Technological capability,strategic flexibility,and product innovation

This paper examines the role of technological capability in product innovation. Building on the absorptive capacity perspective and organizational inertia theory, the authors propose that technological capability has curvilinear and differential effects on exploitative and explorative innovations. The findings support the proposition that though technological capability fosters exploitation at an accelerating rate, it has an inverted U‐shaped relationship with exploration. That is, a high level of technological capability impedes explorative innovation. Strategic flexibility strengthens the positive effects of technological capability on exploration, such that when strategic flexibility is high, greater technological capability is associated with more explorative innovation. Copyright © 2009 John Wiley & Sons, Ltd.     

A Comparison of New Service versus New Product Development: Configurations of Collaborative Intensity as Predictors of Performance

Collaboration among firms for innovation has received considerable attention. However, little is known about how firm‐to‐firm collaboration is configured in new service development (NSD) versus new product development (NPD). This study takes a multidimensional approach and measures firm‐to‐firm collaboration on different intensity dimensions of (1) processes (mutual communication, joint engagement, sharing responsibilities) and (2) ownership (relationship commitment and mutual trust). By showing that the phenomenon of collaboration is multifaceted, this study is able to knit a more comprehensive and cohesive understanding of the differences between NSD and NPD success as the result of different patterns of collaboration. Specifically, it utilizes survey data collected from 194 alliances to substantiate how NSD and NPD differ on these collaborative dimensions and then explores their impact on NSD versus NPD performance. The findings suggest that collaboration between firms in NSD is configured and works differently than collaboration between firms in NPD. The results further show that there is a stronger, positive relationship of intensity levels of joint engagement among firms involved in product development and performance than when a new service is developed. However, the intensity of mutual trust has a stronger, positive relationship with development performance when a new service is developed than when a new product is developed. Implications are discussed, and suggestions for future research are given.     

Design Inertia: Designing for Life‐Cycle Flexibility in Internet‐Based Services*

Managing innovation in rapidly moving environments, such as Internet‐based services, is a major challenge in theory and in practice. Most of the existing literature focuses on the development process as the main area in which innovation takes place. However, in environments where the pace of change of technology and market needs is extremely high, managing service innovations means not only being able to design a good service but also, more importantly, continuously redesigning and adapting the service in order to deal with frequent exogenous changes and opportunities. A high number of innovations therefore must be introduced throughout the entire life cycle of a service. This capability of introducing incremental and radical innovations during the service life cycle (i.e., to adapt a service to contextual changes and opportunities after it has been first released onto the market) at low costs and in the shortest possible time is what is defined here as service life‐cycle flexibility. This process of service adaptation and upgrading implies significant challenges that can be traced back to when a service is first conceived and designed. In fact, many decisions made during the first design process (i.e., the choice of a given database environment) involve a low reversibility rate and may reduce the possibility of taking advantage of future unpredictable opportunities, creating what is called inertia toward innovation. In other words, service life‐cycle flexibility largely depends on how a service has been first designed. This article analyzes two in‐depth case studies of Italian online newspapers and identifies five possible inertia factors that may influence service life‐cycle flexibility, namely (1) technological inertia; (2) internal organizational inertia; (3) external organizational inertia; (4) customer inertia toward changes in the service package; and (5) customer inertia toward changes in the service interaction design. These inertia factors are traced back to the service development process in order to suggest design practices that may increase the service life‐cycle flexibility.     

