Innovation strategy beyond the COVID-19 pandemic: the role of trust under disruptive technology

Abstract

Purpose This paper aims to understand how firms promote innovation under disruptive technology by exploring the role of trust and risk-taking behaviour in enhancing product development towards competitive advantage. Design/methodology/approach This study proposes a structural equation model that entails seven hypotheses for the constructs and their relationship with support from the previous literature. The empirical analysis involves a survey of the 390 small firms in Indonesia to generate four scenarios following the COVID-19 pandemic. Findings The evidence indicates that trust allows the firms to take a risk for new product development, which is, in turn, help to achieve their competitive advantage. However, the impact of product development on competitive advantage varies depending on the capability of the firms to deal with the information technological turbulence. Research limitations/implications This study adopted the concept of trust at the organisational level and did not cover the concept of trust at the family and community levels. Secondly, this study focusses on small and medium-sized enterprises as unit analysis during the COVID-19 pandemic. The results depend on the subject of study, which could be different from the normal condition. Practical implications This study provides four scenarios of foresight innovation strategy, which allow the firms to deal with various plausible futures. The proposed model devise strategies to prepare a strategy in the face of uncertainty. The findings encourage the firms to cultivate trust from their business partners to create innovation. Originality/value This study extends the discussion on how innovativeness leads to firm competitive advantage by examining the role of trust and risk-taking behaviour in product development under information technological turbulence. The results confirm the integration between social capital theory and the contingency approach.

The Impact of Trust, Knowledge Sharing, and Affective Commitment on SME Innovation Performance

“…Therefore, SMEs need to have continuous innovation that requires creativity and innovative behaviour from people within organisations, leading to creativity and innovative behaviour from people within organisations, leading to better SME performance (Lei et al, 2019). Further, SME innovative performance will lead the consumers to the repurchase intention (Alhabsy, 2021).Scholars believe that trust will support this mission by enhancing SMEs' innovation performance in the context of Indonesia during pandemic crises (Jalali et al, 2021;Pratono, 2021). Newly, Seepana et al (2021 found that innovation performance is influenced by trust among workers, indicating confidence and willingness to engage in a strong relationship with another person within SME sectors.…”

“…Scholars believe that trust will support this mission by enhancing SMEs' innovation performance in the context of Indonesia during pandemic crises (Jalali et al, 2021;Pratono, 2021). Newly, Seepana et al (2021 found that innovation performance is influenced by trust among workers, indicating confidence and willingness to engage in a strong relationship with another person within SME sectors.…”

A systematic literature review and bibliometric analysis of research on COVID‐19 in strategy journals

“…Nevertheless, this approach needs to be global and gathers different features. Scholars focus on the role of trust and risk-taking, especially in the case of technological innovation (Pratono, 2021), and on the importance of agility, both strategically and in the way companies run their day-to-day activities (Park, 2021). They also highlight the need for companies to implement a culture of experimentation that will enable them to try new strategies, new products, and new services with the possibility of failing and trying again (Denning, 2020).…”

The strategic innovation under information technological turbulence: the role of organisational resilience in competitive advantage

“…Organisational resilience shows the ability to recover from the crisis by increasing environmental awareness to deal with turbulence and discontinuities (Goncalves et al, 2019). Risk-taking behaviour is the most prominent effort for resilience strategy (Pratono, 2021). Organisation resilience also reflects the capability to continuously manage equilibrium in a dynamic business environment by controlling the resources and absorbing an economic impact without changing the ecological structure (Meli an-Alzola et al, 2020).…”