Research On The Effect Mechanism Of Entrepreneurial Orientation And Complementary Assets On Radical Innovation

Radical Innovation is a completely new product, service, technology or business models which enable the change of rules in the market. It provides the organization with innovative models that help them compete successfully, which finally leads to changes of existing market demand. Entrepreneurial Orientation is defined as decision-making, behavior or progress that the enterprises adopt during their entering into new market. In order to analyze Radical Innovation’s mechanism, Entrepreneurial Orientation is employed and so is a complementary asset.This paper focuses on the investigation of Radical Innovation on the basis of Entrepreneurial Orientation. The investigation is conducted through Complementary Assets that have two dimensions in this paper:generic assets and specialized assets, based on which the innovative, prospective, risk-taking characteristics of Entrepreneurial Orientation are adopted to analyze the mechanism of Radical Innovation.First of all, based on what the precious studies have found, this paper gave a conclusion of the relationship among Radical Innovation, Entrepreneurial Orientation and complementary assets, and the underlying meanings of those three by means of literature reviews. Three-dimensional theoretical framework was then established to fully research the mechanism that Entrepreneurial Orientation has worked upon Radical Innovation. In this framework, the complementary assets play crucial role in regulating and affecting the mechanism. Finally, a huge pile of questionnaire was collected which enable empirical research of combining the methods mathematical statistics and multiple regression analysis.This paper found that Entrepreneurial Orientation has significantly positive impact on Radical Innovation, no matter that Entrepreneurial Orientation was employed as a one-dimensional concept, or as a three-dimensional framework of innovative, prospective and risk-taking characteristics.Being comprehensive strategic philosophy or a solution of upgrading technology, hence grasping new opportunities Entrepreneurial Orientation gave enterprises the capacities to surpass the leading technology mainstream, and influence the market’s needs for high-tech, through which the competitors are dragged behind by their brand-new products, service as well as the commitment for resource reinforcement and management. All the processes were proved to have magnificently driven for Radical Innovation that is of high investment, high risk and high uncertainty.The findings also showed that marketing capacity can significantly reinforce the connections between Entrepreneurial Orientation and Radical Innovation. This connection can be hardly affected by manufacturing capacity. Nevertheless, it was proved that complementary assets played crucial roles in protecting profits, and relieving the impact along with technologic reform. It was concluded that the micro investigation of Radical Innovation, Entrepreneurial Orientation and complementary assets, as well as their relationships supplemented and perfected the current theories.