Innovation Strategies: Impact on Performance and Competition
Key Findings on Innovation Efficiency
Recent research has delved into the intricate relationship between innovation strategies and firm performance and competitiveness. Innovation efficiency emerges as a pivotal concept, reflecting the effectiveness with which companies optimize innovation efforts.
Impact of Centralization on Innovation
The study reveals that centralization, a governance structure where decision-making authority is concentrated, has a negative impact on exploratory innovation. This type of innovation involves experimenting with novel ideas and technologies, often requiring risk-taking and adaptability.
Exploitative vs. Exploratory Innovation
In contrast to exploratory innovation, exploitative innovation focuses on refining and extending existing competencies and technologies. The research shows that firms adopt strategies that foster exploitative innovation when institutional conditions are favorable. These conditions include access to funding, skilled labor, and supportive infrastructure.
Impact on Firm Performance
More radical exploratory innovations, characterized by significant departures from the norm, demonstrate a sustained growth effect over time. On the other hand, exploitative innovation typically has a more immediate impact on performance, leading to incremental gains.
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