A Study on Corporate Foresight and Firm Performance in Large and Small Korean Companies
In this VUCA world, all types of business enterprises seek for sustainable core competences to compete for the future(Hamel & Prahalad, 1994). Corporate Foresight has been applied to strategic planning a...
A Study on Corporate Foresight and Firm Performance in Large and Small Korean Companies
In this VUCA world, all types of business enterprises seek for sustainable core competences to compete for the future(Hamel & Prahalad, 1994). Corporate Foresight has been applied to strategic planning and innovation management in large global companies and evolved as ‘a set of practices of a organization to lay the foundation for future competitive advantages’ by detecting discontinuous changes early, interpreting the consequences, and formulating effective responses(Rohrbeck et al., 2015; Rohrbeck & Kum, 2018; Gordon et al., 2020).
Reflecting the practical applications of Corporate Foresight, qualitative cases studies as well as the process and tools are accumulated in the literature of strategic management, innovation management and futures studies(eg. Becker, 2002; Phaal et al., 2004; Georghiou, 2008; Rohrbeck, 2010a; Battistella, 2014; Ruff, 2015). The empirical evidence on the values of Corporate Foresight builds its base from qualitative studies in large global firms(eg. Rohrbeck & Gemünden, 2011; Jissink et al., 2014) to the quantitative researches including 7-year longitudinal analysis of Corporate foresight and firm performance by Rohrbeck & Kum(2018).
Corporate Foresight in Korea, however, is in the inception with the pioneering empirical work by Yoon et al.(2018, 2019), despite its critical role to prepare the companies to compete for the future. This study intends to solidify the foundation of Corporate Foresight in the academic research and the practical application by shedding the lights on the relations of Corporate Foresight and firm performance in large and small companies in Korea. Expanding the findings in the literature, the relations of Corporate Foresight, innovativeness and firm performance are tested with dynamics of firm sizes, industry type and company life-cycles(eg. Miller & Friesen, 1984; Jissink et al., 2014; Milshina & Vishnevskiy, 2018; Yoon et al., 2018; Meyer et al., 2020).
The path analysis in Structural Equation Modeling of 503 responses of small and large Korean firms proved that Corporate Foresight is positively directly influencing the firm performance(β=.468, p<.001), and firms’ innovativeness(β=.864, p<.001). Corporate Foresight-Firm performance relationship is partially mediated by firm’s innovativeness with the indirect effect of .295***, leading to the total effect of .762***(p<.001). The results of this study confirm and expand the previous researches by Jissink et al.(2014) and Yoon et al.(2018).
It is the key finding of this work when promoting Corporate Foresight that the firm size proved to moderate the mediating relations of Corporate Foresight and innovativeness, influencing the firm performance. In other words, the larger the firm size becomes, the less impacts Corporate Foresight has on firm’s innovativeness, leading to decreasing effects on the firm’s performance, in comparison with smaller firms. This adds supports to those who posit that company size matters in strategic changes and innovations diffusion(Rohrbeck, 2010a). Additionally, firm’s life-cycle has differing roles in the positive effect of Corporate Foresight on firm’s innovativeness leading to the firm performances, which was significant in comparison of those in ‘Birth’ stage vs. the ones in ‘Maturity’ or ‘Revival’ stages of firm’s life-cycle respectively. This result confirms the importance of innovations in firms’ life-cycle sequencing, demanding Corporate Foresight practices in the firms at later life-cycles(eg. Schumpeter, 1934; Miller & Friesen, 1984).
The practical implications of this research for scholars, managers and policy makers are as follows. First, the scholars in Korea should respond to the calls to fill the gap of Corporate Foresight research to uncover the value of Corporate Foresight in Korean companies’ survival and growth as well as to showcase the real practices with documented tools and processes. Second, CEOs and top management teams should give their attentions to Corporate Foresight to identify, observe and interpret factors that induce changes, to determine possible organization-specific implications, and to trigger appropriate organizational responses while engaging the managers with Corporate Foresight trainings and activities. Large companies need to ceaselessly aspire to exercise Corporate Foresight as a practice by individual managers in the large and complex organizational setting. Small companies may resort to collaborative Corporate Foresight platforms to compensate their liabilities of smallness. Third, the policy-makers should consider designing and establishing the framework for collaborative foresight among universities, large/small firms within regional or industrial clusters as in case studies from the literature since corporations are the fundamentals of the prosperity of the national economy.
