Title: Dynamic Capabilities and Firm Performance: The Mediating Effect of Management Innovation.
Abstract: Dynamic capabilities are widely accepted as the cornerstone of a firm’s competitive ad-vantage. In this study, we examine for the first time how dynamic capabilities affect a firm’s performance by influencing the ability to introduce management innovations-the introduction of new-to-the- firm systems, structures, and practices. We argue that the positive effect dynamic capabilities have on management innovation facilitates a firm’s effort to introduce product or service innovations of both the exploitative and exploratory type, as a consequence of which firm’s performance is enhanced. Data from a large sample of firms in EU countries broadly supports our theoretical model. We find a partially mediated effect of dynamic capabilities on firm performance via the management innovation and exploitative innovation variables. Further, management innovation has a positive relationship with exploratory innovation, but their mediated effect on firm performance is weak. These findings contribute to our understanding of the influence of organizational capabilities and innovation on organizational outcomes and advance the theoretical understanding of how dynamic capabilities enhance management innovations and the interaction of management innovation with exploratory and exploitative innovation.
Publication Year: 2015
Publication Date: 2015-01-01
Language: en
Type: article
Indexed In: ['crossref']
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