive perception among consumers and stakeholders
(Arici, 2022; Yeşiltaş, 2022; Cho, 2021). By applying green procedures and effectively
communicating their dedication to sustainability, restaurants may improve their brand image and
gain a competitive edge.
Hypotheses 4. Benefit positively affects image
The effect of image positively affects satisfaction.
Numerous fields, such as marketing, consumer behavior, and service management, have
investigated the connection between image and customer satisfaction (Wu, 2013; Han, 2017).
Understanding how appearance affects satisfaction positively is essential for businesses seeking
to develop substantial brand equity and provide exceptional customer experiences. Numerous
studies on the relationship between image and satisfaction have consistently found a positive
correlation (Ryu, 2012). According to research conducted by Kim (2019) and Ahmed (2023) in
the context of luxury fashion brands, a positive brand image significantly impacts consumer
satisfaction with their purchase. The study highlighted the importance of a positive brand image
in influencing consumers' perceptions of product quality, service, and overall satisfaction.
Likewise, Kaur (2021) investigated the connection between hotel image and customer satisfaction.
Their findings indicated that a positive hotel image, including reputation, physical environment,
and service quality, contributed significantly to customer satisfaction. The study highlighted the
significance of managing and enhancing a hotel's image to increase overall consumer satisfaction.
In addition, Ryu (2008) and Koshki (2014) investigated the connection between the restaurant's
corporate image and customer satisfaction. According to their findings, customers' satisfaction
with restaurant services was significantly influenced by a positive corporate image, which included
dimensions such as corporate reputation, trustworthiness, and customer orientation. The study
highlighted corporate image's role in influencing consumers' perceptions and evaluations,
ultimately leading to greater satisfaction.
These studies demonstrate that image has a significant positive impact on satisfaction. A
brand's positive public appearance in the restaurant enhances customers' perceptions of product
and service quality, trust, and overall satisfaction (Giebelhausen, 2016; Pecotić, 2014). Companies
must invest in managing and promoting a positive image to foster consumer satisfaction and
loyalty. A positive brand, hotel, or corporate image substantially impacts customers' perceptions,
ratings, and happiness (Jin, 2012). To increase consumer satisfaction, businesses should
concentrate on constructing and maintaining a positive image through effective branding strategies,
reputation management, and the delivery of superior products and services in the restaurant.
According to the preceding discussion, we proposed the following hypothesis:
Hypotheses 5. Image positively affects Satisfaction
The effect of image mediates the relationship between benefit and satisfaction.
Service providers try to satisfy customers because of their revenue and efficiency
(Qin ,2009). Almohaimmeed (2017) defines both the concept and significance of consumer
satisfaction. Customer contentment can be characterized by a detailed evaluation of the
service/product based on the purchasing experience and the duration of its use (Wu, 2009).
Simultaneously, the concept of customer purchase intention is extensively investigated
theoretically because it is crucial for fostering customer loyalty (Liu, 2022; Kim, 2020). Like other
hospitality organizations, restaurants may generate customer satisfaction and loyalty by providing
quality service, reasonable prices, and a friendly ambiance (Boo, 2017; Voon, 2012). According
to Hyun (2010), pleased consumers are more likely to utilize the same services again, to develop
brand loyalty, and to recommend the services to others frequently.
Numerous studies have examined the effect of information-sharing on the connection
between service and customer happiness. Following research, Binsar Kristian (2014) suggests that
effective information sharing enhances customer satisfaction by providing relevant and timely
