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Relationships between Innovation Capabilities, Business Performance, Marketing Performance and Financial Performance: Introduction

Relationships between Innovation Capabilities, Business Performance, Marketing Performance and Financial Performance: IntroductionThe process of equipping in new, improved capabilities or increased utility has been defined by Drucker (1985) as innovation. An innovation is related to products, processes, marketing and organization. Different types of innovation has been described by Schumpeter (1934), which are new products, new methods of production, new sources of supply, the exploitation of new market, and new ways to organize business. Innovation capability is one of the attractive areas that need to be studied by the researchers to define, categorize and investigate its performance impacts. In order to achieve sustainable competitive advantage, the firms were provided the strategic orientation to overcome the problems they were facing. (e.g. Drucker, 1985; Hitt et al., 2001; Kuratko et al., 2005).
According to McAdam and Keogh (2004), firms believe that innovations were the important factor to obtain sustainable competitive advantage. Geroski (2005) analyzed the effects of innovations and patents to various organization performance measures in terms of accounting profitability, stock market rates of return and corporate growth. Result obtained by Geroski (2005) showed that it is relatively small direct effect of innovations on firm performance and the benefits from innovations are likely indirect. Companies have noticed the importance of innovation through the increasing competition in global markets such as value added of existing products and services. Innovation is one of the basic component use by the corporate as a stretegy to improve productive manufacturing processes, to be able to compete in the market and to establish good reputation to gain positive status in customers’s perception.
The aim of this paper is to blend the representative existing literature on the relationship between innovation capabilities with business, marketing and financial performances based on methodical literature review. In doing so, this study attempt to find out on how antecedents are related and can contribute to increase of business, marketing and financial performances to help firm perform better.

This post was written by , posted on November 1, 2013 Friday at 10:55 am