Does Competitive Environment Predict Firm Innovativeness in ServiceIndustry? Investigating the Role of Strategic Flexibility

Abstract

This study aims to test the role of competitive environment on firm innovativeness. The study also analyzed the mediating role of strategic flexibility in the relationship between competitive environment and firm innovativeness. The study proposed a model for firm innovativeness, which ultimately help the firm in achieving long term sustainable advantage. This quantitative research is cross-sectional in nature. Standardized scales were adapted from existing studies. This study used hierarchal regression analysis (three-step) and Sobel test to analyze the data collected from 587 Executives/Managers/Owners of service industry firms to test the theoretical model. Results proved that competitive environment helps firm to attain firm innovativeness. The findings of this research study also revealed that strategic flexibility perform a mediating role between competitive environment and firm innovativeness. This research contributes in two different ways; first one, it provides experimental facts and evidence which could be helpful for a firm to perceive competitive environment as a major antecedent of firm innovativeness.