The literature on innovation offshoring has focused on the dichotomous choice between two distinct investment strategies - captive offshoring and outsourced offshoring. We use the concept of ...organizational control to investigate how differences in the informal institutions that prevail in the home and host countries influence multinational enterprise (MNE) strategy (or, the organizational control decision) with respect to subsidiaries established to offshore innovation. While the relationship between formal institutions and MNE strategy has been the subject of considerable academic scrutiny, less is known about the role of informal institutions. We propose that the type of uncertainty precipitated by informal institutions is critical to understanding the strategic behavior of foreigninvesting MNEs. We hypothesize that an MNE's organizational control over a subsidiary will be contingent upon the type of informal institutional uncertainty encountered by the subsidiary. More specifically, we disaggregate the informal institutions construct and develop three new, more explicit, latent constructs - behaviorally-oriented informal institutions (BOII), technology-oriented informal (TOII) and demand-oriented informal institutions (DOII). Our theory posits that while an increase in BOII distance will precipitate a preference for greater organizational control, heightened TOII and DOII distances will induce the opposite outcome - a preference for lower levels of organizational control.
Contests are a historically important and increasingly popular mechanism for encouraging innovation. A central concern in designing innovation contests is how many competitors to admit. Using a ...unique data set of 9,661 software contests, we provide evidence of two coexisting and opposing forces that operate when the number of competitors increases. Greater rivalry reduces the incentives of all competitors in a contest to exert effort and make investments. At the same time, adding competitors increases the likelihood that at least one competitor will find an extreme-value solution. We show that the effort-reducing effect of greater rivalry dominates for less uncertain problems, whereas the effect on the extreme value prevails for more uncertain problems. Adding competitors thus systematically increases overall contest performance for high-uncertainty problems. We also find that higher uncertainty reduces the negative effect of added competitors on incentives. Thus, uncertainty and the nature of the problem should be explicitly considered in the design of innovation tournaments. We explore the implications of our findings for the theory and practice of innovation contests.
This paper was accepted by Christian Terwiesch, operations management.
This study systematically reviews the scientific literature on the role of open innovation in addressing current and emerging societal and environmental challenges. To do so, we analysed the what, ...how, who and why of integrating external partners for sustainability purposes. We found a clear predominance of open innovation mechanisms to develop environmental innovations rather than innovations focused on a triple bottom line. We identified at least four mechanisms associated with the inbound mode of open innovation (crowdsourcing, lead‐user workshops, intermediation, and experiments and discussion sessions) and 10 mechanisms related to the coupled mode of open innovation (alliance, business‐non‐profit engagement, co‐creation, joint ventures, cooperation, collaborative innovation contests, coopetition, cross‐sector partnerships, joint development projects, and innovation networks). Even though sustainability‐oriented innovation promises to be a source of societal transformation and entrepreneurial opportunities, we found that firms can face some tensions when simultaneously addressing financial, environmental and social purposes.
The fields of entrepreneurship, innovation and regional development are inextricably linked, with people, organisations and the environment or their location, forming the main building blocks in an ...integrated model of value creation.
•Industry 4.0 is also significantly shortening the product life cycles.•The critical challenge that firms are facing while managing open innovation is trust among stakeholders.•The present study ...investigates the impact of digital trust on the open innovation performance.•The results show that digital trust has a significantly positive impact on a firm's open innovation.•We suggest firms should develop a technology strategy to adopt the industry 4.0 perpetually.
The fourth industrial revolution, termed Industry 4.0, offers a vital and valuable opportunity to drive social and technological innovations. It has state-of-the-art cyber-physical systems and related technological architecture, which can drastically increase a firm's productivity and innovation performance. Nevertheless, Industry 4.0 is also significantly shortening the product life cycles and demanding the pace of innovation to be accelerated. A firm, however, cannot accelerate the pace of its innovation by exclusively relying only on its internal resources. This is the reason firms are increasingly adopting open innovation strategy through collaboration with external stakeholders. The critical challenge that firms are facing while managing open innovation is trust among the stakeholders. Digital trust, attained through Industry 4.0 technologies, can play an instrumental role in promoting open innovation. Against this backdrop, the present study investigates the impact of digital trust on open innovation performance. The study investigates the role of technological orientation and technological absorption capacity in the association between digital trust and open innovation. Cross-country data of 324 electrical and electronics firms of three major Asia-Pacific countries, namely Malaysia, Indonesia, and Thailand, were collected using a close-ended questionnaire. The study employed partial least square-structural equation modeling (PLS-SEM) and PLS-multi group analysis (PLS-MGA) to analyze the modeled relationships. The results reveal that digital trust, composed of trust and Industry 4.0 technologies, has a significant positive impact on a firm's open innovation. Likewise, results also depict a strongly positive moderating role of technological orientation in the association between digital trust and open innovation. Finally, results also exhibit a significant mediating role of both potential and realized technological absorptive capacities in the association of digital trust and open innovation. It is the first-ever study discussing the linkage of digital trust with open innovation. The findings of this study suggest development of technology strategy to adopt Industry 4.0 technologies for accelerating the pace of open innovation.
