The Innovation Value Chain in New Technology‐Based Firms: Evidence from the U.K.

Innovation is central to the survival and growth of firms, and ultimately to the health of the economies of which they are part. A clear understanding both of the processes by which firms perform innovation and the benefits which flow from innovation in terms of productivity and growth is therefore essential. This paper demonstrates the use of a conceptual framework and modeling tool, the innovation value chain (IVC), and shows how the IVC approach helps to highlight strengths and weaknesses in the innovation performance of a key group of firms—new technology‐based firms. The value of the IVC is demonstrated in showing the key interrelationships in the whole process of innovation from sourcing knowledge through product and process innovation to performance in terms of the growth and productivity outcomes of different types of innovation. The use of the IVC highlights key complementarities, such as that between internal R&D, external R&D, and other external sources of knowledge. Other important relationships are also highlighted. Skill resources matter throughout the IVC, being positively associated with external knowledge linkages and innovation success, and also having a direct influence on growth independent of the effect on innovation. A key benefit of the IVC approach is therefore its ability to highlight the roles of different factors at various stages of the knowledge–innovation–performance nexus, and to show their indirect as well as direct impact. This in turn permits both managerial and policy implications to be drawn.     

Innovation Performance in New Product Development Teams in China's Technology Ventures: The Role of Behavioral Integration Dimensions and Collective Efficacy

In emerging markets, technology ventures increasingly rely on new product development (NPD) teams to generate creative ideas and to mold these innovative ideas into streams of new products or services. However, little is known about how behavioral integration (a behavioral team process) and collective efficacy (a motivational team process) jointly facilitate or inhibit team innovation performance in emerging markets—especially in China, the world's largest emerging‐market setting with collectivist and high power distance cultures. Drawing on social cognitive theory and behavioral integration research, this article elucidates the relationships between behavioral integration dimensions (i.e., collaborative behavior, information exchange, and joint decision‐making) and innovation performance and also examines how collective efficacy moderates these relationships in China's NPD teams. Results from a sample of 96 NPD teams in China's technology ventures reveal that information exchange is positively associated with innovation performance. Collaborative behavior positively but marginally influences innovation performance, whereas joint decision‐making does not relate to innovation performance. Moreover, collective efficacy demonstrates an important moderating role. Specifically, both collaborative behavior and joint decision‐making are more positively associated with innovation performance when collective efficacy is higher. In contrast, information exchange is less positively associated with innovation performance when collective efficacy is higher. This study makes important theoretical contributions to the literature on team innovation and behavioral integration in emerging markets by offering a better understanding of how behavioral and motivational team processes jointly shape innovation performance in China's NPD teams. This study also extends social cognitive theory by identifying collective efficacy as a boundary condition for the overall effectiveness of behavioral integration dimensions. In particular, this study highlights the condition under which behavioral integration dimensions facilitate or inhibit NPD team innovation performance in China.     

Resource allocation strategy for innovation portfolio management

Our study demonstrates empirically that the choice of resource allocation strategy affects innovation performance. Allocating resources to a broader range of innovation projects increases new product sales, an effect that appears to outweigh that of resource intensity. In addition, we find that the performance benefit of breadth is higher for firms that allocate resources selectively at later stages of the innovation process. This breadth‐selectiveness effect is greatest for firms intending to create relatively more novel products, departing further from their knowledge base. Based on these results, we theorize that breadth increases performance because it spreads firms' bets on unproven innovative endeavors. Limiting resource commitments by selecting out deteriorating projects prevents an escalation in the costs of breadth. This advantage increases with the uncertainty implicit in greater innovative intent. The paper thus contributes to theory of how resource allocation strategies influence performance outcomes of innovation project portfolios. Copyright © 2013 John Wiley & Sons, Ltd.     

