Innovation in entrepreneurial organisations: A platform for contemporary management change and a value creator

Purpose: This article examines the significance of innovation to organisations following strategies of entrepreneurial orientation. In particular, the study looks at the significance innovation adds to the implementation of contemporary management control systems (MCSs) and to improved performance in these organisations. Design/methodology/approach: A quantitative analysis was conducted based on a random sample of Australian manufacturing companies. A structural equation modelling approach was adopted to test the study hypotheses. Findings: Results suggest that innovation mediates the relationships between entrepreneurial strategy and each of participative budgeting, the balanced score card (BSC), total quality management (TQM), just in time (JIT), and organisational performance. The study does not indicate a significant relationship between entrepreneurial strategy and activity based costing (ABC), even when innovation is in place. Originality/value: The study empirically tests the vital role of innovation in the organisational adaptive cycle to entrepreneurial strategies, described earlier by Miles and Snow (1978). Further, the study validates a multi-dimensional strategy model first suggested by Langfield-Smith (1997). 2013 Elsevier Ltd. All rights reserved.