Top management Team's cognitive diversity and the Firm's ambidextrous innovation capability: The mediating role of ambivalent interpretation

The top management team (TMT) diversity has received considerable attention in literature, especially due to its influence on an organization's innovation strategy. While previous studies have considered diversity in terms of education, experience, skills, functionality, and gender, little is known about the TMT's cognitive diversity. We contribute to the literature by examining the influence of the TMT's cognitive diversity on an organization's ambidextrous innovation capability; i.e., its incremental and radical innovation capability. Results from 50 TMTs involved in the electronics industry support our hypothesized mediating role of ambivalent interpretation; that the TMT cogitative diversity positively influences ambivalent interpretation, and this, in turn, positively influences both radical and incremental innovation capability. These findings have important implications for how a firm's decision makers (i.e., the TMT) with their diverse cognitive styles support building the firm's ambidextrous capability through ambivalent interpretation.     

Top management team’s innovation-related characteristics and the firm’s explorative R&D: an analysis based on patent data

This study investigates the relationship between characteristics of the firm’s top management team (TMT) and its research and development (R&D) activities. Specifically, this research analyzes how observable characteristics of the TMT, such as functional experiences or educational background, and average tenure affect the firm’s proportion of explorative R&D activities. From the perspective of the upper-echelon theory, we hypothesize that the TMT’s functional experiences with R&D or science or engineering educational backgrounds increase the firm’s tendency towards explorative R&D. Moreover, we propose that the average tenure of TMT members with innovation-related experiences would have a positive moderation effects on these relationships. The hypotheses are tested using a dataset containing biographical information of the TMT members, financial, and patent data of 89 firms in U.S. high-tech industries from 2006 to 2009. Firm’s explorative R&D activities are analyzed using data on patent citations, patent classes, and non-patent references. The empirical analysis shows that the top managers’ educational background in science or engineering as well as their previous functional experiences with R&D have a positive effect on the firm’s explorative innovation activities. We also find that the size of these effects increases with a longer tenure of these TMT members. Our findings provide implications related to the effects of organizational characteristics on the establishment of a R&D strategy and highlight the role of TMT members with innovative experiences in directing a firm’s R&D activities and outcomes.     

In at the Deep End of Firm Internationalization

• The purpose of this research is to examine the consequences of top management team (TMT) internationalization: why and under what conditions can TMT nationality diversity be beneficial?
• On the basis of the upper echelons theory from the strategic leadership literature, the relationship between the TMT nationality diversity and firm performance in the strategic context of firm internationalization is investigated in moderated multiple regressions models (MMR) for a sample of Dutch, Swiss, and UK companies.
• The study findings suggest that the TMT nationality diversity becomes advantageous only in firms with high degree of internationalization. Companies have to be strongly committed to foreign markets so that the benefits of the TMT nationality diversity can materialize.
• The arising managerial implication is that the TMT nationality diversity can be a powerful tool in building a firm’s competitive advantage, provided that companies are strongly exposed to the international environment. The study also provides corroborative evidence that the search for moderating and mediating variables in the TMT demography research represents a step in the right direction.

     

Collaborative ties and ambidextrous innovation: insights from internal and external knowledge acquisition

ABSTRACT

Building collaborative ties has become an increasingly important strategy for influencing firms’ ambidextrous innovation in transition economies, we examine the relationship between collaborative ties and ambidextrous innovation—with a focus on the mediating effect of knowledge acquisition using firm-level data in China. The empirical results reveal several important findings. First, collaborative ties among partners have a positive effect on firms’ ambidextrous innovation. Second, collaborative ties among partners are more beneficial to the firm’s external knowledge acquisition than internal knowledge acquisition. Lastly, the mediating effect of internal knowledge acquisition on the relationship between collaborative ties and ambidextrous innovation of firms is higher than that of external knowledge acquisition. These findings contribute to the literature on ambidexterity theory. Moreover, these findings also extend our understanding of the importance of the integration of internal and external knowledge acquisition in collaborative relationships, and enrich knowledge management literature within the collaborative ties framework.     

Extension of the strategic renewal journey framework: The changing role of middle management

This paper presents the findings of a longitudinal study of a large corporation's journey towards becoming an ambidextrous organisation in the face of emerging technology. By investigating the interplay between the top and middle management, the results show that business intelligence systems allowed the firm to pursue a controlled renewal journey that was data-driven, automated, and supported fast organisational learning. This substituted for active frontline and middle managers. The change in organisational direction was driven by a small and powerful strategic top management group, even though this was a multi-unit firm with more than 100,000 employees. The main advantage of this type of journey is that the organisation can fully realize the advantage of highly centralised formal planning and control while becoming resilient and ambidextrous. A well-functioning decision support system, organisational policies and communication strategy can substitute for collective sense-making and shared strategic schemas. The results also suggest that management control systems can have a profound impact on developing organisational ambidexterity. The article also provides further details on the nature and implications of the rhetorical tactics used by the top management team to focus on organisational attention and action.     

