A Conceptual framework of Strategy, Structure and Innovative Behaviour for the Development of a Dynamic Simulation Model

According to many researchers of organizational theory, a great number of problems encountered by the manufacturing firms are due to their failure to foster innovative behaviour by aligning business strategy and structure. From this point of view, the fit between strategy and structure is essential in order to facilitate firms' innovative behaviour. In the present paper, we adopt Porter's typology to operationalise business strategy (cost leadership, innovative and marketing differentiation, and focus). Organizational structure is built on four dimensions (centralization, formalization, complexity and employees' initiatives to implement new ideas). Innovativeness is measured as product innovation, process and technological innovation. This study provides the necessary theoretical framework for the development of a dynamic simulation method, although the simulation of social events is a quite difficult task, considering that there are so many alternatives (not all well understood).