Drivers and Performance Outcomes of Innovativeness: An Empirical Study
| Published date | 01 September 2013 |
| Date | 01 September 2013 |
| DOI | http://doi.org/10.1111/j.1467-8551.2011.00803.x |
Drivers and Performance Outcomes of
Innovativeness: An Empirical Study
Lida P. Kyrgidou and Stavroula Spyropoulou1
International Hellenic University, School of Economics and Business Administration, Greece, and
1Leeds University Business School, University of Leeds, UK
Email: l.kyrgidou@ihu.edu.gr; ss@lubs.leeds.ac.uk
The issue of innovativeness within organizations has attracted considerable attention in
the literature. However, limited knowledge exists about the drivers of and their simul-
taneous effects on innovativeness and the role of innovativeness in enhancing perform-
ance. We adopt the resource-based view (RBV) of the firm and insights from the
literature on capabilities to investigate specific capability types serving as antecedents to
innovativeness and to examine its performance outcomes. From a sample of 218 Greek
manufacturers, the results indicate that managerial, entrepreneurial and technical capa-
bilities facilitate the establishment of innovativeness, which in turn enhances business
performance. The study lends support to prior research that highlights the importance of
innovativeness in enhancing organizational performance and sharpens understanding of
the drivers of innovativeness and the way they collectively operate through innovativeness
to boost performance. The study further provides new insights into the role of innova-
tiveness from the perspective of the RBV, while highlighting certain firm capabilities that
might both enable and impede competitive advantage and superior performance creation.
As such, this study contributes to the effective management of the innovativeness process
within organizations.
Introduction
With increasing globalization and intensifying
competition worldwide, innovation has become
vital to the survival, profitability and growth of
modern business entities (Tajeddini, 2009; Wuyts,
Dutta and Stremersch, 2004). Innovation broadly
refers to the development and adoption of new
ideas and behaviours in the firm and constitutes
an integral element of the firm’s strategic orienta-
tion (Hitt et al., 2001). However, innovation and
new product development is a collaborative
process (e.g. Wong, Tjosvold and Liu, 2009) that
can only be achieved through combined insights
and collaboration of managers from different
company functions or units (Miller, 1988). In
addition to creativity, the commitment of people
to turn ideas into improved solutions (Nijhof,
Krabbendam and Looise, 2002) and the firm’s
openness to innovative ideas and practices
(Hurley and Hult, 1998) are equally important. It
is thus understandable that focus has shifted to
the study of conditions that enable and motivate
innovative behaviour within organizations.
The concept of innovativeness has received
considerable attention in the business and man-
agement literature (Tajeddini and Trueman,
2008). Several scholars have studied the link
between innovativeness and ‘newness’ (e.g. Roe-
hrich, 2004), while others have examined innova-
tiveness from a cultural perspective (e.g. Hult,
Hurley and Knight, 2004). Still other studies
The authors wish to acknowledge Professor Vangelis
Souitaris (City University) for his constructive insights
into the design and execution of the project and Profes-
sor Robert E. Morgan (Cardiff University) for helpful
comments and suggestions on earlier drafts.
bs_bs_banner
British Journal of Management, Vol. 24, 281–298 (2013)
DOI: 10.1111/j.1467-8551.2011.00803.x
© 2012 The Author(s)
British Journal of Management © 2012 British Academy of Management. Published by John Wiley & Sons Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA, 02148, USA.
have focused on this concept’s relationship to
structural elements in the firm (e.g. Tajeddini,
Trueman and Larsen, 2006), leadership and
climate (e.g. Hossini, Azar and Anvari, 2003). The
current study centres on organizational innova-
tiveness, defined as ‘the ability and willingness to
adopt, imitate or implement new technologies,
processes and ideas and commercialize them in
order to offer new products . . . before competi-
tion’ (Tajeddini, Trueman and Larsen, 2006, p.