How do top management team characteristics affect digital orientation? Exploring the internal driving forces of firm digitalization

The top management team (TMT) plays a key role in the process of the firm digital transformation. However, few studies have focused on the impact of TMT characteristics on the digital orientation of firms. In this paper, we simultaneously explore the impact of the dispersion, aggregation, and background characteristics of TMT on the digital orientation of firms. Based on the upper echelons theory and strategic orientation theory, we propose that the diversity and average education level of TMT positively impact firms' digital orientation. The average age and tenure of TMT have a negative impact on the digital orientation of firms. The overseas and financial backgrounds of TMT members have a positive impact on the digital orientation of firms. Our hypothesis was tested using large-scale longitudinal data and computer-aided text analysis methods from Chinese listed companies. This paper provides useful supplements to early research on digital driving factors and digital orientation in emerging economies, and also provides more universal suggestions for digital practices in firms.     

Complementarity in alliance portfolios and firm innovation

This paper assesses the impact on firm innovation of combining alliance-specific and partner-specific attributes within a firm’s alliance portfolio. In a panel data analysis of the innovation performance of 119 firms operating in the pharmaceutical industry during 1985–2007, we test whether firm’s alliance portfolio displays complementarities across four dimensions. The results suggest that specific combinations of attributes may diminish innovation by decreasing the efficiency of diversity management or by generating redundancies. On the other hand, other alliance portfolio practices are mutually reinforcing and thus foster innovation.     

Launch of a product and patents: evidence from the US cardiovascular pharmaceutical sector

ABSTRACT

Recent literature on the role of patents in shaping competition between incumbents and new entrants shows mixed evidence, as patents can discourage entry into markets but may also encourage potential entrants by increasing profitability from research and development. The increasing use of patents as strategic weapons motivates this investigation of the impact of innovation on competition. In a case study of US pharmaceutical cardiovascular submarkets over the period 1988–1998, we use a panel probit model to study the impact of a firm’s patents and rivals’ patents in the firm’s decision to launch new products. Our results show that the number of a firm’s lagged patents encourages the firm’s entry with new products, while rivals’ initial stock of patents discourages entry, but more recent patents promote entry by opening new technological opportunities.     

Community-level characteristics and member firms’ invention: evidence from university–industry innovation community in China

Increased attention has been drawn to the phenomenon of community-based innovation; however, researchers have mainly emphasized firm-centric communities, paying little attention to non-firm members. This study focuses on university–industry (U–I) innovation communities to address this gap. Using China’s joint patent application data from 2000 to 2017, we construct a U–I collaboration network, identified existing U–I innovation communities, and reveal community-level characteristics of birth, expansion, maturity, and self-renewal in a lifecycle framework. The results suggest that average geographical distance negatively affects firm invention production and within-community knowledge diversity positively affects firm innovation. The effects of dynamic attributes indicate that U–I community membership turnover affects member firm’s patent production in an inverse U-shaped manner. In addition, a firm’s within-community network position exerts a moderating effect on the relation between community membership dynamics and firm innovation. In theoretical terms, this study combines innovation community and social network theories, using a lifecycle framework to examine the influence of the specified characteristics in facilitating member firms’ invention productivity. Finally, this study discusses the practical implications for U–I community stakeholders and policymakers.

     

Offshoring Innovation to Emerging Countries: The Effects of IP Protection and Cultural Differences on Firms’ Decision to Augment Versus Exploit Home-Base-Knowledge

Developed-country multinationals (DMNEs) have increasingly engaged in the practice of offshoring innovation to emerging countries. In this article, we leverage and extend the institution-based view to further our understanding of this phenomenon. Specifically, we examine the differential effects of formal and informal institutions on DMNEs’ strategic decision to offshore innovation activities aimed at augmenting (versus exploiting) home-base-knowledge to emerging countries. Concerning formal institutions, we argue that the stronger the emerging host country’s IP protection, the higher the likelihood that a DMNE offshores innovation activities aimed at augmenting home-base-knowledge. Regarding informal institutions, we argue that the greater the cultural differences between the developed home country and the emerging host country, the higher the likelihood that a DMNE offshores innovation activities aimed at augmenting home-base-knowledge. Additionally, we propose a key contingency that attenuates the relationship involving IP protection while strengthening the one involving cultural differences: the DMNE’s experience with offshoring innovation. Analysis of 128 offshoring innovation implementations by 78 DMNEs in ten emerging countries provides support for all our hypotheses except for the one focused on the moderation effect of experience on the relationship involving cultural differences.     

