Value creation in innovation ecosystems: how the structure of technological interdependence affects firm performance in new technology generations

The success of an innovating firm often depends on the efforts of other innovators in its environment. How do the challenges faced by external innovators affect the focal firm's outcomes? To address this question we first characterize the external environment according to the structure of interdependence. We follow the flow of inputs and outputs in the ecosystem to distinguish between upstream components that are bundled by the focal firm, and downstream complements that are bundled by the firm's customers. We hypothesize that the effects of external innovation challenges depend not only on their magnitude, but also on their location in the ecosystem relative to the focal firm. We identify a key asymmetry that results from the location of challenges relative to a focal firm—greater upstream innovation challenges in components enhance the benefits that accrue to technology leaders, while greater downstream innovation challenges in complements erode these benefits. We further propose that the effectiveness of vertical integration as a strategy to manage ecosystem interdependence increases over the course of the technology life cycle. We explore these arguments in the context of the global semiconductor lithography equipment industry from its emergence in 1962 to 2005 across nine distinct technology generations. We find strong empirical support for our framework. Copyright © 2009 John Wiley & Sons, Ltd.     

Changes in firm knowledge couplings and firm innovation performance: The moderating role of technological complexity

We investigate the effect of changes in a firm's knowledge couplings on its innovation performance. We develop arguments to explain how changes in couplings among existing knowledge domains and those between new and existing knowledge domains affect the generation of valuable inventions. We also examine how observed domain complexity, an indicator of the inherent interdependencies among knowledge domains, moderates the effects of changes in a firm's knowledge couplings on innovation performance. Our results suggest that a change in couplings among existing knowledge domains hurts innovation outcomes, but not when the degree of domain complexity is high, whereas coupling new and existing knowledge domains leads to improved outcomes, but not when the degree of domain complexity is high. Copyright © 2013 John Wiley & Sons, Ltd.     

Competitive intensity and collaboration: impact on firm growth across technological environments

This article investigates the impact of competitive intensity and collaboration on firm growth across technological environments. I propose that competitive intensity determines the likelihood of firm collaboration, and that the interaction of competitive intensity and collaboration influences firm growth. These relationships are, in turn, moderated by industry‐level technological intensity. Analyzing 1,004 firms and 378 collaborations from the manufacturing sector in Singapore, I find that firms facing high or low levels of competitive intensity collaborate less often than those facing moderate levels of competitive intensity. Industry technology intensity moderates this relationship, with a stronger inverted‐U‐shaped association between competitive intensity and collaboration in more technology intensive industries. Collaboration leads to higher growth for firms facing lower levels of competitive intensity than for firms facing higher levels of competitive intensity only in more technology intensive industries. In technologically less intensive industries, collaboration leads to higher growth for firms facing higher levels of competitive intensity as compared to those facing lower levels of competitive intensity. These findings have important implications for competitive and collaborative dynamics for firm growth in different technological environments. Copyright © 2008 John Wiley & Sons, Ltd.     

Teamwork and delegation of decisions within the firm

Teamwork effort is related to a number of firm and workers’ outcomes such as firm productivity, innovation or job satisfaction. Thus, it becomes important to understand the factors conducive to teamwork. In this paper, we analyze the relationship between teamwork and the firm organizational design, with a particular emphasis on the decentralization of decision rights. We develop a simple model allowing for different organizational structures, according to whether or not production and firm strategic decisions are delegated. We find that overall delegation of decision making is positively associated with teamwork. However, when we distinguish between delegation of firm strategic decisions and delegation of production decisions, we obtain that it is just the delegation of firm strategic decisions that induces teamwork. We test the model predictions on a unique dataset of Spanish small and medium size firms that contains information on worker self-reported importance of teamwork. The empirical analysis also corroborates previous findings in the literature regarding the positive relation between cooperation and pay incentives.     