NSD Processes and Practices in Experiential Services*

This paper examines new service development (NSD) in a distinctive set of services: experiential services. Organizations delivering experiential services place the customer experience at the core of the service offering. They focus on the experience of customers when interacting with the organization rather than just the functional benefits following from the products and services delivered. Increasingly, organizations are recognizing that managing customer experiences is a powerful way of differentiating from competitors, establishing emotional connections, and increasing customer loyalty. Studying experiential services sheds light on this highly intangible type of services and, by representing an extreme end of the service spectrum, can advance the knowledge on the wider area of new product and service development. This paper addresses three research questions: (1) What are the processes and practices used in the development and design of experiential services? (2) How are these processes and practices similar to or distinct from established NSD practices? (3) How do these findings reflect on the wider area of NSD? The study concentrates on five dimensions of NSD: (1) the process; (2) market research; (3) tools and techniques; (4) metrics and performance measurement; and (5) organization. For each of these areas propositions are formulated and refined with empirical data. Using the case research methodology, empirical data were collected in 17 case companies: experiential service providers, design agencies, and consultancies known for focusing on the customer experience. The main method of data collection was interviews with those involved in experiential service design, such as founders, executives, or experienced designers. The case data revealed a number of practices specific to experiential services. These include a strong emphasis on gathering customer insights, in several cases obtained through empathic research and ethnographic research techniques. Other specific practices for experiential services include mapping customer journeys or touchpoints and storytelling. The case study companies also revealed a trade‐off between relatively formal, tight methodologies and more flexible, loose methodologies in NSD. More research is required to investigate the contingency factors surrounding tight or loose methodologies. The results also revealed the use of more broadly used NSD practices, such as a systematic NSD process, multiple performance measures, cross‐functional teams, and front‐line involvement. The observations from this study are captured in a set of seven propositions concerning NSD in experiential services. Reflecting on NSD in general, this study highlights the important role of service process innovation compared with service product innovation and the importance of continuous innovation requiring NSD processes and practices that are more flexible, iterative, and nonlinear. The study also supports the argument that different types of services may require different NSD processes and practices.     

Sectoral Heterogeneity in New Service Development: An Exploratory Study of Service Types and Success Factors

The service industry is of fundamental relevance for the economies of industrialized countries, as the service industry produces the highest growth in the gross domestic product. In this regard, new service development (NSD) represents a critical resource for competitive survival and a decisive factor of growth in the service industry. However, service firms across many industries are increasingly faced with the challenge of determining how best to manage their development of new service offerings. Although researchers have shown growing interest in NSD issues, this area is still underutilized. Furthermore, although the heterogeneity of the service industry has been emphasized for years, the current body of research on NSD mainly focuses on specific service environments, providing data that are often not comparable across different service sectors. Additionally, there is no study to date that comprehensively examines innovation activities and the relevance of service innovations’ success factors within different service industries. The aim of this exploratory study is to establish a more balanced picture of the nature of innovation activities in terms of NSD characteristics and success factors in the heterogeneous service industry. From this perspective, this paper begins with an examination of the factors that contribute to the success of NSD. Based on a meta‐analysis of new service success factor studies, 17 different success determinants are classified and aggregated to service‐related success determinants. Subsequently, a cluster analysis of 1016 service companies is used to identify different service innovation types. For the service sector, four service innovation types are determined: efficient developers, innovative developers, interactive adopters, and standardized adopters. Furthermore, based on interviews with service innovation managers, the previously identified success factors are examined for each innovation type using a standardized survey. Finally, based on the results of this exploratory study, the paper concludes with recommendations for NSD management and research propositions for each service innovation type. These propositions support innovation managers to successfully manage service innovations for the innovation type they are operating in.     

Differential Potency of Factors Affecting Innovation Performance in Manufacturing and Services Firms in Australia

