Understanding the Drivers of Radical and Incremental Innovation Performance: The Role of a Firm’s Knowledge-Based Capital and Organisational Agility

Abstract

Organisational agility, a specific dynamic capability, constitutes a key success factor in today’s dynamic business environments. However, it is unclear whether and how firms’ knowledge-based capital enables organisational agility. Moreover, mechanisms through which organisational agility translates knowledge-based capital into innovation performance are poorly understood. This study fills these gaps by investigating direct effects of knowledge-based capital (i.e., human, social, and organisational capital) on organisational agility and, in turn, indirect effects on radical and incremental innovation performance. Leveraging survey data from 385 German firms, this study contributes to the organisational agility and the strategic innovation management literature. First, our analysis validates human and social capital as antecedents of organisational agility, yielding evidence for the premises of the knowledge-based view in a novel context. Second, it substantiates the dynamic capability view as a pivotal theoretical lens for explaining the mechanisms underlying the relationships between firms’ knowledge-based capital, organisational agility, and incremental innovation performance.

Nexus of business intelligence capabilities, firm performance, firm agility, and knowledge-oriented leadership in the Jordanian high-tech sector

“…Eisele et al (2022) reinforce the idea that knowledge capabilities (such as those provided by business intelligence) can foster agility, subsequently influencing innovation and overall performance. fect on performance through agility.…”

How knowledge-based HRM practices and market turbulence foster organizational innovation capability: a two-path mediating role of knowledge sharing

“…In other words, timely access to information allows organizations to generate new ideas and overcome complex problems for developing radically new products and services. The findings of Eisele et al (2022) also revealed that knowledge-based human is positively related to incremental innovation because it enables firms to quickly reconfigure processes related to the design of incrementally new products and services. Despite substantial progress made in the current literature to explain for the significant influences of KHRM practices on innovation, the precise mechanisms underlying the relationship between KHRM practices and specific forms of innovation such as radical and incremental innovation remain poorly understood.…”

“…Regarding the influence of KHRM practices on radical and incremental innovation, Eisele et al (2022) indicated that radical innovations generally involve higher levels of uncertainty and complexity than incremental innovations. To address these complexities, organizations need to rely on knowledge-based human to develop capabilities that provide timely access to knowledge and information, which is particularly important during the design phase of radical innovations.…”