Whether to Integrate R&D and Marketing: The Effect of Firm Competence

Integration of research and development (R&D) with marketing remains a frequent topic in the new product development (NPD) literature, largely because it represents a critical antecedent of new product performance (NPP). Two divergent opinions about this integration exist, such that those who contend that firms should pursue high levels of integration in every case provoke criticisms from those who propose that various NPD processes require different levels of integration. This paper proposes that the two perspectives can be reconciled by taking into account the fact that R&D and marketing are integrated mainly to combine critical knowledge (technological and market) that otherwise would be separate to achieve market success. Following Danneels's approach, we investigate how the effect of R&D–marketing integration on performance change across four types of NPD processes: pure exploitation, pure exploration, technological competence exploitation, and market competence exploitation. Data derived from a deep study of 11 NPD projects by five firms, analyzed through qualitative methods, highlight the necessity to vary the level of integration according to the type of competence to be developed during the NPD process. Our analysis suggests two main conclusions. First, the effect of integration depends strictly on the type of competence that the firm uses to develop and launch a new product. Second, integration does not have a unique effect on performance, but it is necessary to distinguish between market performance (e.g., sales and market share) and process performance (e.g., meeting the planned budget and time to market). In some projects, the effect of integration on the two types of performance is diametrically opposite. In particular, we propose that (1) higher performance will be associated with lower integration in pure exploitative projects; (2) in projects that exploit existing market knowledge, higher market performance will be associated with a higher integration, although these projects tend to offer poor process performance regardless of integration level; (3) in projects that exploit technical knowledge, higher performance will be associated with higher integration; and (4) higher integration will be associated with higher market performance but poorer process performance in pure explorative projects.     

The Effects of Supplier Involvement and Knowledge Protection on Product Innovation in Customer–Supplier Relationships: A Study of Global Automotive Suppliers in China

Globalization drives firms to develop product innovation through their global supply chains. While innovations generated by supply channel members, as opposed to individual partners, are playing an increasingly important role in the success of all supply chain partners, there has been limited research on how supply chain relationships cultivate the process of such innovation generation, particularly in emerging markets. Correspondingly, this study explores how multinational suppliers can develop adaptive product innovation to create competitive advantage in emerging markets. Drawing on the knowledge‐based view and transaction cost economics, this study investigates the influence of supplier involvement and other factors on supplier innovation and performance. The results of a survey of 170 multinational automobile suppliers in China provide support for most of the hypotheses. Specifically, supplier involvement in codesign has an inverted U‐shaped relationship with product innovation. Furthermore, knowledge protection, trust, and technological uncertainty are all found to drive greater product innovation. In addition, the institutional environment moderates the effect of product innovation on performance. Overall, this study enhances our understanding of how MNEs can acquire local knowledge and develop adaptive products in emerging markets.     

Dimensions of uncertainty and their moderating effect on new product development project performance

In this study, we measure the dimensions of uncertainty, starting from the definitions constructed for and generally used in innovation projects. We then evaluate their direct and indirect effects on the performance of product and service development projects. Four dimensions of uncertainty are delimited with satisfactory validity and reliability, suggesting a differential moderating effect of the four types of uncertainty (technical and project uncertainty, market uncertainty, fuzziness and complexity) depending on the performance dimension (effectiveness and efficiency) and co‐moderator (project methods and human resource adequacy). Of the four dimensions explored, technical and project, and market uncertainty are true moderators and have the largest interactive effect, fuzziness has a strong direct effect on both performance dimensions whereas complexity weakly directly influences effectiveness. The latter two also influence the relations between performance and the factors related to human resources and project management methods.     

The organizational form of vertical relationships: Dimensions of integration

In this paper we argue that the organizational form of a buying firm's vertical relationship with a supplier can be defined as a configuration of four distinct, but related dimensions of integration. These dimensions pertain to ownership integration (the extent that the firm owns the upstream component supplier), coordination integration (the intensity of information exchange to align the two stages of production), task integration (the extent that the buying firm performs upstream tasks), and knowledge integration (the extent that the buying firm possesses knowledge about the upstream component). Ranging from fully integrated to fully disintegrated, these dimensions can be combined to form various organizational configurations that better reflect the true nature of organizational forms than one-dimensional conceptualizations. Drawing on distinct fields of research (e.g. transaction costs economics, information-processing theory, and learning) the goal of this paper is to improve our understanding of the four dimensions of integration and their interrelationships. This is an important step for future processes of configurational theory building and normative testing.     