Whether or not industrialized nations are experiencing a fundamental shift from a manufacturing- to a service-based economy may be a matter of debate. However, the service sector is clearly growing at an explosive rate, particularly in comparison with manufacturing. With this in mind, we need to better understand how the successful development of new services differs from that of new products. Such understanding requires identifying the critical success factors for new service development (NSD), as well as contrasting them with the factors underlying successful new product development (NPD). Kwaku Atuahene-Gima describes the results of a study comparing the innovation activities of Australian services firms and manufacturers. The study explores managers' perceptions of the factors necessary for successful NSD and NPD. In addition to comparing the differing perceptions of managers of services firms and manufacturers, the study highlights implications of these differences for managers striving for improved NSD. Services and manufacturing firms focus on similar factors for improving innovation performance. However, the relative importance of those factors depends on the type of firm. The critical factor for services—the importance accorded to innovation activity in the firm's human resource strategy—ranks third in importance for manufacturers. Manufacturers focus primarily on product innovation advantage and quality. In contrast, service innovation advantage and quality ranks third in importance for service firms. Surprisingly, technology synergy is found to have a negative effect on new service performance. If a new service is a close fit with a firm's current technologies, competitors will likely be able to quickly imitate the new service. As a result, NSD efforts based on technology synergy will not provide a competitive advantage. Compared to manufacturers, successful service firms must place greater emphasis on the selection, development, and management of employees who work directly with the customer. Through effective self management, these contact personnel shape the quality of the customer relationship. In addition, their close contact and potentially long-term relationships with customers make such employees an important source of new ideas in the firm's NSD process. Such relationships also cast contact personnel in a make-or-break role in the launching of new services.     

Mixing rich and asynchronous communication for new service development performance

This article explores the nature of relationships between internal communication modes, new service development (NSD) competencies (specifically learning and development competencies) and NSD performance. To do so, it draws on and advances communication theory by comparing and contrasting the contingent approach, favoured by media richness theory and media synchronicity theory, with the multiplicative manner of dual coding theory. Antecedent roles of rich and asynchronous communication modes for two NSD competencies are investigated, and their function as critical contingency variables affecting the competencies–performance link is unravelled. An empirical quantitative study of senior managers of leading service firms was conducted, with a survey‐based methodology. Results show that a learning competency drives development competency which in turn drives NSD performance. Asynchronous communication is essential for learning competency but not for development competency. In contrast, rich communication underpins development but has no direct effect on learning competency. Rich communication is essential for NSD performance when a firm has a low development competency. The interaction between asynchronous and rich communication is shown to be positive for learning, whereas surprisingly it is negative for development competency.     

Open Service Innovation: The Role of Intermediary Capabilities

This study examines how intermediaries, in general, and those with digital service platforms specifically, engage with clients to help them innovate their services within their service ecosystem. Based on an embedded, longitudinal case study, the results reveal the cumulative development and deployment of technological, marketing, and co‐creation capabilities by intermediaries, and how these capabilities allow intermediaries to engage with clients, so as to enable clients’ open service innovation despite their internal challenges. In turn, this article extends theory on service innovation by clarifying the role and function of intermediaries in service ecosystems in enabling clients to leverage open service innovation. Second, this study contributes to resource‐based scholarship by clarifying how these three sets of capabilities and their micro‐foundations relate to each other. Despite the obvious importance of technological capabilities, online intermediaries are more than just “virtual” service platform providers. The intermediary’s technological and marketing capabilities assist clients in dealing with project‐related and organizational challenges to open service innovation. Acting as a higher‐order capability, co‐creation capabilities—through shaping marketing and technological capabilities over time and also through conditioning their deployment—improve the proficiency of these capabilities. The findings advance insights on the agential role of the intermediary’s co‐creation capabilities, purposefully developed and deployed to foster client engagement, and thus support service organizations in leveraging open service innovation.     

Explorative search for a high‐impact innovation: the role of technological status in the global pharmaceutical industry

Extant studies suggest that the potential benefits arising from exploration are associated with access to diverse and distant knowledge across organizational and technological boundaries. However, exploration is not sufficient to assure if innovation actually occurs. Our study identifies exploration into two types, organizational and technological, and argues that the innovative effect of a firm's explorative search beyond organizational and technological boundaries is best leveraged by its technological status in an industry. Data derived from the global pharmaceutical industry indicate that a firm's search across organizational boundaries has a positive effect on its innovation impact, and such effect is strengthened when the firm is high in its technological status. However, the firm's search moving beyond its technological boundary increases innovation impact only for the group of high technological status but decreases it for the low‐status group. It appears that, in the global pharmaceutical industry, a firm's technological status is most critical to exploit knowledge from distant technology domains.     

