Enhancing digital innovation in developing countries: Organizational improvisation and resource constraints in digital entrepreneurial firms

Abstract

By integrating theories of organizational dynamic capabilities and knowledge worker productivity, we explore the linkages between organizational improvisation and digital innovation performance via knowledge worker productivity, with boundary conditions of a firm’s resource constraints in the context of a developing country. We collected data from 308 managers of digital entrepreneurial information technology (IT) firms in Pakistan, a developing country. We found that organizational improvisation positively influences digital innovation performance. This relationship is weaker in firms with high resource constraints. Furthermore, knowledge worker productivity mediates the relationship between organizational improvisation and digital innovation performance. The distinctive characteristics of knowledge workers in the IT sector enable them to maintain productivity by relying on improvisation despite any resource constraints, thereby, enhancing digital innovation performance. This research contributes to the intersection of dynamic capabilities and Drucker’s knowledge worker productivity theories. It explores how organizational improvisation can facilitate improved digital innovation performance despite resource constraints and can build on the productivity level of knowledge workers in developing countries. Our research suggests that investing in knowledge workers facilitates the translation of organizational improvisation to improved digital innovation and mitigates resource constraints’ impact on digital innovation performance in the context of developing economies.