Resources,state ownership and innovation capability: Evidence from Chinese automakers

Promoting innovation has been a major task for both business practitioners and governments in emerging markets. Based on the resource‐based view, this study examines the contributing factors of firms' innovation capability and the contingent role of state ownership. Utilizing data on 102 Chinese automobile firms, we found that financial resources, R&D human capital, innovation leadership, collaborative culture, and government support positively relate to firms' innovation capability. Moreover, the firm's ownership type serves as a boundary condition for the resource–capability relationship. The significance of different resources in developing innovation capability vary for firms with different ownership types. In particular, government support and R&D human capital have stronger effects in promoting non‐state‐owned enterprises' innovation capability. From a practical standpoint, developing innovation capability should consider the critical role of ownership. Specifically, while state‐owned enterprises can capitalize on organizational and financial resources to enhance innovation capability, it is also important for them to transform bureaucratized systems into more market‐orientated ones and facilitate the effective utilization of R&D human capital and government support.     

IT capabilities and firm performance: A contingency analysis of the role of industry and IT capability type

Previous empirical studies examining the relationship between IT capability and accounting-based measures of firm performance reported mixed results. We argued that prior work has relied on aggregate overall measures of the firm's IT capability, ignoring the specific type and nature of IT capability; and also has not fully considered important environmental conditions that influence the relationship. Drawing on a resource-based view, we advanced a contingency perspective and proposed that IT capabilities’ impact on firm resources was contingent on the “fit” between the type of IT capability/resource a firm possesses and the demands of the industry in which it competes. Specifically, using publicly available rankings as proxies for two types of IT capabilities (internally and externally focused), we empirically examined the degree to which three industry characteristics (dynamism, munificence, and complexity) influenced the impact of each type of IT capability on measures of financial performance. After controlling for prior performance, we found there was general support for the posited contingency model. The implications of these findings are also discussed.     

Innovation Culture,Collaboration with External Partners and NPD Performance

Researchers and managers have found that the use of external knowledge in the process of new product development (NPD) helps to sustain a firm's competitiveness by strengthening its innovative performance. However, little is known about why some firms use external knowledge sources for NPD in an extensive manner while others hardly ever use them. In addition, there is disagreement about which external partners significantly contribute to the innovative performance of a firm as valuable knowledge sources. Based on the resource‐based view (RBV) of the firm and Kitchell's innovation adoption model, this paper expects a firm's innovation culture to have a significant impact on its openness to external knowledge – measured in terms of its collaborative behaviour with five different external partners – and for that behaviour to influence the firm's NPD performance. A sample of 254 technology‐based firms across several industries is used to empirically test the research model with covariance‐based structural equation modeling (SEM). The findings deepen our understanding of the discrepancies between successful pioneering firms active in technology and knowledge sourcing and others being less successful.     

Analyzing the impact of a firm's capability on outsourcing success: A process perspective

We investigated the effect of a firm's resource capabilities and interaction processes on the success of IT outsourcing. Grounded in available literature on outsourcing relationship and process theory as well as a resource-based view of the IT resource capability, a conceptual model was composed to examine the causal structure of capability, process, and relationship in IT outsourcing. We identified the firm's resource capability factors and, based on the premise that relationship intensity should be affected by the IT outsourcing process, we developed a first-order factor analysis of resource capabilities in the interactions between the outsourcer and provider. Results of empirical testing using responses from 267 IT outsourcing project teams in Korea supported most of our hypotheses. The integration of corporate IT resource and capability theories with social exchange theory distinguishes our research from that of others, who have generally treated these theories separately.     

IT management capability and its impact on the performance of a CIO

Viewed from the perspective of the activity competency model (ACM) and prior theoretical works, we developed a conceptual framework for investigating the capability of IT management personnel and its impact on the performance of a CIO. A scale for measuring a CIO's effectiveness and management capability was developed and validated. A partial least squares method was used to test the conceptual model empirically and hypotheses were tested through data collected in a large-scale survey. The results supported the proposed framework, and confirmed our hypotheses that both IT and managerial competencies have positive significant impact on the effectiveness of a CIO. We also found that his or her IT management capability significantly impacted the CIO's performance. Our findings are likely to be of particular value to those concerned with IT management training and competency development for CIOs.     

Antecedents of Network Capability and Their Effects on Innovation Performance: An Empirical Test of Hi‐tech Firms in China

A firm's competitive advantage can come not only from internal resources but also from inter‐firm innovation networks. This paper shows that network capabilities (i.e., network visioning capability, network constructing capability, network operating capability and network centring capability) are special skills that enable values residing in network resources. Based on a sample of 211 Chinese hi‐tech firms and by applying structural equation modelling, network capabilities are found to have a positive relationship with innovation performance. Four antecedents of network capabilities – IT maturity, openness of culture, the management system involved and experience with network activities – are also identified in the research and empirically tested. The results of this study provide a new framework that describes how networked firms can gain a competitive advantage.     

