Influences of dynamic capability on breakthrough innovation

Abstract

Purpose The purpose of this paper is to focus on the influences of dynamic capability on breakthrough innovation and explores the essential mechanisms related to such influence. The impact of breakthrough innovation on organizational performance is also examined in conjunction with the manufacturing industry samples in China. Design/methodology/approach This paper follows an empirical design. Data are collected from a survey administered to manufacturing samples in China. Regression analysis is used to test the hypothesis. Findings Results show that the positive impact of breakthrough innovation on organization performance is verified. Technological breakthrough innovation affects both the organization’s financial performance and growth performance in a linear and positive way, while market breakthrough innovation affects organization performance positively with marginal increments. Research limitations/implications This paper uses data of manufacturing industry of China, hence, an extended survey in depth and width is worthy of future investigation. In addition, more unique predisposing factors on breakthrough innovation should be considered in the context of China. Practical implications The research enriches the understanding of how the dynamic capability affects the enterprise’s breakthrough innovation, which helps entrepreneurs understand how to strategize to build dynamic capability during breakthrough innovation decisions and implementations. Originality/value Dynamic capability is uniquely viewed as a multi-dimensional concept from a perspective of modularity, while breakthrough innovation is composed of two constructs. It not only enriches the understanding of how dynamic capability affects breakthrough innovation but also discovers the non-linear impact of breakthrough innovation on enterprise’s organizational performance in the context of China’s manufacturing industry.