Managing Innovation

What Do We Know About Innovation Success Factors?

Alexander Brem, Joe Tidd;Tugrul Daim

• Publisher: WSPC (EUROPE)
• Year: 2019
• eBook ISBN: 9781786346537
• Topic: Business
• Subtopic: Management
• Index: Business

Managing Innovation is a three-part series covering contemporary technology and innovation management research areas. Each volume comprises key articles from both the International Journal of Innovation Management and the International Journal of Innovation and Technology Management, published by World Scientific, and provides an international, disciplinary approach across its broad coverage of topics.

Relevant for both academics and practitioners, this volume answers how organisations can develop innovative approaches from a perspective that encompasses technological advances, changes in the market and individual entrepreneurs.

Contents:

• About the Editors
• List of Contributors
• Introduction — Managing Innovation: What Do We Know About Innovation Success Factors? (Tugrul Daim, Alexander Brem and Joe Tidd)
• Innovation Management:
  • Investigating Organisational Innovativeness: Developing a Multidimensional Formative Measure (Florian Pallas, Florian Böckermann, Oliver Goetz and Kirstin Tecklenburg)
  • Managerial Factors Influencing Success of New Product Development (Sima Sedighadeli and Reza Kachouie)
  • Factors Influencing an Organisation's Ability to Manage Innovation: A Structured Literature Review and Conceptual Model (Marisa Smith, Marco Busi, Peter Ball and Robert Van Der Meer)
  • Predicting New Product Sales: The Post-Launch Performance of 215 Innovators (Alfred Kleinknecht and Gerben Van Der Panne)
  • The Impact of Changing Markets and Competition on the NPD Speed/Market Success Relationship (Murray R Millson and David Wilemon)
• Critical Factors in New Product Development:
  • Innovative Capability, Innovation Strategy and Market Orientation: An Empirical Analysis in Turkish Software Industry (Gülşen Akman and Cengiz Yilmaz)
  • Innovation Success in the Context of Inbound Open Innovation (Philipp Nitzsche, Bernd W Wirtz and Vincent Götel)
  • The Impact of Environmental Uncertainty Dimensions on Organisational Innovativeness: An Empirical Study on SMEs (Cevahir Uzkurt, Rachna Kumar, Halil Semih Kimzan and Hanife Sert)
  • A Study on the Factors That Influence the Fitness Between Technology Strategy and Corporate Strategy (Jin Chen, Yu-Bing He and Xin Jin)
• Tools for New Product Development:
  • Commercialization of Technological Innovations: The Effects of Internal Entrepreneurs and Managerial and Cultural Factors on Public–Private Inter-Organizational Cooperation (Elie Geisler and Giuseppe Turchetti)
  • Assessing Some Important Factors to Reduce Obstacles in Product Innovation (Marcelo Seido Nagano, Juliano Pavanelli Stefanovitz and Tor Guimaraes)
  • Long-Run Dynamics Between Product Life Cycle Length and Innovation Performance in Manufacturing (Markus Plewa)
  • Individual Entrepreneurial Characteristics and Entrepreneurial Success Potential (Wing-Ki Wong, Hong-Man Cheung and Patri K Venuvinod)
• Index

Readership: Students and practitioners in the fields of technology and innovation management. Innovation Management;Technology Management;Innovation Success;Crowd;International Innovation0 Key Features:

• This book contains most important publications in the field of technology and innovation management from the recent years

Part 1

Innovation Management

Chapter 1

Investigating Organisational Innovativeness: Developing a Multidimensional Formative Measure^∗

Florian Pallas, Florian Böckermann, Oliver Goetz and Kirstin Tecklenburg

To survive competition, it is vital for firms to be innovative. As a firm’s cultural predisposition, organisational innovativeness provides an environment that fosters innovations and thus actively supports new product or service development. The purpose of this study is to measure organisational innovativeness and its multiple dimensions from a cultural-strategic perspective on a multifaceted formative scale which we develop theoretically and by means of qualitative interviews. Furthermore, we empirically validate the newly developed construct by investigating how innovativeness and its dimensions translate into innovation success by examining the relationship between innovativeness and innovation performance in depth. Our findings suggest that a strategic focus on innovations, an extrinsic motivation system, openness in communication, as well as management encouragement are all dimensions of organisational innovativeness. Further, our results support the need for a proficient innovation process as a mechanism to systematically and continuously translate innovativeness into successful innovations. Innovation process proficiency fully mediates the relationship between innovativeness and innovation performance, while the contingency factor competitive intensity enhances this performance impact.

Keywords: Organisational innovativeness; culture; innovation process; process proficiency.

