Service employees’ perceptions of organizational vulnerability from macro-level risks and how innovativeness mitigates their impact

Purpose This paper aims to explore how service employees, who often integrate the organization they work for into their identity, can be affected by macro-level risks and the resulting financial vulnerability of their service organization. In addition, it investigates whether innovativeness, a characteristic of the service organization, can alleviate these adverse effects, particularly on firm financial performance and mental well-being. Design/methodology/approach This research develops a conceptual model underpinned by protection motivation theory (PMT) with data used from an online survey of service employees (n = 365). The hypotheses and data are tested using MANCOVA and spotlight moderated-mediation analysis. Findings The results demonstrate the empirical impact of macro-level risks (financial and health) on service employees’ mental well-being and perceptions of firm financial performance. Financial vulnerability emerged as a key mediator in these relationships. Moreover, the findings indicate that high levels of innovativeness within service organizations can help maintain higher levels of mental well-being and perceptions of financial performance but this is only when risks are perceived as low from macro-level events. Originality/value This research broadens the discourse on vulnerability, extending it beyond consumer actors to illuminate the distinct challenges encountered by service employees. In addition, it advances theoretical frameworks by blending ideas from PMT and emphasizing the significance of incorporating deficit and strength-based perspectives in service research. This research argues that this offers a complete comprehension of vulnerability experiences, transcending debates about the exclusivity or superiority of these approaches to considering and understanding experiences of vulnerability.