information about service offerings, processes, and updates. When organizations share accurate
and comprehensive information with customers, it helps manage their expectations and reduces
uncertainties, resulting in increased contentment.
The link within benefit, image, and pleasure has received significant attention in marketing
and consumer behavior studies. Understanding how embodiment facilitates the relationship
between benefit and contentment is essential for businesses seeking to enhance customer
experiences and build brand equity. Several studies have shed light on this dynamic process by
investigating the role of image as a mediator between beneficial effects and satisfaction (Leverin,
2006; Javed, 2017). According to research, a positive image associated with a product or brand
increases customer satisfaction by reinforcing their perceptions of the benefits received (Weiss,
2005). In addition, Almohaimmeed (2017) and Ryu (2012) examined the mediating influence of
restaurant image on the connection between perceived benefits (e.g., cuisine quality and ambiance)
and customer contentment within the context of eateries and beverage establishments. The study
found that restaurant appearance partially mediated the relationship between the perceived benefits
with satisfaction. An upbeat restaurant image reinforces customers' perceptions of the offered
benefits, contributing to greater happiness.
These studies indicate that image mediates the connection between advantage and
satisfaction. They enhance customers' perceptions of the benefits when a product, brand, institution,
or restaurant has a positive impression, resulting in greater satisfaction (Pizam, 2016; Nunkoo,
2020; Zhong, 2020). To increase customer satisfaction, businesses should concentrate on
administering and enhancing their image, effectively communicating the benefits offered, and
providing high-quality experiences. A positive image reinforces customers' perceptions of the
benefits they have received, leading to greater customer satisfaction. These assertations lead to the
following hypothesis:
Hypotheses 6. Image mediates the relationship between benefit and satisfaction
Methodology
Sampling and data collection
(Waiting for Prof. Liu)
(Descriptive Table 1 is below)
This study investigated a group's gender, age, level of education, job level, place of place of
residence, and the types of restaurants they visit most frequently. In terms of gender, the research
sample comprised 191 males (representing 42.1% of the total) and 263 females (representing
57.9% of the total). The participants in this survey were divided into five distinct age groups. Those
under 20 years old accounted for 108 participants (23.8%), those aged 21-30 years old accounted
for 254 participants (55.9%), those aged 31-40 years old accounted for 59 participants (13%), those
aged 41-50 years old accounted for 23 participants (5.1%), and those aged 51-60 years old
accounted for 10 participants (2.2%). This study identified the following categories based on level
of education: senior high school or vocational education (16.1% - 73 individuals), college
education (15.4% - 70 individuals), university education (68.3% - 310 individuals), and graduate
school or above (0.2% - 1 individual). Participants' job levels were divided into four categories:
entry-level workers (80.4%; 365 individuals), supervisors (9%; 41 individuals), managers (9%; 41
individuals), and senior administrators (1.5%; 7 individuals). We determined that 77.8% (353
people) of the research group resided in Northern Taiwan, 10.6% (48 people) in Central Taiwan,
8.4% (38 people) in Southern Taiwan, and 3.3% (15 people) in Eastern Taiwan. 27.8% (126
individuals) preferred hotel restaurants, 50.7% (230 individuals) preferred regular restaurants,
17.6% (80 individuals) preferred fast food restaurants, 0.9% (4 individuals) visited snack shops,
2.4% (11 individuals) preferred beverage shops, and 0.7% (3 individuals) selected other restaurant
types.
Measurements
The study used three dimensions and a scale of seven Likert points with an acceptable range
from intense disagreement (1) to strong agreement (7) to investigate the major hypotheses (Fick
et al., 1991). First, the dimensions of sustainable service have three subdimensions: sustainable
