University of Twente Student Theses

The effect of procurment capabilities and innovative performance on firm performance: A case study on Formula 1 teams from 2008-2017, a high-tech, highly innovative and competitive environment

Segerink, Ing. D.A.M. (2019) The effect of procurment capabilities and innovative performance on firm performance: A case study on Formula 1 teams from 2008-2017, a high-tech, highly innovative and competitive environment.

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Abstract:	It is understood that the procurement department and innovative performance of an organization influence the overall business performance of that organization. The research explaining this matter is based on knowledge based view. This underpins the point of view that human capabilities are one of the firms most valuable assets. Both departments are often linked together and research on the matter showed a positive interaction term between them regarding the business performance of an organization. However, current literature is predominantly based on the view of the management. Procurement managers are asked to grade their own department, and the same goes for the department responsible for innovation. Furthermore, this leads to a gap in existing literature, where objective data can possibly verify or falsify existing literature. Resulting in the formulation of the following main question; “What effect do procurement capabilities and innovative performance of a Formula 1 team have on the business performance of the team?”. The research is performed in an environment that enables unbiased data of Formula 1 teams. The data was extracted form independent sources and if possible, verified two-fold. On team level, ten years of data is gathered and analysed. The analysis used is the Fixed effects model, applicable for longitudinal and for multiple groups. The results show that both the procurement capabilities and the innovative performance of the Formula 1 teams have a positive significant effect on business performance. Controversially, the interaction effect was found to be negative significant. However, this contradicts current literature on the subject of business performance. Furthermore, this implicates that it is for organizations that are active in a comparable industry as is the Formula 1, investing in both the procurement and innovative department can lead to improved business performance. Even so, the interaction between the two departments might be less than current literature suggests and is of interest for further research. Keywords: Procurement; Innovation; Formula 1; Teams; Business performance; Resource based view; Knowledge based view; Fixed effects model; Hausmann test.
Item Type:	Essay (Master)
Faculty:	BMS: Behavioural, Management and Social Sciences
Subject:	85 business administration, organizational science
Programme:	Business Administration MSc (60644)
Link to this item:	https://purl.utwente.nl/essays/80004
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