Innovation Strategy

Topics: Innovation, Human resource management, Factor analysis Pages: 41 (12676 words) Published: May 21, 2013
Decision Sciences Volume 43 Number 2 April 2012

Journal compilation


C 2012, The Authors 2012, Decision Sciences Institute

Innovation Strategy, Human Resource Policy, and Firms’ Revenue Growth: The Roles of Environmental Uncertainty and Innovation Performance∗ Adegoke Oke†
Department of Supply Chain Management, W.P. Carey School of Business, Arizona State University, Tempe, AZ 85287-4706, e-mail:

Fred O. Walumbwa
Department of Management, W.P. Carey School of Business, Arizona State University, Tempe, AZ 85287-4006, e-mail:

Andrew Myers
AJM Associates, Stoke Bruerne, UK, e-mail:

This study investigates the interactions of innovation strategy execution and innovationfocused human resource (HR) policy adoption on innovation performance and revenue growth. In addition, we investigate the moderating role of environmental uncertainty on the effects of innovation strategy execution and innovation-focused HR policy on innovation performance. Results show that the interaction of innovation strategy execution and innovation-focused HR policy is positively related to innovation performance. Results also show that environmental uncertainty positively moderates the innovation strategy execution–innovation performance relationship. Finally, innovation performance mediates the interaction of innovation strategy execution and environmental uncertainty on firms’ revenue growth. Implications of these findings for theory and practice are discussed. [Submitted: November 12, 2010. Revised: March 25, 2011; June 7, 2011; August 19, 2011; September 1, 2011. Accepted: September 7, 2011.]

Subject Areas: Business Performance, Human Resource Policy, and Innovation Strategy.

In recent times researchers have focused on innovation as a key contributor to competitive advantage and survival of firms (e.g., Kim, Song, & Lee, 1993; Verhees & Meulenberg, 2004; Zenger & Lazzarini, 2004; Freel, 2005; De Jong & Vermeulen, ∗ The authors thank the editor, senior editor, associate editor, and three anonymous reviewers for their numerous insightful comments and suggestions to improve this manuscript. † Corresponding




Innovation Strategy, Human Resource Policy, and Firms’ Revenue Growth

2006; Radas & Boˇ i´ , 2009). The influx of research in recent years notwithstandzc ing, notable gaps in the innovation literature exist. For example, Ireland, Covin, and Kuratko (2009) argued that firms require the right set of organizational factors that may include strategy, resources, and skills to successfully exploit entrepreneurial spirit to improve innovation performance in firms. In response, several studies have been carried out to understand the dynamics and processes of innovation in firms, including the influence of antecedents such as top management support and rewards on innovation performance (Morris, Kuratko, & Covin, 2008; Goodale, Kuratko, Hornsby, & Covin, 2011). In addtition, although much is known about the individual effects of various initiatives on innovation performance of firms (Griffin, 1997), little is known about their interaction on firm innovation performance. Managers are constantly faced with a myriad of initiatives for improving innovation performance, but have limited resources for implementing them simultaneously. As such, an understanding of which initiatives are complementary and the underlying processes and conditions under which they are effective will be invaluable to both innovation management researchers as well as practicing managers. To address this gap in the literature we focus in this study on two important management initiatives—innovation strategy execution and innovation-focused human resource (HR) policy—because of their importance in improving innovation performance (Li & Atuahene-Gima, 2001; Beugelsdijk, 2008; Crespell & Hansen, 2008). We define innovation strategy execution as the extent to...
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