Essays on Innovation Management and Organizational Effectiveness

Innovation management has become a crucial strategic task for companies in their efforts to achieve organizational effectiveness. For instance, organizations manage innovation-related activities in order to maintain their market positions and/or assure long-term profitability. The relationship between innovation management and organizational effectiveness has been investigated by researchers from a range of academic disciplines such as economics, organization and management, and marketing. However, this interdisciplinarity has led to ambiguity in the way organizational-level innovation management is conceptualized and empirically examined. This dissertation comprises of an overview and four essays. The overview focuses on reconciling seemingly fragmented views on innovation management. First, I introduce the systems based approach to organizational-level innovation management by suggesting that the innovation management system consists of two core components, namely innovation orientation and innovation capability. I argue that a collective mindset geared towards innovation together with the ability to shape innovation processes and develop new offerings determines the success of an innovation management system. I also suggest that the effectiveness of an innovation management system is contingent on the congruity between its internal components, its external fit with other subsystems of the organization, and with the conditions of the business environment. Subsequently, I focus on empirically examining the interplay of innovation management systems and organizational effectiveness in terms of financial performance. The first three essays examine how the components of the innovation management system relate to each other and affect financial performance in different business contexts. The fourth essay investigates conditions in which innovation projects can fail even if the organization possesses a strong innovation capability. Conceptually, this study contributes to the innovation management literature by expanding our theoretical understanding of the constitutive components of the innovation management system in changing environments and, by so doing, reduces the ambiguity found in the extant literature. Empirically, this dissertation provides more comprehensive evidence of the link between innovation management system and organizational effectiveness than most extant studies. Innovation orientation and innovation capability were both found to be valuable components of innovation management in achieving profitability and growth. The results highlight that innovation capability is a critical component for translating the potential value of strategic orientations, such as innovation orientation, into financial performance outcomes. This dissertation also empirically demonstrates how having and exercising a strong innovation capability can lead to project-level failures and, therefore, sheds light on the possible drawbacks of a strong innovation capability.