The purpose of this paper is to find out how strategic decisions have resulted in innovation in the context of the organizational environment. The author studies connections between strategic decision making and innovation to find out what kinds of factors of the organizational environment influence strategic decisions that lead an organization to innovate.
The theoretical and empirical part proceeds from dividing strategic decisions into proactive and reactive; the environment into internal and external, including primary and secondary environment, and dynamic capabilities; and innovation into product, process, marketing and organizational innovation. The study uses qualitative research and case study methodologies to analyse the case of an Estonian IT company, MicroLink.
The results show that even if innovation is not strategically managed in a company, it can still be innovative. However, the potential for different types of innovation at the organizational and local and global market level is very often determined by the company's general strategic vision and its proactive nature, which should be supported by its dynamic capabilities.
Based on the results, some conclusions are also presented for other Estonian IT companies in terms of what aspects they should keep in mind when making strategic decisions and implementing innovation.
The paper contributes to the understanding of how innovation evolves and it is presumed that innovation is not always a purposeful, but rather an episodic manifestation that could be a result of strategic decisions. Besides, product and process innovation, this study also helps to highlight the role of marketing and organizational innovation, which have gained much less attention in the literature.
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