Innovation strategy and performance of international technology services ventures : The moderating effect of structural autonomy

Purpose – The purpose of this paper is to investigate the moderating role of structural autonomy in the relationship between innovation strategy and performance of international technology services ventures (ITVs). Design/methodology/approach – Data were collected from 200 ITVs serving markets outside their country of origin. Instrumentation followed standard procedure by adapting validated and parsimonious items from existing literature. Factor and hierarchical multiple regression analyses were applied to examine the hypothesised relationships. Findings – The results indicate a significant relationship between innovation strategy (namely service products innovation, process innovation and administrative innovation) and performance of ITVs. Structural autonomy moderates the relationship between process innovation, administrative innovation and performance. There is no moderating effect of autonomy in the association of service products innovation and performance. Research limitations/implications – The study corroborates the argument that service firms have more to gain by granting autonomy. In the context of ITVs, such gains are directly linked to performance through enhanced innovation in service products, processes and administration. It adds to the growing suggestions and rebuttals in the literature of a trade-off between innovation and communication; and between exploration of new knowledge and exploitation of existing knowledge in organisations when there is autonomy. Practical implications – Management can increase innovation and performance by granting greater autonomy to employees. Managers who are concerned that autonomy’s capacity to increase innovation capability may come at the expense of intra-organisational communication can be assured that intra-organisation communications can exist in the face of autonomy, and there is no real trade-off after all. Similarly, there is no basis for any concern for potential trade-off between exploration of new knowledge and exploitation of existing knowledge in organisations. Originality/value – Research suggests that autonomy of subsidiaries, units, groups or individuals encourages innovation, and that innovation strategy can enhance organisational performance. However, there is a counter-argument that same autonomy potentially hinders exploitation and performance of innovations. The study sheds more light on these anecdotal views based on data from ITVs.