The impact of executives’ perceptions of environmental threats and organizational slack on innovation strategies

Chengyuan Wang, Biao Luo, Yong - Liu, Zhengyun Wei

Research output: Contribution to journalArticlepeer-review

4 Scopus citations

Abstract

Purpose – The paper aims to study the relationship between executives’ perceptions of environmental threats and innovation strategies and investigate the moderating effect of contextual factor (i.e. organizational slack) on such relations. It proposes a dualistic relationship between executives’ perceptions of environmental threats and innovation strategies, in which different perceptions of environmental threats will lead to corresponding innovation strategies, and dyadic organizational slack can promote such processes. Design/methodology/approach – The paper is based on a survey with 163 valid questionnaires, which were all completed by executives. Hierarchical ordinary least-squares regression analysis is used to test the hypotheses proposed in this paper. Findings – The paper provides empirical insights about that executives tend to choose exploratory innovation when they perceive environmental changes as likely loss threats, yet adopt exploitative innovation when perceiving control-reducing threats. Furthermore, unabsorbed slack (e.g. financial redundancy) positively moderates both relationships, while absorbed slack (e.g. operational redundancy) merely positively influences the relationship between the perception of control-reducing threats and exploitative innovation. Originality/value – The paper bridges the gap between organizational innovation and cognitive theory by proposing a dualistic relationship between executives’ perceptions of environmental threats and innovation strategies. The paper further enriches innovation studies by jointly considering both subjective and objective influence factors of innovation and argues that organizational slack can moderate such dualistic relationship.

Original languageEnglish (US)
Pages (from-to)216-230
Number of pages15
JournalNankai Business Review International
Volume7
Issue number2
DOIs
StatePublished - 2016

Keywords

  • Cognitive theory
  • Control-reducing
  • Innovation
  • Likely-loss
  • Perception of environmental threats
  • Slack

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management

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