Innovation-based strategic flexibility (ISF): Role of CEO ties with marketing and R&D |
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| Affiliation: | 1. Assistant Professor of Marketing, Rawls College of Business, Texas Tech University Lubbock, Texas 79424, USA;2. Dapper Fellow in Marketing, Professor of Marketing, Ivy College of Business, Iowa State University, CLMP Research Fellow, Indian School of Business, Gerdin Business Building, Ames, IA 50011-1350, USA;3. Frank J. and Jane E. Ryan Endowed Chair, Professor, Strategy and Innovation, Villanova School of Business, Villanova University, 800 E. Lancaster Avenue, Villanova, PA 19085, USA;4. Assistant Professor of Marketing, College of Business, North Dakota State University, Richard H. Barry Hall #342, Fargo, ND 58108, USA;1. INSEAD, Fontainebleau, France;2. University of North Carolina at Greensboro, NC, USA;3. Bocconi University, Milan, Italy;4. Neely Chaired Professor of American Enterprise, Director of the Center for Global Innovation, Director of the Institute of Outlier Research in Business (iORB), Marshall School of Business, University of Southern California, Los Angeles, CA, USA;1. Trinity Business School, Trinity College Dublin, Dublin 2 D02 F6N2, Ireland;2. University of South‐Eastern Norway, USN School of Business, Drammen, Norway;3. Department of Marketing, BI Norwegian Business School, Nydalsveien 37, 0484 Oslo, Norway;1. Farmer School of Business, Miami University, 800 E. High Street, Oxford, OH, United States;1. School of Business, MacEwan University, 5-256B, City Centre Campus, 10700 – 104 Avenue, Edmonton, AB, Canada;2. Alberta School of Business, University of Alberta, 3-20E Business Building, University of Alberta, Edmonton, Alberta T6G 2R6, Canada;1. Brazilian School of Public and Business Administration, FGV/EBAPE, Jornalista Orlando Dantas, 30, Rio De Janeiro, RJ 22231-010, Brazil;2. Terry College of Business, University of Georgia, C302 Benson Hall, Athens, GA 30602, United States |
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| Abstract: | In this research, using a capability perspective, we first define innovation based, strategic flexibility (ISF) as consisting of three lower-level capabilities- market sensing, resource reconfiguration, and proactiveness; then link it to new-product/innovation outcomes, and develop a new metric of ISF that is input–output based. This metric captures a firm’s realized flexibility in translating market opportunities into innovation output. We then examine the role of CEO ties with marketing and R&D in driving a firm's ISF. Combining survey data of 191 CEOs with objective performance data, we find that (a) ISF is positively influenced by the frequency and duration of the CEO's relationship with the two functional units, but negatively influenced by CEO's relationship closeness, and (b) ISF contributes to future profit growth of firms. We test the robustness of our findings to the potential violation of sequential-ignorability assumption as defined in the causal mediation literature and find the results to be robust. The results provide insights into the role of CEO characteristics in driving innovation, and upper echelon’s contributions to marketing. |
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| Keywords: | CEO ties Strategic flexibility Innovation Causal mediation |
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