Strategic complexity for impactful innovation in emerging economy automotive component manufacturing

Abstract

This research was directed at the impact of strategic complexity in innovation on the breadth of innovation strategy objectives achievement in automotive component manufacturing in a developing economy context. Innovation is widely recognized as essential for firms to remain competitive, and innovation strategy guides innovation. Given the risk associated with innovation activity, the question arose whether firms can improve their success, as measured by the breadth of strategy objective achievement, by adopting a complex market access strategy. In the literature, qualified support for this was found in some related contexts, but not in the geoeconomic and industry context studied in this work. The literature also indicated importance of various knowledge sources and innovation-directed transactions and its influence on the diversity of innovation types, so that these had to be taken into account. The methodology was survey based, utilising data on the innovation activities of some 530 automotive component manufacturing firms obtained by a questionnaire applied in the Pune region in India, Beijing region in China and in South Africa. Path analysis by structural equation modelling was applied to analyse the data for the hypothesised relationships. It was found that strategic complexity in the larger combined country dataset is positively and significantly related to a greater breadth of impact of innovation in terms of the market access strategies implemented. It was also observed that diversity of technology and knowledge sources, and innovation types play a fundamental role in this relationship. The results for individual countries are different to those of all countries combined and yielded varying conclusions. The SA dataset was unfortunately too small to meet the requirements for reliable results on its own, but served to support understanding of the influence of its different environment. The findings support the proposition that a diverse innovation strategy should be developed and executed as an integral part of the business strategy.Afrikaans: Hierdie navorsing was gerig op die impak van kompleksiteit van innovasiestrategie op die reikwydte van maatskappye se bereiking die doelwitte van hulle innovasiestrategieë. Die konteks is voertuigkomponentvervaardiging in ontwikkelende ekonomieë. Dit word wyd erken dat innovasie noodsaaklik is vir maatskappye om mededingend te bly. Innovasie word gerig deur 'n maatskappy se innovasiestrategie. Gegee die risiko verbonde aan innovasie, is die vraag of maatskappye hulle sukses met innovasie, soos gemeet aan die reikwydte van hulle bereiking van strategiedoelwitte, kan verbeter deur komplekse strategieë te volg vir marktoegang. In die literatuur is gekwalifiseerde ondersteuning gevind vir so 'n verwantskap in 'n paar verwante kontekste, maar nie in die geo-ekonomiese en sektorkontekste wat in hierdie werk ondersoek is nie. Die literatuur dui ook op die voordele daarvan om 'n verskeidenheid van bronne van kennis en van innovasiegerigte transaksies te hê sodat 'n groter verskeidenheid van tipes innovasie bereik kan word. Die metodologie was gebaseer op 'n vraelys, waarmee data ingewin is oor die innovasie-aktiwiteite van sowat 530 voertuigkomponentvervaardigers in die Punestreek in Indië, die Beijing-streek in China en in Suid-Afrika. Pad-analise, by wyse van strukturele-vergelykingmodellering, is aangewend om die data te ontleed volgens die hipoteses se verwantskappe. Daar is bevind dat reikwydte van bereiking van strategiedoelwitte positief en beduidend verwant is aan strategiese kompleksiteit, in die gekombineerde datastel van al drie lande saam. Daar is ook bevind dat die verskeidenheid van bronne van tegnologie en kennis en van innovasietipes 'n fundamentele rol in hierdie verwantskap vervul. Die resultate van die individuele lande verskil van die van al die lande saam en het tot dienooreenkomstig verskillende gevolgtrekkings gelei. Die SA datastel het ongelukkig te min datapunte bevat om sy eie betroubare resultate te lewer, maar kon wel benut word om die invloed van die SA nywerheid se bedryfsomgewing te kon aflei. Die bevindings ondersteun die voorveronderstelling dat 'n komplekse innovasiestrategie ontwikkel moet word as 'n integrale deel van 'n besigheid se strategie.