A basic premise of the innovation-based competitive strategy literature is that organisational capabilities are drivers of innovation and firm performance. Among the capabilities that are most important to value-creation are internal and external learning capabilities. Strategic marketing literature has actively embraced learning concepts particularly in market orientation and innovation. However, marketers have primarily focused on the linear relationship between market learning and performance, which has led to inconclusive findings. Research attempting to reconcile this debate suggests that market learning may be 'necessary' but not a 'sufficient' condition for a firm's value-creation, stressing the need to examine other forms of learning.
A growing number of researchers suggest that innovation is the missing link in this relationship. However, the past literature has paid limited attention to the non-linear effects of a firm's learning capabilities on innovation and performance. This thesis conjectures that the 'rigidity' and 'interdependency' effects of learning provide a valuable theoretical setting to examine the learning-innovation-performance relationship. The core rigidity paradox suggests that over-investment in a firm's learning capabilities can yield decreasing incremental effects for a firm's innovation. A competing yet complementary perspective suggests that a firm's learning capabilities interact to produce synergistic value for a firm. Surprisingly these two theoretical perspectives have gained limited empirical attention.
Drawing on organisational learning theory and the innovation-based competitive strategy literature, a conceptual model is introduced that attempts to conceptualise the role of the rigidity and interdependency effects in learning on innovation and performance. Using a sample of 249 senior managers from the Australian manufacturing industry, the conceptual model is empirically tested using field survey research in study I and conjoint experimental tasks in study 2, to estimate the linear, curvilinear and interaction effects of learning capabilities. The investigation provides evidence to suggest that the linear effects of a firm's learning capabilities are insufficient in explaining how these capabilities operate to influence firm innovation. Rather, the interactive nature of learning capabilities best explains how a firm's learning capabilities operate. The results further suggest that heavy investment in learning capabilities enhances rather than inhibits innovation for a firm, counter to the rigidity paradox. Several noteworthy implications for marketing theory, in addition to various stakeholders of firms stem from this research. Managers are urged to realign their beliefs to recognise how learning capabilities operate within the field. Finally, avenues for future research within the strategic marketing literature are discussed.