Organizational culture,innovation, and performance: A test of Schein's model

Innovation is the key to organizational survival and therefore the study of processes that support innovation should be of interest to researchers and practitioners alike. Schein's multi-layered model of organizational culture offers a useful framework for thinking about processes that foster innovation. A defining characteristic of the model is the subtle but important distinctions between the varied “layers” of organizational culture (i.e., values and norms, artifacts and behaviors). The basic assumption of this study is that Schein's model offers a tractable explanation of cultural processes that support organizational innovation, especially in service firms. Despite the intuitive appeal and practical value of Schein's conceptual framework, empirical research in relation to the model is limited. This paper develops a rationale for an empirical model based on Schein's conceptual model; the study reports a test of an empirical model. Data collected from approximately 100 principals of law firms provides a suitable empirical context for a test of the model. The findings generally support the hypothesized relationships. A key result is how layers of organizational culture, particularly norms, artifacts, and innovative behaviors, partially mediate the effects of values that support innovation on measures of firm performance. The findings have implications for theory and practice, especially in relation to building an organizational culture within professional service firms that fosters innovative behavior.     

Organizational innovation as an enabler of technological innovation capabilities and firm performance

This study assesses the relationship between organizational innovation and technological innovation capabilities, and analyzes their effect on firm performance using a resource-based view theoretical framework. The article presents empirical evidence from a survey of 144 Spanish industrial firms and modeling of a system of structural equations using partial least squares. The results confirm that organizational innovation favors the development of technological innovation capabilities and that both organizational innovation and technological capabilities for products and processes can lead to superior firm performance.     

Contextual antecedents and consequences of relationships between young firms and distinct types of dominant exchange partners

The paper expands our understanding of how exchange partners, particularly customers, can dominate young firms. Using a grounded theory approach, it discovers that young firms operating in different competitive contexts identify three distinct types of dominance: dominance over innovation, dominance over selling and order filling capacity and dominance over total sales. Data analysis suggests that there are different antecedents and consequences of each type of dominance. The paper discusses the implications of the findings and suggests refinements to our current understanding of dominant exchange partners of young firms.     

Validating the innovation prowess framework for firms in emerging economies facing tight regulatory regimes: the case of Indian pharmaceutical firms

ABSTRACT

The purpose is to investigate the generalizability of an innovation prowess framework, developed for firms in developed countries, for firms in emerging economies facing tight regulatory regimes. Using a qualitative approach we investigate key informants in six firms, supported by secondary documents and the business press, as well as in-depth organizational observation within one organization. Academic evidence suggests there are four factors – one external (industry structure) and three internal (economic structure of the firm, organizational structure of the firm, and historical development of the firm) – that drive the innovation prowess of firms. While firms in developed economies take such factors as the norm, firms in developing countries face evolving norms and internal challenges to comply with tighter regulatory regimes; however, the research suggests that impact of these four factors appear to be similar to those faced by firms in developed countries. Our research contributes by seeking to broaden our understanding of innovation prowess in emerging country contexts. Innovation in these markets is generally less well understood, especially as they adapt to the tighter regulatory regimes required to compete in global markets (e.g. WTO).     

Antecedents of Service Innovation in SMEs: Comparing the Effects of External and Internal Factors

Increasing attention has been paid of late to the importance of effectively developing both exploratory and exploitative innovation in firms. Small and medium‐sized enterprises (SMEs) play a significant role in the growth of economies and in job creation, yet at the same time they can differ significantly from larger firms with respect to effective management. Recent research has examined the effects of environmental and organizational characteristics on the effective development of exploratory and exploitative innovation. SMEs differ from larger firms in many ways, such as the availability of resources, and it is unclear whether findings based on studies in larger firms will also hold true for SMEs. As such, it is important to explore and understand the extent to which SMEs differ from large firms in this important area. Specifically, this paper empirically examines the extent to which organizational factors (connectedness, centralization, formalization) and business environment (dynamism and hostility) are associated with different types of innovation orientations (exploratory and exploitative) among SMEs.     

