Abstract
Using a resource-based approach to innovation, this study proposes an alternative innovation model to the existing market-based Product Life Cycle (PLC) model. In particular, this study explores how the attributes of corporate strategic resources affect product and process innovation patterns. This study covers the development of new theory, as well as the empirical validation of the innovation model proposed in this study. Based on survey data from 257 chief operations officers in the United States, the ‘resource-based innovation model’ was tested and validated through various analytical methods, such as clustering, discriminant, and structural equation modeling analysis. The main findings are that (1) companies relying on both knowledge-based resources (KBR) and property-based resources (PBR) tend to focus on product and process innovation at the same time, (2) companies relying heavily on KBR tend to centralize their efforts for process innovation rather than product innovation, (3) companies with low reliance on KBR and PBR tend to minimize R&D efforts in product and process innovation, and (4) in a dynamic market condition, process innovations serves as order winners, while product innovations serves as order winners in a stable market. This research contributes to the operational management literature by proposing a new resource-based innovation algorithm that helps to understand innovation phenomena that are difficult to explain through the lens of the PLC-based innovation paradigm.
Highlights
Innovation is generally perceived as a significant driving force in corporate success, but innovation is often recognized as a critical cause of risk, social and environmental turmoil, the so-called ‘double edges of innovation’ [1,2,3]
The following hypothesis is proposed to examine the ‘co-centric innovation’ phenomenon that is frequently observed in companies that heavily rely on both knowledge-based resources (KBR) and property-based resources (PBR): Hypothesis 3
The main findings were that (i) companies that heavily rely on KBR tend to focus their efforts on process innovation rather than on product innovation, (ii) companies that heavily rely on both KBR and PBR tend to focus on product and process innovation at the same time, (iii) companies with low reliance on KBR and PBR tend to minimize their product and process innovation efforts, and (iv) in a dynamic market environment, process innovation has more significantly contributed to the company’s sustainable competitive advantage than product innovation, while in a stable market situation, the company’s product innovation, rather than process innovation, determined its sustainable competitive advantage
Summary
Innovation is generally perceived as a significant driving force in corporate success, but innovation is often recognized as a critical cause of risk, social and environmental turmoil, the so-called ‘double edges of innovation’ [1,2,3]. The PLC-based models emphasized a ‘market-based’ perspective in which organizations are considered to be systems that continuously adapt to changing business environments for survival [8,9,10,11,12]. Despite the paradigm shift in competitive advantage, research on the impact of corporate strategic resources on a company’s innovation decisions is very limited, and there has been no empirical study to investigate the relationship between strategic resource attributes and innovation patterns. This gap in the literature has led to a key research question of this study, and more details about the research gap are discussed . The main purpose of this study is to explore how the attributes of a company’s strategic resources affect product and process innovation patterns, from a ‘resource-based’ perspective
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