QUESTION 1

Innovation Orientation & Financial Performance in Sub-Saharan Africa The study examines the extent to which innovation orientation influences financial performance under varying conditions of NPD capability. The data comprises of 245 cases on international new ventures (including manufacturers of physical goods and providers of services). The data is a portion of a large survey of international new ventures across sub-Saharan Africa. Thus, this is a firm-level data with each data point representing a formally registered business organization. The data set provided to you contains 19 variables. All items have been recoded so that larger numbers infer more of the latent variable. For instance, INNOV1 is positively worded, so that a higher score indicates that the firm has a higher Innovation Orientation score. The same applies to all other variables in the dataset. The specific items used to measure the construct are presented below with their respect scale anchors. Innovation Orientation (1 = not at all; 7 = to an extreme extent) My company is known as an innovator among businesses in our industry. I promote new, innovative product/services in my company. My company provides leadership in developing new products/services. My company is constantly experimenting with new products/services. My company has built a reputation for being the best in our industry to develop new methods and technologies. NPD Capability (1 = not at all; 7 = to an extreme extent) We have the ability to: Introduce new generation of products Extend product range Open up new markets Enter new technology fields Introduce production processes Financial Performance (1 = below expectation; 7 = above expectation) Return on assets Return on sales Growth in profitability Profitability Control Variables The dataset also contains information on the five control variables, which are captured with single items each: 1. Industry Type 2. Business experience (Years) 3. Dedicated R&D Function 4. Number of Full-time Staff 5. Environment dynamism Given the information above, provide a short report based on the structure below (It is expected that your report would be structured to reflect what is normally presented by quantitative researchers). (a) Conceptual Model. Present the model in diagrammatic form, and draw on a relevant theory to explain the hypotheses to be tested (this should not be lengthy and should focus on justifying the logic behind the specified relationships).