THE ROLE OF ENTREPRENEURIAL LEADERSHIP AND CONFIGURING CORE INNOVATION CAPABILITIES TO ENHANCE INNOVATION PERFORMANCE IN A DISRUPTIVE ENVIRONMENT

Abstract

Digital disruption leads to high-level risk in innovation management that will impact established firms in disrupted industries. This study investigates the key variables to enhance innovation performance (IP) in a disruptive environment by applying strategic entrepreneurship framework from [Hitt, MA, DG Sirmon, RD Ireland and CA Trahms (2011). Strategic entrepreneurship: Creating value for individuals, organizations, and society. Academic of Management Executive, 25(5), 57–75]. This study sampled the managers of two largest established firms in telecommunication and banking industries in Indonesia. Both industries are in top five of the most disrupted industries. Entrepreneurial leadership (EL) is essential in formulating innovation strategy. This leadership variable has multicollinearity with that of entrepreneurial culture (EC). It indicates that both variables are symbiotic. While in implementing innovation strategy, the configuring core innovation capabilities that combine exploring the opportunity and exploiting the firm’s advantage enhance the IP. Due to core rigidities, this configuring core innovation capabilities should not be orchestrated with collaborative innovation.