Effects Of Operations And Innovation Strategy Fit On Company Performance
Brown, James Edward
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For a company to survive long-term, it must be able to innovate and develop new products and services. There are two types of broad innovation classifications: exploration and exploitation. These two types of innovation require different resources, have different risks, and have different time horizons for the company to receive the benefits. Operations strategies impact the type and quantity of resources available. The concept of fit has been used to match operations strategy and corporate strategy. This dissertation will extend this concept to the relationship between innovation strategy and operations strategy. Building on The Resource Based View and Punctuated Equilibrium, hypotheses were developed and tested using cluster analysis, ANOVA, and linear regression with data from companies in the disposable medical device industry. Results were mixed with some hypotheses not having any support and some hypotheses having very strong statistical significance. The results suggest there is a minimum threshold of innovation mix and efficiency and takes the form of an efficiency frontier instead of a narrow band of fit as hypothesized. Also, the results show that the size of the company affects the relationship between fit and company performance.