Restructuring Organizations Through Innovation: a Study in the Context of the Indian Chemical Sector

The chemical business in India is under pressure from both internal rivalry and the prospect of inexpensive imports. In the context of the chemical sector in India, the current study focuses on understanding the underlying focus on innovation in the intrinsic organizational design strategy to resist extrinsic transformation agents. It also intends to investigate the impact of innovation strategy on the performance of Indian chemical companies. A poll of executives from chemical companies was conducted. To assess the impact of the antecedents of innovation (combined as the Innovativeness Index) on the performance of chemical manufacturing businesses, a structural equation modelling approach is used. It is possible to argue that as a chemical firm’s relative distinctiveness from its rivals grows, so does its performance, as measured by its capital turnover ratio. The chemical firm’s capital turnover ratio (performance) is also influenced by its relative uncertainty measure—that is, the lower the environmental uncertainty, the more successful the chemical firm is. The relative integration of a chemical company also has a beneficial impact on its performance. The degree to which a chemical business may separate itself from its rivals (relative differentiation), as well as its relative integration with the industry, is influenced by the relative uncertainty of its environment. These inferences may help chemical companies become more successful.