Firms’ Reputation for Innovation: Role of Marketing Capability, Innovation Capability, and Knowledge Sharing

Abstract

In the current day competitive business environment, continuous innovation has become a central strategy for most firms. The ability to achieve continuous innovation has been observed to facilitate the growth and profitability of a firm. Innovation can not only lead to new customers and market segments, but it also enables firms to develop a reputation for being innovative. In today’s world of fast-changing preferences and trends, such a reputation for a firm is likely to considerably add to its brand equity and growth prospects. The current study investigates the role of knowledge sharing, innovation capability, and marketing capability in a firm’s reputation for innovation. A set of hypotheses were developed to analyse these relationships using structural equation modelling (SEM). The data were collected from seventy-five (75) senior executives spanning across five different industries in the Indian service and manufacturing sector. The findings of the study indicated that a firm’s reputation for innovation is influenced by factors like innovation capability, which in turn is an outcome of tacit and explicit knowledge sharing within the firm. Further, marketing capability plays a positively moderating role between innovation capability and the firm’s reputation for innovation. Overall, the study highlights that the innovation capability of a firm is a result of tacit and explicit knowledge sharing inside the firm. However, such innovation capability alone is not sufficient for a firm to be viewed as “innovative”. The firm must develop and use appropriate marketing and knowledge management capabilities to highlight such an innovative nature of the firm in order to be viewed as innovative in the market.