Can entrepreneurial orientation improve R&D alliance performance? An absorptive capacity perspective

Research and Development (R&D) alliance studies maintain that alliance partners’ entrepreneurial interactions that pursue innovation opportunities through collective exploitation and exploration of knowledge resources lead to alliance success. Despite the importance of productive resource exchange and generation through such interactions, performance-by-alliance mechanisms remain under-researched. In this study, we develop a theoretical framework hypothesizing that the entrepreneurial orientation (EO) of alliance firms, which underlies their approach to seeking and utilizing resources productively, has a potential impact on their R&D alliance performance, depending on their absorptive capacity (AC). To specify the value creation and capture mechanism in the alliance, we adopt two performance indicators: technological competitiveness and business performance. Findings from a study of 218 small technology-intensive firms conducting R&D alliance projects show that EO translates into business performance through technological competitiveness and that AC leverages the alliance performance implications of EO. The results suggest that EO–AC complementarity is a strategic stimulant that triggers firms to extract greater benefits from R&D alliances.     

Integrating Knowledge and Knowledge Processes: A Critical Incident Study of Product Development Projects

Various scholars have argued that knowledge processes in organizations are integrally linked in practice. The extant literature though treats them separately and thereby disregards the interactions and tensions between them. A result of this way of studying knowledge processes is that little is known about their relative importance and how they work together. This paper addresses this gap in the literature through a critical incident study of knowledge processes in product development projects of high‐tech small firms. The paper starts off with a conceptual framework comprised of four knowledge processes—knowledge creation, knowledge application, knowledge integration, and knowledge retention—and their interactions. From the framework, three hypotheses are derived concerning the importance of these types of knowledge processes and their interactions, which in turn guide the empirical research. The hypotheses were tested in a retrospective study of 58 critical incidents in product development projects of 16 high‐tech small firms in the Netherlands. Data were collected through semi‐structured interviews using the critical incident interviewing technique. Interviewees were asked to “relive” and describe particular successful and unsuccessful examples of product development projects in the past. The analysis of the interview data focused upon whether there are differences between successful and unsuccessful projects in the types of knowledge processes and interactions that are performed. After coding all data into the various types of knowledge processes and interactions of the framework, t‐tests were used to test for significance of differences. The findings indicate that the difference between success and failure in these projects lies primarily in the extent to which knowledge integration and integration between knowledge processes have taken place. These findings demonstrate that, of the four knowledge processes, knowledge integration had the most significant impact on product development project success. The study demonstrates furthermore that higher degrees of interactions between knowledge processes were also associated with project success. Despite the limitations of this study, these results provide empirical support for the claim that integration is a key factor in organizations in general and in innovation projects in particular. For academics, this suggests further research on knowledge integration, and integration between knowledge processes, is warranted. For practitioners, it means that integration is a key process to be considered when choosing and executing new product development projects.     

Modular interconnected processes,fluid partnering,and innovation speed: A loosely coupled systems perspective on B2B service supply chain management

In this paper, we examine whether and how loosely coupled systems in service supply chains influence the speed of innovation in service organizations. Drawing upon the nomological network of loosely coupled systems, we propose a way for supply chains in the business to business (B2B) market context to be conceptualized as loosely coupled systems and explain how the dialectical elements of modularity at the interface of standard process and content interfaces (SPCI) and structured data connectivity (SDC) enable the sharing of high-quality information through fluid partnership in service supply chains to improve innovation speed. Results that are based on a sample of service firms indicate that SPCI and SDC are positively associated with modular interconnected processes, and they, in turn, positively influence the ability to reconfigure supply chain partners (fluid partnership). Fluid partnership enhances information quality, which in turn, influences innovation speed. Implications are discussed for B2B service supply chain efforts in improving innovation speed.     