food, sustainable environment, and sustainable production (Reisch et al., 2013). Second, the focal
point of this research is that service innovation was collectively derived from three indicators
(Lusch et al., 2015). Third, the performance dimension has three subdimensions: benefit, image,
and satisfaction (Babu et al., 2018). The researchers developed an integrated model as outlined in
Figure 1.
---- Insert Figure 1 here ----
Analysis of the data
Initial data analysis indicates the reliability and validity of the defined constructs. The first
examination of the data demonstrates the reliability and validity of the study's constructs. Table 1
displays the mean, factor loading, standard deviation, extracted average variance (AVE),
Cronbach's alpha values, and composite reliability (CR). Values of Cronbach's alpha, which
ranged from 0.66 to 0.92, were determined indicate acceptable internal consistency, as they fall
within the acceptable range of 0.6 to 0.8 (Janssens et al., 2008; Taber, 2018). The highest
Cronbach's alpha value, 0.922, is still considered acceptable. Additionally, the study discovered
that the CR values for each latent variable range from 0.659 to 0.922, which exceeds the suitable
range of 0.6 (Bagozzi et al., 1988), indicating good reliability. Although AVE values range from
0.369 to 0.538, most constructs fit below the acceptable threshold of 0.5, and the study's
convergent validity is adequate since all CR values are above 0.6. (Fornell et al., 1981)
---- Insert Table 1 here ----
The confirmatory Factor Analysis (CFA) model was used to determine the data structure's
optimal model fit and validity. According to the findings, a first-order model with three constructs
was appropriate (sustainable service, service innovation, performance) and achieved a suitable
model fit (χ2 = 98.346, χ2/df = 4.098; p < .001; RFI = .901; CFI = .949; NFI = .934; IFI = .950;
TLI = .924 and RMSEA = .083). The second-order model, which included sustainable food,
sustainable production, and sustainable environment, also demonstrated acceptable fit (χ2 =
207.034, χ2/df = 6.470; p < .001; RFI = .875; CFI = .923; NFI = .911; IFI = .924; TLI = .892; and
RMSEA = .110) as well as the indication of the unidimensionality of the adopted measures
(Anderson et al., 1988). The data χ2
structure shows convergent
= 478.499, χ2/df validity as all factor loadings are
= 3.211;
above 0.50 (Hair et al., 2019) p < .001; RFI = .883; CFI =
.935;data
Common Method Bias (CMB) implies NFI = .909;
in distinct IFIbut=similar,
factors .935;which is poor for data
TLI = .917;
processing. CMB is easier to understand: andtyped
respondents RMSEA = answers to all survey
the same
.070 The complete answer is that the batch makes data in
questions without reading the questions.
various elements comparable, violating discriminant and collinearity. The first factor explaining
the variance is 46.160% < 50%. Thus, there is no presence of CMB (Kock, 2020).
Table 2 presents the standard deviations, the means, the square root of AVE, the VIF value, and
the Pearson correlation coefficients. The high inter-construct correlation values, which exceed
AVE's square root, indicate multicollinearity. Nonetheless, it is essential to evaluate the variables'
relative collective importance. The sustainable service construct contains sustainable food,
sustainable production, and a sustainable environment, which are elements of extended sustainable
services. The VIF values given in are less than 2.5, demonstrating that there is no collinearity
between model variables. While some researchers follow the VIF level of 10, this study
recommends interpreting VIF results in the context of other factors, such as the interconstruct
correlation discussed previously (O’Brien, 2007).
Results
The present research employed the SEM as a statistical analysis tool to consider the
simultaneous relationship between multiple variables. (Collier, 2020). The AMOS 26.0 software's
graphical interface evaluated the model's overall structure. To evaluate the predictions, the SEM
results provide the proposed model fit in Figure 2, where the direct effects are highly mainly
positive and significant, as demonstrated by the data set findings: χ2 = 545.674, χ2/df = 3.368; p
