The rule and mechanism of innovation capability-environmental dynamism coevolution: A longitude case study of Chinese firm in transition

How did enterprise innovation capability convolutes with external environment in the context of economic transition? In this paper, a longitude study is operated, using the case of Sunyard, to show the rule as well as the mechanism underlying the coevolution process. On the one hand, this paper reveals how enterprise adapt to the environment to pursue resources for product innovation under multi-institutional pressure; on the other hand, this paper reveals how companies leverage innovation capability through organizational learning and then select and manage the environment. More importantly, this paper links these two aspects, and reveals the ambidexterity mechanism between selection and adaptation. Theoretically, this finding not only unique to China, but also can be found in other developing countries with under transition.