The impact of organizational inertia on innovation and innovation on performance

In today's competitive world, business model design becomes an important source of firm innovation. Business model innovation refers to the creation or reinvention of existing business models by proposing new value propositions, designing novel value-creation systems, and building original value-capturing mechanisms. However, inertia to change is a major barrier to adopt the innovative business model in organizations and its role have not been investigated completely yet. The purpose of this study is to investigate the impact of organizational inertia on innovative activities and role of these activities on firm performance. This research is an applied and descriptive survey. The study population consists of companies operating in the information technology industry in the city of Tehran. Data were collected from 160 companies using judgment sampling methods. The hypotheses were tested using structural equation modeling. The findings showed organizational inertia has a negative relationship with open innovation and business model innovation; open innovation and business model innovation have a positive effect on the performance and also the negative impact of organizational inertia on the firm's performance has been rejected.