Shareholder reaction to firm investments in the capability maturity model: an event study

This study investigates the differential effects of successfully completed capability maturity model (CMM) appraisals on a firm's short-term and long-term stock performance. Our results indicate a positive share price response on the days surrounding the appraisal date for the stocks of companies obtaining the CMM appraisal. Stocks of firms successfully completing CMM appraisals generally outperform the S&P 500 index over longer-holding periods, although they do not outperform a matched sample. We find support that firms from the information technology industry, firms that are larger, firms of higher CMM maturity levels, and firms completing multiple appraisals are more likely to experience both short-term and long-term benefits from their investing in the CMM.     

Strategic context and patterns of IT infrastructure capability

The importance of a firm's information technology (IT) infrastructure capability is increasingly recognised as critical to firm competitiveness. Infrastructure is particularly important for firms in industries going through dynamic change, for firms reengineering their business processes and for those with multiple business units or extensive international or geographically dispersed operations. However, the notion of IT infrastructure is still evolving and there has been little empirically based research on the patterns of IT infrastructure capability across firms.We develop the concept of IT infrastructure capability through identification of IT infrastructure services and measurement of reach and range in large, multi-business unit firms. Using empirical case research, we examine the patterns of IT infrastructure capability in 26 firms with diverse strategic contexts, including different industry bases, level of marketplace volatility, extent of business unit synergies and the nature of firm strategy formation processes. Data collection was based on a combination of quantitative and qualitative methods with multiple participants.More extensive IT infrastructure capability is defined as a combination of more IT infrastructure services and more reach and range. More extensive IT infrastructure capability was found in firms where: (i) products changed quickly; (ii) attempts were made to identify and capture synergies across business units; (iii) there was greater integration of information and IT needs as part of planning processes; and (iv) there was greater emphasis on tracking the implementation of long term strategy. These findings have implications for both business and technology managers particularly in regard to how firms link strategy and IT infrastructure formation processes.     

Determinants of employees’ intention to exert pressure on firms to engage in web accessibility

Web accessibility can help reduce the digital divide between persons with disabilities and the web by providing easy access to information on the Internet. Providing web accessibility can be an important element that manifests a firm's corporate social responsibility (CSR) and employees can play a vital role in this process. This paper examines how employees can impact a firm's decision to fulfil their CSR regarding web accessibility. We propose that employees’ intention to exert pressure on a firm is primarily influenced by three psychological needs, namely need for control, need for belonging, and need for meaningful existence. Additionally, perceived importance of CSR moderates the relationship between need for meaningful existence and intention. We empirically test the research model using data collected from 106 Chinese employees. The results suggest that for employees to pressure their firms to improve the accessibility of their websites, it is imperative to enhance their perceived importance of web accessibility, and their need for belonging and for a meaningful existence. We present the theoretical and managerial implications arising from our findings.     

Collaborations with Scientific Partners: The Mediating Role of the Social Context in Fostering Innovation Performance

The success of collaboration between firms and scientific partners is still debated. Although a firm's social context seems to be crucial to explain the success or failure of such collaboration in terms of innovation performance, a deep analysis of the context role is still lacking. Therefore, the aim of this paper is to analyse whether a firm's internal climate as well as the quality of the relationships with scientific partners can mediate the relationship between collaboration and innovation performance. Results, based on survey research developed in Finland, Italy and Sweden, suggest that collaborations with scientific partners achieve good results in terms of innovation performance, through an explanation path which involves a firm's social context.     

Impact of absorptive capability on software process improvement and firm performance

Software process improvement (SPI) is a continual organizational learning process with the goal of obtaining and sustaining competitive advantage in rapidly developing business and software environments. However, no research has focused on a firm’s capability to increase effective external SPI knowledge acquisition and utilization. Thus, this study uses dynamic capability theory in order to investigate empirically the capability of a firm to absorb external knowledge and achieve SPI. Specifically, we propose a research model and examine the relationships among a firm’s potential absorptive capability (PAC), realized absorptive capability (RAC), SPI success, and firm performance. In this regard, we surveyed 108 respondents in 56 SPI-certificated Taiwanese firms. We then tested our model using a partial least squares structural equation modeling technique. The results indicate that SPI success is significantly influenced by PAC through RAC. The results also suggest that absorptive capability is critical to SPI success and that the latter ultimately influences firm performance.     