533). This definition draws from Hurley and Hult
(1998), who view innovativeness as being a result
of organizational values and beliefs that increase
firms’ willingness to adapt to new technologies,
processes and ideas with the aim of offering
unique products before rivals.
Despite the perceived role of innovativeness
in enhancing performance (e.g. Deshpandé and
Farley, 2004), knowledge remains limited and
offers little insight into firms’ efforts with regard
to innovativeness enhancement. The literature
highlights three particular problems that limit
existing research. First, despite the number of
studies on innovativeness, research on the conse-
quences of innovativeness remains inconclusive in
the empirical literature (Droge, Calantone and
Harmancioglu, 2008). Although several examples
in the literature demonstrate innovativeness’s
contribution to business success (e.g. Nonaka,
1991), case studies have not been enriched with
large-scale data; thus, the exact nature of the link
between innovativeness and performance is not
yet clear (Cho and Pucik, 2005). Second, knowl-
edge about the drivers of and their simultaneous
effects on innovativeness is scarce (Hult, Hurley
and Knight, 2004), which limits understanding
of the mechanisms through which innovativeness
can be enhanced and facilitate improved per-
formance outcomes. Third, extant research has
employed diverse performance measures;
however, most have focused on perceived success
or are unidimensional or narrow in scope, failing
to tap key business performance aspects (Robson,
Katsikeas and Bello, 2008). In contrast, the
general literature suggests that business perform-
ance is a multi-component construct and calls for
the use of multidimensional conceptualizations
and measurements (e.g. Morgan, Kaleka and
Katsikeas, 2004).
Drawing on the resource-based view (RBV) of
the firm and the literature on capabilities, we
propose that specific capability types serve as
drivers of innovativeness, and we examine its per-
formance outcomes. Recent research has distin-
guished between ordinary capabilities, or those
that firms use in the short term, and dynamic
capabilities, or those that firms deploy to obtain,
modify and combine resources and create ordi-
nary capabilities (see Drnevich and Kriauciunas,
2011). In this context, we focus on the latter,
which are reflected in organizational and strategic
processes through which firms attain new
resource configurations as market characteristics
evolve or radically change (Eisenhardt and
Martin, 2000), rather than on ordinary activities
or routines through which firms strive to maintain
their short-term performance. According to the
RBV, firms with superior resources and capabili-
ties can achieve competitive advantages and
enhance their profitability in the markets in which
they operate (e.g. Peteraf, 1993). Thus, firms
introducing superior and novel products through
innovativeness should enjoy competitive advan-
tages and financial success (Hult and Ketchen,
2001). This study attempts to examine the links
among capabilities, innovativeness and perform-
ance. We suggest that entrepreneurial, managerial
and technical capabilities are potential drivers of
innovativeness, which in turn is conducive to
enhanced performance results.
This study contributes to the literature in
several ways. First, it provides new insights into
the role of innovativeness from the standpoint of
the RBV. This inquiry identifies three distinct
types of capabilities and simultaneously examines
their role in facilitating the establishment of inno-
vativeness within the firm. The study differs from
much of the resource- and capability-based
empirical research on the subject, which has com-
monly employed secondary data and, as such, is
bound by the proxies of organizational resources
and capabilities in those data (e.g. Danneels,
2002). Moreover, the study is a response to Priem
and Butler’s (2001) call for research on the accu-
mulation of capabilities, and it exemplifies the
link between a firm’s innovativeness efforts and its
capabilities in portfolio building and leveraging.
Second, the study examines performance out-
comes of innovativeness and, drawing from recent
developments in the general field (e.g. Morgan,
Kaleka and Katsikeas, 2004; Robson, Katsikeas
and Bello, 2008), treats business performance as a
multidimensional construct tapping sales, cus-
tomer and financial aspects. Third, this study
282 L. P. Kyrgidou and S. Spyropoulou
© 2012 The Author(s)
British Journal of Management © 2012 British Academy of Management.
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