STRATEGIC RENEWAL UNDER PRESSURE: HOW FIRM SIZE DICTATES INNOVATION PATHWAYS

Abstract

In dynamic and competitive environments, strategic renewal enables firms to adapt by reconfiguring resources, capabilities, and strategic orientation to respond to changing market and technological pressures. This study examines how firm size influences innovation pathways and strategic renewal outcomes under environmental stress. Using a quantitative cross-sectional design, data were collected from 292 firms across multiple industries and analyzed with ANOVA and regression techniques. Results indicate that small firms predominantly pursue radical innovation, leveraging flexibility and entrepreneurial culture to explore disruptive opportunities. Large firms favor incremental innovation, optimizing existing processes and resources, while medium firms adopt hybrid strategies that balance exploration and exploitation. Strategic renewal success is significantly affected by both firm size and innovation type, with large firms achieving more consistent outcomes through incremental innovation. These findings highlight the moderating role of organizational scale in shaping innovation strategies and renewal effectiveness, providing insights for managers seeking to align strategic initiatives with firm characteristics and environmental conditions.