Assessing the impact of knowledge management strategies announcements on the market value of firms

Although there is much literature on the relationship between KM strategies and organizational performance, the benefit of KM strategies is not well understood. We addressed this issue by exploring how KM strategies influence a firm's market value using event study methodology. We evaluated the cumulative abnormal returns for KM strategies announced by U. S. firms from 1998 to 2003. Our findings supported the hypothesis that firms’ announcements about their KM strategies provoked positive reactions in the market. More specifically, strategies that focus on either (i) knowledge reusability through IT or (ii) knowledge sharing through informal discussions among employees contributed to higher performance than strategies that emphasized both. This outcome empirically supported our argument that the emphasis on either tacit or explicit knowledge results in a better market value of the firm. Furthermore, the market's reaction to the announcement is dependent on the firm's industry classification. The findings of this study offer insights that may help managers maximize the market impact of their KM strategies.     

Radical Innovation with Limited Resources in High‐Turbulent Markets: The Role of Lean Innovation Capability

How do firms radically innovate with limited resources in high‐turbulent environments? We examine this question via in‐depth comparative case studies of ten start‐up firms in diverse high‐turbulent markets. Evidence shows that the perceived value of resources depends on two contextual factors: market type and business model type. More interestingly, firms that see resource limitation as an enabler rather than an inhibitor seem to have a distinct capability that we call lean innovation capability. It is defined as a distinct capability that reflects a firm's ability to experiment with ideas that meet core customer needs by constantly iterating the initial offering with the purpose of validating the learning through continuous market feedback to achieve sustainable performance. The three main qualities of these companies are (1) adopting abductive reasoning, (2) embracing a validity‐driven approach, and (3) operating in the overlapping spaces of fundamental customer needs, business viability and technological feasibility. Lean firms adopt design‐thinking methodology and act like bricoleurs, such as make‐do by applying combinations of the available resources through rapid prototyping to new problems and opportunities in an experimental way. Briefly, lean innovation capability enables firms to manage limited resources by reconfiguring and reallocating existing resources, and, thereby, helps empower resource‐limited radical innovation.     

Embedded (Lead) Users as Catalysts to Product Diffusion

Firms can harness social user networks not only for ideation, but also to accelerate and facilitate diffusion of new product introductions. They select individuals whose own product adoptions and opinions influence adoption decisions of others. In this paper we transfer this rationale to firm employees. We focus on ‘embedded users’ who are employees of a firm, but at the same time users of the firm's products. We aim to find out if their access to user networks, use experience and lead userness impact their opinion leadership and domain‐specific innovativeness. We also show how cognitive empathy towards external users is a mechanism to explain these relationships. Drawing on the user innovation and consumer behaviour literature, we derive and test eight hypotheses on a sample of 54 firm employees in gaming hardware firms. We find that lead userness is positively related to domain‐specific innovativeness and opinion leadership, but use experience only to the former. Cognitive empathy mediates all relationships in our study. To facilitate embedded users' tendency to act as opinion leaders and to adopt new products, managers should encourage their employees to use the firm's products to build use experience and thus develop cognitive empathy towards external users.     

Entrepreneurial Leadership and New Ventures: Creativity in Entrepreneurial Teams

This study tests the view that new venture's innovative capability is influenced by the interaction of a lead entrepreneur's leadership and his or her entrepreneurial team members' creativity, as measured by the creation of patents. Focusing on 112 entrepreneurial teams in Taiwan's high‐tech new ventures, the findings suggest that lead entrepreneurs who are risk‐taking, pro‐active and innovative can stimulate their entrepreneurial team members' creativity. Moreover, new venture's innovative capability can be improved by the joint contribution of higher entrepreneurial leadership and more creativity in entrepreneurial teams. The findings also imply that the contingent impact of creativity in teams on the leadership–innovation relationship needs to be considered.     

Dynamic information technology capability: Concept definition and framework development

In a digital world, information technology (IT) units routinely update their capabilities to cope with changing business requirements and frequent technology releases. Extending the dynamic capabilities literature, this article presents the concept of dynamic IT capability, a multidimensional first-order dynamic capability that enables IT units to assist firms in appropriating business value from IT resources by influencing a set of IT-related ordinary capabilities. Scholars currently lack a dynamic capabilities framework that explains, from an IT unit’s perspective, how IT resources can be acquired, deployed, integrated, and reconfigured to fulfill business objectives. To bridge this research gap, we develop a high-level framework that highlights three constituent components of dynamic IT capability: dynamic digital platform capability, dynamic IT management capability, and dynamic IT knowledge management capability. Through an extensive literature review, we identify and summarize the set of ordinary capabilities that each dynamic IT capability component creates and reconfigures. We then offer guidance on future instrument development. To encourage further exploration of this critical construct, we close by highlighting future avenues for dynamic IT capability research.     

