This study adopts the premise that innovation capability underpins a service firm's value creation ability andthat management style, employee behaviors and marketing underpin its innovation capability. This study examinesthe role of managers and employees in the creation and delivery of superior value to customers viathe firm's innovation capability. To test this premise the current study examines the role of transformationalleadership (TFL) as an aspect of the service firm's management style in creating and delivering value to customersthrough its services. This study adopts a multi-level study, collecting data from managers, employeesand customers of service firms in a Southeast-Asian country, Cambodia. The results show that a service firm'sinnovation capability has a positive effect on the firm's value offering (VO), the VO has a positive relationshipwith customer perceived value-in use (PVI), and PVI has a positive relationship with firm performance. Thisstudy also finds moderating effects of TFL on the relationship between service innovation capability and VO,and of service marketing capability on the relationship between VO and PVI respectively.