Contingency view on technological differentiation and firm performance: evidence in an economic downturn

Although the importance of strategy for firm performance has been studied, little evidence has been offered regarding this linkage in hostile environments characterized by a lack of exploitable market opportunity and fiercer competition. This study aims to examine the viability of strategic postures of technological differentiation in such a setting using data from 1,054 samples across 32 industries in 30 countries during 2001–2002, when global economies suffered a downturn. The empirical results show that differentiation-oriented firms underperformed efficiency-oriented ones during this period. However, in the face of deteriorating market conditions, a strategic orientation toward technological differentiation, in concert with an internal commitment to R&D investment or external munificence toward technological opportunity, yields better performance. Finally, this study finds that firms with tight coupling between differentiation and efficiency outmaneuver those with a pure strategy or no strategy at the time of an economic downturn.     

Cointegration of firm strategies within groups: a long‐run analysis of firm behavior in the Japanese steel industry

This paper uses cointegration analysis to study the competitive interaction among firms within the integrated and minimill groups in the Japanese steel industry. The use of cointegration analysis overcomes some of the limitations associated with prior attempts at modeling firm behavior within groups, and allows us to model strategies that take considerable time to adjust. Results indicate that several strategies displayed slow adjustment characteristics. All of the strategies that displayed these properties were cointegrated within the group. Finally, over the long run, the rate of strategic response to ‘shocks’ in the system varied across members and strategies: some converged, while others diverged from the group relationship. We conclude by discussing the relevance of our findings to research on strategic groups and competitive dynamics among firms. Thus the paper contributes to the literature on strategic groups and competitive dynamics, and illustrates the use of cointegration analyses to study the competitive behavior of firms. Copyright © 2002 John Wiley & Sons, Ltd.     

Knowledge,firm boundaries,and innovation: Mitigating the incumbent's curse during radical technological change

We explore the relationship between a firm's organization and its ability to face a radical technological change. We suggest that, during such a change, the presence of both in‐house upstream knowledge and downstream market linkages, within a firm's boundary, has its advantages. We test our predictions in the context of the robotics industry where manufacturers of mechanically controlled “brawny” robots, which were valued mainly for their payload capacity, faced the advent of electrically controlled “brainy” robots that emphasized accuracy and repeatability. We find that “preadapted” firms—the ones with prior relevant technological knowledge and with access to internal users of “brainy” robots—were the innovation leaders in the emerging new technology but were laggards in the old technology. Copyright © 2014 John Wiley & Sons, Ltd.     

Combining methods in the technology intelligence process: application in an aerospace manufacturing firm

Technological change is a major factor in gaining competitive advantage in manufacturing industries. Promoting innovation, exploiting technological opportunities and avoiding threats are increasingly important. Firms need to recognise both current and potential future technological advances that can affect their products, services and processes. This paper presents a Technology Intelligence (TI) methodology and toolset, the main purpose of which is to enable companies to monitor and assess technological developments associated with their products, components, processes and other areas of concern. These technology management activities will assist the company in evaluating its environment while taking advantage of technological changes that represent opportunities or threats. The methodology is described in detail and demonstrated using a case study conducted in an aerospace manufacturing firm in the United Kingdom.     

Inward technology licensing and firm performance: a longitudinal study

Inward technology licensing (ITL) is often viewed as an important strategy adopted by firms to achieve innovation. However, relatively limited research has focused on evaluating the contribution of ITL to firm performance. The gap is all the more surprising since the benefits of external technology acquisition on innovation output have been emphasized in a lot of the literature. This study therefore sets out to investigate the extent to which the investment of ITL by firms affects their performance. In view of the relative abundance of data on variables for a longitudinal investigation, this analysis concentrates on the electronics-manufacturing industry. The longitudinal sample allows this examination to control the more extraneous effects and to provide more convincing evidence for examining the relationship of ITL and firm performance. A total of 341 Taiwanese electronics-manufacturing firms balanced over the period from 1998 to 2002 is taken as the analytical sample. The basic statistics indicate that acquiring technology externally shows an increasing tendency within the firms. The analyses, from the least square dummy variable method, reveal that ITL per se does not provide a significant contribution to firm performance; however, the positive impact of ITL on their performance increases with the level of the firms' internal research and development (R&D) efforts. Both the checks for robustness and the split-sample analyses validate the results. The findings not only highlight the importance of internal R&D efforts but also suggest that firms had better use ITL as a complement rather than a substitute of internal R&D for their competence.     

