Radicalness of Product Innovations and Performance in International Markets: Roles of the Interactive Use of Management Control Systems

Abstract

Previous literature presents diverse results regarding the role played by Management Control Systems (MCS) in successful product innovation settings. This divergence can be explained by the fact that previous research concentrated mainly on the level of product innovation as measured by the number of products launched to the market, ignoring the potential influence of MCS on the degree of radicalness of product innovation (RPI). The aim of this paper is to provide a better understanding of the potential roles of MCS in innovation settings by exploring how the interactive use of MCS influences successful RPI in terms of organizational performance. Using data collected from 231 Spanish organizations, the results from a Partial Least Squares analysis support the following: First, interactive use has a positive direct effect on RPI, i.e, it acts as an enabler of radicalness. Second, the interactive use of MCS moderates the relationship between RPI and organizational performance. Understanding how MCS shape and manage innovation activities that involve different levels of certainty, risk, routines and complexity offers a complementary and more precise perspective of the roles of control within innovative firms.