Strategic agility in innovation : Unpacking the interaction between entrepreneurial orientation and absorptive capacity by using practice theory

Abstract

This study intends to unpack the interaction effect between entrepreneurial orientation (EO) and absorptive capacity (ACAP) by analyzing the organizational micropractices of six highly profitable companies to identify three practices and nine micropractices that drive the positive profit outcomes from EO and ACAP. To identify 6 cases, the present study used K-means cluster analysis with a generalizable quantitative dataset in which the interaction between EO and ACAP was found to be associated with high profitability. The 6 cases were selected to unpack the interaction between EO and ACAP to capture this interaction at the microlevel. For this task, we used 31 interviews and practice theory as theoretico-methological perspective. The study contributes by identifying three practices – namely, (1) proactive idea generation, (2) value-driven product development, and (3) market-driven product commercialization – and nine micropractices. These practices shape what we define as strategic agility in innovation.