Navigating imposed innovation: A decision-making framework |
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Institution: | 1. School of Business & Management, State University of New York, Brockport, 109B Hartwell Hall, 350 New Campus Drive, Brockport, NY 14420, U.S.A.;2. Haskayne School of Business, University of Calgary, SH426 Scurfield Hall, 2500 University Drive N.W., Calgary, Alberta T2N 1N4, Canada |
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Abstract: | Modern economies are characterized by the rising role of nonmarket actors (e.g., regulatory agencies, social activists, labor unions, media) that are gaining influence over the behavior of for-profit firms. These nonmarket stakeholders use their clout over industry players to impose innovations that require costly changes in business practices or technological trajectories while lacking firm-level economic justification. How should a company respond when it is pressured to adopt a new practice or change its products, while the economic calculations suggest that this is going to be a pure cost? Our study suggests alternative strategic responses to imposed innovation pressures and explores the factors determining the choice of an optimal strategy. Grounding the argument on the outside-in approach to pursuing imposed innovations, we propose a framework of organizational responses to external pressures to innovate, with varying degrees of firm engagement and different levels of cooperation with other industry actors. We also present a decision tree approach, allowing organizational decision makers to analyze the contextual determinants and ultimately arrive at the most appropriate, context-determined strategy. |
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Keywords: | Imposed innovation Nonmarket stakeholders Stakeholder pressure Competitor collaboration Resistance to innovation |
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