Digital at the edge – antecedents and performance effects of boundary resource deployment

With business ecosystems digitalizing by the force of digital innovation, the deployment of boundary resources (such as application programming interfaces: APIs) becomes a strategic option across contexts. We distinguish between boundary resources that provide access openness and those that provide resource openness, and theorize the antecedents and consequences of their deployment. Employing panel data regressions to a longitudinal cross-industry dataset, we find that the digital knowledge base of the focal firm and the existence of potential digital complementors drive boundary resource deployment. Such deployment benefits firm performance depending on the firm’s market power. From our empirical analysis, we reveal a differentiated perspective on the quality of the confined openness provided by boundary resources as well as the embeddedness of their deployment in the rationales and motivations of the associated actors in digital business ecosystems. We complement the existent theoretical framework on boundary resources and provide valuable insights to managers reflecting about deploying boundary resources in a beneficial way.     

The effect of ethical leadership on employee social innovation tendency in social enterprises: Mediating role of perceived social capital

Although social innovation has gained prominence in policy, academic, and practitioner debates, there remains a lack of understanding of how leader aspects such as behavior and ethics contribute to fostering social innovation among employees in the social enterprise, owing primarily to a dearth of empirical research on this subject. The goal of this study is to empirically examine the effect of ethical leadership on the social innovation tendency among employees in social enterprises; also, employees' perceived social capital is hypothesized as a mediator through which the ethical leader is likely to influence their social innovation tendency. Using data collected from 189 employees associated with a variety of social enterprises, the results of structural equation modeling indicate that ethical leadership has both a direct and indirect effect on the social innovation tendency among employees, where the indirect effect of ethical leadership involves influencing the employees' perceived social capital, which subsequently influences their tendency for social innovation. Accordingly, the study offers key implications for social enterprise leaders aspiring to boost innovation in their endeavors aimed at achieving the enterprise's objective of creating positive social impact.     

Narrowing the age-based digital divide: Developing digital capability through social activities

Healthcare information technologies (HIT) have shown great potential for improving the effectiveness and quality of healthcare services. However, the inequal ability of older adults to use HIT may limit their exploitation of these benefits. To narrow the age-based “digital divide”, this research further develops the concept of digital capability and emphasises the link between older adults and their social context. Based on a qualitative inductive study of 33 participants, who included Chinese patients and their family members, we generate a novel theoretical model for understanding the process by which social activities may shape older adults' digital capabilities. Based on the model, we suggest two strategies that might encourage older adults to engage with HIT. This research contributes to the information systems (IS) literature by strengthening digital capability as a conceptual lens to investigate individuals' engagement with information communication technologies (ICTs). It also extends research on the social context for ICT use by revealing how social processes at multiple levels influence digital capability development. Finally, this study offers practical implications for governments and private sectors to encourage and promote ICT use by older adults.     

Proactive or reactive IT leaders? A test of two competing hypotheses of IT innovation and environment alignment

When does it benefit a firm to take a lead in innovation with information technology (IT)? How should a firm align its IT innovation with a dynamic industry? In addressing these questions we present a typology of IT Innovation and Environment Alignment (ITIEA) based on a firm's IT innovation strategic orientation and the industry environment. The traditional ‘fit’ perspective predicts that a firm that matches its IT innovation with a dynamic environment would obtain performance benefits. In contrast, the ‘options’ perspective suggests that a firm that takes advantage of a stable environment to proactively pursue IT innovation and develop IT capability as real options would obtain performance advantage. We employ a quasi-experiment design to test these two competing hypotheses using archival data of IT leaders over a time frame of 6 years. We perform a longitudinal analysis of the performance change trajectories of proactive and reactive IT leaders over time. The results indicate a general support for the ‘options’ perspective that proactive IT leaders that lead in innovation with IT in relatively stable environments are found to consistently outperform reactive IT leaders in overall performance, allocative efficiency, and cost efficiency in management process. However, interestingly, the results also show a partial support for the ‘fit’ perspective that reactive IT leaders that emphasize intensive deployment of IT innovation in dynamic environments are found to obtain a cost advantage in production and operation process over time. The findings offer practical implications for managers to better engage in IT innovations to create and sustain competitive advantage. Synthesizing options thinking and dynamic capability perspective, we provide a framework to better understand IT innovation, dynamic environment, and performance outcomes. The findings also shed useful light on whether, when, and how to innovate with IT for sustained competitive advantage.