The Effects of a CEO’s Technical Background and Cross-functional Coordination on Technological Innovation Performance: The Mediating Role of Technological Innovation Orientation

The major purpose of this research is to provide a refined understanding of the effects of a CEO’s technically oriented functional background and cross-functional coordination on the firm’s technological innovation performance by including as a mediating variable in the research model the construct of technological innovation orientation which has been recently identified as an important factor affecting the firm’s technological innovation performance. Strategic management and innovation research has suggested managerial functional background as a crucial factor affecting the successful innovation outcomes. Nevertheless, no empirical analysis has been conducted on the relationship between CEOs’ or top managers’ functional backgrounds and the organizational innovation performance. One plausible reason for the absence of prior research empirically examining the relationship between managerial functional background and innovation performance may be that the research has failed to identify some intervening mechanism through which managers’ relevant functional backgrounds influence the firm’s innovation outcomes. Cross-functional coordination has been frequently recognized as a crucial driver for the firm’s successful technological or product innovation performance. Yet, previous empirical research has provided a limited support for the direct positive impact of cross-functional coordination on such innovation performance. Research has shown that that cross-functional coordination may not be sufficient on its own to generate the firm’s superior technological or product innovation performance due to some inherent adverse effects it brings about. Given lack of extant empirical research exploring relevant mediating mechanisms that may link cross-functional coordination with firm innovation performance, the controversy regarding the direct impact of cross-functional coordination on innovation performance remains unsettled. In an effort to fill up the aforementioned gaps or deficiencies in previous studies, the present research proposed and empirically tested a conceptual research model and hypotheses in which a CEO’s technically oriented functional background and cross-functional coordination affect the firm’s technological innovation performance, directly and indirectly, via technological innovation orientation. Technological innovation orientation represents an organizational culture conceptualized as an organization-wide direction of thinking toward creating or adopting new ideas, products, services, or processes. Analysis of a sample of 87 small and medium-sized enterprises (SMEs) in the Korean IT industry revealed that technological innovation orientation fully and positively mediated the relationship between the firm’s technological innovation performance and a CEO’s technically oriented functional background and cross-functional coordination, respectively. Both a CEO’s technically oriented functional background and cross-functional coordination did not have significant direct effects on the firm’s technological innovation performance when technological innovation orientation was controlled in the model. Theoretical and practical implications for the results of this research were discussed.