< .001; RFI = .878; CFI = .924; NFI = .896; IFI = .924; TLI = .911; and RMSEA = .072, which
demonstrates an acceptable model fit. AMOS 26.0, SPSS Statistics 27, and Stata 17 software were
utilized to explore the mediating effects among latent variables. The indirect effect paths were
determined using a bootstrap confidence interval approach with 2000 resamplings, p values, a two-
tailed test, a 95% bias-corrected confidence interval (CI), and user-defined estimands (Liu, 2018).
Hypothesis 1 proposed the direct effect of sustainable service to service innovation, which was
examined in this research. The analysis identified a significant and positive direct effect of
sustainable service on service innovation (β = .522, p < .001) with a bias-corrected 95% confidence
interval containing no zero, thereby providing supporting evidence for Hypothesis 1. A direct
relationship between service innovation and performance is proposed by Hypothesis 2. The results
demonstrated a statistically significant positive indirect effect (β = .434, p < .001), whose bias-
corrected 95% confidence interval (CI) excludes zero, supporting effectively Hypothesis 2. The
benefit is directly, positively, and substantially related to the image, as shown in Table 3a (β = .652,
p < .001), thereby supporting Hypothesis 4. The study also confirms that image positively relates
to satisfaction (β = .717, p < .001); consequently, Hypothesis 5 is successfully supported.
---- Insert Table 3a here ----
Service innovation was predicted to mediate the relationship between sustainable service and
performance by Hypothesis 3; however, the analysis reveals that the indirect effect is positive and
statistically significant (β = .233, p < .001), proving thus Hypothesis 3. The construct image serves
as a mediator in the interaction between benefit and satisfaction. The result demonstrated a positive
and indirect effect (β = .467, p < .001) with no zero values in the 95% bias-corrected CI, providing
strong support for Hypothesis 6. Figure 2 and Table 3b show the results of the mediating effect
analysis.
---- Insert Table 3b here ----
This study compared three alternative hypotheses-testing models to the specified research
framework to determine the most suitable model. Alternative models in which second-order
variables were transformed into first-order factors are displayed in Figure 3. As shown in Figure
3a, this research first transformed second-order sustainable service into first-order factors of
sustainable food, sustainable environment, and sustainable production. This alternative model's
model fit is as follows: χ2 = 819.864; χ2/df = 5.030; p < .001; RFI = .818; CFI = .870; NFI = .843;
IFI = .871; TLI = .848; and RMSEA = .094. Only the indirect effect of service innovation on the
relationship between sustainable food and performance is insignificant, according to the results of
the mediation effect analysis of alternative model 1 (Table 4a). Secondly, the second-order factor,
performance, was transformed into the first-order factors of benefit, image, and satisfaction using
the model that best fits the data: χ2 = 814.026; χ2/df = 4.994; p < .001; RFI = .819; CFI = .871;
NFI = .845; IFI = .872; TLI = .850; and RMSEA = .094 (Fig. 3b). The results of the alternative
Model 2 mediation effect analysis (Table 4b) indicate that all indirect effects are positive and
statistically significant, thus confirming all hypotheses. Lastly, the second-order factors of
sustainable service and performance from the first two alternative models were stimulated and
simultaneously transformed into first-order factors, providing a model fit: χ2 = 1089.258; χ2/df =
6.642; p < .001; RFI = .759; CFI = .817; NFI = .792; IFI = .818; TLI = .788; and RMSEA = .112
(Fig. 3c). Table 4c presents the results of the analysis of the mediation effect for alternative Model
3, which indicates that approximately 30% of the calculated mediation effect does not support the
suggested hypothesis. The following model fit is more appropriate than the initial conceptual
model: χ2 = 545.674; χ2/df = 3.368; p < .001; RFI = .878; CFI = .924; NFI = .896; IFI = .924; TLI
= .911; and RMSEA = .072, all three alternative models had less favorable outcomes. Thus, the
