The Relationships among Environments, External Knowledge Acquisition, and Innovation

The effect of perceived rewards on radical innovation: the mediating role of knowledge management in Indian manufacturing firms

This paper examines the mechanisms through which employees' perception of rewards influences their radical innovation. The paper develops and empirically tests a model proposing that perceived rewards influence radical innovation via the mediating mechanisms of knowledge acquisition and knowledge sharing. Data from three Indian manufacturing companies were collected using a questionnaire. Responses from 235 employees were analysed (using structural equation modeling via AMOS27) to examine the links between perceived rewards, knowledge sharing, knowledge acquisition, and radical innovation. The findings showed that: 1) perceived rewards had positive and significant relationships with radical innovation, knowledge acquisition, and knowledge sharing; 2) knowledge acquisition had a positive and significant relation with radical innovation, but knowledge sharing was not significantly related to radical innovation; and 3) knowledge acquisition mediated the relationship between perceived rewards and radical innovation. No support was found for the mediating role of knowledge sharing in radical innovation. The paper examines the overlooked role of perceived rewards in facilitating knowledge behaviours and radical innovation. In addition, the practices examined in the model are assessed as perceived by employees, rather than as perceived or intended by managers.

A Study on the Mechanisms Linking Environmental Dynamism to Innovation Performance

The purpose of our study is to examine the mechanisms that link environmental dynamism to firms’ innovation performance. Although there have been extensive studies on the effect of environmental dynamism on innovation performance, they have focused primarily on its direct effect and have resulted in rather inconsistent research findings. Thus, to explain the relationship between environmental dynamism and innovation performance more clearly, we intend to investigate the mechanisms through which environmental dynamism influences innovation performance in this study. Specifically, we aim to examine the mediation effects of strategic prospecting, absorptive capacity, and combined strategic prospecting–absorptive capacity on the relationship between environmental dynamism and innovation performance. Based on data collected from 266 small and medium-sized firms in Korea, our study has found that, assuming a causal interdependence between the mediators, both strategic prospecting and combined strategic prospecting–absorptive capacity mediate the relationship between environmental dynamism and innovation performance. It has also been found, however, that absorptive capacity alone does not mediate the relationship between environmental dynamism and innovation performance, while absorptive capacity mediates the relationship when it is linked to strategic prospecting. The results of our study further reveal that no direct effect of environmental dynamism on innovation performance exists, implying that the significant effect of environmental dynamism on innovation performance demonstrated in previous studies may be spurious in nature. Based on the findings, we present conclusions, theoretical and practical implications, and limitations with future research directions.