How Do Resource Structuring and Strategic Flexibility Interact to Shape Radical Innovation?

As high resource consumption and high uncertainty are two of the most critical challenges to radical innovation, it is imperative to adopt resource structuring for an active management of resource portfolios, and also to adopt strategic flexibility for active management of contextual uncertainties, especially for firms in the emerging economies characterized by serious resource deficiency and high contextual uncertainty. Though firms engaging in resource structuring and strategic flexibility separately could foster radical innovation, the interaction effect of resource structuring and strategic flexibility could be complementary or substitutive, and the effective utilization of these two organizational dimensions as a joint force should be well aligned to achieve scientific breakthroughs. Specifically, this study explores how two different types of strategic flexibility (i.e., resource flexibility and coordination flexibility) as special capabilities interact with two different types of resource structuring (i.e., resource acquisition and resource accumulation) as special mechanisms to shape radical innovation under high uncertainty. With a sample of 508 Chinese firms, our results show that the specific effects of resource acquisition and resource accumulation on radical innovation are contingent upon resource flexibility and coordination flexibility in two contrasting patterns. Specifically, a firm with high resource flexibility tends to foster radical innovation under high uncertainty by interacting with resource accumulation, rather than with resource acquisition; in contrast, a firm with high coordination flexibility is likely to foster radical innovation under high uncertainty together with resource acquisition, rather than with resource accumulation. The theoretical and practical implications of the above two contrasting patterns are also discussed.