The role of diagnostic and interactive control uses in innovation

Abstract The purpose of this paper is to shed insights into the current inconsistencies of the control-innovation relationship. We draw on the dynamic capabilities literature to hypothesize that diagnostic and interactive control uses are indirectly related to innovativeness through their influence on the perceived formalization of coordination routines. That is, diagnostic and interactive control uses provide an input for an effective coordination process; the information provided allows for the coordination of activities to flourish. Further, we draw on contingency literature to hypothesize that the controls' direct effect on innovativeness depends on the degree of technological turbulence. Using data from a survey of 695 RD it includes a previously un-researched mediating variable (coordination routines), a moderator (technological turbulence), and two types of innovativeness (rate and newness). Second, the study demonstrates why and when diagnostic use is beneficial for innovativeness.