Diffusing knowledge-based core competencies for leveraging innovation strategies: Modelling outsourcing to knowledge process organizations (KPOs) in pharmaceutical networks

As pharmaceutical firms try to market their products and reduce costs, vertically integrated structures hamper innovation processes. Yet, pharmaceutical firms must innovate to compete. Outsourcing knowledge intensive activities to knowledge process organizations (KPOs) serves to reduce innovation process obstacles. Grounded in diffusion theory and strategic management literature, this conceptual paper explores four interrelated strategic concepts: core competencies, economies of scale and scope, knowledge sharing, and learning. This paper claims that (a) accumulated core competencies of multinational pharmaceutical companies (MPCs) erode over time and these companies become dependent on KPOs (b) MPCs must understand how KPOs manage core competencies (c) economies of scope benefit KPOs enabling them to sustain competitive advantages for their MPC partners, meanwhile the benefits from economies of both scale and scope shift from MPCs to KPOs (d) KPOs need to monitor their rate of learning to remain competitive. The paper identifies implications for industrial managers and directions for future research.     

The Interplay of Customer and Product Innovation Dynamics: An Exploratory Study

The challenges of successfully developing radical or really new products have received considerable attention from a variety of marketing, strategic, and organizational perspectives. Previous research has stressed the importance of a market‐driven customer orientation, the resolution of market and technological uncertainty, and organizational processes such as cross‐functional teams and organizational learning. However, several fundamental issues have not been addressed. From a customer's perspective, a more innovative product tends to have uncertain benefits and requires customers to learn new behaviors. Customer preferences can, therefore, change as product experience and learning increase. From a firm's perspective, it is unclear how to be customer‐oriented under such dynamic preferences, and product strategies using evolving technologies will tend to interact with how customers learn about an innovation. This research focuses on identifying unresolved issues about these customer and product innovation dynamics. A conceptual framework and series of propositions are presented that relate both changing technology and customer learning to a firm's strategic decisions in developing and launching really new products. The framework is based on in‐depth interviews with high‐tech product managers across several sectors, focusing on the business‐to‐business context. The propositions resulting from the framework highlight the need to consider relevant customer dynamics as integral to a firm's product innovation process. Successful innovation strategies and future research challenges are discussed, and applications to better understanding customer needs and theories of disruptive innovation are examined. Several key insights for innovation success hinge on a broad, downstream orientation to customer needs and product innovation dynamics. To be effective innovators, firms must know their customers' customers and competitors as well as or better than their immediate customers do. Market research must extend downstream for a comprehensive understanding of customer needs dynamics. In the context of disruptive innovation, new dimensions of customer needs may become more valuable based on perceived downstream customer trends. Firms may also innovate on secondary needs because mainstream customers do not always give firms the design freedom to radically innovate on primary features. Understanding customer commitments and how they develop under evolving needs can help firms focus resources on innovative efforts more likely to be accepted by customers.     

Strategic concepts as micro‐level tools in strategic sensemaking

Research Summary: The purpose of this article is to illuminate the role of concepts in strategic sensemaking. Based on a longitudinal real‐time study of a city organization, we demonstrate how the concept of “self‐responsibility” played a crucial role in strategic sensemaking. We develop a theoretical model that elucidates how strategic concepts are used in meaning‐making, and how such concepts may be mobilized for the legitimation of strategic change. Our main contribution is to offer strategic concepts as a missing micro‐level component of the language‐based view of strategic processes and practices. By so doing, our analysis also adds to studies on strategic ambiguity and advances research on vocabularies. Managerial Summary: Our analysis helps to understand the role of strategic concepts, that is, specific words or phrases with established and at least partly shared meanings, in an organization's strategy process. We show how adopting the concept “self‐responsibility” helped managers in a city organization to make sense of environmental challenges and to promote change. Our analysis highlights how such concepts involve ambiguity that can help managers to establish common ground, but can also hinder implementation of specific decisions and actions if it grows over time. We suggest that under environmental changes, development of new strategic concepts may be crucial in helping managers to collectively deal with environmental changes and to articulate a new strategic direction for the organization.     

