The Relationship between Innovation Orientation and Strategic Typology in Business Firms

The Relationship between Innovation Orientation and Strategic Typology in Business Firms

Parviz Kafchehi (Department of Business Administration, University of Kurdistan, Sanandaj, Iran), Kaveh Hasani (Young Researchers and Elite Clubs, Sanandaj Branch, Islamic Azad University of Sanandaj, Sanandaj, Iran) and Arman Gholami (Department of Business Administration, Payame Noor University of Tehran, Iran)
Copyright: © 2016 |Pages: 20
DOI: 10.4018/IJKBO.2016040101
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Abstract

The aim of this study is to investigate the relationship between innovation orientation and strategic typology in firms such a way that a classification on the organization's orientation toward innovation and strategy could be obtained. The statistical population includes high executive managers of firms who have been acting in 4 industries of banking (B), food (F), insurance (I), and pharmacy (P), and have been the five pioneering firms in these industries. To test the hypothesis, the mean test analysis, the Goodness- of- Fit- Test, Chi- square test, and cross- tables were used and tested by SPSS18 software. The results show that there is a significant relationship between the firm's orientation toward innovation and competitive strategy; the more firm's orientation toward innovation, the firms uses more Prospector strategy, and their strategies have a more aggressive state. This paper provides a richer understanding of innovation orientation and strategic typology formation for similar firms.
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Introduction

Today’s firms search for a competitive advantage to distinguish themselves from others so that they could achieve a unique characteristic in their products and services in the complex and turbulent current era. As a strategic direction, innovation orientation is a method of thinking and leading that drives the firm over the long term, keeping it innovative (Siguaw, Simpson, & Enz, 2006). Innovation offers vital advantages to firms like maintaining or enhancing market share and outperforming competitors (Lisboa, Skarmeas, & Lages, 2011). Past research on innovation in firms has examined the determinants (Nystrom, Ramamurthy, & Wilson, 2002), processes (e.g., Schroeder, Van de Ven, Scudder, & Polley, 2000; Hipp & Grupp, 2005), and consequences of innovation (e.g., Subramanian & Nilakanta, 1996; Seng Tan, 2004). The scholars have distinguished between product and process innovation (e.g., Damanpour & Gobalakrishnan, 2001; Bergfors & Larsson, 2009; Chenavaz, 2012; Wong, 2012), technical and administrative innovations (e.g., Subramanian & Nilakanta, 1996; Markard & Truffer, 2006; Katzy & Crowston, 2008; Cordero, Farris, & DiTomaso, 2013; Nambisan, 2013), and radical and incremental innovations (e.g., Lu & Chen, 2010; Un, 2010; Bakovic, Lazibat, & Sutic, 2013; Oerlemans, Knoben, & Pretorius, 2013).

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