Strategic flexibility helps on firms obtaining profit from product innovation

Abstract

Abstract: Although it is generally acknowledged that product innovation is critical for firms to sustain their competitive advantages, however the firms sometimes fail to obtain economic returns from product innovation. The moderative effect of strategic flexibility (composed of resource flexibility and coordination flexibility) on the relationship between product innovation and firm performance is focused on in order to address an important but previously unexplored question as follows: Could strategic flexibility help on firms obtaining profit from product innovation? Utilizing the sample of 607 Chinese firms, an empirical test reveals that the moderative effect of resource flexibility on the positive relationship between product innovation and firm performance is negative, while that for coordination flexibility is positive. Furthermore, such moderative effects are very likely to be profound for confronting a high level of competitive intensity by firms. In conclusion, the implications and possible future extensions are discussed.

Key words: strategic, flexibility, product innovation, competitive intensity, performance

He Yuetong, Lu Yanqiu. Strategic flexibility helps on firms obtaining profit from product innovation[J]. Science Research Management, 2011, 32(10): 10-17.

References

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