Managing Innovation Champions: The Impact of Project Characteristics on the Direct Manager Role*

A key challenge for organizations seeking to improve the management of innovation lies in determining when to lend direct managerial support, and how much support, to those championing such projects. This research provides insights into the connection between project characteristics and the type and frequency of direct manager involvement. As such, it addresses the following research question: how does the level of project innovativeness, strategic relatedness, and resource requirements impact the level of empowerment of innovation champions and the sponsor or supervisor role played by managers? The research method involves a survey of 89 project champions from four divisions of large, multinational Korean companies. The results show that when innovativeness was high but projects were strategically related, there was greater project champion empowerment but also a more frequent managerial sponsor role. This suggests it may be best to allow innovators, who are close to the project's markets, technologies, and industry conditions, to have greater freedom over objectives and decisions. Yet they may also need the advice and support of their managers to function optimally under the highly uncertain conditions that characterize innovative projects. This combination of empowerment and a sponsor role, though appropriate for highly innovative projects, may also require high strategic relatedness, however. On the other hand, when projects are less strategically related and when resource requirements are high, the analysis suggests managers are more likely to exert control. Managers may therefore need to become more closely involved in decision making for costly ventures representing new strategic directions for their organizations. Overall, this research suggests that both empowerment and manager roles are relevant to the management of innovation. These results offer academic value in recognizing the nature of the direct manager role under different innovation project conditions. It further reveals a need for academics to recognize both the supervisor and sponsor roles in the management of innovation. For managers, the findings suggest that for organizations to effectively develop and commercialize innovations managers need to recognize when certain projects call for different levels and types of involvement.     

How Elephants Learn the New Dance When Headquarters Changes the Music: Three Case Studies on Innovation Strategy Change

Does a product innovation strategy change at company headquarters resonate the same way at different strategic business units (SBUs)? What factors play a role in differing implementation of new innovation strategies? A collective case study was conducted at three SBUs of an international conglomerate to investigate why the SBUs implement the same corporate innovation charter in vastly different manners, both in strategic processes and in organizing for new product development (NPD). This study's contribution to the literature is twofold. First, it develops initial insights into how three SBUs implement diverse SBU‐level innovation strategies in response to the same product innovation charter. Second, it extends the findings of previous studies on NPD strategy by presenting how three SBUs reshape their structure and resource allocation, changing various dimensions of their innovation strategy while also fitting the competitive structure in their individual, non‐high‐tech, traditional manufacturing industries as they respond to the corporate mandate. In this study, several factors were observed to influence a firm when formulating a new product innovation strategy. First, past performance and strategic typology constrain the innovation paths available. Poor past performance limits available resources whereas the strategic typology managers use limits their ability to recognize other opportunities. Next, capacity constraints provide a catalyst in moving toward process improvements. Third, management involvement in the day‐to‐day implementation of change is necessary to ensure that the new processes are implemented. Finally, corporate performance metrics are quite influential in how SBUs adapt to change. This study identifies that even with the immense power corporate has over these SBUs, some still dance to their own tune, ignorant of their deviation from the corporate mandate because the metric is not sufficient to detect these deviations. This study suggests the use of multiple types of metrics to minimize the likelihood of nearsighted responses to innovation charter changes.     

Stage‐to‐Stage Information Dependency in the NPD Process: Effective Learning or a Potential Entrapment of NPD Gates?

