Ample evidence suggests that firm innovativeness is important for firm competitiveness. Despite the significance of the CEO for firm outcomes in general, the role of the CEO in firm innovativeness remains unclear. The purpose of this paper is to focus on the impact of two CEO characteristics – organizational identification and risk propensity – on firm innovativeness. The authors also adopt a contingency view to examine the moderating role of organizational size.
Using data from 159 information technology firms based in India, the authors hypothesize that CEO organizational identification and risk propensity will have a positive effect on firm innovativeness. The authors further hypothesize that smaller organizations will benefit more from the positive effects of CEO organizational identification and CEO risk propensity.
The empirical findings indicate that CEO organizational identification and risk propensity positively influence firm innovativeness. Also positive effects of CEO organizational identification and CEO risk propensity are more in smaller organizations.
This study highlights the role of CEO characteristics in the pursuit of firm innovativeness. Significantly, the study shows that both CEO organizational identification and risk propensity can enhance firm innovativeness. However, their effectiveness is contingent on organizational size.