R&D 'programmes-competencies' matrix: analyzing R&D expertise within the firm

The author suggests that the systematic identification of a firm's technologies opens up the possibility of evaluating, protecting, optimizing, enriching and exploiting these technologies to the full. A firm's technologies fall into two parts: those embodied and exploited in current operations and those evolving from the collective competencies of its R&D staff. The author's aim is to evaluate and describe the firm's R&D competencies.
The identification of R&D competencies proceeds in three steps: tracing the background of the current and past programmes, constructing a programmes/competencies matrix, and deriving an expertise profile. The construction of the matrix is the key activity and requires much care in its execution, if competencies are to be properly defined and truly existing, and if it is to be exhaustive. The author sketches a procedure for constructing a matrix and discusses problems of implementation and draws attention to some of its limitations.
The author claims that such an inventory of expertise could improve the efficiency of the use of the R&D resource, identify a laboratory's strengths and weaknesses, direct R&D into hitherto neglected channels, assist individuals to identify and evaluate their own expertise, justify obtaining funding for building expertise in shortage areas. The method should be considered as a starting point to formulate appropriate strategies to gain access to technology.     

Embodying the past,designing the future: technological determinism reconsidered in technology education

International Journal of Technology and Design Education - From a philosophical viewpoint, technological design is about connecting what is desirable with what is technically possible. Technology...     

Understanding the links between technological opportunism, marketing emphasis and firm performance: Implications for B2B

The capability of firms to sense and respond to changes in technologies, called technological opportunism, is of growing importance to managers as a source of competitive advantage. However, exactly how technological opportunism impacts firm performance is still not clearly understood. Furthermore, the role of marketing in this relationship, if any, has yet to be examined. Understanding this relationship is critical for marketing managers not only for determining strategic investments of resources but also for demonstrating marketing return on activities. This paper explores the links between technological opportunism and firm performance. The results show that technological opportunism has a strong positive impact on key measures of performance such as firm sales, profits and market value. Importantly, marketing emphasis is the mechanism through which the technological opportunism-performance relationship is achieved. Finally, the impact of marketing emphasis on B2B firms is different than that for B2C firms, highlighting the importance of these activities for B2B marketing managers.     

A competition‐based explanation of collaborative invention within the firm

Existing literature shows that collaborative invention within the firm enhances innovativeness by facilitating knowledge recombination. Despite such benefit, firms vary in their use of collaborative invention when drawing on their individual inventors' knowledge. In addressing this puzzle, we argue that competition from rival products building on similar knowledge compels firms to favor search depth over exploratory search and respond expeditiously, thus reducing a firm's inclination toward collaborative invention. In contrast with prior research's focus on how upstream resources influence a firm's position in downstream markets, this study shows that downstream competition drives heterogeneity across firms in their utilization of upstream resources. Copyright © 2013 John Wiley & Sons, Ltd.     

Market power of the firm and international transfer of technology : A historical excursion

The power of the multinational enterprise to influence or control the international transfer of technology over the past century has shifted from that based upon a priviledged possession of a specific intangible asset to that based on the governance of a set of interrelated activities. This changing form of economic leverage has had important consequences on both the structure of the international technology market and economic policies of home and host governments.     

Sales technology within the salesperson's relationships: A research agenda

The average cost of a sales call has declined approximately 15% over the past decade, while average salesperson compensation has doubled. These statistics illustrate an important benefit of technology: salespeople are more productive. To better understand the impact technology has played on sales and sales management, this paper examines the impact of sales technology from four perspectives: the salesperson, the field sales manager, the sales executive, and the customer. Noting that the needs and evaluations of technology vary, depending upon the functional position and viewpoint, a research agenda is offered that reflects these various perspectives.     

