Influence of dynamic sensing capabilities on firm competitiveness and mediation role of inside-in innovation

Abstract

The aim of the study is to determine the influence dynamic sensing capabilities on Firm Competitiveness and the mediation role of Inside-In Innovation. The study is done within the context of the South African energy companies, an industry undergoing profound structural and technological shifts. Hence, the research aims to deliver actionable insights for practitioners to enable robust innovation strategies that enhance Firm Competitiveness amid rapid change in the ecosystem. Furthermore, the research anticipated to close the theoretical divide in the mechanisms underpinning dynamic capabilities. Existing archetypes of open innovation fall short of explaining dynamic capabilities - mechanisms of transforming resource advantage into competitive advantage - because they omit Inside-In Innovation. Hence, the objective is to determine mechanisms underpinning Inside-In Innovation and its integration within dynamic capabilities frameworks. Positivism paradigm deploying deductive or quantitative research approach was deployed. Existing validated survey instruments were adopted for the study targeting a minimum of 150 responses to provide meaningful analysis closer to previous studies. Ethical considerations were adhered to, and the research rigour will be determined. The study is limited by its cross-sectional nature and reliance on self-reported data from participants. The results have shown that direct relationship between Dynamic Sensing Capabilities (DSC) and Firm Competitiveness (FC) is not statistically significant, while direct relationship between Dynamic Sensing Capabilities (DSC) and Inside-In Innovation (III) is statistically supported. Furthermore, the direct relationship between Inside-In Innovation (III) and Firm Competitiveness (FC) is statistically supported; however, the effect sizes are small indicating that complementary elements of open innovation may be required to strengthen the relationship. Lastly, H4 analysis shows that indirect path (DSC → III → FC) was considered statistically supported, while the direct path (DSC → FC) was considered not statistically supported; therefore, this indicates full mediation. Therefore, Inside-In Innovation provides mechanism of transforming resource advantage into competitive advantage and deeper reflections and reconfiguration of internal resources and processes enabling innovation, in so doing, closing the current gap in open innovation archetypes failure to explain dynamic capabilities mechanism.