MNE liability of foreignness versus local firm-specific advantages: The case of the Chinese management software industry

The theory of the multinational enterprise (MNE) suggests that the subsidiaries of MNEs possess firm-specific advantages (FSAs) that can overcome their liability of foreignness (LOF). It also suggests that subsidiaries can gradually decrease their LOF over time as they learn more about the host country environment and develop better connections to local business networks. Accordingly, subsidiaries should outperform local firms not only at point of entry but also (and increasingly so) in the long run as LOF decreases. This paper challenges this received wisdom by using case-study methodology to argue that LOF may not decrease over time and, meanwhile, the FSA gap between local firms and subsidiaries may narrow. We focus on two types of FSAs (asset and transaction ownership) and three sources of LOF (complexity, uncertainty, and discrimination) to develop a theoretical framework for analysing the dynamic relationships between LOF and FSAs and show how local firms can outperform foreign subsidiaries over time. We use the case of the Chinese management software industry to illustrate the framework. Our findings have important implications for MNEs competing abroad as well as helping to explain the emergence of strong competition from local firms.     

Facilitators of organizational innovation: The role of life-cycle stage

One of the most serious challenges facing an entrepreneurial company, particularly a high-technology firm, is knowing how to manage innovation as the organization evolves. Macro-level facilitators/inhibitors of innovation—i.e., organizational and environmental conditions of a firm that promote or restrain innovation such as the structure of an organization, its incentive system, resources provided by its environment, or its ways of analyzing firm-external information—and their relationship to the innovativeness of the firm are considered in this study.Two basic arguments have been put forward previously as to why the innovativeness of an organization may change as it evolves. First, it has been suggested that facilitators of innovation change over time and so will firm innovativeness. That is, the relationship between the facilitator and innovation stays unchanged but the facilitator itself is transformed, causing changes in firm innovativeness as it develops. For instance, it has been suggested that mature firms become less innovative because their structure becomes overly formalized to perform other functions more efficiently, which then stifles innovative processes. Second, other researchers have proposed that the relationship between a facilitator and innovation changes as firms evolve; for instance a formal structure may support innovation in a younger firm because it allows the entrepreneur to focus her energy, whereas it may suppress innovation later since it inhibits an innovator's interaction with other environments. The results of our analysis, using data from 326 U.S. firms in different stages of their development and involved in many kinds of high-tech industries, support the second theory.However, the results for the relationships of the individual facilitators to innovation were not always as expected. We found that formally structured young firms were less innovative than informal ones and that in older organizations, formalization had no negative impact on innovation. This finding possibly can be explained with micro-level facilitators of innovation: younger firms may have more entrepreneurial personnel whose ability for innovation is more inhibited through a formal structure than the more “seasoned” employees in older, larger firms. However, this finding implies that the concern for formal structures with respect to firm innovativeness does not necessarily apply as typically assumed.Of similar significance was our finding with respect to the relationship between financial incentives and innovation. It has been suggested that younger rather than older firms use incentives such as equity to encourage an innovative environment. Results of this research, however, show that innovation is associated with stock incentives especially in older firms. This may be an indication for older firms to use differentiated incentives that reflect the individual's contribution to the firm to retain innovative personnel, whereas start-ups might rely on the excitement of working in a new venture as an incentive for innovative behavior.More in line with expectations were the results for how firms process external information. Environmental scanning and data analysis were positively associated with innovation, and this more so in older firms, presumably because they have become more remote from developments outside the organization. This result confirms the notion that much innovation by a firm is initiated externally. However, the results also indicate that the conditions of the environment itself are of lesser importance to firm innovativeness than the firm's active pursuit of information from its environment. An often discussed implication of these findings is that the boundaries of a firm must be permeable, at least from the outside in, and systematic information gathering from customers, competition, research institutions, etc. may be necessary to the success of a firm that depends on its product development. This seems especially important for older firms.As expected, the centralization of power in an organization also affected innovation. Centralization correlated positively with innovation in new ventures and negatively in older firms. This indicates the importance of the entrepreneur and strong leader in a start-up. It also suggests, though, that as the firm matures, this person has to give up some of her control and may have to relinquish the job at the head of the organization to someone else.Finally, there are some more general implications of this work to managers involved with organizational innovation. First, reliance on past experience may be detrimental to future performance. Whereas a firm evolves through different stages, means that have facilitated innovation earlier may be detrimental to it now or tomorrow, and vice versa. Second, copying successful strategies for innovation from other firms may not necessarily work—not because their implementation was worse but because the conditions of the other firm, for instance its evolutionary stage or its micro-level facilitators, were different.Researchers who study innovation should consider including life-cycle stage as a potential moderating variable. Factors that facilitate innovation at some point during an organization's evolution actually hinder it in another. Also, factors that were unimportant to innovation at the inception of a firm may facilitate it in later stages. This study supports the conclusion that the consideration of contingency factors, such as life-cycle stage, may enhance the development of a theory of organizational innovation.     

