Companies are striving to digitize, innovate and improve their competitive advantage. This in turn heavily depends on the company's environment, especially the growth of the industry in which the company is located, as well as the environmental dynamism. Therefore, the question of how a company's digital orientation influences the company's commitment to innovation is addressed in this paper. In addition, industry growth and environmental dynamics may moderate the effect.
To investigate the relationships, we looked at the 500 largest listed companies in the United States and use computer aided text analysis (CATA) as well as quantitative methodologies, such as multiple regression analysis, to investigate our research construct. We aim to show that digital orientation is positively related to innovation commitment of firms and expect industry growth as well as environmental dynamism to intensify this connection.
With our findings, we aim to advance knowledge on competitive advantage in the digital transformation and specifically on the new construct of digital orientation. The results of this research construct are crucial for both research and practice and lead to many new research opportunities.
Table of Contents
1. INTRODUCTION
2. THEORETICAL BACKGROUND
2.1. DIGITAL ORIENTATION
2.2. INNOVATION COMMITMENT
2.3. INDUSTRY GROWTH
2.4. ENVIRONMENTAL DYNAMISM
3. HYPOTHESES
4. METHOD
5. DISCUSSION AND CONCLUDING REMARKS
5.1. THEORETICAL AND MANAGERIAL CONTRIBUTIONS
5.2. LIMITATIONS AND FUTURE RESEARCH
5.3. CONCLUSION
Research Objectives & Core Themes
This study investigates how a company's digital orientation influences its commitment to innovation, specifically analyzing the moderating roles of industry growth and environmental dynamism to advance knowledge on competitive advantage in the context of digital transformation.
- The relationship between digital orientation and innovation commitment
- Moderating effects of industry growth on firm innovation
- Impact of environmental dynamism on strategic flexibility
- Application of Computer-Aided Text Analysis (CATA) in management research
- Resource-based view of firm strategic positioning
Excerpt from the Book
2.1. Digital orientation
The concept of digital orientation, as a strategic approach to tackle the changing competition logic triggered by the digitalization and digital transformation, is relatively new. Since the first explicit conceptualization of digital orientation was introduced by (Quinton et al., 2018) in 2018 research on the topic is still scarce. Based on the resource-based view of the firm (Barney, 1991; Wernerfelt, 1984), choices about strategic orientations such as digital orientation represent valuable intangible capabilities that are difficult to imitate by others (Schweiger, Stettler, Baldauf, & Zamudio, 2019) and sensibly intertwined with the organization’s resources (Gatignon & Xuereb, 1997; Renko, Carsrud, & Brännback, 2009). Thus, an organization can achieve a competitive advantage and superior performance by organizing its resources that are valuable, rare, inimitable and non-substitutable (Barney, 1991; Wernerfelt, 1984). Following the premise that digital technologies differ fundamentally from non-digital technologies (Kallinikos, Aaltonen, & Marton, 2013), Quinton et al. (2018) propose a concept of digital orientation reflecting a combination of market orientation, entrepreneurial orientation and learning orientation.
They introduce the term of digital orientation and define it as “the deliberate strategic positioning of an SME to take advantage of the opportunities presented by digital technologies” (Quinton et al., 2018). The approach of Kindermann et ) builds upon the concept of Quinton et al. (2018) but caters to overcome focal deficits since potential benefits from combining complementary orientations are not constrained to the digitalization context (Kindermann et al., 2021; Schweiger et al., 2019). Moreover, although a combination of existing strategic orientations offers advantages in dynamic environments, they argue that the persuasiveness of digital technologies is eroding the competitive advantage resulting from these existing strategic orientations. Thus, their novel construct integrates Nambisan, Wright, & Feldman's (2019) three key themes capturing the implications of digital technologies - affordances, openness and generativity - and the strategic alignment model (SAM) of (Henderson & Venkatraman, 1999). Their conceptualization goes beyond combining extant strategies but rather refers to a novel form of an “organization’s guiding principle aiming to pursue digital technology-enabled opportunities to achieve competitive advantage” (Kindermann et al., 2021.
Summary of Chapters
1. INTRODUCTION: Outlines the importance of digital transformation in modern business and establishes the research gap regarding digital orientation and innovation commitment.
2. THEORETICAL BACKGROUND: Provides definitions and foundational frameworks for digital orientation, innovation commitment, industry growth, and environmental dynamism.
3. HYPOTHESES: Develops the theoretical arguments linking digital orientation to innovation commitment, moderated by industry growth and environmental dynamism.
4. METHOD: Describes the longitudinal research design, sample selection of S&P 500 companies, and the use of Computer-Aided Text Analysis (CATA) to calculate variables.
5. DISCUSSION AND CONCLUDING REMARKS: Synthesizes the results into theoretical and managerial implications, concludes the paper, and suggests avenues for future research.
Keywords
Digital orientation, Innovation commitment, Industry growth, Environmental dynamism, Digital transformation, Computer-aided text analysis, Competitive advantage, Resource-based view, Strategic management, Technology scope, Digital capabilities, Ecosystem coordination, Firm performance, Innovation strategy, Market turbulence.
Frequently Asked Questions
What is the primary focus of this research paper?
The paper examines how a company's strategic "digital orientation" influences its commitment to innovation, and how specific environmental factors change this relationship.
What are the central thematic fields?
The core themes are digital management strategy, innovation processes, industry-level growth dynamics, and the influence of environmental instability on firm behavior.
What is the main research question or goal?
The goal is to analyze whether digital orientation is positively related to innovation commitment and if this connection is strengthened by high industry growth and high environmental dynamism.
Which scientific methodology is utilized?
The study uses longitudinal data from 500 large U.S. public firms, employing Computer-Aided Text Analysis (CATA) on shareholder letters and multiple regression analysis for testing the hypotheses.
What topics are covered in the main section?
The main sections cover the theoretical definition of key constructs, the development of hypotheses based on literature, a detailed description of the data collection and measurement, and a discussion of the practical and scientific contributions.
Which keywords characterize this work best?
Key terms include Digital orientation, Innovation commitment, Environmental dynamism, Industry growth, and Digital transformation.
How is digital orientation operationalized for analysis?
It is operationalized using CATA software to count specific word frequencies in shareholder letters, evaluating the strategic attitude of firms based on four defined dimensions like technology scope and digital capabilities.
Why are industry growth and environmental dynamism considered important?
They are used as moderators because they act as contextual conditions; for example, high growth and high dynamism create pressures that make innovation and digital adaptation essential for firm survival and competitive success.
- Citar trabajo
- Anonym (Autor), 2022, The Influence of a Company's Digital Orientation on its Innovation Commitment. A Moderating Model of Industry Growth and Environmental Dynamism, Múnich, GRIN Verlag, https://www.grin.com/document/1276316