A Study on Corporate Foresight and Firm Performance in Large and Small Korean Companies
In this VUCA world, all types of business enterprises seek for sustainable core competences to compete for the future(Hamel & Prahalad, 1994). Corporate Foresight has been applied to strategic planning and innovation management in large global companies and evolved as ‘a set of practices of a organization to lay the foundation for future competitive advantages’ by detecting discontinuous changes early, interpreting the consequences, and formulating effective responses(Rohrbeck et al., 2015; Rohrbeck & Kum, 2018; Gordon et al., 2020).
Reflecting the practical applications of Corporate Foresight, qualitative cases studies as well as the process and tools are accumulated in the literature of strategic management, innovation management and futures studies(eg. Becker, 2002; Phaal et al., 2004; Georghiou, 2008; Rohrbeck, 2010a; Battistella, 2014; Ruff, 2015). The empirical evidence on the values of Corporate Foresight builds its base from qualitative studies in large global firms(eg. Rohrbeck & Gemünden, 2011; Jissink et al., 2014) to the quantitative researches including 7-year longitudinal analysis of Corporate foresight and firm performance by Rohrbeck & Kum(2018).
Corporate Foresight in Korea, however, is in the inception with the pioneering empirical work by Yoon et al.(2018, 2019), despite its critical role to prepare the companies to compete for the future. This study intends to solidify the foundation of Corporate Foresight in the academic research and the practical application by shedding the lights on the relations of Corporate Foresight and firm performance in large and small companies in Korea. Expanding the findings in the literature, the relations of Corporate Foresight, innovativeness and firm performance are tested with dynamics of firm sizes, industry type and company life-cycles(eg. Miller & Friesen, 1984; Jissink et al., 2014; Milshina & Vishnevskiy, 2018; Yoon et al., 2018; Meyer et al., 2020).
The path analysis in Structural Equation Modeling of 503 responses of small and large Korean firms proved that Corporate Foresight is positively directly influencing the firm performance(β=.468, p<.001), and firms’ innovativeness(β=.864, p<.001). Corporate Foresight-Firm performance relationship is partially mediated by firm’s innovativeness with the indirect effect of .295***, leading to the total effect of .762***(p<.001). The results of this study confirm and expand the previous researches by Jissink et al.(2014) and Yoon et al.(2018).
It is the key finding of this work when promoting Corporate Foresight that the firm size proved to moderate the mediating relations of Corporate Foresight and innovativeness, influencing the firm performance. In other words, the larger the firm size becomes, the less impacts Corporate Foresight has on firm’s innovativeness, leading to decreasing effects on the firm’s performance, in comparison with smaller firms. This adds supports to those who posit that company size matters in strategic changes and innovations diffusion(Rohrbeck, 2010a). Additionally, firm’s life-cycle has differing roles in the positive effect of Corporate Foresight on firm’s innovativeness leading to the firm performances, which was significant in comparison of those in ‘Birth’ stage vs. the ones in ‘Maturity’ or ‘Revival’ stages of firm’s life-cycle respectively. This result confirms the importance of innovations in firms’ life-cycle sequencing, demanding Corporate Foresight practices in the firms at later life-cycles(eg. Schumpeter, 1934; Miller & Friesen, 1984).
The practical implications of this research for scholars, managers and policy makers are as follows. First, the scholars in Korea should respond to the calls to fill the gap of Corporate Foresight research to uncover the value of Corporate Foresight in Korean companies’ survival and growth as well as to showcase the real practices with documented tools and processes. Second, CEOs and top management teams should give their attentions to Corporate Foresight to identify, observe and interpret factors that induce changes, to determine possible organization-specific implications, and to trigger appropriate organizational responses while engaging the managers with Corporate Foresight trainings and activities. Large companies need to ceaselessly aspire to exercise Corporate Foresight as a practice by individual managers in the large and complex organizational setting. Small companies may resort to collaborative Corporate Foresight platforms to compensate their liabilities of smallness. Third, the policy-makers should consider designing and establishing the framework for collaborative foresight among universities, large/small firms within regional or industrial clusters as in case studies from the literature since corporations are the fundamentals of the prosperity of the national economy.
주제어
#innovativeness strategic foresight corporate foresight organizational foresight collaborative foresight firm performance
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