International Business Management

Year: 2016
Volume: 10
Issue: 22
Page No. 5442 - 5450

The Structural Model Investigating the Causal Relationships Between Management Strategy and Innovation Activity and Performance in Manufacturing and Service Sectors

Authors : Moonjong Choi, Sam Park and Hyunsun Park

Abstract: Today, innovation is as an essential factor for corporations for gaining competitive advantage and generating profits continuously in a rapidly changing environment. Within this environment, the managements of corporations have identified innovation as a core activity, they are implementing various innovation activities for their products, structure, processes and human resource management to differentiate themselves from other corporations. Therefore, by considering previous studies on innovation, we aim to use empirical analysis to observe how business strategies that have a large impact on innovation, such as product and market differentiation and cost-leadership strategies, affect the innovation activities of actual corporations. Based on empirical analysis of the survey of 176 corporations, we found that three elements of business strategy, product differentiation, market differentiation and cost leadership have a significant impact on corporate innovation activities. Moreover, corporate innovation activities are a significant factor in improving business performance. The results of this study show that differentiation strategies and cost leadership are important factors in achieving business performance goals through innovation activities. Additionally, the results provide theoretical implications for the relationship between business strategies, corporate innovation activities and business performance and other useful implications for corporate innovation activities.

How to cite this article:

Moonjong Choi, Sam Park and Hyunsun Park, 2016. The Structural Model Investigating the Causal Relationships Between Management Strategy and Innovation Activity and Performance in Manufacturing and Service Sectors. International Business Management, 10: 5442-5450. Asian Journal of Information Technology, 18: 250-260.

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