Constituents of radical innovation—exploring the role of strategic orientations and market uncertainty

Abstract

Radical innovations are those that provide the biggest boost to the firm's competitive edge in terms of technology, market position, and customer value in general. There is continuing debate concerning the organizational conditions and capabilities that promote or prevent the emergence of different types of radical innovation. The aim in this study is to provide further insights into this issue through an empirical investigation covering the role that two firm-specific strategic orientations—namely technology orientation and customer relationship orientation—play in the process. We examine their effect on three different dimensions of radicalness: the technology, the market and the business model, and also consider the moderating effects of market uncertainty on these relationships. Our findings from an empirical cross-industrial study among 209 Finnish companies suggest that a technology orientation enhances all dimensions of innovation radicalness, whereas a customer relationship orientation positively affects the technological and business model dimensions. The analysis also reveals interesting interaction effects in that market uncertainty negatively moderates the effect of a technology orientation on technological and market radicalness. Overall, the results of the study provide novel evidence concerning the constituents of different types of radical innovation and the environmental contingencies that affect their achievement.