How should firms orchestrate intrinsic and extrinsic motivational strategies for diverse value-creation outcomes: Synergy or trade-off effect?

Abstract

Motivational strategies are vital in boosting performance, yet their effectiveness at the firm level remains underexplored. This study proposes a supportive organizational culture as a firm's intrinsic motivational strategy and a rewards-based strategy as its extrinsic motivational strategy. Leveraging from a resource-based view and resource orchestration theory, intrinsic and extrinsic motivational strategies should be uniquely configured to optimize their impact on diverse value-creation tasks. Interview and survey data were collected from Chinese manufacturing firms. Three distinct interaction patterns—none, negative, and positive—were discovered, offering novel insights for industrial firms: First, to fortify a market information system, utilizing intrinsic or extrinsic strategies alone can be effective. Second, negative interaction implies a trade-off decision between intrinsic and extrinsic strategies and warns of resource redundancy for new product innovation development. Lastly, intrinsic strategies positively contribute to objective market performance only when synergizing with a high level of extrinsic strategies.