Lorenzo Massa and Christopher L. Tucci
This chapter offers a broad review of the literature at the nexus between Business Models and innovation studies and examines the notion of Business Model Innovation in three different situations: Business Model Design in newly formed organizations, Business Model Reconfiguration in incumbent firms, and Business Model Innovation in the broad context of sustainability. Tools and perspectives to make sense of Business Models and support managers and entrepreneurs in dealing with Business Model Innovation are reviewed and organized around a synthesizing meta-framework. The framework elucidates the nature of the complementarities across various perspectives. Finally, the use of business model-related ideas in practice is discussed, and critical managerial challenges as they relate to Business Model Innovation and managing business models are identified and examined.
This chapter reviews conceptual and empirical arguments for expecting the structure and nature of capital markets to impact on the financing of innovation. Market failure and innovation systems approaches to problems in the financing of innovation are reviewed, including approaches based on the varieties of capitalism, insider and outsider financial systems, and legal rights literatures. The complementarity between financial markets and other markets coordinating the allocation of resources is emphasized so that the impact of financing problems on innovation behaviour cannot readily be separated from wider system effects. The chapter concludes that there are generic issues involved in the financing of innovation related centrally to the long-term and uncertain nature of the pay-offs to innovation investment. The evidence suggests that different financial systems embedded in different financial market and legal structures address different elements of this problem in different ways. Relatively coordinated and bank-financed insider systems appear to offer greater commitments of long-term patient capital alongside investment in firm-specific human capital. There are big pay-offs in these systems in terms of incremental innovation in particular. The death of bank-based coordinated systems has been, as Mark Twain remarked on reading his obituary, greatly exaggerated.
Michael A. Hitt, Susan E. Jackson, Salvador Carmona, Leonard Bierman, Christina E. Shalley, and Douglas Michael Wright
Little systematic research has been done on strategy implementation, yet there is a body of work providing guidance for implementation efforts. The authors examine three basic collections of work on resources and governance, managing human capital, and accounting-based control systems, explaining how these issues have implications for strategy implementation. Although the chapters in this Handbook provide many useful insights concerning issues that must be addressed in order to effectively implement firms’ strategies, there is need for more and systematic work. The purposes of this final chapter are to identify promising future research directions and to serve as a catalyst for the creation of additional collections of work that can enhance our understanding of strategy implementation. The five specific topics for which more work on strategy implementation is needed are innovation and entrepreneurship, marketing strategies and services, managing operations, managing financial assets and human capital, and strategies (international, acquisitions, differentiation).
Competitiveness derives from the creation of the locally differentiated capabilities needed to sustain growth in an internationally competitive selection environment. Such capabilities are created through innovation, and because capabilities are varied and differentiated, and since the creative learning processes for generating capabilities are open-ended and generally allow for multiple potential avenues to success, a range of different actors may improve their competitiveness together. According to this article, the efforts to promote competitiveness through innovation can rarely be understood in isolation from what others are achieving at the same time. This applies whether one is speaking of countries, of national groups of firms in an industry, of subnational regions, or of individual companies. Indeed, it is worth emphasizing that the degree of interaction between innovators in search of competitiveness has tended to rise substantially historically, and has attained new heights in recent years.
Nick von Tunzelmann and Virginia Acha
This article considers not just traditional “low-tech” industries but also those classified by the Organization for Economic and Co-operation Development (OECD) as “medium-tech.” It combines them hereafter as “low- and medium-tech” (LMT) industries. These are frequently “mature” industries, where technologies and market conditions may change slowly. Furthermore, this article untangles the relationship between the technologies and markets which comprise an “industry”—effectively OECD type classifications are rejected in favor of alternative sectoral taxonomies. This article also elucidates the roles of firm strategies and structures in the LMT industries. The implications of this discussion for the evolution of industry structure, especially entry, are also considered in this text. Finally, this article concludes with a call for revising the academic agenda.
Service innovation now occupies a more prominent position in innovation studies over the last few years, but this has yet to be reflected in an accumulation of knowledge about services in innovation policy. Services innovation is a topic of growing interest for innovation researchers and policy makers alike. This has particularly been so in the last decade, as services have grown to constitute the larger part of employment and output in most industrial countries. The services sectors of these economies are important for their productivity, economic competitiveness, and quality of life. But innovation in services is important for other reasons beyond the economic importance of the sector. First, innovation in services extends beyond the services sectors to affect service activities in all sectors of the economy. Second, some services play central roles in innovation processes throughout the economy.
Rita Gunther McGrath and Jerry Kim
From the perspective of the field of strategic management, innovation has traditionally been regarded as tangential to the primary concerns of the field. Strategy sought to understand how firms might achieve a sustainable competitive advantage, or long period of out-performance relative to a comparison set. With the advent of hypercompetition, in which competitive advantages are transient, an increasing amount of economic activity does not reflect the assumptions of either the industrial organization stream of strategy research or even the more recent firm-focused resource or capabilities-based view. Specific implications for integrating an innovation perspective in strategy research include new approaches to measuring performance; a new focus for strategy analysis that considers firms within networks of individuals and other organizations; and a new role for general managers. Ironically, our research suggests that strategy may well benefit by returning to its traditional roots as a field that searches for answers relevant to general managers.
The types of strategy, finance, and organization that support innovation process change over time can vary markedly across industrial activities and institutional environments. The innovative firm must, therefore, be analyzed in a comparative–historical perspective. This article presents and illustrates a framework for analyzing the “social conditions of innovative enterprise” in the comparative and historical experiences of the advanced economies. It builds upon prominent theories of the innovative firm. Furthermore, it focuses on the regional agglomerations of capabilities, now known as “Marshallian industrial districts,” that, by the late nineteenth century, had enabled Britain to emerge as the world's first industrial nation. This article also provides a perspective on the emergence and growth of the US managerial corporation that propelled the US economy to international industrial leadership during the first half of the twentieth century.
