Service innovation through dynamic knowledge management

PurposeThe purpose of this paper is to report the findings of a study on the management of intellectual capital in Fortune Motors. It intends to highlight how an automobile service firm apply dynamic knowledge management concept to create new service processes which resulted in breaking through the bottleneck of profit loss.Design/methodology/approachThe study is based on an in‐depth case study, semi‐structured interviews and extensive access to the secondary data on the firm. A qualitative approach was used to analyze the data due to the complexity of contextual content.FindingsThe proposed model has been validated and found that dynamic capabilities could enhance knowledge management by linking external resources or stimuli and internal knowledge management practices. Empirical evidence has also been provided on how a firm can apply dynamic capabilities to its knowledge management to substantiate service innovation.Research limitations/implicationsFurther studies verifying the linkage between knowledge management and specific capabilities can be extended from this study.Practical implicationsThe proposed model provides a guideline for practitioners in managing their valuable knowledge and enhancing the existing knowledge management practices.Originality/valueThis paper identifies a gap in the linkage between knowledge management and constant environmental changes that has been overlooked. To narrow down this research gap, a model of a cyclical flow has been proposed containing processes of integration/coordination, learning/experimentation and innovation and transformation.