Managing External Information in Manufacturing Firms: The Impact on Innovation Performance*

Drawing upon a sample of 206 medium‐sized manufacturing firms, this article investigates the extent to which management of external information is associated with innovation performance. The overall purpose of the article is to examine whether or not those organizations that are better at managing external information are also those that are the better innovators. The research strategy used was a survey, and data were collected by means of mail questionnaires (with a 62.4% response rate). A multiple regression analysis was used for hypothesis testing. The results show that scanning the technological sector of the environment was positively associated with innovation performance, while scanning customers, suppliers, and competitors proved to be negatively correlated with innovation performance. Cross‐functional integration in the form of collaboration also proved significantly correlated with innovation performance, while interaction showed no such relationship. Further, decision‐making based on information from the industry environment correlated significantly with innovation performance. Research and managerial implications of these findings are presented and are discussed.