New Service Development: An Analysis of 27 Years of Research *

This study examines the state of the art in new service development (NSD) research published in the period between 1982, when the first NSD article appeared in an academic journal, and 2008. First, a multisource search was conducted, which resulted in the identification of 145 NSD‐related articles. Then, a content analysis was performed of these articles using multiple classifier variables with regard to general publication characteristics, focus of the research, and the research methodology that was employed. By examining the results, a number of developments in and patterns of scholarly research in NSD are revealed. More specifically, it appears that the greatest attention in the early writings was on a narrow set of NSD topics like critical success factors and the NSD process, which were predominantly investigated through large‐scale surveys with single respondents in the U.S., Canadian, and U.K. financial services industry. The analytical techniques that were used at that time were rather simple. In contrast, in recent NSD works there is an expansion of research topics (such as customer involvement and the organization of NSD) that are increasingly investigated in high‐tech service industries in Europe through qualitative research designs. Also, multiple respondent studies have started to appear in NSD investigations, while analytical techniques have also become more advanced. This pattern clearly uncovers signs of increasing maturation for the NSD discipline. In addition, some underresearched areas are identified, leading to suggestions for future research into this growing and important field.     

Networking as a Means to Strategy Change: The Case of Open Innovation in Mobile Telephony

The purpose of this article is to investigate how innovation networks can be used to deal with a changing technological environment. This study combines different concepts related to research and development (R&D) collaboration strategies of large firms and applies these concepts to R&D alliance projects undertaken by Nokia Corporation in the period 1985–2002. The research methodology is a combination of in‐depth semistructured interviews and a large‐scale quantitative analysis of alliance agreements. For the empirical analysis a distinction is made between exploration and exploitation in innovation networks in terms of three different measures. As a first measure, the difference between exploration and exploitation strategies by means of the observed capabilities of the partners of the contracting firms is investigated. The second measure is related to partner turnover. The present article argues that in exploration networks partner turnover will be higher than in exploitation networks. As a third measure, the type of alliance contract will be taken; exploration networks will make use of flexible legal organizational structures, whereas exploitation alliances are associated with legal structures that enable long‐term collaboration. The case of Nokia has illustrated the importance of strategic technology networks for strategic repositioning under conditions of change. Nokia followed an exploitation strategy in the development of the first two generations of mobile telephony and an exploration strategy in the development of technologies for the third generation. Such interfirm networks seem to offer flexibility, speed, innovation, and the ability to adjust smoothly to changing market conditions and new strategic opportunities. These two different strategies have led to distinctly different international innovation networks, have helped the company in becoming a world leader in the mobile phone industry, and have enabled it to sustain that position in a radically changed technological environment. This study also illustrates that Nokia effectively uses an open innovation strategy in the development of new products and services and in setting technology standards for current and future use of mobile communication applications. This article presents one of the first longitudinal studies, which describes the use of innovation networks as a means to adapt swiftly to changing market conditions and strategic change. This study contributes to the emerging, but still inconsistent, literature on explorative and exploitative learning by means of strategic technology networks.     

Customer Involvement in New Service Development: An Examination of Antecedents and Outcomes*

