Inter-organizational networks and innovation in small, knowledge-intensive firms: A literature review

Abstract

In this study, we address the effect of innovation strategy and an innovative working climate on financial performance in the Norwegian wood industry. Innovation strategy embodies four dimensions: the degrees to which innovation in the form of products, processes, and business systems are embedded in the management values and priorities as well as the degree of expenditure in R&D. An innovative working climate is exemplified by team cohesion, supervisory encouragement, resources, autonomy, challenge, and openness to innovation. Previous studies have indicated a lack of research in traditional manufacturing firms on both innovation strategy and a supportive working climate. Our survey was answered by 241 CEOs. The connectional model was tested with structural equation modelling, and all hypotheses received support. This result implied that innovation strategy and an innovative working climate enhanced financial performance in traditional manufacturing firms.