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The impact of exploitative and explorative innovation on companies’ financial performance: a longitudinal study

Wiegard, S. (2018) The impact of exploitative and explorative innovation on companies’ financial performance: a longitudinal study.

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Abstract:Being innovative is considered to be a fundamental cause of organizational success. Literature generated many types of innovations and previous research discovered interrelationships between different types of innovation. Conducting innovation portfolio management effectively is therefore a key factor for improving organizational performance. The main objective of this paper is to analyze whether an optimal innovation portfolio mix between exploitative and explorative innovations exists among manufacturing companies that leads to a highest possible financial performance compared to other innovation portfolio mixes. This study uses secondary data gathered over a period of eight years to examine potential portfolio mixes that achieved high financial performances over the years. Relationships between research and development hours spent on innovations and financial performance indicators are empirically tested as well as relationships between different innovation portfolio groups and financial performance indicators. The sample of 52 small- and medium-sized Dutch enterprises produces non-significant test results. Detailed limitations and suggestions for further research are given to tackle this valuable research domain, delivering guidelines of how to proceed with discovering an optimal innovation portfolio mix for manufacturing companies.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:International Business Administration BSc (50952)
Link to this item:http://purl.utwente.nl/essays/75304
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