The new product development (NPD) process is a sequence of stages and gates. Each stage consists of NPD activities that provide NPD managers with information input about the new product project progression. Information input is used for review decisions at gates. Over the course of an NPD process, managers learn about a new product project as to ensure successful launch. The view is that a new product project is shaped by the path of NPD activities it has traveled. Because learning is assumed to take place over the course of the NPD process, stage‐to‐stage information dependency is an assumption of NPD research. A concern raised is that development activities for each NPD stage are rigorously followed by NPD managers. In other words, stage‐to‐stage information dependency may potentially trap NPD managers rather than create effective learning from end to end of the development process. The purpose of this paper is to explore the assumption of stage‐to‐stage information dependency in NPD. The investigated research questions are whether the selection of NPD activities is linked between stages and whether these information dependencies strengthen NPD gate decisions. For the information dependencies identified in the study, the innovation experience characteristics of NPD managers pursuing them and the influence of information dependencies on NPD gate decisions are analyzed so as to provide insights for a discussion of information dependency versus information independency in the NPD process. The applied research method is an experiential simulation of NPD gate decision‐making—NPDGATES. One hundred thirty‐one NPD managers from international product development strategic business units (SBUs) situated in Denmark participated in the study. Logistic regressions were conducted as the basis for the calculation of stage‐to‐stage information dependency probabilities. Based on the study findings, the assumption about information dependency in the NPD process held by NPD research is found to be flawed. End‐to‐end information paths in the NPD process are rare. Further, market condition changes are found to significantly influence the stage‐to‐stage information dependencies demonstrated by NPD managers. It seems that competition becomes a reassurance of NPD efforts. Also, the results show that NPD experience creates inflexibility in relation to the selection of NPD activities. The need for strict process management is strong among experienced NPD managers. In relation to NPD gates, the results show that information dependencies increase priority given to financial decision criteria at gates and lower priority given to customer and market decision criteria. Overall, stage‐to‐stage information dependency seems to create inflexibility that hinders successful NPD process implementation.     

Passion for Work,Nonwork‐Related Excitement,and Innovation Managers’ Decision to Exploit New Product Opportunities

This article investigates the role of affect in innovation managers’ decision to exploit new product opportunities—a decision central to the innovation process. The model proposes that different types of passion can trigger managers’ exploitation decisions but that this effect is contingent on experiencing excitement from events outside their work environment. A field experiment with 90 owner–managers of young firms located in an innovation context (business incubators) shows that passion for work and nonwork‐related excitement levels interdependently impact innovation managers’ decision to exploit new product opportunities. Specifically, harmonious passion has a general positive effect on managers’ propensity to exploit. In contrast, the effect of obsessive passion is more complex and contingent on the additional excitement managers experience such that the positive relationship between obsessive passion and the decision to exploit is more positive with higher levels of excitement. These findings extend the product innovation management literature by acknowledging that decision‐makers’ affective experiences influence innovation decisions and provide a first step toward understanding the role of affect and passion in the product innovation context. Second, the finding that obsessive passion and nonwork‐related excitement interact in explaining opportunity exploitation decisions highlights the need to incorporate contingency relationships in models of innovation decision‐making. Third, in drawing on a field experiment and the experimental manipulation of managerial affect during the decision‐making task, this article answers a recent call in the project management literature to pursue less common methodological approaches and develop “broader theoretical schema” in order to enhance our understanding of innovation management. Finally, this study also has implications for practitioners because it can help innovation managers understand their own decision policies. To the extent that innovation managers are able to regulate their affective experiences, this improved understanding might prevent them from premature and faulty decision‐making.     

Managing innovation in a knowledge intensive technology organisation (KITO)

This study aims to add to the existing knowledge of how innovation works in organisations. By understanding how to assess/evaluate processes that support and enable innovation, managers can better manage innovation as a business process. This paper addresses elements of organisational behaviour that relate to people management where innovation and technology management is concerned. Perception plays a crucial role in driving behaviour and therefore the widely accepted business scorecard methodology has been used to measure innovation practices in the organisation. The research was done in a knowledge intensive technology organisation (KITO) in South Africa. Interviews with managers of R&D were conducted. These interviews were used to adapt an existing audit instrument to suit the technology–based organisation. Thereafter, a comprehensive audit of innovation was conducted at three different management levels using the adapted instrument. Over 100, mostly R&D managers, were asked to complete a scorecard–based questionnaire and to draw a visual representation (VR) of innovation. The results of the interviews, audit and VRs were used to produce a management framework that is not only applicable to a KITO, but can also be used widely to improve innovation through enhanced visual understanding of any technology–based organisation. The results of the study indicate that measuring innovation through a validated instrument is highly valuable. The Holistic System Framework for innovation and the measurement instrument facilitated (1) management of, and (2) organisational learning about innovation. The comprehensive audit indicated, on a strategic level, the strengths and weaknesses of the innovation process as practised in the organisation. The instrument is valuable at a strategic management level as it indicates where in the organisation the gaps exist regarding the management of the process of innovation with the aim to create a competitive advantage.     

