Fostering strategic synergy: Empirical insights on aligning innovation activities with competitive strategies

An effective innovation strategy is crucial for firm performance and national economic growth, yet many firms still face the challenge of misalignment between their innovation activities and strategies. While previous studies focused on the mediation role of innovation activities on strategy and performance, research is needed to examine the complex interdependencies between strategies and innovation activities to better understand their impact on firm performance.

From a configurational perspective, this study investigates how different combinations of innovation activities and strategies influence firm performance. Twenty combinative effects of four categories of innovation activities and five strategic types on two firm performance measures (growth and profit) were explored, resulting in the creation of an innovation-strategy alignment map. This study contributes to innovation strategy literature by providing the alignment map, where four configurational clusters with equifinality were identified. It also contributes to competitive strategy literature by offering empirical verification for the “pure” versus “hybrid” debate and identifying two new types of hybrids with more and different strategic dimensions by using an empirical method, thus advancing the call for more detailed hybrid strategy research in this area. In addition, the innovation-strategy alignment map provides options to managers with different resources and capacities for effective planning.