The pursuit of disruptive innovations by middle managers: effects of the firm’s customer orientation and mastery achievement goals

Abstract

Disruptive innovation (DI) poses a significant challenge for firms due to their uncertain nature and unique diffusion patterns before entering the market. A proactive strategy to address the issue of DI can turn a potential disruption into a business opportunity. To implement such an aggressive approach, firms should enhance their intrapreneurship capabilities through middle managers’ disruptive innovation activities (DIA). However, research on managing and promoting DI by middle managers is still at a nascent stage. Therefore, this study aims to fill this gap in the literature by examining the influence of a firm’s customer orientation (i.e., mainstream and emerging) and middle managers’ mastery achievement goals on their DIA. It analyses the direct and interaction effects of firms’ customer orientation and middle managers’ achievement goals on their DIA. The data from 337 middle managers are analyzed in structural equation modelling. The results indicate that managers’ perception regarding their firm as ‘emerging customer orientated’ positively influences their DIA. Perception regarding the firm as ‘mainstream customer orientated’ negatively influences. Mastery achievement goals of middle managers positively impact their DIA. The interaction of emerging customer orientation and mastery achievement goals significantly influence middle managers’ DIA. Later, interviews were conducted to elaborate on the survey data results, which complemented the findings and provided further insight into the identified effects. These results provide a comprehensive understanding of middle managers' strategic role in nurturing DI in an organizational setting and contributing to the theory and practice.

Appendices

Appendix A. Questionnaire Items

Disruptive innovation activities [source—(Sadiq et al. 2020)]

Activities which stressed on making a niche product/service gradually attractive to the mainstream customers

Activities which stressed on products/services that customers have not yet realized they would need

Activities which discover and address the unstated needs of customers

Activities with lower expected short-term returns than their alternatives

Activities which stressed on product/service features that used to be considered secondary

Activities which tried to proactively change the customer’s tastes and preferences

Activities which may make your existing products/services obsolete

Mastery achievement orientation [source—(Tenzer and Yang 2019)]

I am constantly looking for new challenges and development opportunities at work

It is important for me to make comprehensive use of my abilities, talents, and potentials at work

I want to make a difference in life

Mainstream customer orientation [source—(Govindarajan et al. 2011)]

This organization pursues ideas that mainstream customers value

This organization invests adequate resources in innovations that mainstream customers value

In deciding whether to pursue an innovation, this organization places a great deal of emphasis on the quantification of market size, market share, and financial projections of revenue and cost

Market research efforts in this organization are aimed at obtaining information about the needs of mainstream customers

Emerging customer orientation [source—(Govindarajan et al. 2011)]

This organization pursues ideas that small, emerging customer segments value

This organization sufficiently allocates the critical financial and human resources to carve out a strong position in small, emerging customer segments

This organization focuses adequate energy and talent on small, emerging customer segments

This organization places a lot of emphasis on customers of the future

Appendix B. Selected verbatim extracts

Themes	Participant-1	Participant-2	Participant-3	Participant-4	Participant-5
Customer priorities of the firm	“…with the development of mobile money solutions our firm started to priorities the low-income population as our future customers…..it helped me and others to focus on ideas that could serve these customers.”	“…I think, the ideas that can improve customer experience, which is aligned with our mission to empower societies and as we are a commercial entity so financial viability is also very important”	“while, pitching new ideas the financial projections are one of the key considerations for the purpose of evaluation. In the past….I have seen ideas being rejected due to their non-alignment with the financial strategy of the firm”	“The market that was being targeted was not explored before by any of us. Therefore, I had to gather initial data to work out the plan to approach a different customer segment”	“priorities of launch of products or services was more driven by the firm’s sales and distribution model…. while focus was on the easy hanging fruit then long term strategy…..therefore, I had to align my work with the firm priorities”
Supporting Organizational Culture	“You can’t do much if the firm you are working for don’t want you to do something. We got lucky as most of the initiatives were in line with the desires and vision of the management and we received ample support from them”	“I think, as an organization we have been provided various platforms to pitch ideas to the management. It’s now up to employees to go and pitch their ideas on these platforms. Even apart from that, in this firm no body stops you from discussing new ideas” “Then there is a Technology Division specific platform. Here people from various departments of Technology Division participate and present their ideas. It is like an open house forum. Best ideas are selected through voting. The employee who won last time was also sent to a learning trip to US”	“Well, undertaking such initiatives was mainly driven by an enabling environment and provision of relevant resources” “…My department received ample support from all power corners to undertake innovative initiatives that were aligned with the firm priorities…”	“…. we have forums at xxxx to present novel business ideas. In the past on many occasions we have worked on various ideas” “So, irrespective of the novelty of ideas, everyone can express themselves through these forums”	“…. The innovative ideas that support the organizational business strategy are mostly encouraged and incentivized. This enables everyone in the firm to develop their project proposals accordingly”
Personal Motivation	“…but it’s up to the individual team members how much efforts that they put and come up with the solutions to various problems. It’s true at all levels” “I had been looking forward to the launch of the service because I had several ideas that depended on it”	“usually, we have very limited time to work on new ideas while doing our routine operations in parallel. We couldn’t participate in ideas forum this year just because we didn’t have time to work on new ideas.”	“…..the individual’s own interest cannot be ruled out in such type of work…..no one undertake such initiatives without some level of personal interest….same was true for me…” “alignment of personal motivation and job requirements enhances the efforts that a person undertakes to find innovative solutions….”	“…I personally liked the new business strategy and was interested to work on the projects linked with it and luckily I got the chance to work on a few of them….” “If you get to work with what you want….it’s a perfect combination for you and the firm…..however, sometimes people do think differently and do not connect with their work the way they could have…”	“to a great extant yes……the desire to achieve a status in the organization becomes a driving force behind the initiatives a person takes….the desire to do better than others and becoming a star employee motivates you to promote the firm’s strategic priorities or champion improvements in it…”
Top Managements’ Strategic Recognition	“I remember having long conversations with the management to explore different options on how to exploit the untapped potential of the mobile money service in the country” “…..you know recognition of such ideas by others in the management is another issue.” “The past track record of idea selection by management was encouraging for me…”	“.…. may be the people evaluating such ideas also require having that special ability to pick the right disruptive idea. Because disruptive innovations are different than other types and you know that, the evaluators are often from the same organization as we are, which may also influence their way of evaluating these ideas”	“The winner of the program was a very junior resource. But the management really encouraged him, and he was also made the Ambassador of the firm. Our CEO may not know the names of some managers, but he does remember the name of that guy.”	“People from all departments come out in these forums. The management not only praises them but also recognize them through other means.”	“…for disruptive ideas to get through to implementation stage….you need to have people at the top with a vision and the ability to understand the long term consequences for the firm…”