An Empirical Investigation into the Antecedents of Knowledge Dissemination at the Strategic Business Unit Level

Knowledge dissemination is of crucial importance for the strategic planning in new product development. Many new ideas stem from recombination of previously successful, disseminated actions, and knowledge dissemination offers a clear overview of market needs, technology developments, and competitors' actions. Moreover, in dynamic environments, where strategic planning has to be added by some kind of improvisation, knowledge dissemination leads to a high quality of improvisation. It leads to a quick awareness of external or internal surprises, gives an opportunity to learn quickly from the past, and compensates for a coordination mechanism instead of planning. The dissemination of knowledge does not always happen spontaneously. Especially, people with a technical background often are highly individualistic and do not disseminate knowledge naturally. So, this must be fostered by the organization. In management research, particularly on technology and innovation management, many facilitating factors have been identified that enhance communication. Intuitively, they also would seem useful in enhancing knowledge dissemination; however, these factors have not been tested empirically for this specific use. Research on knowledge and its management has not given much attention to the way knowledge in an organization is disseminated and the factors that can facilitate it. If such factors are mentioned, they are not tested empirically and their relative impact is not addressed. In this study we identified 17 important factors in enhancing knowledge dissemination and validated 10 of these factors empirically and determined their relative impact. We focused on technological knowledge in new product development—not on the project level but on the level of the strategic business unit. The field research comprised three parts. In the first step, we conducted in‐depth interviews with research and development (R&D) managers and their supervisors to select the most important potential facilitating factors. In the second step, in‐depth interviews with senior executives, information technology (IT) officers, and R&D experts were conducted to determine whether the constructs regarding knowledge dissemination and the potential facilitating factors had face validity. Finally, the potential factors were tested empirically in 277 U.S. high‐technology firms at the strategic business unit (SBU) level. It was our intention to examine potential factors beyond the level of the particular project, so we looked for antecedents in an SBU environment with a longer‐term impact. Our results indicate that individual commitment to the firm is very important to facilitate knowledge dissemination as well as organizational crises and risk‐taking behavior. Individual commitment was found to have the greatest impact on the level of knowledge dissemination, followed by organizational crisis and risk‐taking behavior. It is thus up to management to find new ways to control individual commitment. More research, however, is required to better understand the ways by which managerial interventions stimulates knowledge dissemination.     

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.     

Ordered to Innovate: A Longitudinal Examination of the Early Periods of a New Product Development Process Implementation in a Manufacturing Firm

Firms can generate rather long‐lasting growth spurts through continuous innovation. Moreover, literature suggests that, when growing organically, firm performance is enhanced through a revenue expansion emphasis encompassing new‐to‐the‐world or new‐to‐the‐firm physical goods or service augmentations. This organic approach usually outperforms cost‐reduction programs, which often yield minor improvements to existing products; or an emphasis on simultaneous revenue expansion and cost reduction. While this finding has the major implication that firms should focus and generate more radical new products for long‐term success, there is need for research that investigates how firms should implement the strategy change to organic growth via innovation. The authors present a case study, which suggests that in the short run, it might be better to commence a revenue expansion strategy by focusing on incremental new product development (NPD) efforts, rather than focusing too much on new‐to‐the‐world or new‐to‐the‐firm products. Moreover, analyses of the rich, multimethod data, collected over a two‐and‐a‐half‐year interaction with the focal firm, illustrates that to increase success prospects of an organic innovation strategy, managers should not only engage incrementally innovative new product projects initially, but also ensure proficiency in commercializing the new product with cross‐functional NPD teams. Thus, in early stages of organization transformation, the merits of the organic growth strategy will be swiftly demonstrated, the cross‐functional teaming skills are learned and tested, and the new strategy becomes institutionalized. While somewhat contradictory to other studies on this topic, this more evolutionary exploration provides a new perspective for organizational change, especially when a firm is ordered to innovate. In conclusion, the insights gleaned in this study shed light on the journey from stagnating firm to a successful serial innovator via formalized NPD process implementation.     