development of the three alternative models completely supports the initial model's suitability for
advanced hypothesis testing.
Discussion
Theoretical implications
This research contributes significantly to sustainable service, service innovation, and hospitality
industry performance literature. First, the study offers empirical evidence of the direct and positive
relationship between sustainable service and service innovation, thereby expanding the
understanding of sustainable service within the context of the restaurant industry (Huang et al.,
2017). Adams et al. (2016) and other researchers have previously emphasized the significance of
sustainable practices in fostering innovation.
In accordance with previous investigations (Den et al., 2010; Prajogo et al., 2016), this research
confirms the direct and positive relationship between service innovation and performance (Den et
al., 2010; Prajogo et al., 2016). The results demonstrate the significance of innovative services to
employee performance and organizational success. This study improves the existing understanding
of how sustainability and innovation interact to affect performance by establishing the function of
mediation of service innovation in the relationship between sustainable service and performance.
(Zhou et al., 2023; Schaltegger et al., 2016)
Thirdly, the research indicates the mediation function of image in the relationship between
benefit and satisfaction, contributing to the existing literature on the relationship between
organizational image and client satisfaction (Nguyen et al., 2001; Walsh et al., 2013). By
demonstrating the significance of image in the service sector, the study highlights the need for
organizations to enhance their image to increase consumer satisfaction.
Managerial effects
The findings of this research have implications for administrators and practitioners in the
restaurant industry. First, the results highlight the significance of sustainable service in promoting
service innovation and performance overall. The implementation of sustainable practices, such as
local procurement, waste reduction, and energy-efficient operations, should be considered by
managers (Kuo et al., 2018). They can increase their competitive advantage and contribute to a
more sustainable future if they do so (Lubin & Esty, 2010).
Managers should cultivate a culture of innovation and creativity among employees, considering
the value of service innovation to performance (Chen et al., 2016). This can be accomplished
through training programs, incentives, and a work environment encouraging employees to develop
and implement innovative ideas (Alegre et al., 2013).
Thirdly, the research emphasizes the significance of organizational image in determining
consumer satisfaction (Walsh et al., 2013). Managers should prioritize enhancing their
organization's image by emphasizing customer service, quality, and sustainability. Ozcelik et al.
(2016) state that effective communication of an organization's values and achievements in
sustainability can enhance its image and boost consumer satisfaction.
Limitations and further research
Some opportunities for future research arise from the limitations. Due to the study's specific
geographic location, the collected data may not be representative of the overall restaurant industry.
According to Scherrer et al. (2021), future investigations must examine expanding the sample to
include various geographic locations and restaurant categories.
Second, the study's cross-sectional design precludes an examination of variations over time.
Ward et al. (2014) state that longitudinal studies can provide valuable insights into the
relationships between sustainable service, service innovation, and performance dynamics.
Thirdly, this research investigated the important role of service innovation and image as
mediators in the examined relationships. Future research could investigate additional potential
mediators and moderators, such as organizational culture, employee motivation, and
management's commitment to sustainability (Chen et al., 2015; Waddock et al., 1997)
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Table 1.
Statistical descriptions, measurement item details, and confirmatory factor analysis
