MANAGING CORPORATE INNOVATION IN RESPONSE TO LEGITIMACY PRESSURE: A MULTI-CASE STUDY OF HIGH-TECH FIRMS

Abstract

Background: A key strategy for achieving environmentally friendly development is green innovation. The majority of studies on the factors that influence business innovation activities have either prioritized internal/external causes. Objective: The empirical significance of the research relies on independently investigating the effects of a firm's profit and legitimacy pressure, as well as its relationship to innovation. Methods: The findings showed that legitimacy pressure by consumers had a considerably positive impact on both industrial item innovation as well as process innovation using datasets of high-tech firms.Results: The findings also showed that the profitability of a firm has a beneficial impact on item innovation, but that it has little to no effect on innovation in green processes. Furthermore, the association between legitimacy stress and the development of products is positively moderated by corporate profitability. Conclusion: The findings demonstrate that both the combination of the two factors—profitability (internal) and legitimacy pressure (external)—as well as their individual effects on firm innovation strategies. This is an integrative viewpoint on how firms might be more creative and responsible.