Commercial Innovations from Consulting Engineering Firms: An Empirical Exploration of a Novel Source of New Product Ideas

Industrial firms interact with many outside organizations such as the customers, suppliers, competitors, and universities to obtain input for their new product development (NPD) programs. The importance of interfirm interactions is reflected in a large number of interdisciplinary studies reported in a wide variety of literature bases. As a result, several sources of new product ideas have been investigated in the extant literature. Yet given the growing complexity and risks in new product development, there seems to be a need for managers to obtain input from new and unutilized sources. Apparently, one source that industry has not tapped adequately for its NPD efforts is the consulting engineering firms (CEFs). To fill the aforementioned gap in the literature, this article explores the roles and suitability of CEFs in new product development by conducting a rigorous in‐depth case research of new product idea generation in a large Australian firm manufacturing a variety of industrial products. To generate ideas for the sponsoring firm, longitudinal field interviews with 64 managers and engineers from 32 large CEFs were conducted over a one‐and‐one‐half year period. The findings of the field interviews were combined with the documentary evidences and the archival data. This longitudinal data collection enabled the author to generate new product ideas over real time and to gain access to the information that otherwise might have been difficult to obtain. The results suggest that CEFs are a rich source of new product ideas of potential commercial value. However, industry is making little use of CEFs, which underscores the need for industrial firms to collaborate and to establish an effective idea transfer relationship with them. Moreover, the services of CEFs are not restricted to idea generation but can stretch across the entire NPD process. These findings of the study encourage product managers to conceptualize NPD as a highly synergistic mutually interdependent process between CEFs and industrial firms rather than simply an arm's‐length consulting transactions. Given the dearth of research on idea generation with CEFs, this study highlights the findings that are novel and that go beyond the techniques of new product idea generation established in the extant literature.     

Transformational Leadership and Organizational Innovation: The Roles of Internal and External Support for Innovation*

Leadership has been suggested to be an important factor affecting innovation. A number of studies have shown that transformational leadership positively influences organizational innovation. However, there is a lack of studies examining the contextual conditions under which this effect occurs or is augmented. Therefore, this study aimed to investigate the impact of transformational leadership on organizational innovation and to determine whether internal and external support for innovation as contextual conditions influence this effect. Organizational innovation was conceptualized as the tendency of the organization to develop new or improved products or services and its success in bringing those products or services to the market. Transformational leadership was hypothesized to have a positive influence on organizational innovation. Furthermore, this effect was proposed to be moderated by internal support for innovation, which refers to an innovation supporting climate and adequate resources allocated to innovation. Support received from external organizations for the purposes of knowledge and resource acquisition was also proposed to moderate the relationship between transformational leadership and organizational innovation. To test these hypotheses, data were collected from 163 research and development (R&D) employees and managers of 43 micro‐ and small‐sized Turkish entrepreneurial software development companies. Two separate questionnaires were used to collect the data. Employees' questionnaires included measures of transformational leadership and internal support for innovation, whereas managers' questionnaires included questions about product innovations of their companies and the degree of support they received from external institutions. Organizational innovation was measured with a market‐oriented criterion developed specifically for developing countries and newly developing industries. Hierarchical regression analysis was used to test the hypothesized effects. The results of the analysis provided support for the positive influence of transformational leadership on organizational innovation. This finding is significant because this positive effect was identified in micro‐ and small‐sized companies, whereas previous research focused mainly on large companies. In addition, external support for innovation was found to significantly moderate this effect. Specifically, the relationship between transformational leadership and organizational innovation was stronger when external support was at high levels than when there was no external support. This study is the first to investigate and empirically show the importance of this contextual condition for organizational innovation. The moderating effect of internal support for innovation, however, was not significant. This study shows that transformational leadership is an important determinant of organizational innovation and encourages managers to engage in transformational leadership behaviors to promote organizational innovation. In line with this, transformational leadership, which is heavily suggested to be a subject of management training and development in developed countries, should also be incorporated into such programs in developing countries. Moreover, this study highlights the importance of external support in the organizational innovation process. The results suggest that technical and financial support received from outside the organization can be a more important contextual influence in boosting up innovation than an innovation‐supporting internal climate. Therefore, managers, particularly of micro‐ and small‐sized companies, should play external roles such as boundary spanning and should build relationships with external institutions that provide technical and financial support. The findings of this study are especially important for managers of companies that plan to or currently operate in countries with developing economies.     

