Top management is also responsible for other decisions that affect the nature of innovation
within the firm. For example, what sources of new revenue should the firm pursue in the next
five years? What is an appropriate mix or portfolio of innovation projects? Will the firm be a
technology leader or follower? What type of innovation will the firm do in-house versus partner
or outsource? Each of these decisions and those mentioned above affect the configuration of
formal organization, work, people, and informal organization that supports them most effectively.
Innovation is not a competitive strategy in itself, but can enhance any competitive strategy once
the strategy has been articulated. If the strategy involves increasing the rate at which new
products or services are introduced, then innovation can impact the firm in multiple ways.
Innovation can enhance how a firm conducts day-to-day operations, increase the rate at which all
employees generate ideas for new products and services, and facilitate quick and efficient
commercialization of new products.