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Strategic orientation toward digitalization to improve innovation capability: why knowledge acquisition and exploitation through external embeddedness matter

Strategic orientation toward digitalization to improve innovation capability: why knowledge... This study aims to analyze the mediating effect of the open innovation processes of knowledge acquisition and exploitation as external embeddedness strategy on the relationships between strategic orientation toward digitalization and the three dimensions of the innovation capability: client, marketing and technology.Design/methodology/approachThe research model was tested using a structural equation modeling design based on survey data from a financial and insurance sector multinational enterprise with direct operations in seven emerging countries. This sector is classified as being highly digitalized.FindingsThe results show that strategic orientation toward digitalization has an effect on innovation capability, with a greater impact on the client and technology dimensions than on the marketing dimension. However, the relationships with clients and technology are partially mediated by acquisition, while the one with marketing is mediated by exploitation.Originality/valueThis finding widens the current purpose and theoretical sense of external embeddedness as a type of inter-organizational arrangement key for digitalization in the literature, which is focused on the adaptation of digital technology of the head office to the needs of the subsidiaries and the systems of their local allies. By contrast, the study results show that external embeddedness is key for the multinational to be able, from its global way of creating value through digital technologies, not only to improve operating efficiency, but also to meet costumer experience expectations in each host country and innovate in local commercialization strategies, on account of the knowledge transfer between the multinational and the local players on customer preferences and technology uses in local markets. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Knowledge Management Emerald Publishing

Strategic orientation toward digitalization to improve innovation capability: why knowledge acquisition and exploitation through external embeddedness matter

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References (66)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1367-3270
eISSN
1367-3270
DOI
10.1108/jkm-03-2020-0231
Publisher site
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Abstract

This study aims to analyze the mediating effect of the open innovation processes of knowledge acquisition and exploitation as external embeddedness strategy on the relationships between strategic orientation toward digitalization and the three dimensions of the innovation capability: client, marketing and technology.Design/methodology/approachThe research model was tested using a structural equation modeling design based on survey data from a financial and insurance sector multinational enterprise with direct operations in seven emerging countries. This sector is classified as being highly digitalized.FindingsThe results show that strategic orientation toward digitalization has an effect on innovation capability, with a greater impact on the client and technology dimensions than on the marketing dimension. However, the relationships with clients and technology are partially mediated by acquisition, while the one with marketing is mediated by exploitation.Originality/valueThis finding widens the current purpose and theoretical sense of external embeddedness as a type of inter-organizational arrangement key for digitalization in the literature, which is focused on the adaptation of digital technology of the head office to the needs of the subsidiaries and the systems of their local allies. By contrast, the study results show that external embeddedness is key for the multinational to be able, from its global way of creating value through digital technologies, not only to improve operating efficiency, but also to meet costumer experience expectations in each host country and innovate in local commercialization strategies, on account of the knowledge transfer between the multinational and the local players on customer preferences and technology uses in local markets.

Journal

Journal of Knowledge Management – Emerald Publishing

Published: Jun 21, 2021

Keywords: Knowledge transfer; Open innovation; Digital transformation; Digital innovation; Network embeddedness; Agile organizations

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