The Mediating Role of Strategic Orientations on the Relationship between Ambidexterity‐Oriented Decisions and Innovative Ambidexterity

Building on upper echelon theory and strategic process theory, this article analyzes the relationship between ambidexterity‐oriented decisions and innovative ambidexterity. While ambidexterity‐oriented decisions embrace the capability of top management teams to manage contradictory strategic directions, namely adaptability and alignment, innovative ambidexterity captures the ability of firms to simultaneously develop discontinuous and incremental innovations. In addition to the direct relationship between ambidexterity‐oriented decisions and innovative ambidexterity, it is argued that innovation orientation and cost orientation denote two cultural implementation mechanisms that mediate this effect. Using two top‐executive data sets collected in the United States (n = 83) and India (n = 78), the empirical analysis shows that innovation orientation and cost orientation partially mediate the direct influence of ambidexterity‐oriented decisions on innovative ambidexterity, thus further explaining how formulated decisions made by the top management team nurture ambidextrous innovation behavior. Hence, this article extends prior literature that emphasizes a positive influence of top managers on innovation through incorporating an organizational ambidexterity perspective. Second, this study contributes to ambidexterity literature through integrating strategic process theory. While ambidexterity‐oriented decisions primarily relate to strategy formulation, innovation orientation and cost orientation are associated with strategy implementation. The results show that both strategic subprocesses are vital in enabling ambidextrous innovation behavior. Third, an operationalization for the ability of top management to balance adaptability‐ and alignment‐oriented decisions is provided based on prior literature.     

Profitability Goals,Control Goals,and the R&D Investment Decisions of Family and Nonfamily Firms

Research and development (R&D) investments can help build sustainable competitive advantages and improve firm performance. Nevertheless, managers also acknowledge the difficulties associated with managing R&D and the low chances of success of innovation programs. For this reason, researchers have long been interested in understanding how managers make R&D investment decisions. Research grounded in the behavioral theory of the firm suggests that a primary driver of R&D investment decisions is profitability: when profitability goals have not been met, managers are more likely to initiate a problemistic search through increasing R&D investments. While emphasizing profitability goals and their relationship with R&D investments, prior research largely downplays the role of goals beyond profitability that exist in a significant number of firms (family firms) that are owned and managed by family members whose primary concern is preserving their control over the organization. Research indicates that these family‐centered noneconomic goals lead family managers to minimize R&D investments and that the coexistence of multiple goals produces highly variable R&D investment behavior. Yet, how family‐centered goals for control and profitability enter decision‐making in family firms is not fully understood. In this study, we propose that family managers form distinctive reference points that capture supplier bargaining power and are used to evaluate the degree of external obstruction to their managerial control. The empirical analysis of panel data on 431 private Spanish manufacturing firms observed over the period 2000–2006 shows that the importance of profitability and control goals follows a sequential logic in family firms, such that family firms react more strongly to increasing supplier bargaining power when their profitability reference points have been reached. This study extends current understanding of the distinctive organizational processes engendered by family management in business organizations leading to new research opportunities at the intersection of the innovation management and family business literatures.     

