European Management Studies (Jan 2024)
The Relationship Between Innovation Strategy and Performance with the Moderating Role of Environmental Dynamism
Abstract
Purpose: This study aims to investigate the relationship between innovation strategy and performance with a moderating role of environmental dynamism in Poland. Innovation strategy and performance are popular topics of many studies, but the relationship between them is complex, as previous research reports mixed results. On the one hand, exploration, exploitation and ambidexterity innovation strategies have positive effects on performance, but on the other hand some research indicates a negative relationship. These mixed results are often explained by the dynamism of environment. Design/methodology/approach: The paper presents the results of a quantitate research that uses CAWI techniques (Computer-Assisted Web Interview). Data were acquired from 259 respondents working in large and innovative firms in Poland. The paper presents the results of the hierarchical multiple regression on the relationship between innovation strategy and performance with a moderating role of environmental dynamism. Findings: Research results show the positive relationship between exploration, exploitation as well as combined innovation ambidexterity strategies and organisational outcomes, while the relationship between balanced innovation ambidexterity strategy and performance is not statistically significant. Moreover, the research shows that environmental dynamism is a significant factor strengthening the positive relation between innovation strategy and performance, but only in the case of exploration and balanced innovation ambidexterity strategies. It also points out that the environmental dynamism strengthens the negative link between exploitation innovation strategy and performance. Practical implication: Research results show that both exploration and exploitation innovation strategies improve organisational performance. Moreover, the simultaneous pursuit of exploration and exploitation innovation activities allows to achieve better organisational performance. Managers should also take into consideration the environmental dynamism, as it impacts the relationship between innovation strategy and performance. Firms operating is stable environments should execute an exploitation innovation strategy, while firm in dynamic environments should chose an exploration innovation strategy or balanced innovation ambidexterity strategy to achieve better performance. The combined innovation ambidexterity strategy seems to be an appropriate strategy in stable as well as dynamic environments. Originality/value: The paper provides new insights on the link between exploration, exploitation and ambidexterity innovation strategies and organisational outcomes. It does not focus just on exploration or exploitation innovation strategies, but also on the jointed outcomes of both strategies on performance and its interplay with the environmental dynamism.
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