The effects of IT use intensity and innovation culture on organizational performance: the mediating role of innovation intensity

Abstract

Purpose This study aims to investigate innovation intensity by exploring the roles of internally focused and externally focused information technology (IT) use intensity and innovation culture on innovation intensity and organizational performance. Design/methodology/approach A model exploring the effects of internally and externally focused IT use, plus two key dimensions of innovation culture – collaborative and entrepreneurial – on innovation intensity and organizational performance is tested via a structural equation model using partial least squares with data collected from 395 top executives. Findings The results indicate that intense use of internally and externally focused IT and the collaborative dimension of culture positively affect innovation intensity, which, in turn, increases operational and financial performance. Practical implications Innovation is an important driver of performance, for both internal efficiency and competitiveness. The role of IT in the innovation process is key: it allows information, knowledge and idea sharing. Top managers should make a wide array of IT tools available to increase internal and external information exchanges. They should also develop an organizational context that stimulates innovativeness and promotes collaboration. Originality/value IT helps employees acquire and use the knowledge needed to innovate within and outside organizational boundaries. To be innovative, employees need to work in an organization with a strong innovation culture, a primary determinant of innovation intensity. This study is one of the first to examine the effects of an organization’s innovation culture and its use of IT on innovation intensity and organizational performance. In addition, constructs of innovation intensity and internally and externally focused IT use are developed and tested.