Does Strategic Planning Enhance or Impede Innovation and Firm Performance?*

Does strategic planning enhance or impede innovation and firm performance? The current literature provides contradictory views. This study extends the resource‐advantage theory to examine the conditions in which strategic planning increases or decreases the number of new product development projects and firm performance. The authors test the theoretical model by collecting data from 227 firms. The empirical evidence suggests that more strategic planning and more new product development (NPD) projects lead to better firm performance. Firms with organizational redundancy benefit more from strategic planning than firms with less organizational redundancy. Increasing R&D intensity boosts both the number of NPD projects and firm performance. Strategic planning is more effective in larger firms with higher R&D intensity for increasing the number of NPD projects. The results reported in this study also consist of several findings that challenge the traditional views of strategic planning. The evidence suggests that strategic planning impedes, not enhances, the number of NPD projects. Larger firms benefit less, not more, from strategic planning for improving firm performance. Larger firms do not necessarily create more NPD projects. Increasing organizational redundancy has no effect on the number of NPD projects. These empirical results provide important strategic implications. First, managers should be aware that, in general, formal strategic planning decreases the number of NPD projects for innovation management. Improvised rather than planned activities are more conducive to creating NPD project ideas. Moreover, innovations tend to emerge from improvisational processes, during which the impromptu execution of NPD activities without planning spurs “thinking outside the box,” which enhances the process of creating NPD project ideas. Therefore, more flexible strategic plans that accommodate potential improvisation may be needed in NPD management since innovation‐related activities cannot be planned precisely due to the unexpected jolts and contingencies of the NPD process. Second, large firms with high levels of R&D intensity can overcome the negative effect of strategic planning on the number of NPD projects. Specifically, a firm's abundant resources, when allocated and deployed for NPD activities, signal the high priority and importance of the NPD activities and thus motivate employees to acquire, collect, and gather customer and technical knowledge, which leads to creating more NPD projects. Finally, managers must understand that managing strategic planning and generating NPD project ideas are beneficial to the ultimate outcome of firm performance despite the adverse relationship between strategic planning and the number of NPD projects.     

Radical Product Innovation Capability: Literature Review,Synthesis, and Illustrative Research Propositions

Product innovation is a key to organizational renewal and success. Relative to other forms of innovation, radical product innovations offer unprecedented customer benefits, substantial cost reductions, or the ability to create new businesses, any of which should lead to superior organizational performance. In other words, a radical product innovation capability is a dynamic capability, one that enables the organization to maintain alignment with rapidly evolving customer needs in high‐velocity environments. Extensive research has been conducted on the antecedents to an incremental/general product innovation capability, and meta‐analyses have been conducted to integrate the results from the various studies. However, whether and how a radical product innovation capability differs from an incremental product innovation capability is also critical. The purpose of this work is to develop a testable model of the antecedents to radical product innovation success. Based on an extensive literature review, a comprehensive set of organizational components that comprise a firm's radical product innovation capability is identified. These organizational components include senior leadership, organizational culture, organizational architecture, the radical product innovation development process, and the product launch strategy. Of course, each of these components has subcomponents that provide even more texture. This review highlights how the components of a radical innovation capability function differently from those for an incremental capability. In addition, this review strongly suggests that the direct effects models that dominate this literature underestimate the complexity of the interplay of components that comprise a radical product innovation capability. Thus, a model to demonstrate this interplay of these organizational components is provided. Illustrative research propositions are offered to provide guidance to researchers. Suggestions for executives and managers who are involved in the product development process and for scholars who seek to advance the state of knowledge in this area are offered in the conclusion.     