Customer involvement has been recognized as an important factor for successful service development. Despite its acknowledged importance, a review of the literature suggests that there is little empirical evidence about the effectiveness and outcomes of interacting with customers while developing new services. Similarly, the extant literature shows mixed views about the effect of technological uncertainty on customer involvement and the effectiveness of customer involvement at different stages of the new service development process. Against this backdrop, the present study has three objectives: (1) to investigate the effects of customer involvement on operational dimensions (i.e., innovation speed and technical quality) and market dimensions (i.e., competitive superiority and sales performance) of new service performance; (2) to examine the effect of technological novelty and technological turbulence on customer involvement; and (3) to explore the moderating effect of the stage of the development process on the relationships among technological novelty, technological turbulence and customer involvement, and customer involvement and new service performance. A total of 807 firms with 75 or more employees in a varied set of industries were selected from the Dun & Bradstreet's 2004 listing of Spanish service firms. A questionnaire was mailed to the person in charge of new service development at each company. A total of 102 complete questionnaires were returned. Findings reveal that whereas customer involvement has a positive direct effect on technical quality and innovation speed, it has an indirect effect on competitive superiority and sales performance through both technical quality and innovation speed. The study also finds a positive effect of technological novelty as well as technological turbulence on customer involvement. Contrary to expectations, the study does not find any moderating effects of the stage of the development process. This study has several theoretical and managerial implications. In terms of theoretical implications, the study supports the role of technological uncertainty (novelty and turbulence) as an antecedent to customer involvement. It also provides empirical evidence of the impact of customer involvement on operational and market dimensions of new service performance. In terms of managerial implications, the study offers critical insights on how customer involvement in new service development translates into improved new service performance. Furthermore, it reveals that the importance of customer involvement in technologically uncertain contexts and its impact on new service performance are independent of the stage of the development process, suggesting that managers should involve customers throughout the entire development process.     

Antecedents and Consequences of Creativity in Product Innovation Teams

The generation of creative ideas and their manifestation as new products (NPs) are fundamental innovation activities of product innovation teams. Despite the importance of generating creative ideas at the fuzzy front end of the product innovation process, our understanding of antecedents and consequences of creativity of product innovation teams is limited. Drawing on Shane and Ulrich's organization design perspective of innovation, this study aims at examining the intermediary role of creativity as a critical link between team dynamics and product competitive advantage. In this study, the authors focus on NP and marketing program (MP) creativity in product innovation teams. They develop and empirically test a model that examines how internal and external team dynamics influence NP and MP creativity, and how NP and MP creativity affect product competitive advantage as a strategic innovation outcome. The study uses 206 matched responses from senior managers and product team leaders in high‐tech manufacturing firms in the United States to avoid common‐method bias. The authors use maximum likelihood estimation in a structural equation model to empirically test the proposed model. They find that two separate dimensions of creativity—novelty and meaningfulness—are differentially affected by team dynamics. For example, NP novelty as a result of divergent process is predominantly influenced by external team factors such as market‐based reward system and planning process formalization. On the other hand, NP meaningfulness as a result of convergent process is dominantly influenced by internal team factors such as social cohesion and superordinate identity. In addition, MP novelty is determined by social cohesion, superordinate identity, planning process formalization, and encouragement to take risks, while MP meaningfulness is influenced by social cohesion and planning process formalization. Our findings also suggest that NP novelty and meaningfulness, but not MP novelty and meaningfulness, play important intermediary roles in determining product competitive advantage. This study contributes to narrowing the important gap in the literature by examining the effect of team dynamics on creativity and by linking creativity to strategic innovation outcomes. Our study suggests that a firm's ability to manage team dynamics toward generating creative NPs and MPs constitutes a dynamic capability that can provide a competitive advantage over the competition.     

An Attention‐Based View of Family Firm Adaptation to Discontinuous Technological Change: Exploring the Role of Family CEOs' Noneconomic Goals

Recent studies show that managerial attention is a particularly important precursor of established firms' responses to discontinuous technological change. However, little is known about the factors that shape managerial attention‐response patterns. Our qualitative study investigates how the attention of family firm chief executive officers (CEOs) to discontinuous technological shifts, the interpretation and decision‐making processes associated with these changes, and ultimately organizations' responses are affected by CEOs' noneconomic goals. Based on seven longitudinal case studies in the German consumer goods industry, the paper induces a process model that extends the findings of the literature on the attention‐based view and helps to explain heterogeneity in family firms' adaptation to discontinuous technological change. This study shows that the family CEO's specific noneconomic goals—such as power and control, transgenerational value, the maintenance of family reputation, the continuance of personal ties, or personal affect associated with the family business—determine whether the CEO assesses an emerging technology as relevant enough to warrant a reaction from the firm. Moreover, the family CEO's noneconomic goals constrain the set of considered responses. The outcome of this sensemaking process determines the organization's response. For instance, in the specific context of this study, the goal of “family power and control” entailed an immediate interpretation of the focal trend as important for maintaining influence, and resulted in an unconstrained set of responses and, ultimately, high innovation in the new domain. Over time, family CEOs might reevaluate the emerging trend based on their goals and adapt organizational moves accordingly. The paper identifies and discusses how ambiguities and dilemmas may arise during this process. Our findings contribute to the literature on adaptation to discontinuous technological change and to family firm research.     

