Incremental and radical product innovation capabilities in a quality management context: Exploring the moderating effects of control mechanisms

Abstract

This paper addresses calls for understanding of the contextual conditions under which Quality Management (QM) may be effective in supporting radical and incremental innovation in a technologically dynamic sector. Particularly, formal and informal control mechanisms can play a role in such a knowledge intensive sector, where the degree of formalisation may be a constraint to explorative behaviours. This study focuses on the moderating role of support for creativity and formalisation of the innovation process as two types of control mechanisms entailing different levels of formalisation. The sample consists of 111 organisations from the information technology service sector featuring technological dynamism. The results evidence that QM is associated with incremental innovation capability, but not with radical innovation. A positive moderating role of formalisation of the innovation process was found in incremental innovation. The results indicate that these two types of innovation require different kinds of resources and enabling actions, which advises the adoption of a contingent perspective when analysing the QM–innovation link in future research. The existence and use of specified procedures are not a drawback in the innovation process within a firm. Thus, organisations should be aware that the effectiveness of QM to increase incremental innovation capability is likely to be enhanced by a formalisation of the innovation process. In contrast, for breakthrough innovation, QM was not evidenced to be a successful mechanism. The findings suggest that support for creativity is the mechanism that managers can best use to promote radical innovation.