Crafting firm competencies to improve innovative performance

Recent interdisciplinary research suggests that customer and technological competencies have a direct, unconditional effect on firms’ innovative performance. This study extends this stream of literature by considering the effect of organizational competencies. Results from a survey-research executed in the fast moving consumer goods industry suggest that firms that craft organizational competencies – such as improving team cohesiveness and providing slack time to foster creativity – do not directly improve their innovative performance. However, those firms that successfully combine customer, technological and organizational competencies will create more innovations that are new to the market.