Organizational Attributes,Market Growth,and Product Innovation

Extensive research has shown that organizational attributes affect product innovation. Extending this literature, this article delimits two general categories of organizational attributes and relates them to product innovation. Organizational attributes can be either control oriented or flexibility oriented. Control‐oriented organizational attributes strive to realize organizational activities as intended, while flexibility‐oriented attributes allow organizational activities to emerge in a directed way. The classical institutional theory suggests that organizational attributes, no matter whether they are control oriented or flexibility oriented, serve two major functions: a constraining function and an enabling function. Recognizing the dual functions of organizational attributes, this article argues that both types of organizational attributes are indispensable for the functioning of innovative organizations and that the impacts of control‐oriented organizational attributes on product innovation decrease with market growth, while the impacts of flexibility‐oriented organizational attributes on product innovation increase with market growth. Empirical results largely support these hypotheses. Strategic planning, as a control‐oriented organizational attribute, is positively associated with product innovativeness, regardless of the market growth rate. The effectiveness of other organizational attributes, including formalization and organizational redundancy, varies with market conditions. As the rate of market growth increases, formalization becomes less effective for, but never becomes detrimental to, product innovativeness. Conversely, as the rate of market growth increases, organizational redundancy becomes more effective for product innovativeness. Overall, the results show that both control‐oriented and flexibility‐oriented elements are indispensable for the design of innovative organizations.     

Featuring Capability: How Carmakers Organize to Deploy Innovative Features across Products

Innovative features such as hands‐free car entry and ignition systems, stop‐start devices, telematics systems, and panoramic windshields are increasingly important to carmakers' innovation strategies. However, while product‐centric innovation has been extensively studied, there is less insight into the way companies implement their feature‐innovation strategies. The capability to explore, integrate, and deploy such attractive features is a critical dynamic capability; it allows carmakers to refresh their products, develop their competences, and maintain the efficiency of their traditional new product development. This research investigates the structures and processes of feature innovation in the automotive industry. It is based on a global investigation encompassing 9 generalist carmakers and 26 cases of feature innovation. The results show a clear trend, over the past decade, toward a structure of autonomous “advanced engineering” units and processes that are responsible for exploring innovative features and transferring them to multiple products. This paper details the key attributes of these units, and the role they play along the multiproduct learning cycle. Supplementing this structural analysis, the paper also identifies the coordination patterns between exploration and new product development activities. These results provide industry‐level insights into the way firms organize their feature‐innovation capability, and bring empirical elements to the ambidexterity literature.     

The Moderating Role of Tangibility in Synchronous Innovation in Services

A synchronous pattern of innovation as between technological and management innovation, for example, can help firms improve their performance. This article explores this idea with respect to servitizing companies that introduce service delivery innovation as a means of gaining competitive advantage. It finds that the degree of tangibility, an indicator of the firm’s position on the product–service continuum, affects whether and how managers recognize the need for management innovation when introducing service delivery innovation. Using a socio‐technical perspective in conjunction with insights from managerial cognition, the relationship between management innovation and two central types of service delivery innovation—technological and customer interface—is examined. Tangibility shapes the managerial cognitive structures that are related to the enterprise’s technical and social subsystems in a paradigm that is capable of demonstrating contrasting effects. Technological delivery innovation is related to management innovation in firms with high tangibility. Customer interface delivery innovation, on the other hand, relates to management innovation in firms with low tangibility. This study uses a sample of diverse firms with varying degrees of tangibility to provide support for this theory.     