Developing logistics value propositions: Drawing Insights from a distributed manufacturing solution

With a focus on supply chains as ecosystems of service exchange, our paper aims to explore how value propositions are developed and evolve via combinations of service innovation. A single longitudinal case study is presented. The units of analysis are different projects along a logistics service provider (LSP)’s innovation journey. The study explores how the case company identified innovation in logistics as a gap and developed a distributed manufacturing strategy with a unique business model involving a reallocation of production functions across a global supply network. Our contribution is two-fold. In terms of theory, we adopt a service-dominant logic perspective to investigate how companies' value propositions evolve over time. In terms of managerial contributions, our paper provides insights into how service providers can strategically integrate their resources with service ecosystem partners to provide competitive business propositions.     

Process Innovation and Integration in Process‐Oriented Settings: The Case of the Oil Industry

Scholars have long argued that in new product development integrated innovation processes replace sequentially organized ones because of changing capabilities, integration of knowledge, and the increasing importance of market orientation. The intention of this paper is to study whether this also applies in process‐oriented industries. Process‐oriented settings are fundamentally different from product‐oriented ones as the emphasis is on efficiency, clear guidelines, and tacit knowledge, while radical innovation is less important. It is also less obvious why market orientation—a key driver of integration in new product development—should change the way the innovation process is organized, as there is no product to be developed in the first place. A Stage Gate Model could therefore be well‐suited to achieve more efficiency and effectiveness. In order to investigate process innovation in a process‐oriented setting, we decided to study the upstream oil and gas industry, a scale‐intensive, process‐oriented setting that substantially contrasts with traditional science‐driven industries such as biotechnology and pharmaceuticals, where patents are relevant. The particular advantage of this setting is that virtually no product innovation occurs, allowing the isolation of process innovation. Relying on five inductive case studies of major projects (BP's Prudhoe Bay, Chevron's Kern River, Conoco Philips's Ekofisk, ENI's el‐Bouri, and Shell's Troll field), we find that integration occurs in process‐oriented settings but does so for different reasons than in product‐oriented ones. Integration emerges from an innovation mode characterized by: (1) trial and error (not R&D) as the main mode of innovation; (2) the cooperation of experts from different knowledge backgrounds; (3) the development of Information and Communication Technology (ICT), which facilitates this cooperation across disciplines and projects; and (4) the need to increase efficiency as demand outstrips supply. More precisely, demand shapes reward systems and determines whether new raw materials will be used (creating new supply that requires innovation of processes in periods when demand outstrips supply). Supply and reward systems therefore create the conditions where trial and error, integration of knowledge, and ICT development mutually enforce each other, leading to the integration of the innovation process. Besides contributing to the literature on innovation the paper also offers interesting insights for managers. In order to foster innovation in process‐oriented settings they need to provide specialists with room to experiment over extended periods of time, encourage cooperation across disciplines, and create both incentives and systems to facilitate this process. Finally, managers need to consider the ability of staff to cooperate at the outset, when they set up their recruitment process.     

The Role of Suppliers in Market Intelligence Gathering for Radical and Incremental Innovation*

