In e-commerce, advances in digital technology are increasingly driving service innovation, reshaping the principles of competitiveness and value creation through customer orientation, service quality, seamless customer experience, transparency, and trust. These elements add a new dimension to ethical business leadership. While current literature largely treats servitization and business model innovation as distinct phenomena, the portfolio architecture of service configurations as an independent mechanism of related diversification and the potential moderators of its ethical impact remain insufficiently formalized. This study aims to conceptualize service architecture diversification as a form of diversification through a portfolio of service-oriented business models and to examine its relationship with financial performance under varying levels of ethical components, specifically transparency and trust. The analysis is based on panel data from eight Ukrainian online retailers for the period 2019–2024. The study utilizes key indicators from official financial statements and a composite transparency and trust index constructed from publicly available information across four transparency markers. To quantify service architecture diversification, a composite index was developed using reproducible data. Methodologically, the study employs five panel regressions with fixed effects for online retailers and years, along with nonlinearity tests and lagged diagnostic models. Standard errors were estimated using heteroscedasticity-consistent standard errors, and the analysis was performed using Python’s statsmodels. Two separate series of regression models were constructed for different dependent variables, namely ROA and operating margin. In the baseline linear models, the effect of service architecture diversification is not statistically significant for either operating margin (p = 0.942) or ROA (p = 0.546), suggesting no immediate within-year effect. Nonlinearity diagnostics for ROA suggest a phased pattern, in which the quadratic term is negative and close to significance (b =-0.038; p = 0.067). In sensitivity checks excluding influential observation, significance becomes stronger in both the operating margin series (p = 0.025) and the ROA series (p = 0.046). Lagged tests for operating margin reveal a short-term negative relationship (b =-0.039; p = 0.002) together with a positive interaction between the indices (SArD×TT(t−1): b = 0.0056; p = 0.027). This is interpreted as evidence of the potential role of ethical transparency and trust in mitigating the negative effects of service transformation, although this moderating effect is sensitive to sample composition. From a practical perspective, the article positions service architecture diversification as a manifestation of ethical business leadership in business model innovation and establishes directions for further research aimed at refining its operationalization, clarifying its architectural alignment with the principles of ethical leadership, and explaining the mechanisms for overcoming the servitization paradox in the context of online retail.

In e-commerce, advances in digital technology are increasingly driving service innovation, reshaping the principles of competitiveness and value creation through customer orientation, service quality, seamless customer experience, transparency, and trust. These elements add a new dimension to ethical business leadership. While current literature largely treats servitization and business model innovation as distinct phenomena, the portfolio architecture of service configurations as an independent mechanism of related diversification and the potential moderators of its ethical impact remain insufficiently formalized. This study aims to conceptualize service architecture diversification as a form of diversification through a portfolio of service-oriented business models and to examine its relationship with financial performance under varying levels of ethical components, specifically transparency and trust. The analysis is based on panel data from eight Ukrainian online retailers for the period 2019–2024. The study utilizes key indicators from official financial statements and a composite transparency and trust index constructed from publicly available information across four transparency markers. To quantify service architecture diversification, a composite index was developed using reproducible data. Methodologically, the study employs five panel regressions with fixed effects for online retailers and years, along with nonlinearity tests and lagged diagnostic models. Standard errors were estimated using heteroscedasticity-consistent standard errors, and the analysis was performed using Python’s statsmodels. Two separate series of regression models were constructed for different dependent variables, namely ROA and operating margin. In the baseline linear models, the effect of service architecture diversification is not statistically significant for either operating margin (p = 0.942) or ROA (p = 0.546), suggesting no immediate within-year effect. Nonlinearity diagnostics for ROA suggest a phased pattern, in which the quadratic term is negative and close to significance (b =-0.038; p = 0.067). In sensitivity checks excluding influential observation, significance becomes stronger in both the operating margin series (p = 0.025) and the ROA series (p = 0.046). Lagged tests for operating margin reveal a short-term negative relationship (b =-0.039; p = 0.002) together with a positive interaction between the indices (SArD×TT(t−1): b = 0.0056; p = 0.027). This is interpreted as evidence of the potential role of ethical transparency and trust in mitigating the negative effects of service transformation, although this moderating effect is sensitive to sample composition. From a practical perspective, the article positions service architecture diversification as a manifestation of ethical business leadership in business model innovation and establishes directions for further research aimed at refining its operationalization, clarifying its architectural alignment with the principles of ethical leadership, and explaining the mechanisms for overcoming the servitization paradox in the context of online retail.