EFFECT OF ORGANISATIONAL AND ENVIRONMENTAL FACTORS ON INNOVATIVENESS AND BUSINESS PERFORMANCE RELATIONSHIP

Abstract

We have investigated the role played by organisational and environmental factors in innovativeness and business performance relationship. The study is based on a purposive sample of 168 key informants (senior level managers in decision-making roles) from Indian firms. For data collection, we developed scales to measure innovativeness and business performance. The results show that innovativeness is a significant determinant of business performance. We also find that influence of innovativeness on external business performance is moderated by organisational and environmental variables. The organisational decision makers in India can draw insights from these results and better decide their strategic postures for designing organisational structure (OS) and for coping better with the external business environment. The study contributes to the literature by providing empirical evidence in support of organic structure and innovativeness for Indian firms to achieve superior business performance in the face of turbulent external business environment.