Roger Miller, Donald Lessard, and Vivek Sakhrani
Megaprojects are intricate solutions shaped over many years to fit specific contexts and market needs. This chapter focuses on megaprojects as games of innovation in which sponsors, experts, and potentially opposing stakeholders interact to shape opportunities into projects and to design and deliver these projects. Each project calls for multiple innovative choices over time in the face of foreseeable and emerging issues, in a design tradespace that reflects multiple dimensions of value. Keeping these trade-offs alive over the life of the project requires that sponsors and experts master the inherent complexity of megaprojects and develop architectures and processes that deliver with requisite complexity.
Gautam Ahuja and Elena Novelli
This article (a) identifies the different theoretical perspectives and abstractions used to conceptualize the M&A–Innovation relationship; (b) reviews the literature on antecedents, consequences, and integration of M&A in the context of innovation; and (c) identifies potential directions of further research on this topic that have both theoretical and practical implications. Among the important research directions identified are: (a) ‘strategic’ mergers that are potentially used as mechanisms for competitor pre-emption; (b) systems effects of mergers including the impact of mergers on sector-wide diffusion of technologies; (c) ‘consequential’ effects of mergers on more ‘final’ measures of innovation performance such as firm productivity and profitability; (d) mergers; and (e) divestments as providing context or ‘shocks’ to an activity system and their value as an empirical source of exogenous variation.
Toby E. Stuart and Adam M. Kleinbaum
Intra-organizational social networks are known to be important antecedents to individual career attainment, but research examining their influence on firm-level performance has been limited. We argue that the intra-organizational network is likely to affect two firm-level outcomes: coordination and adaptability. Prior research has shown formal structure to be a useful tool for reshaping organizational networks, but we argue that firms vary in their rates of network responsiveness. When formal organizational structure is changed, some firms will experience a rapid reshaping of their networks; in other firms, the network will respond more slowly to the new formal structure. We posit that slow network responsiveness may provide coordination advantages via compensatory fit, whereas fast network responsiveness may facilitate more rapid adaptability. We view network responsiveness as a useful means through which the internal network structure of a firm drives ambidexterity, dynamic capabilities, and firm performance.
Elke Schüßler and Jörg Sydow
Events such as conferences, trade fairs, festivals, award ceremonies, and related phenomena are becoming an increasingly prominent research topic in the social sciences. Sometimes classified as field-configuring events, tournament rituals, or temporary clusters, such intentionally organized temporary social arenas in which diverse members of an industry or organizational field assemble, often periodically, have recently been recognized as important selection environments and sites for the negotiation of values in creative industries. By drawing on theoretical concepts from management studies, organizational sociology, and economic geography, this chapter provides a review of the existing research on what we denote as ‘organized field-level events’ and proposes three theoretical perspectives: organized field-level events as creative products, events as mechanisms of configuring and maintaining creative fields, and organizing field-level events as a form of institutional work.
The effectiveness of innovation processes depends fundamentally on the organizational context in which they take place; in other words, to be effective, innovation processes must be correctly ‘organized’. This chapter discusses how and why considerations of the organizational context are important for innovation and examines aspects of organizations that have been identified in the broader Organization and Management Theory (OMT) literature as being of particular importance when thinking about innovation management. It begins by focusing on three streams of literature—culture, leadership, and team dynamics—that already include a concern for innovation and discusses their role in innovation management. In addition, three areas of research in OMT will be discussed that have particular promise for advancing understanding of innovation management—institutional theory, theories of practice adoption, and organizational identity theory—but that have yet to be systemically connected to innovation.
Mark Dodgson, David M. Gann, and Nelson Phillips
This chapter defines innovation management, and analyses its scope and changing nature. It explains the value to the study of innovation management of merging insights from various disciplines, levels of analysis, and research methods. The chapter argues innovation management is a field driven by its practice, but a number of theories are presented that help explain its conduct. Five recurrent challenges of innovation are outlined: dealing with disruption, balancing portfolios, integrating the innovation process, managing intangibles, and encouraging creativity and play. Six different types of innovation process are delineated: research and technology led, market facing, internal coupling, external collaboration, strategic integration, and future ready. The chapter introduces the contributions made in the other chapters of the Oxford Handbook of Innovation Management.
Bengt-Åke Lundvall and Susana Borrás
This article is about what governments have done and could do to promote the production, diffusion, and use of scientific and technical knowledge in order to realize national objectives. This article begins with “story-telling” based on sketchy historical facts. The aim of the two stories is to illustrate that innovation policy covers a wide set of issues that have been on the agenda far back in history while still remaining important today. Furthermore, this article moves on to sketch the history of innovation policy, splitting it up into the three ideal types: science, technology, and innovation policy. It uses the documents from Organization for Economic and Co-operation Development and other sources to do so. Finally, it points to future challenges, and highlight research opportunities.
This article presents an overview and assessment of the systems of the innovation approach. It focuses mainly on national systems of innovation, but in addition it addresses sectoral and regional systems of innovation. This article addresses the emergence and development of the systems of innovation (SI) approach, its strengths and weaknesses, the criticism that it is “undertheorized,” the constituents of SIs, the main function and activities in SIs, the boundaries of SIs, and proposals for further research. It also discusses how the rigour and specificity of the SI approach could be increased. The innovation concept used in this article is wide and includes product innovations as well as process innovations. Product innovations are new—or better—material goods as well as new intangible services. Process innovations are new ways of producing goods and services.