Introduction

It is widely accepted that innovations are a crucial determinant of a firm’s success and competitive advantage (e.g., Auh and Menguc, 2005; Hultink et al., 1998; Vorhies and Morgan, 2005). By developing new and/or better solutions to customer problems, innovations can open up new markets or broaden existing ones. How well companies initiate and conduct new product development activities and thereby accomplish continuous innovation success is influenced by their organisational innovativeness (Olson et al., 2005; Siguaw et al., 2006). Research on the effect of innovativeness on companies’ success is substantial and well established (e.g., Deshpandé et al., 1993; Langerak et al., 2004; Narver et al., 2004; van der Panne et al., 2003). However, research on the measurement of innovativeness is underdeveloped to the extent that the definition often depends on the underlying research questions (Dobni, 2008; Garcia and Calantone, 2002; Siguaw et al., 2006). Measurement approaches are therefore inconsistent across studies, which complicates the transfer as well as the generalisation of previous results. Consequently, different conceptualisations of innovativeness have evolved which focus on distinct aspects within an organisational setting.

A review of the extensive literature on organisational innovativeness indicates that previous research can be divided into the following research streams (see Table 1 for a summary of the distinguished research): (1) innovation output, (2) product innovativeness, (3) technological superiority and (4) cultural-strategic perspective. Whereas innovation output refers to the number of newly introduced products and processes (e.g., Damanpour, 1991; Homburg et al., 2002), product innovativeness is related to the degree of “newness” of these innovations (e.g., Salavou, 2004; Salomo et al., 2008), therefore focusing on consumers’ or companies’ perception rather than on mere innovation output. Research on innovativeness as technological superiority is concerned with a firm’s ability (i.e., amount of R&D expenditure) or potential to introduce new processes or products (e.g., Carmen and Maria José, 2008; Ortt and van der Duin, 2008) but fails to indicate the importance of being innovative on the employee level. From a cultural-strategic perspective, organisational innovativeness is defined as a firm’s openness towards innovation that manifests in an active innovative organisational behavior (e.g., Chandler et al., 2000; Deshpandé et al., 1993; Simpson et al., 2006). We focus on the cultural-strategic perspective as it captures innovativeness at a deeper level within an organisation, is more persistently compared to the other streams and acts more as a fundamental condition for a company’s innovative behavior. Therefore, organisational innovativeness can be described as the “primary determinant of innovation” (Ahmed, 1998, p. 31). Management is thus well advised to support an innovative culture to nurture employees’ internal resources more efficiently and to generate competitive advantages (Barney, 1986).

Table 1. Representative research on organisational innovativeness by focus.

Topic	Perspective	Exemplary research
Exemplary research	Number of newly introduced products or processes	Berthon et al., 1999; Damanpour, 1991; Han et al., 1998; Homburg et al., 2002; Manu, 1992; Manu and Sriram, 1996; Subramanian and Nilakanta, 1996
Product innovativeness	The degree of “newness” of innovations	Danneels and Kleinschmidt, 2001; Garcia and Calantone, 2002; Guimaraes and Langley, 1994; McNally et al., 2010; Katila and Shane, 2005; North and Smallbone, 2000; Olson et al., 1995; Salavou, 2004; Salomo et al., 2008
Technological superiority	Ability of a firm to introduce new processes or products	Avlonitis et al., 1994; Carmen and Maria José, 2008; Deshpandé et al., 1993; Molina-Castillo and Munuera-Aleman, 2009; Ortt and van der Duin, 2008; Paladino, 2007; Rothwell, 1994; Simpson et al., 2006; Smith et al., 2008
Cultural-strategic perspective	Openness of a firm towards innovation that manifests in an active innovative supportive behavior	Ahmed, 1998; Auh and Menguc, 2005; Calantone et al., 2002; Capon et al., 1992; Chandler et al., 2000; Dobni, 2008; Hult et al., 2004; Hurley and Hult, 1998; Martins and Terblanche, 2003; Scott and Bruce, 1994; Siguaw et al., 2006; Vázquez et al., 2001; Wang and Ahmed, 2004; Worren et al., 2002

Most of the existing research measures and conceptualises a cultural-strategic innovativeness in the context of a single organisational or functional dimension rather than a comprehensive multidimensional approach (Calantone et al., 2002; Capon et al., 1992; Chandler et al., 2000; Hult et al., 2004). However, using this approach ignores the conceptual richness of the construct, which is too complex to be operationalised as unidimensional (Wang and Ahmed, 2004). Only a few studies assess innovativeness by using a multidimensional conceptualisation to account for its distinct facets (Ahmed, 1998; Dobni, 2008; Martins and Terblanche, 2003; Scott and Bruce, 1994) and even less research has subsequently tested the multidimensionality of organisational innovativeness empirically.

