Abstract
Digital disruption leads to high-level risk in innovation management that will impact established firms in disrupted industries. This study investigates the key variables to enhance innovation performance (IP) in a disruptive environment by applying strategic entrepreneurship framework from [Hitt, MA, DG Sirmon, RD Ireland and CA Trahms (2011). Strategic entrepreneurship: Creating value for individuals, organizations, and society. Academic of Management Executive, 25(5), 57–75]. This study sampled the managers of two largest established firms in telecommunication and banking industries in Indonesia. Both industries are in top five of the most disrupted industries. Entrepreneurial leadership (EL) is essential in formulating innovation strategy. This leadership variable has multicollinearity with that of entrepreneurial culture (EC). It indicates that both variables are symbiotic. While in implementing innovation strategy, the configuring core innovation capabilities that combine exploring the opportunity and exploiting the firm’s advantage enhance the IP. Due to core rigidities, this configuring core innovation capabilities should not be orchestrated with collaborative innovation.
Highlights
Christensen (1997, 2006) introduces the ‘theory of disruption’
The objective of the study is to investigate factors in strategic entrepreneurship process, which consists of opportunity-seeking activities (OSA) and advantage-seeking activities (ASA) that will enhance the innovation performance (IP) of established firms in disrupted industries
The data was loaded into SmartPLS Version 3.2.7, and the factor loading scores were calculated for each measurement item on its related construct
Summary
Christensen and Overdorf (2000) introduce the term ‘disruptive change’, which is related to the dynamic change due to technology advancement and type of innovation in the industry landscape. Those technologies have potentially disruptive effects on trade, services, production, and business models (Del Vecchio et al, 2018). Nowadays, these technologies progress have been enabling firms on (1) digitising and integration of vertical and horizontal value chains, (2) digitising of product and service offerings, and (3) digital business models and customer access (Geissbauer et al, 2016). According to Blaschk et al (2017), there are five vital digital elements, namely people, businesses, things, data, and cloud which enable companies to create a disruptive business model such as personalised micro-segments, freemium, on-demand services, and multi-sided platform services which lead to disruption in business environment
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