Asymmetric roles of business ties and political ties in product innovation

This study investigates the asymmetric roles of business ties and political ties in innovation processes. The study posits that business ties strengthen organizational competence and enhance the environmental fit. In contrast, political ties increase the environmental fit but ossify organizational internal routines. The study uses an extensive survey on 766 Chinese firms across multiple sectors to test hypotheses. The empirical results provide strong supports for hypotheses by showing that: (1) business ties have a positive impact on product innovation, indicating that despite different types of business ties, they share common features in enhancing product innovation; (2) political ties have an inverted U-shaped relationship with product innovation, indicating that the positive effect of political ties on product innovation would diminish as the costs of political ties outweigh the benefits.     

The Diffusion of a Process Innovation with Gently Declining Production Cost

This paper develops a model to investigate the diffusion process of a cost-reducing process innovation within an industry. Two factors drive the diffusion process. First, the gradually declining production cost with the innovation makes the adoption of the innovation more profitable, and consequently motivates more firms to adopt it over time. Second, the switching from old technology to new technology requires suitable organizational knowledge, which is costly to acquire. This tends to slow down the diffusion. The interaction between the two factors determines the path and the speed of the diffusion process. The model is able to explain three observations in technology diffusion, including (1) the S-shaped diffusion path; (2) the rejection of an innovation by some firms; and (3) unprofitable technology adoption. A policy implication of the model is that, through subsidizing the transfer of relevant knowledge from adopters to non-adopters, government can facilitate the diffusion of innovations and improve social welfare.     

Organizational innovation,technological innovation,and export performance: The effects of innovation radicalness and extensiveness

This study focuses on the relevance of different types of innovation for firms’ export performance. Despite ample research on the innovation–performance relationship, previous studies have mainly focused on technological innovations, leaving the effects of organizational innovations relatively unexplored. Hypotheses on the relationship between organizational and technological innovations and firm export performance are tested by structural equation modelling using data from 218 Swedish export ventures. The results indicate that organizational innovation enhances export performance both directly and indirectly by sustaining technological innovation. Moreover, by fine-graining our analysis of the mediating role of technological innovation, according to its radicalness and extensiveness, for organizational innovation, we show how the latter enhances both the radicalness and extensiveness of technological innovation although, notably, only extensiveness is actually beneficial for export performance. This study helps alleviate the scarcity of research examining the links among different types of innovation in relation to export performance and contributes to international business and marketing literature by generating new evidence regarding the mechanisms through which organizational and technological innovations may improve export performance.     

