Decision Sciences Volume 43 Number 2 April 2012
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: email@example.com
Fred O. Walumbwa
Department of Management, W.P. Carey School of Business, Arizona State University, Tempe, AZ 85287-4006, e-mail: firstname.lastname@example.org
AJM Associates, Stoke Bruerne, UK, e-mail: email@example.com
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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