The importance of internal and external R&D network linkages for R&D organisations: evidence from Singapore

This paper examines the importance of internal and external R&D networks for R&D organisations of multinational firms (MNCs) in Singapore and investigates corresponding R&D management requirements in this context, namely a late-industrialising country in Asia. A unique feature of Singapore is its ability to attract 'high quality' foreign direct investment, involving activities of higher value added and more complex technology without having developed full-fledged R&D activities among its business organisations, thus creating a challenging situation for subsidiary R&D managers, both in the internal R&D organisation as well as in the external research environment. This paper analyses these issues.
Based on in-depth interviews with 53 R&D subsidiaries of MNCs operating in Singapore, this paper identifies internal and external R&D management needs. Through our analysis of data gleaned from these interviews, we found that subsidiary R&D managers need to increase and/or maintain the strategic importance of their R&D site internally within their global corporate R&D organisation. This requires constant upgrading of the technological level at the R&D subsidiary and intense communication with headquarters as well as other R&D subsidiaries. Furthermore, our findings indicate that in the external research environment, subsidiary R&D managers need to create an efficient local network of external players. If these internal and external issues are properly addressed, the R&D subsidiary can effectively contribute to the corporate R&D organisation and be a critical partner in the local research network. Lessons learned from the Singapore experience include the need to develop sufficient local expertise as well as to change the mindset of managers to focus on creativity rather than precise execution.     

Communication and attention dynamics: An attention‐based view of strategic change

Research Summary : The attention‐based view (ABV) has highlighted the role of organizational attention in strategic decision making and adaptation. The tendency to view communication channels as “pipes and prisms” for information processing has, however, limited its ability to address strategic change. We propose a broader role for communication as a process by which actors can attend to and engage with organizational and environmental issues and initiatives and argue that such a view can significantly advance understanding of strategic change. On this basis, we offer suggestions for future research on communication practices, vocabularies, rhetorical tactics, and talk and text in shaping organizational attention in strategic change. We also maintain that this enhanced view of the ABV can help advance research on dynamic capabilities, strategy processes, strategy‐as‐practice, and behavioral strategy. Managerial Summary : To further enhance our capabilities to manage strategic change and renewal processes in organizations, we need a better understanding of how to manage organizational attention. In this article, we highlight the importance of understanding the role of communication and discuss the use of different communication practices, vocabularies, rhetorical tactics, and talk and text as possible levers that can be used to dynamically shape organizational attention. We call for further research to advance the understanding of how these levers can be used to influence the ways in which different sets of strategic issues, initiatives, and action alternatives are handled. We believe that such an enhanced view of organizational attention can enable the development of new, improved strategy practices to manage strategic change and renewal processes.     

The impact of strategic dissent on organizational outcomes: A meta‐analytic integration

Research summary: Strategic dissent represents divergence in ideas, preferences, and beliefs related to ideal and/or future strategic emphasis. Conventional wisdom in strategic management holds that such differences in managerial cognitions lead to higher‐quality strategic decisions, and thus to enhanced firm performance. However, 4 decades of empirical research have not provided consistent findings or clear insights into the effects of strategic dissent. Hence, we analyze the relative validity of predictions about these effects from both social psychological theories of group behavior and information processing perspectives on decision‐making. Then, we conduct a meta‐analytic path analysis (MASEM) based on current empirical evidence. Synthesizing data from 78 articles, we put to rest the notion that strategic dissent leads to positive outcomes for organizations and estimate how negative its effects actually are. Managerial summary: Top management teams (TMTs) set the tone and direction for their firms in important ways. Top managers, however, often disagree over fundamental issues related to strategy. Such strategic dissent affects how important decisions are made, and thus how the firm performs. In more specific terms and contrary to popular belief, strategic dissent creates not only dysfunctional relationships among top managers, but also disrupts the process by which these managers exchange, discuss, and integrate information and ideas in making strategic decisions. In short, firms have not yet generated value through numerous perspectives, ideas, and opinions among their top managers. We discuss interventions that could prove helpful in efforts to benefit from having diverse cognitions in a TMT.