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Does strategy formalization foster innovation? Evidence from a French sample of small to medium-sized enterprises

Marc Fréchet and Hervé Goy ()
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Marc Fréchet: COACTIS - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet [Saint-Étienne], TSM - Toulouse School of Management Research - UT1 - Université Toulouse 1 Capitole - CNRS - Centre National de la Recherche Scientifique - TSM - Toulouse School of Management - UT1 - Université Toulouse 1 Capitole
Hervé Goy: COACTIS - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet [Saint-Étienne]

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Abstract: Despite abundant research, the relationship between strategy formalization and innovation remains unclear. Some acknowledge a positive impact of strategy formalization on innovation while others consider it an impediment to novelty and creation. Going beyond the conflicting views over the influence of formalization, we combine open innovation and socio-material perspectives. This study aims to contribute to the debate by considering the possibility that formalization is a means of benefiting from openness with respect to innovation. Therefore, we predict that formalization might positively moderate the impact of openness on innovation. Relying on a unique sample of 555 SMEs, we investigate the effects of strategy formalization and openness—according to their various facets and interactions—on new product innovation. We find a positive influence of formalization (whether it is approached as a process or as a strategic tool) on product innovation. Our findings also support the idea that formalization increases the effectiveness of openness on innovation performance. Implications are discussed, and future research directions are outlined at the end.

Keywords: innovation; open innovation; strategy formalization; SMEs (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse, nep-ent, nep-ino and nep-sbm
Date: 2017
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01623788
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Published in M@n@gement, AIMS (Association internationale de management stratégique), 2017, 20, pp.266 - 286

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