This chapter provides a conceptual framework for integrating the array of variables defined in diffusion research to explicate their influence on an actor's decision to adopt an innovation. The ...framework groups the variables into three major components. The first component includes characteristics of the innovation itself, within which two sets of variables are defined concerning public versus private consequences and benefits versus costs of adoption. A second component involves the characteristics of innovators (actors) that influence the probability of adoption of an innovation. Within this component six sets of variables concern societal entity of innovators (either people, organizations, states, etc.), familiarity with the innovation, status characteristics, socioeconomic characteristics, position in social networks, and personal qualities. The third component involves characteristics of the environmental context that modulate diffusion via structural characteristics of the modern world. These latter characteristics incorporate four sets of variables: geographical settings, societal culture, political conditions, and global uniformity. The concluding analysis highlights the need in diffusion research to incorporate more fully (a) the interactive character of diffusion variables, (b) the gating function of diffusion variables, and (c) effects of an actor's characteristics on the temporal rate of diffusion.
We examine whether and how CEO foreign experience affects firm’s green innovation. Using a sample of Chinese public companies and hand-collected CEO foreign experience data, we document a positive ...association between CEO foreign experience and corporate green innovation. Furthermore, consistent with the view that CEOs with foreign experience would play a more significant role when provided with more resources, we find that the positive relationship is more pronounced in less financially constrained firms, in state-owned enterprises, and in less competitive industries. Additional analyses indicate that enhanced environmental ethics and general competency are two potential mechanisms through which CEO foreign experience affects corporate green innovation. Finally, we find that CEO foreign experience is positively related to green innovation quality and internationalization. Collectively, these findings suggest that CEO foreign experience is a significant factor for corporate green innovation in emerging markets.
Digital technology usage has been extensively studied in academic research and industry. A deeper look at firm performance shows that digital transformation strategy and organisational innovation are ...facilitated by digital technology usage. This study further examined the mediating effects of digital transformation strategy and organisational innovation on the relationship between digital technology usage and firm performance. An empirical study was performed based on a survey of supervisors from financial industries in Taiwan. Two hundred twenty-seven companies responded to the questionnaires. The findings indicated that digital technology usage has positive influences on digital transformation strategy and organisational innovation, which in turn influence firm performance. Furthermore, digital transformation strategy and organisational innovation played full mediating roles between digital technology usage and firm performance.
► Innovation capacity and developed innovations in small enterprises are examined. ► Innovation patterns in manufacturing and service industries are compared. ► Results show slight differences ...between the manufacturing and service industries. ► Findings indicate significant differences across the sectors within these industries. ► Characteristics of small enterprises as innovators across the sectors are provided.
This paper explores what kinds of innovations have been developed in small manufacturing and service enterprises and what has been the degree of innovation capacity that small enterprises possess. In addition, it compares what differences there are across the manufacturing and service sectors. The empirical evidence is based on quantitative data gathered through an email questionnaire which yielded 708 qualified responses from the representatives of Finnish small enterprises with fewer than 50 employees. The analysis is based on descriptive statistics and non-parametric tests. The evidence displays a rich diversity of innovation patterns in small enterprises. The empirical evidence demonstrates only slight differences between the manufacturing and service industries while it indicates significant differences across the sectors within these industries. The value of the present study lies in the better understanding of innovation development in small enterprises. The rich diversity of innovation patterns in small enterprises suggests that diversity should also direct the policies aiming at supporting innovation development in the context of small business. Finally, applying these results will provide more specific questions for studying the nature of innovation development in small enterprises.
As incumbents strive to collaborate with start-ups in the pursuit of cutting-edge digital solutions, the complexities posed by disparate partners and their innovative endeavours often lead to ...intricate tensions. Our research underscores the critical role of innovation intermediaries in enabling a successful digital co-creation, yet a deeper understanding of this novel and evolving context is required. Through a comprehensive study of two innovation intermediaries, five incumbent companies, and eleven start-ups, we shed light on how intermediaries can effectively mitigate the hard-to-manage tensions that emerge. Our analysis uncovers three primary tensions: incompatible digital co-creation cultures, divergent digital innovation operations, and misaligned technical capabilities. We further propose a four-phase process for innovation intermediation, including the establishment of digital co-creation foundations, catalysing digital innovation projects, orchestrating the co-creation process, and scaling the resulting outcomes.
