Unpacking the relationship between an innovation strategy and firm performance: The role of task conflict and political activity

This article adds to extant literature by examining the contingent effect of two cross-functional processes on the relationship between the use of an innovation strategy and firm performance, namely, task conflict and political activity. The authors examine the effects of these processes with a sample of 260 firms. The positive relationship between the use of an innovation strategy and firm performance is stronger for higher levels of cross-functional task conflict and lower levels of cross-functional political activity. Furthermore, the authors find support for a configurational hypothesis: the innovation strategy–firm performance relationship is strongest for the high task conflict/low political activity configuration and weakest for the low task conflict/high political activity configuration. The results unveil two important cross-functional mechanisms influencing the extent to which the benefits of an innovation strategy can be reaped.