While the developments of multidimensional approaches are undoubtedly important in terms of improving the methodological soundness of innovativeness studies, existing measures of cultural innovation orientation use only reflective formulation. By using reflective measurement approaches, one misses the opportunity to discover the multiple dimensions that generate this important resource. These reflective measurement approaches are useful for assessing a firm’s degree of a specific dimension of innovativeness; that is, a change in the degree of that dimension reflects a change in all the indicator values (Jarvis et al., 2003). However, recently several academics have warned about a potential misspecification of constructs in organisational measure development, calling for consideration of a formative measurement perspective (e.g., Diamantopoulos et al., 2008; Diamantopoulos and Siguaw, 2006; Podsakoff et al., 2006). Thus, there is an emergent recognition that a formative approach, in which the indicators (dimensions) cause the latent construct rather than being caused, might be more appropriate (Diamantopoulos and Siguaw, 2006; MacKenzie et al., 2005). As a firm’s culture often becomes the established property of an organisation’s unspoken, subconscious common sense (Barney, 1986), it is deeply seated and shared by the organisation personnel. Therefore, as a culture, innovativeness is manifested in the typical characteristics of an organisation formed by components, such as the managers’ and employees’ behaviors (Martins and Terblanche, 2003). Thus, the latent construct innovativeness seems to be composed of different aspects suggesting a formative conceptualisation.

Besides the conceptual issues, Hurley and Hult (1998, p. 52), acknowledge “[…] creating a more innovative culture requires a change in the system […]” highlighting the importance of identifying the constitutes/drivers of innovativeness. This statement stresses the necessity to gain a broader understanding of the elements that constitute organisational innovativeness. This is also in line with several academics who have called for a reliable and valid scale of organisational innovativeness as a strategic, cultural orientation (Deshpandé and Farley, 2004; Siguaw et al., 2006). Thus, given the importance of firms’ need to create an innovative culture, we develop a multidimensional formative measurement scale of innovativeness to assess a comprehensive view of a firm’s underlying cultural predisposition towards innovation.

To further validate our new formative measurement approach of organisational innovativeness and to assess the nomological validity, we analyse how innovativeness translates into innovation success. Only Calantone et al. (2003) have to date investigated the mechanisms that allow cultural-strategic innovativeness to be translated into innovation success by investigating the mediating effects of new product development speed and corporate strategic planning. However, these authors state that further research is needed to identify other mediators. Moreover, Simpson et al. (2006) have recently called for future research to examine the indirect relationship between organisational innovativeness and financial performance by including operational efficiency measures (e.g., process proficiency). To address this research gap, we include innovation process proficiency as a mediator in our model. Innovation process proficiency is a firm’s capability defined as the degree of quality with which it performs its new product development process. While this construct has been already found to mediate the effect of market orientation on new product performance (e.g., Langerak et al., 2004), we still lack knowledge of how it mediates the effect of organisational innovativeness on a company’s performance. By including this mediator, we want to explore and better understand the route from a firm’s organisational innovativeness to innovation success and business performance.

To summarise, the purpose of this research is to develop a new multidimensional formative measurement approach to organisational innovativeness and to validate its nomological validity by examining its effect on innovation success via innovation process proficiency. Hence, the paper’s objectives are twofold: (1) to develop a new higher-order formative approach to innovativeness and its dimensions, thus providing managers with a deeper understanding of how to foster a firm’s innovativeness and (2) to empirically validate our construct by shedding more light on the nature of innovativeness’s performance impact; more precisely, we investigate whether innovation process proficiency translates a company’s innovativeness into successful innovations.

Literature Review

Previous conceptualisations of cultural-strategic innovativeness

As shown in Table 1, different streams are involved in the area of organisational innovativeness. Each of them focuses on different aspects and have a different perspective of this construct. However, several researchers have argued that an innovative culture is a principal determinant of innovation (Ahmed, 1998; Sarros et al., 2008), while the other streams might be rather consequences or a result of a company’s innovativeness (Ahmed, 1998; Naranjo Valencia et al., 2010; Siguaw et al., 2006). A cultural-strategic perspective follows the traditional view that attitudes and behavior, which are affected by (e.g., innovative) values and norms, determine innovativeness, which then lead to certain outcomes (Calantone et al., 2002; Kohli and Jaworski, 1990; Olson et al., 2005). Hence, a firm’s innovative culture often becomes an established property of an organisation’s unspoken, subconscious common sense (Barney, 1986) and is present at the different levels (employee, team and management) within an organisation (Wang and Ahmed, 2004). Thus, culture acts as a code of practice that all the organisational members have to actively follow (Deshpandé and Webster, 1989).

Several studies have measured innovativeness by using a cultural-strategic perspective. These approaches suggest...

Table of contents

• Cover
• Halftitle
• Series
• Title
• Copyright
• Dedication
• About the Editors
• List of Contributors
• Contents
• Introduction
• Part 1 Innovation Management
• Part 2 Critical Factors in New Product Development
• Part 3 Tools for New Product Development
• Index