Book Review: Determinants of Innovative Behaviour

    By: PDMA Headquarters on Oct 04, 2013

    Book Review: Determinants of Innovative Behaviour: A Firm's internal Practices and Its External Environment      

    By:Cees van Beers, Alfred Kleinknecht, Ronald Ortt, and Robert Verburg, New York : Palgrave Macmillan , 2008 . 308+xv pages (includes index). 
    Review by: S. S. Pal

    Companies need innovations to remain in business. This enjoins upon them, on one hand, to keep their innovation causeways clear, and on the other, to drive the efforts to the preferred innovation destinations with more clarity. Innovative behaviors are the purposeful blends of both these simultaneous actions. Although innovation is regarded as a natural trait of human beings, companies are required to put energy toward their preferred directions. This determines the collective innovative behavior, which shows up and propels the companies when they compete with one another. Some are doing this well and some not so well, which helps explain how some still exist and some become extinct.

    This book gives us a close look at some of these company behaviors, which, according to the authors, determine their innovativeness (or lack thereof). The text is an edited collection of 11 selected and anonymously reviewed research papers presented at a workshop on innovation systems at Delft University of Technology in October 2006. The papers are grouped into three parts of a company's environment that influence its innovative behavior: (1) a firm's internal organization; (2) the external organization; and (3) the middle area linking the internal to the external. In each part, the book provides an overview of some current research on determinants of innovation at the firm level from the perspective of “innovation economics, human resource management (HRM), and technology management” (p. 3). These perspectives are of much interest and of concern to the product innovation community across the board, first, in their understanding with these the primary innovative behavior patterns as obtained in the firms, along with their underlying cause and effect dynamics, and then consequently deriving the essential clues from that realization for temporally maneuvering on the factors found as determining the preferred innovative behavior for their eventual strategic advantage.

    Issues examined in: ”Internal Organization” include (1) the strategic impact of HRM practices as obtained in innovation/quality enhancers versus cost-cutters; (2) relating job satisfaction to innovation; and (3) relating skill endowment of a firm to research and development (R&D) profitability and hence to the expenditure on it. “External Organization” highlights two studies—one about the bearing foreign direct investment (FDI), imports, and R&D collaboration have on innovative products and another about the econometric angle in whether a regional specialization in certain industries improves the relative efficiency of regional innovation systems in a country.

    Six behaviors, outlined as follows, serve as linkages between the “internal” and “external” organizations.

    The first behavior is complementary external technical knowledge. Innovative firms systematically access external sources of technical knowledge to complement their competence base and to proactively leverage multiple innovation-to-cash paths to get the most from their innovative efforts. The most effective organization for innovation is influenced by the external environment in which it competes as well as by the strategies and approaches it uses for managing technological innovation. Innovating organizations are distinguished from the operating organizations. The latter relate to the arrangements “necessary to manage everyday business activities and generate incremental improvements to existing products and processes,” while the former are held “essential to foster the generation, deployment and commercialization of radical and disruptive technological breakthroughs.” The basic design challenge, therefore, appears here as “the way in which these two different organizations co-exist within the innovating firm as a crucial determinant of the company's ability to manage both incremental and radical innovation” (p. 94).

    The second behavior is open innovation opportunity and threats. Paul Trott discusses how a changeover from the linear model of science and innovation of the past to the triadic interaction of academia, industry, and the market forms the basis of today's models of innovation (p. 129). The “open innovation” milieu is reviewed as a realistic opportunity for innovation management, but caution is also given related to information leakage and knowledge losses, to dangers of imitation, counterfeiting, and innovation, and to unauthorized reverse engineering (i.e., nonconsensual acquisition of technical knowledge) in those endeavors.

    In the opinion of the reviewer, regarding this second behavior we can indeed overcome the shortcomings, or at least keep a tight rein on them, if we replace the triad model with a star-delta model in our understanding. We would add a fourth country-specific politico-legal dimension to the prevailing innovation triad model as the central node in a star-delta operational cycle, with the central node influencing the three individual nodes in a static condition in the star mode but disengaging itself in the dynamic state when innovations are worked out in the delta mode by interactions of the triadic nodes.

    Assimilation of acquired knowledge is the third behavior. Early stage integration mechanism is important in successful R&D acquisitions (p. 162). Authors describe knowledge observability as “the extent to which the knowledge-base can be understood through observation” and knowledge mobility as “the extent to which the knowledge-base of the R&D centre can be separated from its physical setting” (fromBirkinshaw, 2002). The more the knowledge is human dependent, the more mobile is it; thus, more human integration is required for a successful R&D acquisition. Task integration should be the appropriate assimilation methodology for codified knowledge elements. The following matrix can be used to capture the success propositions in brief.



    Focus on high levels of human integration

    Mergers and acquisitions (M&As) M&A integration becomes successful with high levels of task integration and human integration



    Focus on high level of task integration at the early stage, followed by a strong human integration

    Focus on task integration







    In collaboration across geographies, the fourth behavior, multinational firms overcome communication difficulty posed by language barriers via the use of e-collaboration tools using graphics. E-collaboration between global virtual members in the open innovation mode significantly enhances communication and, hence, effective NPD in the supply chain.

    Regarding demand for innovation, the fifth behavior, favorable demand conditions for appropriation of innovation benefits enhance occurrence of innovation. Demand prospects, type and intensity of competition, market structure, factors governing the production of knowledge (i.e., appropriability, technological opportunities), resource endowment, and the firm size determine a firm's innovative activity (p. 188). Limited competitive pressure is conducive, but presence of more competitors is detrimental. Both the “demand-pull” and “technology-push” effects are important to a firm's innovation performance.

    This research, on one hand, finds that “a firm that reports that it is financially constrained but not otherwise constrained is adversely affected in its pursuit of R&D activity,” and simultaneously, on the other hand, that “a firm facing a priori hampering factors other than financial constraints is less willing to undertake R&D activities and thus less likely to be hit by financial constraints. Adverse factors per se impact innovative behavior in firms.

    Overall, the book may be somewhat theory-heavy; after all, it is essentially a collection of thematic research papers. Nevertheless, all the papers can be seen as having relevance in the real world. For researchers, the book provides a good load of information and rich references. In sum, the text is well edited, well produced, and relatively jargon-free—see, for example, the captivating literature survey paper by Paul Trott, “Exploring Knowledge Flows and Losses in the ‘Open Innovation’ Age” (pp. 126–150). However, because at its very core this is a collection of research papers with many details, the book is no fast read. Of course, after going through the opening introduction by the volume editors (pp. 1–10), a reader can pick up any chapter at will without any difficulty in appreciating the theme and with no loss of continuity. This will help readers enjoy the issues discussed in a much more poised and reflective mode.

    Released: October 4, 2013, 10:37 am | Updated: October 30, 2013, 11:49 am
    Keywords: PDMA Blog

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