Business Models for Strategic Innovation

Cross-Functional Perspectives

S.M. Riad Shams, Demetris Vrontis, Yaakov Weber, Evangelos Tsoukatos, S.M. Riad Shams, Demetris Vrontis, Yaakov Weber, Evangelos Tsoukatos

• Publisher: Routledge
• Year: 2018
• eBook ISBN: 9781351257909
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Business allgemein

This book extends our understanding of how different cross- functional business and management disciplines, such as innovation and entrepreneurship, strategic management, marketing and HRM, individually and collectively underpin innovation in business management.

Business Models for Strategic Innovation develops insights from cross-disciplinary business knowledge streams and their cutting edge discipline-specific practical implications to create a cross- functional business innovation management model. Novel cross- disciplinary knowledge plays an imperative role in business innovation and we know that innovative management processes have significant implications for effective cross- functional management. In this context, each chapter of the book presents fresh insights on diverse business knowledge- streams as well as their applied implications on cross- functional business innovation management. Finally, centred on these cross- disciplinary business theories and their cutting edge implications, the last chapter of this book proposes a model of strategic cross- functional business innovation management process.

This academically rigorous work uses innovative theoretical propositions and state- of- the- art empirical analysis in order to enable cross- functional management teams to support organisation- wide business innovation processes.

1Strategic innovation management

A cross-functional vision to be materialised

S. M. Riad Shams, Demetris Vrontis, Yaakov Weber and Evangelos Tsoukatos

Introduction

“Parallel to an expanding volume of research on innovation, the academic debate on the subject is becoming everlasting” (Conta et al., 2015, p. 107); however, in general, “innovation can be a critical driver in the successful handling of the constantly appearing new (business) challenges” (Conta et al., 2015, p. 107). As a result, ongoing research on business innovation management is imperative to focus on the relevant issues of this research-stream and the related topic-specific debates, in order to deliver the value to the associated stakeholders that is expected and accepted by them. Continuous innovation in business management is crucial for any business firm, not only for their survival, but also to ensure their ongoing progress.

For long-term success, “(strategic) innovation has become systemic and drives capitalist economic advantage” (Romer, 1990; Burton-Jones, 2001, as cited in Shams, 2015, p. 161). In general, strategic innovation in business needs a proper understanding of the needs, wants and expectations of the target market (Bresciani et al., 2012), in order to satisfy those needs through the commercialisation of the outcome of a business innovation process. In addition to the business innovation management centred on the issues related to a single business functional area, the cross-functional input from different functional areas of a business firm is, in general, instrumental to proactively plan, implement and monitor the strategic innovation management process in business, in order to enhance and sustain the impact of a newly innovated product/service, idea, technology or management process on long-term business success. However, a concise review of the extant literature in this chapter suggests that the cross-functional business innovation teams play an imperative role in the organisation-wide strategic innovation management process; the review also reveals that the current research in this field is not adequate to proactively explore the diverse issues in business, related to the overall implications of cross-functional business teams for strategic innovation management, focusing on diverse socio-economic environments and business settings.

From this context, the remainder of this chapter

•firstly, defines innovation in business and extends the discussion to the relevant areas of business management;

•secondly, accentuates significance of cross-functional teams for business innovation;

•thirdly, discusses the lack of current research on cross-functional business management for strategic innovation management, in order to set a cross-functional vision for strategic innovation in business;

•and finally, presents the conclusion of the overall discussions of the chapter.

Furthermore, this introductory chapter provides an overview of the contexts that are embraced in the rest of the chapters of this book, in order to develop insights on diverse business-function-specific innovation processes, with an aim to integrate the core issues of those processes into an inclusive cross-functional model of strategic innovation management in business.

The definition of innovation and innovation management in business

In general, strategic innovation management in business is defined as:

[…] a firm’s tendency to engage in and support new ideas, novelty, experimentation and creative processes that may result in new products, services or technological processes. Innovativeness represents a basic willingness to depart from existing practices and venture beyond the current state of the art (in order to sustain the competitive advantage underlying the innovation).

(Lumpkin and Dess, 1996, p. 142, as cited in Vrontis et al., 2012, pp. 422–423; Shams and Kaufmann, 2016, p. 1257)

Business models innovation has emerged as an important means for firms to commercialise new ideas and technologies (Chesbrough, 2010, p. 354) in order to use the innovation outcome and the underlying innovation value internally and externally at a profit, in a way that would be expected and accepted by all associated stakeholders, including the customers (Kaufmann and Shams, 2015). From this context, the business model innovation management “represents the logic of the firm to propose customer value and to set up a viable revenue and cost structure for value capture (Teece, 2010), into the focus of attention of management practitioners and scholars alike” (Spietch et al., 2014, p. 237). Value is defined as

an anticipated outcome of any sort of planned and organized activity. The activity could be derived from monetary, psychic, or physical resources. The more the outcome meets initial anticipation, the more the possibility of win-win outcomes or value optimization for all involved stakeholders.