Exploring the Role Performance of Corporate Ethics Officers

Organizations continue to show renewed focus on managing their ethics programs by developing organizational infrastructures to support their ethics implementation efforts. An important part of this process has been the creation of an ethics officer position. Whether individuals appointed to the position are successful in the role or not may depend on a number of factors. This study presents a suggested framework for their effectiveness. The framework includes a focus on personal, organizational and situational factors to predict performance in the role. The study examines the complex nature of the role. These include task complexity, low task visibility, role conflict, and role ambiguity. Personal, organizational and situational factors that can serve as buffers against the complexities associated with the role are presented. The study suggests that individuals with certain competencies and orientations may be better suitable for the ethics position, and firms need to consider key organizational and situational issues critical to the performance of an ethics officer. The research and practice implications of the study are given.     

Enhancing or inhibiting: The impact of investment in political ties on the link between firm innovation and productivity

Whether investment in political ties enhances or inhibits firm innovation has not been well understood in the literature. Theoretically, proactive use of political ties could help firms gain favourable political resources, thereby enhancing the effectiveness and efficiency of firm innovation activities. However, investment in political ties might conflict with innovation in internal resource orchestration processes. Based on a sample of 9693 firms across 27 transition economies, I find that the effect of investment in political ties on the link between innovation and productivity is based on type of innovation and type of political investments. Although bribery does not show any significant influence on the link between either product or organizational innovation and firm productivity, managerial time invested in political ties weakens the positive relationship between organizational innovation and productivity.     

The Technological Innovation Journey of Hisense Group

This case illustrates key innovations that took place in Hisense Group, one of the leading companies in the electronic appliances industry in China, from 1990s to 2010. Several factors contributed to its leading position, including strategic positioning, consistent technological innovation over decades, and an efficient administrative system. Since 1992, Hisense has paid close attention to technological innovation. It makes it clear that R&D plays a dominant role in competition. Hisense has continuously invested heavily in R&D and restructured its R&D administrative system, including the organizational framework, incentive mechanisms, project management and teamwork. Hisense’s strategy has resulted in major technological innovations. Hiview chip is a technological breakthrough, which helps the company gain competitive advantages.     

Navigating imposed innovation: A decision-making framework

Modern economies are characterized by the rising role of nonmarket actors (e.g., regulatory agencies, social activists, labor unions, media) that are gaining influence over the behavior of for-profit firms. These nonmarket stakeholders use their clout over industry players to impose innovations that require costly changes in business practices or technological trajectories while lacking firm-level economic justification. How should a company respond when it is pressured to adopt a new practice or change its products, while the economic calculations suggest that this is going to be a pure cost? Our study suggests alternative strategic responses to imposed innovation pressures and explores the factors determining the choice of an optimal strategy. Grounding the argument on the outside-in approach to pursuing imposed innovations, we propose a framework of organizational responses to external pressures to innovate, with varying degrees of firm engagement and different levels of cooperation with other industry actors. We also present a decision tree approach, allowing organizational decision makers to analyze the contextual determinants and ultimately arrive at the most appropriate, context-determined strategy.     

Incremental Innovation and Business Performance: Small and Medium-Size Food Enterprises in a Concentrated Industry Environment

Past studies have analyzed issues pertaining to the definition of innovation, methods of measuring innovation and the relationship between organizational characteristics and innovation orientation. Extant studies have adopted a large business or a technologically intense context of study. By studying the adoption of new products, methods, systems, markets, and supply sources in small and medium-size seafood retail enterprises, this study reviews innovation and the adoption of innovation in a broader and novel context. Seafood retailers in this study operate in a concentrated industry environment where two large supermarket chains account for more than 70 percent of national food retail sales. The seafood retailers operate in a highly competitive environment, the industry is maturing, the firms are not very advanced technologically, and the sector has a disproportionately large number of firms owned and operated by persons of non-English speaking backgrounds. The results of the study indicate that incremental innovation offers substantial competitive advantages to small and medium-size firms, that incremental innovations can be adopted and operationalized rapidly by entrepreneurs with different cultural backgrounds and skills, and that small and medium-size firms that focus on sales and marketing innovations are profitable and are able to compete successfully with large businesses.     