Drawing on transaction cost economics theory, this study addresses the following research questions: (1) Does supplier involvement in market intelligence gathering activities have a greater impact on innovation success in predesign or commercialization activities? and (2) Does supplier involvement in market intelligence gathering activities have a greater impact on success in radical or incremental product innovation? Hypotheses are tested using both subjective and objective measures of success from a study of 205 incremental and 110 radical new product development projects. Results from the estimation of a two‐group path model suggest that this theoretical framework is useful in providing guidance as to when product developers should emphasize the gathering of market intelligence through suppliers. Consistent with conventional wisdom, the findings suggest that supplier involvement in market intelligence gathering activities are positively related to success in incremental innovations across predesign and commercialization activities. However, supplier involvement in market intelligence gathering activities is found to have no significant impact on market share and is negatively associated with perceived product performance in radical innovations in predesign tasks. Also, while there was no significant difference in market share for supplier involvement in market intelligence gathering activities between radical and incremental innovation in commercialization activities, supplier involvement in these activities did have a greater impact on perceived product performance in radical innovation than it did in incremental innovation. Although current practice suggests that teams allocate fewer resources to the gathering of market intelligence through their suppliers during predesign activities in incremental innovation projects compared with radical innovation projects, the findings in this study suggest that they should do the opposite. Shifting resources allocated for engaging suppliers in market information gathering activities in predesign activities from radical innovation projects to incremental innovation projects could increase the return on these investments. Alternatively, these resources currently allocated to the gathering of market intelligence through suppliers in predesign activities of radical innovation projects could also provide greater benefits if allocated to commercialization activities of radical innovation projects, where they have the greatest positive impact.     

Creating Dynamic Capability: The Role of Intertemporal Integration, Knowledge Retention, and Interpretation

Uncertainty about the ability for technological knowledge to be transformed to meet market demands, lack of complementary technologies, the lack of developed markets for a given technical feature, and other types of uncertainty add significant challenges to organizations as they develop products for future markets. In spite of these significant challenges, some organizations develop a dynamic capability in new product development that becomes a powerful source of competitive advantage and a source of renewal, growth, and adaptation as the environment changes. Many approaches to new product development (e.g., cross‐functional development teams, quality function deployment, early supplier involvement, heavyweight product development teams) address the need to integrate knowledge more rapidly and effectively within projects. These approaches do not address, however, how knowledge is integrated over time or how integration of knowledge from previous new product development efforts influences the firm's new product development performance. This study focuses on providing a greater understanding of the integrative practices that contribute to this capability in new product development. Based on insights from the innovation and learning literatures, this study proposes relationships about the influence of knowledge retention and interpretation activities on the organization's ability to integrate knowledge developed in prior new product development projects and on new product development performance. Data collected from a sample of new product development professionals are employed to test the proposed relationships among knowledge retention, knowledge interpretation, integration of prior knowledge, and new product development performance. The findings suggest that knowledge retention and interpretation activities positively impact a firm's new product development performance. In particular, practices that enable the retention and interpretation of knowledge improve new product development performance indirectly through the firm's enhanced ability to apply knowledge developed in prior product development projects to subsequent projects. Practices that enable the interpretation of knowledge in the firm's current strategic context also improve new product development performance directly. These findings lead to important implications for managing new product development.     

A hub-and-spoke model for multi-dimensional integration of green marketing and sustainable supply chain management

Since the concept of sustainability was transformed into business mainstream, both sustainable supply chain management and green marketing have become key topics of academic research and managerial practices. Great advances have been made in the two areas in parallel. It has been recognized that green marketing and sustainable supply chain management should be seamlessly integrated so that green customer's needs can be better met by the supply chain capabilities. Existing research has explored point-to-point integration approach. This paper proposes a new hub-and-spoke integration model to integrate green marketing and sustainable supply chain management from six dimensions: product, promotion, planning, process, people and project (called the 6Ps). Empirical study has been undertaken with industries to test the 6Ps integration model. Results from the empirical study on integration dimensions, integration strategies, and drivers and obstacles for multi-dimensional integration are presented together with managerial implications. The new integration model allows the flows of resources such as information, materials and funds between green marketing and sustainable supply chain management through multiple direct pathways. It has the potential to achieve better overall business performance against the triple bottom line objectives.     

