Innovation-based strategic flexibility (ISF): Role of CEO ties with marketing and R&D

Arunachalam, S and Ramaswami, S N and Patel, P C and Chai, L (2021) Innovation-based strategic flexibility (ISF): Role of CEO ties with marketing and R&D. International Journal of Research in Marketing. ISSN 0167-8116 (In Press)

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Abstract

In this research, using a capability perspective, we first define innovation based, strategic flexibility (ISF) as consisting of three lower-level capabilities- market sensing, resource reconfiguration, and proactiveness; then link it to new-product/innovation outcomes, and develop a new metric of ISF that is input–output based. This metric captures a firm’s realized flexibility in translating market opportunities into innovation output. We then examine the role of CEO ties with marketing and R&D in driving a firm's ISF. Combining survey data of 191 CEOs with objective performance data, we find that (a) ISF is positively influenced by the frequency and duration of the CEO's relationship with the two functional units, but negatively influenced by CEO's relationship closeness, and (b) ISF contributes to future profit growth of firms. We test the robustness of our findings to the potential violation of sequential-ignorability assumption as defined in the causal mediation literature and find the results to be robust. The results provide insights into the role of CEO characteristics in driving innovation, and upper echelon’s contributions to marketing.

Affiliation: Indian School of Business
ISB Creiators:
ISB Creators
ORCiD
Arunachalam, S
http://orcid.org/0000-0003-4110-9531
Item Type: Article
Uncontrolled Keywords: CEO ties, Strategic flexibility, Innovation, Causal mediation
Subjects: Marketing
Depositing User: Gurusrinivasan K
Date Deposited: 27 Dec 2021 07:37
Last Modified: 27 Dec 2021 07:37
URI: https://eprints.exchange.isb.edu/id/eprint/1608
Publisher URL: https://www.sciencedirect.com/science/article/pii/...
Publisher OA policy: https://v2.sherpa.ac.uk/id/publication/12612
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