Organizational learning and technological innovation: the distinct dimensions of novelty and meaningfulness that impact firm performance

This manuscript delineates technological innovation into the separate dimensions of novelty and meaningfulness to examine how a firm’s organizational learning modes of adaptive learning and experimental learning, together with unabsorbed slack resources, influence the effects of novelty and meaningfulness on firm financial performance. The multi-method empirical approach leverages secondary data from firm patent information and COMPUSTAT, and primary data from senior executives at 167 firms in various high-tech industries. The results indicate that adaptive learning heightens meaningfulness but diminishes novelty, whereas experimental learning harms meaningfulness. Additionally, firms’ unabsorbed slack resources moderate the relationships of experimental and adaptive learning with novelty. In particular, experimental learning enhances novelty only when a firm has sufficient unabsorbed slack to adjust resource levels in accordance with experimentation. Further, the results suggest that meaningfulness increases firm financial performance as represented by Tobin’s q, both independently and jointly when considered with novelty. These insights underscore the necessity of treating novelty and meaningfulness as separate dimensions of technological innovation that impact firm performance.