Knowledge acquisition from innovation failures: a study of micro, small and medium enterprises (MSMEs)

Purpose – This study aims to empirically examine the influence of management control systems (MCSs) on knowledge acquisition from innovation failure (KAFIF), which further impacts empowerment, creativity and organizational innovation. This study argues that enabling an MCS positively influences KAFIF, whereas controlling the use of an MCS negatively influences KAFIF. Further, KAFIF positively impacts empowerment, creativity and organizational innovation. Design/methodology/approach – This study aims to create a comprehensive stimulus–organism–response (S-O-R) framework. This framework includes anMCS (belief, interactive, boundary and diagnostic) as a stimulus, KAFIF as an organismand creativity, empowerment and organizational innovation as responses. The data were gathered using an online survey administered to a sample of 321 employees working in India’smicro, small and mediumenterprises and analyzed using partial least squares structural equationmodeling. Findings – The results indicate that there is no correlation between belief control and the acquisition of knowledge from the failure of innovation, interactive control has a positive association with KAFIF and boundary control has no relationship with KAFIF. Diagnostic control has a significant negative association with KAFIF. Further, this study found that KAFIF positively associates with empowerment, creativity and organizational innovation. Originality/value – This study is among initial studies that examine the influence of MCSs on KAFIF, which impacts empowerment, creativity and organizational innovation. Further, it helps be one of the initial literature on studying KAFIF rather than innovation success.