Abstract

The term innovation orientation has been frequently used in the innovation literature, but with a mix of conceptualizations and meanings. Drawing from work found in the innovation, management, and marketing literatures over the past 35 years, the concept of innovation orientation as a system is conceptualized and defined in this article. The domain of innovation orientation is delineated as a multidimensional knowledge structure and a framework for understanding innovation orientation and its consequences in an organizational context are developed. The framework defines the innovation orientation knowledge structure as composed of a learning philosophy, strategic direction, and transfunctional beliefs within an organization that define and direct the organizational strategies and actions toward specific innovation-enabling competencies and processes. These innovation-oriented firm competencies are in the areas of resource allocation, technology, employees, operations, and markets. The framework then explains that these appropriately developed innovation-enabling competencies lead to innovation outcomes, specifically ideal innovation form, type, and rate that, in turn, affect firm performance. An inventory of propositions for future research that correspond to the innovation orientation concept is also presented in this comprehensive framework. This study provides two important contributions to the existing innovation literature. First, the article examines the vast innovation literature to arrive at a clear definition of the innovation orientation construct to provide a consistent conceptualization for future research. Second, the article develops a comprehensive, organized framework for understanding innovation orientation and its effects. In doing this, the framework extends the dynamic capabilities research stream by offering an explanation of how innovation orientation fosters the development of organizational competencies and makes it possible for a firm to recognize and respond to shifts in market dynamism.