Organizational Learning, Managerial Ties, and Radical Innovation: Evidence From an Emerging Economy

Abstract

Although organizational learning has been recognized as an important driver of radical innovation, the literature ignores the moderating roles of managerial ties in changing the effects of learning on radical innovation. By providing access to external resources, managerial ties increase resource availability in emerging economies. Firms in these economies can utilize different ties to acquire the complementary resources for organizational learning to improve radical innovation. This study advances research on organizational learning and managerial ties by examining how different managerial ties affect the relationships between organizational learning and radical innovation in emerging economies. By integrating organizational learning theory and social capital theory, we find that political ties strengthen the relationship between exploitative learning and radical innovation, while business ties strengthen the effects of both exploratory learning and exploitative learning on radical innovation. Both types of ties strengthen the relationship between the interaction of the two types of learning and radical innovation. Our results reveal the different moderating roles of political ties and business ties in changing the organizational learning–innovation link, an indirect mechanism through which managerial ties affect the long-term development of firms in emerging economies. Firms in these economies should build the appropriate ties according to their portfolios of learning.