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Top1. Introduction
The Public sector enterprises (PSEs) generally operate differently from their private counterparts. They usually differ in their strategic objectives, use different control and incentive structures, and many a time lack autonomy in decision-making (Bloch and Bugge 2013). In many countries, they constitute a large part of the economy and operate in many critical industries (Stewart-Weeks and Kastelle 2015, Arundel, Bloch, and Ferguson 2019). The early 2000s witnessed a growth in the number of studies focusing on strategic management of public sector enterprises, particularly innovation in PSEs (Johnsen 2015). Innovation in the public sector drew attention as the researcher observed its positive spillover effect across industry boundaries (Aschhoff and Sofka 2009, Edler and Yeow 2016, Edquist and Zabala-Iturriagagoitia 2012). However, innovation in PSEs is still a least explored topics and required systematic research attention (Bugge and Bloch 2016, Salge and Vera 2012).
Innovation has a firm ground in the strategic management literature (Hamel 2000). The topic has well-established theoretical grounds, methodological applications, and contextual focus (Keupp, Palmie, and Gassmann 2012). The resource-based view of the firm (Wernerfelt 1984) and the strategic allocation of resources are predominantly used as the theoretical disposition to explain the innovation ability of the firm together with other theoretical concepts viz organization structure & culture (Bartunek et. al, 2007). These studies generally used innovation and strategy at aggregate level and used various proxy variables and constructs to observe causal relation, particularly in the context of PSEs (Walker 2012, Nohria and Gulati 1996). This argument has two firm grounds. First, a limited attempt had been made for systematic audit of both innovation and strategic characteristics in PSEs. Strategic management literature provides well- established strategy typology based on the instinctive strategic characteristics that empirically used to distinguish the organization over industry and time. Strategy typology specifies the relationship between strategy, technology, structure, and process, making it suitable for innovation study (DeSarbo et al. 2006). They are also well refined, tested and widely cited for large size organizations (Veett, Ghobadian, and Gallear 2009, Wolff and Pett 2000).
Second, insufficient empirical evidence exists linking strategy typologies to specific type of innovation. This study departs from this limitation. The study provides a systematic innovation audit and mapped the strategic characteristics of Indian PSEs during 2019-20. To this end Miles et al. (1978) strategy typology is used to characterize Indian PSEs. As noted by Morais and Graça (2013) the Miles and Snow typology has three basic features “…(i) innate parsimony, (ii) industry independent nature and (iii) correspondence with the trends in business and management across different sectors and countries”. According to this typology, organizations represent four distinct strategy categories, namely- Prospector, Analyzer, Defender and Reactor. The objective of this study is to find out current status of innovation and type of strategy being followed by Indian PSEs. Further the study answers the research question- how does strategy influence innovation in the context of Indian PSEs? In this connection data from 315 senior executives (top two layers) of sixteen large PSEs, across manufacturing industries in India are used for analysis.