How functional involvement affects the transformation of external knowledge into innovation outcomes

This paper aims at investigating organizational mechanisms through which firms involved in open innovation initiatives can acquire external knowledge, integrate it with the existing one residing in the diverse functional areas, and transform it into innovation outcomes. Following the knowledge transformation perspective, we use the notions of early‐stage and late‐stage functional involvement, and explain their mediating effects on a firm's innovation performance. Based on a sample of 131 international firms involved in open innovation projects, we find that high involvement of functions related to the early stage of the innovation process – notably new concept generation, research and development, and design and testing – fully mediates the effect of external knowledge transfer on innovation performance. Similarly, high involvement of functions related to the late stage of the innovation process – notably manufacturing, marketing, distribution, and logistics – has significant indirect effect on innovation performance but lower than that of early‐stage functional involvement. Furthermore, the empirical research reveals that early‐stage functional involvement mediates the positive effect of external knowledge transfer on late‐stage functional involvement. Theoretical and practical implications of our findings are discussed.     

Integration planning for technology intensive acquisitions

Rapid technological change, growing technological complexity and shortening product life cycles increasingly force companies to source technologies externally. One means of building up competencies and fostering innovation based on external resources such as knowledge is through the acquisition of technology-based companies. However as literature and practice have shown, technologically motivated and intensive acquisitions are highly vulnerable to failure. One of the main reasons for this value destruction lies in the miscarried and inappropriate integration of the technology-based company after the acquisition.
Based on eight in-depth case studies on technology intensive acquisitions in multi-national technology-based companies this paper aims to identify the main causes of failure in internalizing external knowledge during the integration of technology intensive acquisitions. It was derived that a lack of integrative decision-making, of systemic processes and of a holistic change of both companies during the integration hinders successful knowledge sourcing through acquisitions. Based on these findings, a concept for integration planning which is tailored towards the specific characteristics of technology intensive acquisitions is proposed. This concept is embedded in the acquisition process and encompasses the development of an appropriate integration strategy and the determination, assessment and planning of the required integration projects thus fostering successful knowledge sourcing.     

Integrating the supply chain: industrial relations implications in US grocery distribution

Recent technological innovations have emphasised increasing integration between enterprises across the supply chain. This article reviews these developments within US grocery distribution and highlights the potential for supply chain integration to increase union bargaining power, as well as employer strategies aimed at reducing the threat of industrial vulnerability resulting from cross-enterprise interdependence.     

The Influence of CEOs' Visionary Innovation Leadership on the Performance of High‐Technology Ventures: The Mediating Roles of Connectivity and Knowledge Integration

Senior leaders play an essential role in facilitating knowledge creation processes and driving firms' innovation performance. However, little is known about the underlying relational mechanisms by which CEOs help build knowledge integration capability and drive firm innovation. We developed and tested a conceptual model about the ways in which CEOs shape a context conducive for knowledge creation processes and drive multiple innovation performance. A field, survey‐based, study among small‐ to medium‐sized technological ventures (SMVs) showed that CEO visionary innovation leadership (manifested by both vision for innovation and enactment of the vision through specific leadership behaviors) was positively related to a context of connectivity. Connectivity was related to firm knowledge integration capacity, which in turn resulted in enhanced firm innovation (new product quality, development speed, and product innovation). The findings also indicate direct links between CEO visionary innovation leadership and knowledge integration, and between connectivity and product innovation. Implications for theory and practice are discussed.     

中国经济增长影响因素的变迁：2004～2011

在综合供给与需求角度下的经济增长的相关研究结论基础上,本文通过构建中 国经济增长的面板数据模型研究发现,外来投资对中国经济增长的影响较弱,内 部投资对经济增长贡献远高于外来投资;消费因素受到金融危机的影响较小,它 对经济增长的拉动作用并没有降低,而出口因素受金融危机的影响较大;东、中 部的劳动力处于富足状态,而西部经济需要更多的劳动力。面板数据模型的实证 分析结果表明,金融危机对中国经济增长的影响是显著的,它改变了各影响因素 对经济增长的促进或拉动作用,这种改变的幅度又随区域的不同而有所差异;中 国经济增长结构不均衡,有进一步优化的空间;开拓以西部为主国内市场,不仅 能使中国经济获得进一步增长的动力,更能为中国经济发展提供战略层面的安全 保障。