Managing the tradition and innovation paradox of the agribusiness industry: the impact of the network on operating, financial and social performance

Abstract

PurposeThe paper aims to investigate the role of the network in managing the tradition and innovation paradox in the agribusiness industry. In particular, this study aims to demonstrate that agribusiness firms can innovate through tradition by joining a network, to capture the way intellectual capital (IC) is created, shared and transformed.Design/methodology/approachThe authors approached the study using the social capital conceptual framework, considering the network a critical determinant of social capital, which enhances the organization's ability to share, create and utilize knowledge. Then, the authors also employed the extended territorial strategy theory. The authors derived empirical evidence from companies belonging to the PGI-labeled Consortium of Pasta di Gragnano (Consortium). The authors used a quantitative approach, carrying out a panel data analysis.FindingsThe results suggested that belonging to Consortium had a positive impact on the operating performance, the financial performance and the environment where consortium firms operate. Thus, being part of a network helps firms to innovate in a traditional industry.Research limitations/implicationsThe evidence of this work provided several implications for managers, IC community and the policy public. For managers, the authors observed that agribusiness firms can preserve their traditions through knowledge sharing with firms that operate in the same network. For IC community, the authors contributed to the debate on the social capital theory, arguing that the one area of IC that has received significant attention is the role of the network, which enhances the organization's ability to generate, share and apply knowledge effectively (Lin, 2017; Solitander and Tidström, 2010). Finally, the authors argued that policymakers should implement new reforms that facilitate the formation of networks, especially in socio-economic contexts where the unemployment rate is high.Originality/valueThis is the first study that employs quantitative analysis to investigate this paradox.