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This research study examines the relationships between innovativeness of firms, their organizational characteristics, and organizational performance. Previous studies that have examined these relationships have yielded conflicting results. A fundamental assumption of this research is that these conflicting results may be due to a narrow definition of the construct of innovativeness. This research demonstrates that by using a multidimensional measure of innovativeness, the reasons for the conflicting findings of past research becomes evident. The results of this study show that substantive relationships do exist between organizational factors, organizational innovativeness, and organizational performance. These relationships, however, are complex, and can only be detected if innovativeness is measured as a multidimensional construct. Each of the organizational factors examined in this study showed significantly different effects on each dimension of two types of organizational innovativeness - technical and administrative innovativeness. Further, the results show that innovativeness does improve organizational performance. However, each dimension of the two types of innovativeness affects different aspects of organizational performance. Key words - innovation, management, management of innovation, organizational studies, measurement, methodology

Innovation can bring productive change to the way business is done - a concept not easily accepted by government agencies. Barriers combine to stifle innovation and include the difficulty in providing services and programs to customers with competing interests, the leadership void created with recurrent turnover in top management, an emphasis on risk avoidance, and a focus on internal processes. Product champions are individuals who are committed, dedicated, willing, and able to take an innovation and carry it through the barriers that exist with the bureaucracy of government agencies. Only through active participation of product champions at all levels of the organization can productive innovation take place: top managers as the chief executive product champions, midlevel managers as the business innovation product champions, and employees at all levels as the technical innovation product champions.

Two distinct themes emerge from the Special Research Forum on Innovation and Organizations. One group of articles develops an expanded view of the influence of context on organizations' ability to innovate. Together, the articles offer a complex multilevel view of context as including elements ranging from the dominant strategy of an organization to the social-psychological antecedents of creativity. A second group of articles provides a community and population perspective on the diffusion of innovations. We suggest the possibility of a union between the context and industry dynamics approaches. (Reprinted by permission of the publisher.)

This article suggests that there is an inverse U-shaped relationship between slack and innovation in organizations: both too much and too little slack may be detrimental to innovation. Two related mechanisms governing this relationship are proposed: Slack fosters greater experimentation but also diminishing discipline over innovative projects, resulting in the hypothesized curvilinear relationship. Comprehensive worldwide data on 264 functional departments of two multinational corporations support the prediction. (Reprinted by permission of the publisher.)

We tested the effects of innovation and market complexity on firm performance. Generational technological change - a major advance within a technology regime - fosters the emergence of niches and local rivalry. Findings from the U.S. microcomputer industry between 1982 and 1991 suggest accelerated markets reward innovativeness that differentiates firms within a niche but not across niches. Changing niches confers a short-term penalty. Strong performers adopt new technology quickly, without changing niches. (Reprinted by permission of the publisher.)

We examined problems with sustained product innovation in 15 firms that averaged 96 years of age, 54,000 employees, and $9.4 billion in annual revenues. Findings reveal that the inability to connect new products with organizational resources, processes, and strategy thwarted innovation in these large, mature organizations and that innovators lacked the power to make these connections. We suggest that these organizations must reconfigure their systems of power to become capable of sustained innovation and offer recommendations for practice. (Reprinted by permission of the publisher.)

This research examines an integrated theoretical model that explains how strategies for participating in the market for corporate control (acquisitions and divestitures) affect internal control mechanisms and, together, influence internal and external innovation. Nine out of ten hypotheses received support, with results showing that firms engaging in acquisitions and divestitures emphasize financial controls, de-emphasize strategic controls, and thereby produce less internal innovation. Furthermore, these firms are likely to seek external innovation to gain short-term benefits in competitive advantage. We conclude that engaging inthe market for corporate control strongly affects the context in which innovation is framed, the control mechanisms employed, and the design and process of innovation. (Reprinted by permission of the publisher.)

Hot spots are fast-growing geographic clusters of competing firms. Drawing on several literature streams, we develop an evolutionary model that contrasts hot spot and non-hot spot competitors within the same industry. Initially, economies of agglomeration, institutional forces, and managers' mental models create an innovative environment within the hot spot. Over time, those same forces create a homogenous macroculture that suppresses innovation, making hot spot competitors more susceptible than non-hot spot competitors to environmental jolts. (Reprinted by permission of the publisher.)

There is a growing recognition that innovation speed is important to a firm's creating and sustaining competitive advantage amidst rapidly changing business environments. However, there has been little theoretical advancement or model building regarding when innovation speed is appropriate, what factors speed up innovations, and how differences in speed affect project outcomes. In this article, we organize and integrate the innovation speed literature, develop a conceptual framework of innovation speed, and offer researchable propositions relating to the need for and antecedents and outcomes of innovation speed. Specifically, we argue that innovation speed (a) is most appropriate in environments characterized by competitive intensity, technological and market dynamism, and low regulatory restrictiveness; (b) can be positively or negatively affected by strategic-orientation factors and organizational-capability factors; and (c) has an influence on development costs, product quality, and ultimately project success. (Reprinted by permission of the publisher.)

Implementation is the process of gaining targeted organizational members' appropriate and committed use of an innovation. Our model suggests that implementation effectiveness - the consistency and quality of targeted organizational members' use of an innovation - is a function of (a) the strength of an organization's climate for the implementation of that innovation and (b) the fit that innovation to targeted users' values. The model specifies a range of implementation outcomes (including resistance, avoidance, compliance, and commitment); highlights the equifinality of an organization's climate for implementation; describes within- and between-organizational differences in innovation-values fit; and suggests new topics and strategies for implementation research. (Reprinted by permission of the publisher.)