(Shams, 2013a, p. 244; 2013b, p. 263)

As a result, the innovation management process in business predominantly focuses on planning and implementing a unique course of action that could optimize value for all associated stakeholders. In order to ensure that a firm could optimize value for their key stakeholders through business innovation, the firms in the contemporary business environment administer an innovation management process, which is a “continuous process to develop innovative capacities in socio-economic settings through on-going development and adaptation of strategies and processes that enable higher advantage in collective and individual levels, compared to the prior strategies and processes to enhance socio-economic development” (Shams, 2016a, p. 671). Furthermore, it is important to ensure that “the innovation of unique strategic (business) models, which do not simply fit new competitive conditions, but perpetually and automatically predict and adapt… according to the pace and nature of change” (Thrassou et al., 2014, p. 352, as cited in Shams and Lombardi, 2016, p. 221).

Following the discussion thus far, it can be argued that the key issues that are depicted in Figure 1.1 play a central role in the process of strategic innovation management in contemporary business practices.

Figure 1.1The constructs, process and outcome of strategic innovation management in business

The arguments presented in this section from the extant literature suggest that innovative idea generation, screening and selection of the appropriate idea for developing novel product/service or relevant technology is an integral part of successful innovation management in business. In terms of selecting the appropriate idea, considering the needs, wants and expectations of the associated stakeholders (Sanchez et al., 2012; Christofi et al., 2015; Santoro et al., 2017) is crucial, in order to experiment and commercialise the innovative idea and the resulting product, service or technology, so that the outcome of the innovation management process would be expected and accepted by the key stakeholders (Shams and Belyaeva, 2017, Shams, 2017; 2016b; 2011). Figure 1.1 (the constructs, process and outcome of strategic innovation management in business) portrays this procedure of strategic innovation management.

The significance of cross-functional teams in business innovation

The innovation management process and its subsequent “rewarding value-delivery process does not rely solely on an organization’s or its entrepreneur’s inspired efforts. Stakeholders, the most important associates of a value-delivery network and their significant contributions, are certainly required for a win–win outcome” (Kaufmann and Shams, 2015, p. 10, as cited in Shams et al., 2017, np). As a consequence, the internal and external stakeholders of a firm have significant implications for planning, implementing and monitoring the strategic innovation management process. For example, “increased use of cross-functional teams (within and across a firm) in new product development is related to higher project success” (McDonough, 2000, p. 221). In relation to this view, researchers further argue that

on the basis of a study of 141 cross-functional product development teams, the authors find that innovativeness is positively related to the strength of superordinate identity in the team, encouragement to take risk, customers’ influence, and active monitoring of the project by senior management.

(Sethi et al., 2001, p. 73)

In fact, cross-functional teaming or “cross-boundary teaming, within and across organizations, is an increasingly popular strategy for innovation” (Edmondson and Harvey, 2017, p. 1), since, “the relationship between cross-functional collaboration and…innovativeness is stronger” (Clercq et al., 2011, p. 680). In terms of change management in business operation, cross-functional teams play a positive role to implement proactive and effective change management strategies (Piercy et al., 2013). In terms of technology innovation and operational effectiveness, “cross functional teams have an indirect influence on continuous improvement of operational performance through the alignment between technology innovation effectiveness and operational effectiveness” (Santa et al., 2011, p. 122). In terms of purchasing management, “a positive impact was found of cross-functional integration and functional coordination on purchasing performance, and of purchasing performance on firm performance” (Foerstl et al., 2013, p. 689). In terms of talent management, “both talent management and performance management have a positive impact on cross-functional integration and functional coordination” (Foerstl et al., 2013, p. 689). In terms of marketing innovation,

causal pathways leading to cross-functional coordination and marketing adaptiveness can be enhanced by resource dependency, cross-functional teams, multifunctional training, and management support. In particular, management support is a crucial condition for cross-functional teams and multifunctional training. While resource dependency is an important internal factor for coordination, a high resource dependency can result in a negative effect on marketing adaptiveness.

(Mohsen and Eng, 2016, p. 5946)

In terms of supply chain management and HRM, the success of cross-functional teams contributes to job satisfaction (McAndrews and Ha-Brookshire, 2016). Furthermore, “cross-functional executive involvement and worker involvement positively affect the strategic alignment of the lean manufacturing statement and bundles (just-in-time, total quality management, total preventive maintenance, and human resources management) with environmental and social goals and practices” (Longoni and Cagliano, 2015, p. 1332). In terms of knowledge manage...

Table of contents

• Cover
• Half Title
• Series Information
• Title Page
• Copyright Page
• Contents
• List of figures
• List of tables
• Notes on contributors
• Foreword
• Acknowledgement
• Editorial note
• 1 Strategic innovation management: A cross-functional vision to be materialised
• 2 Neuromarketing applications of neuroprosthetic devices: An assessment of neural implants’ capacities for gathering data and influencing behavior
• 3 The role of information sharing and communication strategies for improving stakeholder engagement
• 4 Assessing the dynamic of agri-food export trends before and after the EU Eastern Enlargement
• 5 How does entrepreneurial orientation influence knowledge exploitation?
• 6 Profitability of the Italian credit cooperative banks
• 7 Applying persuasion science in marketing communications: A comparison of marketing communications professionals in Armenia and Greece
• 8 Innovative tertiary strategies on improving satisfaction level of students
• 9 Relationship marketing and entrepreneurial innovation: A B2B context of stakeholder relationship management
• 10 Disclosure of electric mobility in annual reports of automotive companies: Risks, strategies, and environment
• 11 Human and task integration during post-merger integration
• 12 An integrated cross-functional model of strategic innovation management in business: The implications of ten cross-functional business areas
• Index