International journal of Contemporary Business Studies

International Journal of Contemporary Business Studies
Vol: 3, No: 6. June, 2012 ISSN 2156-7506
Available online at http://www.akpinsight.webs.com
meta-construct consolidating firm level variables that support innovation. Five types managerial levers
used are strategy, structure, resource allocation, organizational learning and knowledge management tool
and culture (Crossan & Apaydin, 2010). Innovative organization faced dilemmas such as structure and
action, dilemma with opposition of persistence and change or repetition and novelty which appeared as
tensions between different time horizons (Chanal, 2004). In this context, managerial levers is used to
overcome the innovation dilemmas (Chanal, 2004). The following discussions will describe each of the
managerial levers.
1.1Strategy
The first managerial lever is strategy. Strategy has been perceived as a continuous management activities
(Drejer, 2006; Li, Zhou, & Si, 2010). Indeed, it is an activity the most necessary form of and the
foundation for innovation (Ian Steward & Peter Fenn, 2006). Strategy is needed in order to overcome
managerial challenge which might arise from potential disruptive with existing resource endowments,
capabilities and organizational routines (Blumentritt & Danis, 2006). Strategy is claimed to defined the
gaps between the current and desired performance and thus it is vital for innovation in pursuing
competitive advantage (Ian Steward & Peter Fenn, 2006). Therefore, the role of innovation and firm‟s
innovative target should be linked with the competencies and strategic orientation of particular firm
(Blumentritt & Danis, 2006). In fact, a study in manufacturing firms has showed that innovation strategy
with formal structure are significant predictors of performance (Terziovski, 2010). Strategy managed to
differentiate organizational pattern between the high innovation performance and the less successful ones
(Pullen, Weerd-Nederhof, Groen, Song, & Fisscher, 2009).
Innovation practices differ among firms with different strategic orientation (Blumentritt & Danis, 2006).
For instance, the SMEs firms achieved high innovation performance combine both analyzer (used for
incremental innovation) and prospector (used for radical innovation) business strategy (Pullen, et al.,
2009).This is because strategy concerned the survival of entire organization and involved large portion of
resources and also strategic thinking of tactical level (Drejer, 2006). When discussed the importance of
strategy with innovation, Drejer (2006) has come out to define strategic innovation as the ability to
create and revitalize the business idea and concept of the company by changing both the market of the
company and the competencies and business system of the company. In an empirical study of Taiwanese
electronics industry, found that product innovation is strongly related to differentiation strategy while the
process innovation was strongly related to differentiation and cost leadership strategies (Liang-Hung &
Chun-Hsien, 2008).
Empirically, Blumentritt and Danis (2006) indicated that approaches to innovation vary across firms with
different strategic orientation and firm‟s strategies played significant role in deciding which to pursue and
which to disregard. As mention by Y. Chen and Yuan (2007), a firm needs to seek optimal balance
between internal R&D and technology outsourcing when formulating innovation strategy. Innovation
which is oriented by strategy is essential in determining organization direction in the long run, generate
innovativeness and contribute to the different pattern of innovation orientation (Stock & Zacharias, 2011).
For instance, it is found that innovation orientation of strategy contributed high scores to integrated
innovator and top-down innovator while scored low to the internally driven and proactive customer
innovator type (Stock & Zacharias, 2011). In a case study of Chinese firms, Q. Xu, Liu, and Chen (2002)
have argued the use of knowledge strategy to be integrate with technological innovation to ensure
companies effective and efficient. This is important due to the fast changing environment and firm need
to articulate knowledge strategy to stimulate innovative activities (Xu, et al., 2002).
Various elements and measures are used to represent strategy in relation to innovation study. A study of
600 Australian small and medium enterprises of manufacturing sector, the innovation strategy has
emphasize on vision or mission, strategic goals, increase in production, customer satisfaction,
administrative, employee skill and employee commitment (Terziovski, 2010). While Stock and Zacharias
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