Performance Implications of Organizational and Technological Innovation: An Integrative Perspective

Abstract

Manufacturing firms engage in various innovation activities to achieve a sustainable competitive advantage. Although technological innovation is considered one of the key performance drivers, organizational innovation has become increasingly prominent. This study analyzes the relationship between organizational and technological innovation and examines their effect on firm performance in the manufacturing context. The empirical evidence is based on the European Manufacturing Survey (EMS)—Serbian data set gathered in 2018. Hypotheses on the relationship between organizational and technological innovations and firm performance are tested by structural equation modeling using data from 240 Serbian manufacturing firms. The results have shown that technological concepts strongly mediate the impact of organizational factors on firm performance (return on sales—ROS). Moreover, it could be said that, in contrast to the individual approach, to foster a ROS, a synergic effect of organizational and technological concepts is needed, implying the need for an integrative perspective in the process of innovation.