The impact of external and internal entrainment on firm innovativeness: A test of moderation

The theory of entrainment suggests that positive benefits, such as enhanced competiveness and above-normal levels of performance, can be achieved by creating temporal alignment and coordination between and among an organization's internal processes and external environment. We investigate the effect of external and internal entrainments on firm innovativeness, and hypothesize that the interaction between external and internal entrainment serves to enhance the effect of external entrainment on firm innovativeness. Using survey responses from the owners, CEOs, and top managers of 217 organizations in a range of industries, we establish evidence of (1) a positive link between external entrainment and firm innovativeness, and (2) the moderating effect of internal entrainment on the external entrainment-firm innovativeness relationship. The results provide insight into the performance benefits of managing the temporal elements of an organization's environment.