Table 2.
Mean, standard deviations, correlations, and discriminant validity
Construct and factors Mean S.D. Factor Loading CR AVE
FoodSS (Cronbach’s Alpha = .873) 0.917 0.787
Food1 5.11 1.226 0.800
Food2 5.30 1.185 0.939
Food3 5.34 1.212 0.916
ProductSS (Cronbach’s Alpha = .828) 0.687 0.427
Pro1 5.07 1.142 0.552
Pro2 5.12 1.152 0.634
Pro3 5.31 1.169
Pro4 4.94 1.269 0.757
SpaceSS (Cronbach’s Alpha = .792) 0.794 0.571
Space1 4.85 1.364 0.846
Space2 5.07 1.226 0.542
Space3 4.88 1.341 0.839
ServiceSS (Cronbach’s Alpha = .773) 0.844 0.645
Ser1 5.12 1.211 0.732
Ser3 5.10 1.421 0.861
Ser4 4.92 1.532 0.811
ImageOP (Cronbach’s Alpha = .885) 0.797 0.570
Ima1 5.52 1.081 0.875
Ima2 5.53 1.022 0.726
Ima3 5.48 1.052 0.646
BenefitOP (Cronbach’s Alpha = .901) 0.924 0.754
Ben1 5.37 1.137 0.773
Ben2 5.37 1.103 0.910
Ben3 5.47 1.073 0.907
Ben4 5.42 1.093 0.877
SatisfactionOP (Cronbach’s Alpha = .888) 0.926 0.806
Sat1 5.42 1.080 0.846
Sat2 5.46 1.083 0.913
Sat3 5.52 1.115 0.932
Variables 1. 2. 3. 4. 5. 6. 7. Mean S.D VIF
Sustainable service
1. Sustainable food 0.887 5.25 1.08
2. Sustainable production 0.528** 0.654 5.04 1.01 1.47
3.Sustainable environment 0.359** 0.549** 0.756 4.93 1.10 1.64
4. Service 0.261** 0.295** 0.436** 0.803 5.04 1.16 1.33
Performance
5. Satisfaction 0.266** 0.236** 0.200** 0.280** 0.898 5.44 1.01 1.67
6. Image 0.253** 0.193** 0.230** 0.290** 0.609** 0.755 5.50 0.97 1.98
7. Benefit 0.199** 0.232** 0.251** 0.290** 0.445** 0.580** 0.868 5.41 0.97 1.59
**. Correlation is significant at the 0.01 level (2-tailed) / *. *. Correlation is significant at the 0.05 level (2-tailed).
Square root of average variance extraction is shown on the diagonal in bold
Table 3a.
Direct effect analysis of sustainable service, service innovation, performance, benefit, image, and satisfaction
Relationship Direct Effect P-value Results
H1: Sustainable service > Service innovation 0.522 *** Support
H2: Service innovation > Performance 0.434 *** Support
H4: Benefit > Image 0.652 *** Support
H5: Image > Satisfaction 0.717 *** Support
Table 3b.
Mediating effect analysis of sustainable service, service innovation, performance, benefit, image, and satisfaction
Relationship Indirect Percentile 95% CI Bias-corrected 95% CI P-value Results
Effect
Lower Upper Lower Upper
H3: Sustainable service > Service 0.233 0.136 0.371 0.135 0.368 *** Support
innovation > Performance
H6: Benefit > Image > Satisfaction 0.467 0.349 0.597 0.372 0.583 *** Support
Table 4a.
Mediating effect analysis of sustainable food, sustainable environment, sustainable production, service innovation, performance, benefit, image, and
satisfaction
Relationship Indirect Percentile Bias-corrected P-value Results
Effect 95% CI 95% CI
1 Sustainable food > Service 0.060 -0.001 0.122 0.004 0.107 insignificant Not support
2 Sustainable environment > Service 0.199 0.105 0.277 0.118 0.261 *** Support
3 Sustainable production > Service 0.024 -0.039 0.089 -0.032 0.075 * Support
4 Benefit > Image > Satisfaction 0.467 0.349 0.597 0.372 0.583 *** Support
Table 4b.
Mediating effect analysis of sustainable service, service innovation, benefit, image, and satisfaction
1 Sustainable service > Service 0.303 0.179 0.524 0.203 0.502 *** Support
innovation > Benefit
2 Sustainable service > Service 0.329 0.165 0.554 0.186 0.518 ** Support
innovation > Image
3 Sustainable service > Service 0.317 0.188 0.575 0.213 0.539 *** Support
innovation > Satisfaction
Table 4c.
Mediating effect analysis of sustainable food, sustainable environment, sustainable production, service innovation, benefit, image, and satisfaction
1 Sustainable food > Service 0.099 0.012 0.235 0.017 0.200 * Support
innovation > Image
innovation > Image
7 Sustainable production > Service 0.037 -0.042 0.136 -0.032 0.119 insignificant Not support
8 Sustainable production> Service 0.040 -0.045 0.142 -0.033 0.123 insignificant Not support
innovation > Image
9 Sustainable production> Service 0.038 -0.045 0.150 -0.035 0.133 insignificant Not support
Sustainable
Benefit
food
H4
H3
H1 H2
Sustainable Sustainable Service H6
Innovation Performance Image
environment service
H5
Sustainable
Satisfaction
production
Figure 1. Research framework and hypothese
Sustainable
Benefit
food
*
3**
.64
.69
7*
H3. .227*** H4. .652***

