Innovative capabilities, operations priorities and corporate performance in manufacturing firms

Abstract

The purpose of this paper is to explore the linkage between innovative capabilities and operations priorities and corporate performance and try to answer the question of how innovative capabilities support a manufacturing firm’s operations priorities and corporate performance. By using survey data from 184 manufacturing firms, firms are clustered according to their innovative capabilities. These clusters are explored in terms of operations priorities and corporate performance. The findings substantiate that manufacturing firms can be clustered according to their innovative capabilities. Each innovation cluster adopts and develops different operations priorities and they attain diverse financial performance levels implying that there are alternative ways to compete in the market even within the same industry. However, each alternative strategy provides diverse levels of benefits. The findings demonstrate further that high performing firms compete effectively on multiple operations priorities simultaneously. Hence, firms need to excel in multiple priorities and innovation types in their market.