The role of strategy in the innovation process: A stage approach.

Organizational innovation has been of central interest in recent years because of its importance for organizational survival and competitive advantage. Researchers in the field have divided the innovation process into stages in an attempt to understand the innovation process and the factors that affect it. However, empirical studies that examine the relationship between the stages are scarce. In addition, although business strategy is emphasized as an important factor in the innovation process, little is known about its role in the innovation process and its effect on the stages. This research provides empirical support for the relationship between the stages of the innovation process and the moderating effect of organizational strategy on the relationship between the stages within the two stage model of innovation. In this study, a direct, positive relationship is proposed between the innovation generation (first stage) and innovation outcome (second stage) stages of the innovation process. Dimensions of innovation outcome that are examined include innovation type (product innovation and process innovation), innovation radicalness and innovation frequency. Low cost, differentiation and market orientation strategies are proposed to be moderators on the relationship between the stages. To test the proposed relationships, a survey was mailed to executives who are involved in the innovation process in organizations where innovation is expected to be common and they were asked to complete the questionnaire. Hierarchical regression was the primary data analysis method and General Linear Model was applied as the pot-hoc data analysis method. Results of the primary data analyses provided support for the direct, positive relationship between the innovation generation and innovation outcome stages of the innovation process. Specifically, there was a direct, positive relationship between innovation generation and product innovation, process innovation, innovation frequency and innovation radicalness. Result of the primary data analysis provided support for the moderating effect of strategy (market orientation and differentiation) on the relationship between innovation generation and only innovation frequency dimension of innovation outcome. Post-hoc analysis suggested a significant moderating effect of strategy (market orientation and differentiation) on the relationship between innovation generation and innovation radicalness dimension of innovation outcome. Limitations of the study and directions for future research are discussed.