**
H1. .522*** H2. .434*** .921***

Sustainable .765*** Sustainable Service
environment service Innovation Performance Image H6. .467***
.76
**
3*
7*
* H5. .717***
*
.87
Sustainable
Satisfaction
production
Figure 2. Results of the proposed research framework

Sustainable service
Sustainable
Benefit
food
.1 .060 .060 *
43 0**
.00 .199*** .69 **
5 .024* 2*
.65
Sustainable .474*** Service .426*** .922***
Performance Image .467***
environment innovation
3 08 .759 .71
7*
5. *** **
. 05
Sustainable
Fig 3a. Alternative Model 1 – Second order sustainable service separated into first Satisfaction
production
order factors of sustainable food, sustainable environment and sustainable
χ2 = 819.864; χ2/df = 5.030;production
p < .001; RFI = .818; CFI = .870;
NFI = .843; IFI = .871; TLI = .848; and RMSEA = .094
Performance
Sustainable
food Benefit
***
.303*** . 525
.6
.329**
54
**
**
.317*** 2*
.65
*
Sustainable .771*** Sustainable .587*** Service .571***

Image .467***
environment service innovation
.71
7*
*
**
.549 * *
64
***
.8
Sustainable Fig 3b. Alternative Model 2 – Second order performance separated into
Satisfaction
production first order factors of benefit, image and satisfaction
χ2 = 814.026; χ2/df = 4.994; p < .001; RFI = 0.819; CFI = 0.871;
NFI = 0.845; IFI = 0.872; TLI = 0.850; and RMSEA = 0.094
Sustainable service Performance

.099*
Sustainable .108*
food Benefit Fig 3c. Alternative Model 3
.102*
***
.236*** . 493 –Combined alternative
.20
0* .258*** *
** ** models 1 and 2
.245*** .652
χ2 = 1089.258; χ2/df = 6.642;
Sustainable .479*** Service .538***
Image .467*** p < .001; RFI = .759;
environment innovation
CFI = .817; NFI = .792;
.71
7*
*
.037 .372
**
.512 ** IFI = .818; TLI = .788;

74
.040 .381 ***

.0
.038 .361 and RMSEA = .112

Sustainable
Satisfaction
production
Fig 3. Results of proposed research framework-alternative models

Fig 3a. Alternative Model 1 – Second order sustainable service separated into first order factors of sustainable food, sustainable environment,
sustainable production
Fig 3b. Alternative Model 1 – Second order performance separated into first order factors of benefit, image and satisfaction
Fig 3c. Alternative Model 3 – Combined alternative models 1 and 2

(Group 2) EXAMINING THE RELATIONSHIP BETWEEN SUSTAINABLE SERVICE, SERVICE INNOVATION, AND PERFORMANCE IN THE RESTAURANT INDUSTRY

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(Group 2) EXAMINING THE RELATIONSHIP BETWEEN SUSTAINABLE SERVICE, SERVICE INNOVATION, AND PERFORMANCE IN THE RESTAURANT INDUSTRY

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EXAMINING THE RELATIONSHIP BETWEEN SUSTAINABLE SERVICE, SERVICE

INNOVATION, AND PERFORMANCE IN THE RESTAURANT INDUSTRY

Figure 1. Research framework and hypothese

H3. .227* H4. .652*

H1. .522* H2. .434* .921***

Figure 2. Results of the proposed research framework

Sustainable .771* Sustainable .587* Service .571***

Sustainable service Performance

.512 ** IFI = .818; TLI = .788;

.040 .381 ***

.038 .361 and RMSEA = .112

Fig 3. Results of proposed research framework-alternative models

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