Management innovation enters the game: Re-considering the link between technological innovation and financial performance

The aim of this study is to investigate the innovation-performance relationship at the organizational level by empirically examining the role of management innovation in the link between technological innovation and financial performance. We adopt a view that is less present in the innovation literature and examine how technological innovations spur the need for new managerial solutions, which in turn result in improved firm performance. We apply a research methodology of testing our model via structural equation modeling on data gathered from 604 firms in three countries: Slovenia, Spain, and South Korea. The findings indicate that management innovation is the mechanism that enables firms to fully benefit from their technological discoveries in order to result in superior financial performance. The conclusions of the paper are related to shifting the view that presumes the crucial and almost exclusive importance of technological innovation for enhancing firm performance.