Entry into new niches: the effects of firm age and the expansion of technological capabilities on innovative output and impact

We provide evidence that young firms systematically differ from older firms in their innovative output when they enter ‘new to the firm’ technological niches. We analyze data from 128 biotechnology firms since their inception and track these firms over time. Our analyses reveal that the organizational age at which the firm branches into new technological niches significantly influences its innovative activity. We refine the focus of the extant literature by separately examining the effects of branching on the quantity of innovative output and the impact that this output has on the technology domain. Subsequent to branching into new niches, we find that older firms have a higher quantity of output than their younger counterparts, whereas young firms tend to outpace their older rivals with higher impact. We discuss the implications of these findings for the literature on dynamic capabilities and entrepreneurship. Copyright © 2011 John Wiley & Sons, Ltd.     

The power of marketing within the firm: Its contribution to business performance and the effect of power asymmetry

While marketing continues to gain prominence as an orientation within the firm, concerns remain about the contributions of the marketing subunit. Given the current limited and conflicting evidence on the issue, this study responds to calls for research on the link between a powerful marketing subunit and business performance. The study draws on the critical contingencies perspective on power, which was specifically developed to study power distribution among organizational subunits. The key objectives of the study are (1) to determine whether a powerful marketing department is beneficial to business performance, (2) to reconcile conflicting evidence pertaining to the marketing function's contribution to performance beyond that of a market orientation, and (3) to investigate the effect on business performance of power asymmetry between marketing and other functions. Employing data from senior managers in medium and large manufacturing firms, the study shows that a powerful marketing function is associated with improved business performance above and beyond the contribution of a market orientation. Power asymmetry between marketing and finance/accounting and between marketing and production has a negative effect on business performance while a power asymmetry between marketing and R&D shows a positive effect on business performance. Finally, a differentiation strategy attenuates the negative performance outcomes of power asymmetry between marketing and production.     

Implementing the lead user method in a high technology firm: A longitudinal study of intentions versus actions

The customer or user's role in the new product development process is limited or nonexistent in many high technology firms, despite evidence that suggests customers are frequently an excellent source for new product ideas with great market potential. This article examines the implementation of the Lead User method for gathering new product ideas from leading edge customers by an IT firm that had not previously done much customer research during their new product development efforts. This case study follows the decision‐makers of the firm through the process, where the end result is the generation of a number of useful product concepts. Besides the ideas generated, management at the firm is also impressed with the way the method makes their new product development process more cross‐functional and they plan to make it a part of their future new product development practices. Approximately one year later the firm is revisited to find out if the Lead User method has become a permanent part of their new product development process. The authors find, however, that the firm has abandoned research on the customer despite the fact that several of the lead‐user derived product concepts had been successfully implemented. Management explanations for their return to a technology push process for developing new products include personnel turnover and lack of time. Using organizational learning theory to examine the case, the authors suggest that the nontechnology specific product concepts generated by the lead users were seen as ambiguous and hence overly simplistic and less valuable by the new product development personnel. The technical language spoken by the new product personnel also increased the inertia of old technology push development process by making it more prestigious and comfortable to plan new products with their technology suppliers. The fact that the firm was doing well throughout this process also decreased the pressure to change from their established new product development routine. The implications for these finding are that: 1) it is necessary to pressure or reward personnel in order to make permanent changes to established routines, and 2) researchers should be careful at taking managers at their word when asking them about their future intentions.     

Look Who's Talking: Sources of Variation in Information Disclosure in the UK

The article examines the correlates of variable levels of information disclosure by management to employees in the UK. It develops several hypotheses that are tested using 1998 and 2004 Workplace Employment Relations Survey data. The results show that managerial perceptions of goal alignment by employees and the existence of direct participation mechanisms are positively associated with disclosure at both dates. The size of the workplace has a generally negative relationship at both dates, but less so in 2004 than in 1998. Other variables such as financial distress and the presence of trade unions and joint consultation have more complicated relationships over the two time periods. The article discusses theoretical and policy implications of the findings.