Application and performance impact of stage–gate systems – the role services in the firm’s business focus

Although service innovation is important, knowledge of new product and service development, including the positive effect of stage‐and‐gate‐type systems, has been derived almost exclusively from studies in the manufacturing sector. In the present paper, we address two important questions: How do differences in the firm’s business focus, which describes whether a firm puts more emphasis on products or services in its business activities, influence the usage of such formal innovation processes? Is stage‐and‐gate‐type systems’ impact on innovation program performance contingent on the firm’s business focus? Unlike previous studies, we not only differentiate service and manufacturing by industry classification codes but also apply a continuous measure to take into account the blurring of boundaries between the manufacturing and service businesses. Based on a comprehensive discussion of service‐specific characteristics and their implications for innovation management and using a cross‐industry, multi‐informant sample of innovation programs from 272 firms with 1,985 informants, we find empirical support for firms with a stronger focus on the service business being less likely to use stage‐and‐gate‐type systems. Furthermore, the use of stage‐and‐gate‐type systems fosters innovation program performance, and this effect becomes stronger as the business focus shifts toward services. This result implies that service‐based firms can benefit from stage‐and‐gate‐type systems to a greater extent than product‐based firms. Our research also demonstrates the gap between the desired level of innovation process formalization and its current usage in practice, especially for firms with a dominating service business.     

Development of a Technical Innovation Audit

Measuring performance is helpful, but it's only part of the story. To learn from our past successes and failures, we need to understand how they came about. To continually improve, we must examine not only our innovation performance, but the processes with which we develop and exploit these innovations. Vittorio Chiesa, Paul Coughlan, and Chris Voss present a framework for auditing technical innovation management. Their auditing methodology goes beyond performance measurement by highlighting problems and needs, and providing information that can be used in developing action plans for improving performance. The foundation of their audit methodology is a process model of technical innovation. The model addresses the managerial processes and the organizational mechanisms through which innovation is performed. Underlying this method is the notion that success in innovation is related to good practice in the relevant management processes. The model identifies four core processes: concept generation, product development, process innovation, and technology acquisition. Supporting these core processes are three enabling processes: the deployment of human and financial resources, the effective use of appropriate systems and tools, and senior management leadership and direction. The outcome from these core and enabling processes is performance in terms of innovation and the resulting competitiveness in the marketplace. This model provides the basis for a detailed audit of current innovation practice and performance. The audit has two dimensions: the process audit assesses whether the processes necessary for innovation are in place and the degree to which best practice is used; and the performance audit focuses on the outcomes of each core and enabling process and of the overall process of technological innovation and its effect on competitiveness. The performance audit helps identify needs and problems, but it doesn't explain why gaps exist between current and required performance and it doesn't provide an action plan for closing these gaps. The process audit meets these needs. The audit methodology uses a two-level approach: a rapid assessment based on innovation scorecards and an in-depth audit. These scorecards provide an overview of the company's strengths and weaknesses with regard to technical innovation management, highlighting those areas that require in-depth examination. The in-depth audit identifies not only the processes, but the areas within each requiring attention.     

An inquiry on dimensions of external technology search and their influence on technological innovations: evidence from Chinese firms

A central part of technological innovation for industrial firms involves search for new external knowledge. A well‐established stream of literature on firms' external knowledge search has demonstrated that firms investing in broader search may have a great ability to innovate. In this paper, we explore the influences of technology search on firms' technological innovation performance along three distinctive dimensions: technical, geographic, and temporal dimensions, using a unique panel data set containing information on Chinese firms that were active in technology in‐licensing and patenting during the period 2000–2009. Our findings reveal that Chinese firms' technological innovation performances are related to external technology search in quite different ways from the ones suggested in the extant literature using evidence from developed countries. We find that Chinese firms searching ‘locally’ along the technical dimension have better technological innovation performance than those searching ‘distantly’. However, when a Chinese firm in‐license relatively old (mature) technologies or those from geographically nearby areas, it will be less bounded to searching familiar technical knowledge.