Innovation in conservative and entrepreneurial firms: Two models of strategic momentum

TLDR

Innovation in firms is conceptualized either as a reluctant, challenge‑driven process (conservative model) or as an aggressive, continuously pursued activity (entrepreneurial model). The study tests these models by predicting that conservative innovation will positively correlate with environmental, information‑processing, structural, and decision‑making variables, while entrepreneurial innovation will negatively correlate with variables that warn against rapid change. Analyses of 52 Canadian firms confirm that conservative firms exhibit the predicted positive correlations, whereas entrepreneurial firms show the expected negative correlations, validating both models.

Abstract

Abstract Two very different models of product innovation are postulated and tested. The conservative model assumes that innovation is performed reluctantly, mainly in response to serious challenges. It therefore predicts that innovation will correlate positively with environmental, information processing, structural and decision making variables that represent, or help to recognize and cope with these challenges. In contrast, the entrepreneurial model supposes that innovation is always aggressively pursued and will be very high unless decision makers are warned to slow down. Thus negative correlations are predicted between innovation and the variables that can provide such warning. Correlational and curvilinear regression analyses revealed that each model was supported by conservative and entrepreneurial sub‐samples, respectively, in a diverse sample of 52 Canadian firms.