Innovation and competitive advantage creation: The role of organisational leadership in service firms from emerging markets
International Marketing Review
ISSN: 0265-1335
Article publication date: 25 May 2018
Issue publication date: 13 July 2018
Abstract
Purpose
The purpose of this paper is to explain how emerging market firms create competitive advantage through innovation. The study through the upper echelon theory and the power distance cultural perspective examines the mediating role of organisational leadership in the innovation and competitive advantage relationships.
Design/methodology/approach
Data were collected from the service sectors of two emerging economies, i.e. India and Ghana. Robust standard error regressions were run at two levels. First, at the specific country level and later on the aggregated level for robustness check.
Findings
The results show that in both India and Ghana, innovation largely relates positively with competitive advantage. In specific terms, market innovation was found to be the most significant determinant of competitive advantage in both contexts. Additionally, organisational leadership was also found to be mediating between innovation and competitive advantage in both contexts independently and collectively to confirm the effect of power distance and leadership role in such cultures.
Research limitations/implications
The current study looks at only two emerging markets with high power distance cultures. The implication is that the impact of leadership may differ in emerging economies with low power distance.
Originality/value
The current study looks beyond the mundane relationship between financial performance measures and innovation to assess innovation and competitive advantage in emerging markets context, which has not received the needed attention. It further explains how emerging markets firms can ride on the back of power distance to create a competitive advantage with their innovation development and implementation through organisational innovation leadership. The study offers that the maximum exploitation of the beneficial effect of innovation – competitive advantage – in service firms can only be achieved when leaders spearhead the innovation process and see it through implementation.
Keywords
Citation
Anning-Dorson, T. (2018), "Innovation and competitive advantage creation: The role of organisational leadership in service firms from emerging markets", International Marketing Review, Vol. 35 No. 4, pp. 580-600. https://doi.org/10.1108/IMR-11-2015-0262
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited