A dynamic perspective on the impact of process innovation upon competitive strategies

The paper lays the foundation for building a dynamic theory of the impact of process innovation upon competitive strategies. An innovation is tracked over two and a half decades to observe changing patterns in competition resulting from ongoing innovation development, emerging complementary technologies, and expanding use. The study finds that the innovation created competitive opportunities and threats for both firms that adopted it and those that did not.     

The role of institutional arbitrage in the search for product innovation: Firm level evidence from Norway

Evolutionary theorizing conceptualizes the discovery of new products as a successful outcome from searching for innovation in which firms combine new and old knowledge and resources. Prior research has shown that the propensity for discovering new products is greatest when firms cross a technological and/or organizational boundary in the search for new knowledge. In this paper, we add a new dimension to this literature: we examine whether, and to what extent, crossing a national boundary, as when firms use knowledge from network partners in foreign countries, influences the likelihood that firms will introduce new products into the market. Drawing on theorizing on institutional arbitrage in the literature on national innovation systems (NIS) and varieties of capitalism (VOC), we propose that companies that cross a national boundary in searching for innovation are significantly more likely to introduce new products. Detailed survey data on firms; data on their network partners, including their location; and regression analysis show that the use of knowledge from actors in foreign NIS has a positive influence on product innovation.     

The Chinese steel industry in transition: industry perspective on innovation policy

There is little empirical research on how the Chinese Government should function in innovation management, particularly during its critical period of economic transition. This study explores and investigates the Chinese Government's innovation management structure, procedures and functions by interviewing government R&D management officials and industrial innovation managers and users. Questionnaires were distributed to industrial innovation practitioners and users of new steel products to solicit their perspectives on innovation policy issues. Findings indicate that current government innovation management procedures have received a tepid welcome from the industries. While there was general agreement that the government should maintain some involvement in industrial innovation, opinions regarding just how the government should intervene differed significantly between producers and users. Producers generally favoured more indirect government involvement. Policy implications are discussed.     

Priorities when selecting business partners for service innovation: The contingency role of product innovation

Firms increasingly engage in business-to-business cooperation to develop relevant innovations. Scholars have shown that firms can improve service innovation either by cooperating with suppliers or by cooperating with competitors. However, there is a dearth of research examining the relative importance of cooperating with suppliers and competitors to improve service innovation, and how this relative importance depends on embracing product innovation. Based on a cross-industry sample of 16,062 Spanish firms, this article addresses these research gaps, finding that firms can benefit from cooperating with both suppliers and competitors to boost service innovation, without prioritizing either. However, this article also shows that, if firms embrace product innovation, they should prioritize cooperating with competitors to boost service innovation.     

The effects of buyer-supplier's collaboration on knowledge and product innovation

Drawing on marketing and management literature, this study investigates integration mechanisms between channel members. Specifically, the research framework is built upon the buyer-supplier gray-box integration approach, knowledge-based view, and agency theory. This study identifies and compares the effects of two gray-box integration mechanisms, namely supplier task involvement and joint planning, on two kinds of knowledge acquisition. I find that both supplier task involvement and joint planning positively influence manufacturers' product knowledge acquisition and end customer knowledge acquisition. Supplier task involvement has a stronger effect on knowledge acquisition than joint planning. The relationships between integration mechanisms and knowledge acquisition are contingent upon supplier incentives. Furthermore, this study also extends the literature by comparing the effects of two different kinds of knowledge on product innovation performance. Even though both product and end customer knowledge lead to better product innovation performance, end customer knowledge has a stronger effect than product knowledge on product innovation performance. Theoretical and managerial implications are discussed at the end.     

Industrial product innovation: An international comparison

This paper presents and discusses the data obtained from a study of 500 industrial innovations introduced in major industrialized countries from 1953 to 1973. The trends in industrial innovation of both the country of origin and the country of market introduction are examined based on the data presented.     

The dynamics of product innovation and firm competences

This study examines how product innovation contributes to the renewal of the firm through its dynamic and reciprocal relation with the firm's competences. Field research in five high‐tech firms of varying age, size, and level of diversification is combined with analysis of existing theory to develop the findings of the study. Based on the notion that new products are created by linking competences relating to technologies and customers, a typology is derived that classifies new product projects based on whether a new product can draw on existing competences, or whether it requires competences the firm does not yet have. Following organizational learning theory, these options are conceptualized as exploitation and exploration. These organizational learning concepts are used to gain a dynamic and path‐dependent view of product innovation and firm development, and to reveal the unique nature and challenges of different types of product innovation. Copyright © 2002 John Wiley & Sons, Ltd.     

Development and return on execution of product innovation capabilities: The role of organizational structure

This paper conceptualizes and tests an integrated model that combines the dual-core and ambidextrous models of product innovation. The integrated model distinguishes the development and return on execution of radical and incremental product innovation capabilities. The authors argue that organizational structure plays an important dual role as an (a) antecedent to the development of radical and incremental product innovation capabilities and (b) as a moderator in determining the new product performance returns from executing such capabilities. Using a sample of high-tech firms, the study finds that organizational structure is more consistent in predicting the execution of product innovation capabilities into new product performance than in predicting the development of such capabilities. For example, the effect of radical product innovation capability on new product performance is negative but nonsignificant under a formal structure, while the same effect is positive under an informal structure. Conversely, the effect of incremental product innovation capability on new product performance is positive under a formal structure, while the same effect is negative under an informal structure. The implications for managing different types of product innovation capabilities under formal versus informal structures and their effects on new product performance are discussed.     

Backing outsiders: selection strategies for discontinuous innovation

A key challenge in managing innovation is to explicitly identify ways to improve an organization's performance with regard to discontinuous innovation. However, discontinuous innovation does not fit the existing ‘frame of reference’ and hence requires a reframing of the traditional ways of innovating within the organization. More specifically, previous research shows that practices that work well in the context of incremental innovation do not work in the context of discontinuous innovation. Thus, the aim of this paper is to explore innovation practices that enable organizations to select innovation projects, which are ‘outside the box’ of its prior experience, i.e. are discontinuous in nature. Building on the experience of more than 150 firms across 12 countries, we have identified nine innovation practices for the selection of discontinuous innovation; these can be grouped into three clusters: enable, engage and experience. In sum, we identify that an organization needs to acknowledge that its choice to engage in discontinuous innovation will have consequences for the innovation practices chosen to select which discontinuous projects to carry forward.     

The complementary effect of intellectual property protection mechanisms on product innovation performance

This study assessed the effect of simultaneous implementations of different intellectual property (IP) protection mechanisms on a firm's product innovation performance (PIP). The study categorized seven widely-used IP protection mechanisms (IPPMs) into two groups: formal and informal. Complementarity was then tested within and between the formal and informal groups of IPPMs. The result showed that there existed complementarity when multiple IPPMs were implemented from the same groups. Throughout an additional analysis on the moderating effect of the industrial complexity in technology, it was found that the ‘between groups' combination effect was also existed but varied from even negative to positive concluding that industrial complexity of technology moderates the effects of combinations of IPPMs on a firm's PIP. These results imply that the use of multiple IPPMs is effective but the effect varies by the technological complexity of industry.     

The effect of radical innovation in/congruence on new product performance

Radical innovation is critical for many firms and for society. This research focuses on the impact of radical innovation congruence — the degree to which management values regarding radical innovation match radical innovation norms in the business unit. We offer a model and empirically test it to assess the impact of radical innovation congruence on new product performance. We find that radical innovation norms are positively associated with new product performance, whereas we find no such association for management values and new product performance. Contrary to our expectations, we did not find a significant effect of radical innovation congruence on new product performance; however, we did find that radical innovation incongruence can have a positive effect on new product performance but only when radical innovation norms are higher than management values. Thus, we suggest that the unintended situation of radical innovation incongruence may result in some positive consequences after all. Further, high radical innovation norms, far more than management values, seem to be critical determinants of new product performance.     