Strategies,technologies, and organizational learning for developing organizational innovativeness in emerging economies

Innovativeness is an important organizational capability for competitive advantage sustainability in the dynamic environment of Asia's emerging economies. Drawing upon dynamic capability theory, this study develops a research model of organizational innovativeness development for firms in emerging economies. The proactive strategic orientations reflected by entrepreneurship and technology oriented strategy provide important visions for organizational innovativeness. Further, the utilization of knowledge management systems and organizational learning are identified as intervention processes that translate these strategic orientations into real innovation capability. A survey involving 114 firms operating in China was conducted for hypothesis testing. The empirical results provide strong support and advance the knowledge of organizational innovativeness development for firms in Asia's emerging economies.     

Big data dreams: A framework for corporate strategy

The phenomenon of big data—large, diverse, complex, and/or longitudinal data sets—is having a stark influence on organizational strategy making. An increase in levels of data and technological capabilities is redefining innovation, competition, and productivity. This article contributes to both practical strategic application and academic research in the strategic management domain by presenting a framework that identifies how big data improves functional capabilities within organizations, shapes entirely new industries, and is a key component of innovative and disruptive strategies used by learning organizations to diversify and break down barriers of traditionally defined industries. This framework provides an appropriate basis for internal corporate strategy discussions that surround big data investments by explaining how firms create value through various approaches. In addition, we offer guidance for how firms might derive their own big data approach through the merits of aligning data strategy aspirations with data strategy authenticity.     

How Small Business Advisory Program Delivery Methods (Collective Learning,Tailored, and Practice‐Based Approaches) Affect Learning and Innovation

Past studies relate small business advisory program effectiveness to advisory characteristics such as advisory intensity and scope. We contribute to existing literature by seeking to identify the impact of different advisory program methods of delivery on learning and subsequent firm innovation behavior. Our research is based on a survey of 257 Australian firms completing small business advisory programs in the three years preceding the research. We explore the range of small business advisory program delivery methods in which our surveyed firms participated and, with reference to the literature on organizational learning and innovation, we analyze predictors of firms' learning ability and innovativeness based on the identified delivery methods. First, we found that business advisory programs that involved high levels of collective learning and tailored approaches enhanced firms' perceptions of their learning of critical skills or capabilities. We also found that small business advisory programs that were delivered by using practice‐based approaches enhanced firms' subsequent organizational innovation. We verified this finding by testing whether firms that have participated in small business advisory services subsequently demonstrate improved behavior in terms of organizational innovativeness, when compared with matched firms that have not participated in an advisory program.     

Why do firms train? Empirical evidence on the relationship between training and technological and organizational change

We explore the relationship between training and innovation using key insights from the resource‐based approach, organizational learning and labour studies. By using data from 304 large enterprises in Italy, the study highlights a twofold role of training in favouring technological and organizational changes. First, training plays a role in allowing the acquisition and the assimilation of new knowledge. Consequently, firms in which the provision of training is part of a bundle of high‐performance management practices are more likely to undertake technological and organizational changes and to develop new competencies internally. Second, training supports firms in the assimilation of technological and organizational changes. Consequently, firms that undertake these changes exhibit a superior participation rate for employees and greater time intensity of their training programmes. Firms' inclination to develop new competencies internally does not affect, however, the intensity of training, thereby suggesting that organizational learning processes do not start by a broad involvement of employees in formalized training programmes.     

企业营销创新中真实型领导与创新绩效的关系研究

本文在相关文献研究与实际调研的基础上,建立了企业营销创新中包含真实型领导、组织氛围、隐性知识共享以及创新绩效之间相互关系的结构方程模型,并以246家企业为样本对其进行了实证检验。研究发现,企业营销创新中真实型领导对组织氛围和隐性知识共享有正向的显著影响,组织氛围对隐性知识共享有正向的显著影响,组织氛围和隐性知识共享对创新绩效有正向的显著影响,组织氛围及隐性知识共享在真实型领导和创新绩效之间发挥了完全的中介作用。这一结论进一步丰富了真实型领导理论,为企业真实型领导的实施提供了一种新思路。