The effects of internal technological diversity and external uncertainty on technological alliance portfolio diversity

This research proposes internal and external determinants that influence the diversity of a firm’s alliance portfolio. Focusing on technological aspects of the firm as well as investigating internal and external factors, we suggest that the internal technological diversity of the focal firm, as well as the technological uncertainty of the industry, affects the technological diversity of the alliance portfolio. The hypotheses are tested on a sample of U.S.-listed semiconductor firms’ global R&D alliances from 1990 to 2010. We find that the internal technological diversity of a firm has a negative influence on its technological alliance portfolio diversity. However, technological alliance portfolio diversity seems unaffected by the uncertainty of the firm’s environment. This study contributes to prior literature which has extensively studied the effects of alliance portfolio diversity on firm performance but has paid little attention to its determinants.     

Does Board Co-Working Experience Influence Directors’ Decisions Toward Internationalization?

Despite the importance of board capital in a firm’s corporate strategic orientation and the high degree of international expansion that many firms have experienced in recent years, little or no research has explored how board capital affects a firm’s internationalization decision. Drawing upon resource dependence theory, this study argues that board capital may help increase the firm’s degree of internationalization and that board co-working experience may facilitate the contribution of directors with human and social capital to firm internationalization. The results indicate that board capital (directors’ international experience, directors’ industry-specific experience and directors’ board appointments) is positively associated with internationalization and that board co-working experience has a positive moderating influence on the board capital-internationalization relationship. One important implication of the empirical evidence is that firms trying to expand internationally should consider nominating directors with rich human and social capital to the board because such directors can provide strategic advice and facilitate access to critical information and valuable resources needed for internationalization. Additionally, those international firms might be advised to consider board tenure when appointing board directors because board co-working experience allows directors to integrate their knowledge of the firm’s internal affairs with their expertise in the area of international strategy and to combine their knowledge properly to address firm-specific issues, consequently enabling them to address international issues effectively.     

The evolution of cluster network structure and firm growth: a study of industrial software clusters

Since the cluster began to receive attention as a critical environmental factor in geographical economics, it has provided a major research methodology across multiple disciplines from industrial organization, strategic management, regional innovation system, and Triple Helix to virtual clusters. Network structure analysis (NSA) offers a common framework to observe clusters that have been studied separately from the viewpoint of industrial organization and strategic management. Industrial structure analysis, is based on the externality of a network and the resource-based view, focused on the inherent network capacity, have been combined with the study of structural changes through cluster NSA, to create a new direction for the growth of industry and individual firms. This study aims to analyze the correlation between the networking of structural change and a firm’s performance by selecting a software industrial cluster as a representative case for the knowledge industry. We examine the network structural positions of each node during the cluster evolution process. This empirical study has significance for establishing a firm’s growth strategy as well as supporting the policy about clusters, through outlining the dynamic evolution process of the networking activities in a knowledge industry cluster.     

Diverse Institutional Environments and Product Innovation of Emerging Market Firms

• This study unbundled institutional environment into two distinct aspects: institutional distance (the degree of dissimilarity between the institutional environment of a firm’s home country and an economy into which it expands) and institutional diversity (the variety of all the institutional environments to which a firm is exposed), and related them to product innovation performance of emerging market firms.
• Data on 917 Chinese manufacturing firms in multiple industries over 3 years was analyzed.
• The results show a positive relationship between institutional distance and product innovation success. An inverted U-shaped relationship was found between the institutional diversity of a firm’s foreign markets and its product innovation success.

     

Driving business performance: innovation complementarities and persistence patterns

Complementarities between technological and non-technological innovation are crucial determinants of firm performance. Although innovation complementarity has been extensively tested in the empirical literature, it has not been analysed in conjunction with innovation persistence. This fact is mainly due to the lack of data sets able to provide adequate longitudinal information. The capacities to develop market-oriented behaviour and introduce new organisational innovations, together with technological innovation, are the drivers of a firm’s productivity and profitability. We find that these activities complement technological innovation and that their impact is greater when they persist over time, thus introducing a more general concept of innovation persistence. We present an empirical model based on a large new panel of Italian manufacturing firms covering the period 2000–2012 which enables us to determine the precise impacts of a firm’s innovative attitude, in a broad definition that incorporates non-technological innovation and persistence, on its productivity and profitability.     