The contingent effects of political strategies on firm performance: A political network perspective

Research Summary: We examine the performance impact of corporate political strategies by analyzing the relationships among firms and various government institutions. While a firm's political connections to a focal government with decision‐making authority enhance performance, connections to a rival government competing with the focal government harm performance, particularly when the rivalry is intense. Firms can neutralize the negative effect from this political rivalry by using direct or indirect connections to a constraining government with power over the focal government. We find support for our conjectures based on an analysis of interactions among Chinese steel firms and the central and provincial governments in acquisition decisions during the industry's consolidation period of 1999–2010. Managerial Summary: Firms invest in political capital in order to influence public policies in their favor. However, the government is a not a monolithic entity and the relationships among various government institutions can alter and even reverse the effects of a firm's political strategy. This research shows that a firm's political connections can be both an asset and a liability. That is, although firms benefit from their connections to governments with decision‐making authority, they can be caught in the crossfire when there is a rivalry between governments. Furthermore, our research suggests that firms can cope with the negative impact from political rivalry by taking advantage of the structural relationships within the political system and influencing governments that have constraining power.     

Taking industry structuring seriously: A strategic perspective on product differentiation

Given legal impediments to consolidation and collusion, firms often resort to product differentiation to attain market power. This paper provides a formal analysis of product differentiation as a tool for such industry structuring at both the firm and industry level. We examine: how industry structure differs when firms collaborate on their differentiation decisions, and when the profitability of such collaboration is greatest; how an individual firm's differentiation decisions affect subsequent market outcomes under price competition, such as margin, market share, and profit; how mere differentiation differs from a ‘differentiation advantage’; and how changing a firm's differentiation affects its rivals through both positive externalities (by restraining rivalry) and negative externalities (by shifting competitive advantage). Our results have implications for empirical research, strategy theory, and pedagogy.     

Learning process in new product development teams and effects on product success: A socio-cognitive perspective

The study purports to develop and empirically test a model of team learning process and its effects on team performance in new product development teams. Using the socio-cognitive theory of learning in groups and organizations, several hypotheses were tested to show that the primer components of social cognition (that is, information acquisition, information dissemination, information implementation, unlearning, thinking, intelligence, improvisation, sense-making, and memory) form an interactive process model of the team learning phenomenon. By studying 165 new product development projects, it was shown: (i) that the eight primer socio-cognitive factors of information acquisition, information dissemination, information implementation, memory, thinking, improvisation, unlearning, and sense-making constitute interrelated sub-components of a higher-order team information-processing construct; (ii) that team intelligence is positively related to components of team information-processing; and (iii) that information-processing facilitates new product success primarily through the positive effects of superior information implementation. Theoretical and managerial implications of the study findings are discussed.     

A service science perspective on business model innovation

Using four basic principles of service science, we systematically explore value-proposition design as one type of business model innovation. Service science combines organization and human understanding with business and technological understanding to categorize and explain service systems, including how they interact and evolve to cocreate value. Our goal is to apply a scientific approach to advance design and innovation in service systems. Our foundation is service-dominant logic, which provides perspective, vocabulary, and assumptions on which to build a theory. Our basic theoretical construct is the service system, entities that are dynamic configurations of four kinds of resources. Our core principles center on the way value is computed within and among entities, how interaction is based on access to resources and their capabilities, and on how value computation and interaction depend on symbol processing and language guided by mutually agreed-to value propositions. In this context, service science can inform and accelerate value-proposition design by systematizing the search for adaptive advantages that improve existing offerings, create new offerings, or reconfigure the value-creating ecosystem.     

Ownership structure and innovation: An emerging market perspective

Considerable attention has been focused on the ways in which emerging market firms can obtain and mobilize the knowledge and resources required for innovation. Innovation is a particular challenge in emerging markets because of inadequate external institutions. In this study, we focus on the importance of ownership structure, and in particular on ownership type diversity and ownership concentration. Using transaction cost and agency theories embedded in an emerging market context, we argue that ownership structure provides an important mechanism by which firms can assemble and direct the resources necessary for innovation in the context of inadequate external institutions. Specifically, we hypothesize that ownership type diversity improves innovation performance and that increasing ownership concentration has the same effect, but only up to a point. Using a panel dataset of 487 and 475 Chinese listed companies during 2004–2005 and 2005–2006 respectively, we find supportive empirical evidence for our hypotheses. Our findings also suggest that ownership type diversity is a more important factor in explaining innovation performance than ownership concentration, although most of the extant literature focuses on the latter.