Abstract
In the past few decades, a firm’s innovative climate has received much attention in the context of innovative behavior, competitiveness, and business performance. The existing literature has relied to a great extent on innovative climate as an interacting factor and overlooked its role as an antecedent of various organizational phenomena. Furthermore, the interaction effects of the firm’s size and age on the relationships between innovative climate and other organizational variables have gone unnoticed. This study adds to the literature by empirically assessing the effects of the firm’s innovative climate on organizational learning and employees’ innovative behavior as well as its consequences on the firm’s competitiveness and business performance. Additionally, it addresses the interaction impacts of firm size and age on the relationships between the abovementioned variables. This research achieves its goal by developing an integrative research design that analyzes complex relations using covariance-based structural equation modeling (SEM) and regression techniques on a dataset of 408 Chinese law firms. The results indicate that the firm’s innovative climate has a significant positive relationship with organizational learning and employees’ innovative behavior. It is also found that organizational learning has a significant positive influence on employees’ innovative behavior. Meanwhile, organizational learning and employees’ innovative behavior have a significant positive influence on firm competitiveness and business performance. Another important finding is that contextual factors, i.e., firm size and age, strengthen these relations. Theoretical and managerial implications, including links to firm size and age, are provided.
Highlights
Economic and technological development and globalization reveal that constant innovation is the determining factor of competitive superiority and business performance, regardless of the type of industry [1]
The findings reveal that the innovative climate significantly contributes to organizational learning and employees’ innovative behavior, whereas the latter two lead to the law firm’s competitiveness and performance
The purpose of this study is to examine the role of innovative climate in organizational learning, employees’ innovative behavior, firm competitiveness, and business performance in Chinese law firms
Summary
Economic and technological development and globalization reveal that constant innovation is the determining factor of competitive superiority and business performance, regardless of the type of industry [1]. It is critical to carry out in-depth analysis of the organizational factors or mechanisms that help to promote innovative accomplishments and enhance a firm’s competitiveness and business performance. Researchers have utilized various theories for conceptualizing the contextual factors of the work environment that influence a firm’s competitiveness and business performance. Among these prominent theories are leadership member exchange theory [3], interaction theory [4], componential theory [5,6], multiple social domains theory [7], and organizational climate theory [8]. Trends reveal that innovative climate is one of the most critical factors for the firm’s competitiveness and business performance [9]. An innovative climate is an imperative antecedent of a firm’s performance and other organizational phenomena [6,10]
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