煤炭产业技术创新战略的探讨

在分析和探讨技术创新及其战略理论的基础上,分析了我国煤炭产业的技术创新及其战略问题,考虑到技术发展阶段差异较大的特点,先进企业的创新战略应选择率先创新与模仿创新并存,其他大多数企业则应主要采用模仿创新战略,并形成产学研相结合、主体及模式多元化的集成创新格局。     

Product innovation success based on cancer research in the pharmaceutical industry: co-publication networks and the effects of partners

This paper builds upon the literature which provides conflicting theoretical insights and empirical results concerning the importance of companies’ collaborative relations, their position within a network of collaborative relations and the effects on their innovative performance. Taking the importance of collaborations and networks in the pharmaceutical industry into account, the paper untangles the influence of the firm’s co-publication relations with different types of partners and its network position on the company’s product innovation in a specific disease area—cancer. We find rather robust evidence that in particular, companies’ indirect connections within the co-publication network, including connections to academic institutions and biotechnology companies, support product innovation. In contrast to evidence in the strategic alliance literature, direct co-publication links to biotechnology companies do not support product innovation in terms of new cancer medications.     

The decoupling of product and process life cycles

When should a plant, if ever, adopt more flexible forms of production technology? The factors supporting the decision for a dedicated system are often based on the dedicated technology's lower fixed and variable costs with respect to production volumes. In. many industries, it is clear that such cost-reduction techniques are essential to a firm's success. On the other hand, flexible manufacturing systems, though initially more expensive, eliminate the requirement for an immediate investment in a new process once the life span of a particular part or product has ended. Given these fundamental differences, it is clear that the question of whether a firm within an industry should select a manufacturing technology which is highly flexible or dedicated can be key to its long-term success. To gain a reasonable understanding of which decision is best, it is imperative that the relationships between innovation, market, and production costs be understood and quantified. The aim of this report is to analyse these vital connections in an attempt to shed further light on these questions. In this context, we introduce the notion of ‘fast response process capability’ as an alternative to the dynamic model of product and process innovation cycles introduced by Utterback and Abernathy (1975). We argue that this new framework will have a large strategic implication across the industry.     

Strategic purchasing participation,supplier selection,supplier evaluation and purchasing performance

In this article, we examine how purchasing’s strategic participation influences supply management activities via the choice of appropriate operational and strategic criteria. Specifically, the study focuses on supplier selection and monitoring ongoing supplier performance evaluation based on operational and strategic criteria. A combination of choosing appropriate supplier selection criteria and monitoring supplier performance ensures that the benefits of purchasing’s participation in strategic planning translate into better purchasing performance of cost, quality, delivery, flexibility and innovation. We test the hypotheses using survey data collected from manufacturing companies in the US by means of a path model. Our results provide support for the tenet that purchasing’s participation in strategic planning influences purchasing performance directly as well as through the mediating effects of supplier selection criteria and supplier performance evaluation. We discuss the theoretical and managerial implications of the findings and propose directions for further research.     

Bridging the critical interface: Ambidextrous innovation for water provision in Nairobi's informal settlements

This article examines innovation activities in water infrastructure in Nairobi, Kenya. The focus is on efforts by Nairobi City Water and Sewerage Corporation (NCWSC) to provide water services to the inhabitants in the informal areas of the city using an automated vending machine, or Pre-Paid Dispenser (PPD). In this study, we investigate what happens when a regime actor like NCWSC tries to implement an ambidextrous (two-handed) strategy: managing the existing system according to conventional practice and at the same time innovate in new technical solutions and business models to cater for unconnected users.Besides presenting our results, our aim in this article is also to introduce a research strategy for innovation studies in infrastructural systems in low-income urban areas. Three interconnected parts stand out as our contribution:First, we present a novel conceptual framework, by adding ideas from innovation studies to the Large Technical Systems approach. We investigate how regime actors can innovate to provide water to unconnected users, without expanding the system in a traditional way.Second, we propose a novel method for analysing and understanding innovation on the margins of the infrastructural system, or in our terms, innovation in the critical interface. Central to our method is, through empirical observation, to identify misalignment between the innovation (PPD) and contextual factors at the local level, where the innovation is implemented (interface misalignment), and misalignment between the innovation and the existing water regime (internal misalignment). We use a qualitative method and results forms as a basis for further research and starting point for regime actors in search of an improved ambidextrous strategy.Third, we analyse the innovation process per se. In the Nairobi case, we assess the ambidextrous innovation strategy, and claim that the PPD functions as an adapter in the critical interface, enabling the regime actors to operate in an environment of misalignment.