Creative and habitual actions represent competing behavioral options that may be simultaneously influenced by multiple domains of social action. This article integrates psychological and sociological descriptions of creativity and conformity to present a theory of individual creative action within organizational settings composed of intertwined group, organizational, institutional, and market domains. This theory contributes to the innovation literature by illustrating how intentional action and evolutionary processes that legitimize action interact to facilitate creativity and innovation. (Reprinted by permission of the publisher.)

In this article, organizational innovation is viewed as fundamentally cognitive, and the concept of organizational intelligence is developed and related to innovation. Individual and organizational intelligences are conceptualized as being functionally similar (i.e., as purposeful information processing that enables adaptation to environmental demands). Organizational intelligence, however, is a social outcome and is related to individual intelligence by mechanisms of aggregation, cross-level transference, and distribution. A conceptual framework is proposed that relates types and levels of intelligence, moderated by contextual factors, to the two stages of the organizational innovation process: initiation and implementation. Implications for research and management are discussed. (Reprinted by permission of the publisher.)

The complexity of political, regulatory, and technological changes confronting most organizations has made radical organizational change and adaptation a central research issue. This article sets out a framework for understanding organizational changes from the perspective of neo-institutional theory. The principal theoretical issue addressed in the article is the interaction of organizational context and organizational action. The article examines the processes by which individual organizations retain, adopt, and discard templates for organizing, given the institutionalized nature of organizational fields. (Reprinted by permission of the publisher.)

Organizations, like sponges, must have the capacity to absorb inputs in order to generate outputs. Researchers have developed theories of organizational absorptive capacity; researchers have also developed models of the effective generation of new products. The challenge lies in integrating the two research streams. (Reprinted by permission of the publisher.)

Intelligence is not something possessed once and for all. It is in constant process of forming, and its retention requires constant alertness in observing consequences, and open-minded will to learn [...]

A descriptive model of the behavior of managers in adopting new technologies in business differentiates between administrator behavior at one end of a continuum and entrepreneurial behavior at the other. The results of the study show that in majority of the cases, an entrepreneurial type of behavior is exhibited in adopting technology. The adoption of technology depends largely on the intent to maximize the advantages of existing opportunity.

There has been a growing interest in the relationship between market orientation and innovation. Empirical research on 158 manufacturing companies and 117 services firms is conducted in Australia to study the effects of market orientation on selected innovation characteristics. Results show that market orientation significantly influences innovation-marketing fit, product advantage and interfunctional teamwork. However the relationship with product newness and innovation-technology fit is not significant.

There is general confusion as to the strategic value to be placed on the right mix of process innovation relative to product innovation for R&D resource allocation. A study is conducted to resolve the process innovation versus product innovation dilemma and develop a measure of process innovation. It employs a consumer-based approach to differentiate between process and product innovation with the help of a model based on elimination by aspects (EBA) choice theory. An empirical illustration of the model is performed. The model highlights the need to develop an integrated strategy of process and product innovation based on consumer demands. It also provides managers with guidelines on how to select the right mix of process innovation as compared to product innovation.

Virtual organizations offer an appealing concept in flexibility and responsiveness, but there have been failures as well as successes and it is beginning to appear that the virtual concept has been overemphasized. Large integrated businesses should realize their own capacities for innovation, and not necessarily feel pressured to form alliances. In fact, the type of innovation needed determines whether it can best be obtained through the organization or by a decentralized approach. Specific cases are presented to help determine which approach is appropriate.

Institutional ownership is examined in terms of its impact on firm innovation. The analysis focuses on three competing hypotheses regarding the behavior of institutional investors. The myopic investor hypothesis holds that institutional investments are made to generate short-term gains. The superior investor hypothesis proposes that institutional investors can select companies with greater value potential as indicated by their greater innovative ability. The active investor hypothesis contends that institutional investors do not necessarily choose companies for their innovativeness, but strongly influences the firms they invest in to become more innovative. The results of the analysis support the third hypothesis, but not the first two.

This paper maps out the literature on innovation in organizations in terms of three theoretical perspectives. These are referred to as the individualist perspective, the structuralist perspective, and the interactive process perspective. The perspectives provide the reader with a framework both for organizing this voluminous literature, and for understanding the key theoretical and methodological differences that are evident within this field. (Reprinted by permission of the publisher.), Introduction The word innovation is frequently used to describe an object such as a new microcomputer or a late model car. Despite this tendency to objectify the concept in everyday [...]

A study was conducted on the impact of the market structure variables imports and foreign direct investment on domestic firms. Chamberlain's random effects probit was applied to a panel data set of 1,270 German manufacturing firms over the period 1984-1988. Both variables were found to have positive and substantial effects on product and process innovation.

The timing of announcements of innovations in a vertically differentiated industry is investigated. Early announcements in a quality-price game give the competing company the opportunity to adjust its quality based on the already known outcomes of the innovation. Late announcements only enable the low quality company to discover the innovative rival organization's quality before they adjust their prices, but not before they adjust their quality. Early announcements are found to be socially desirable, but not advantageous for the innovative firm.

During the 1980s, external changes that affected demand for beer in Japan caused Japan's four major brewers to shift to product strategies featuring a heavy emphasis on new product development. This article focuses on the implementation of those strategies, that is, the building of organizational capability to carry out new product development successfully. It examines organizational weaknesses and obstacles that blocked product development, as well as measures taken and organizational arrangements instituted to overcome resistance and support innovative product development. The building of 'local' capability - in the units specifically in charge of product development - is a necessary but insufficient condition for successful new product development; support from the broader organization is required as well. The article also shows how the Japanese brewers, rather than eliminating bureaucracy, creatively used 'bureaucratic' means such as formal working arrangements, systems, and procedures to foster and support innovation. (Reprinted by permission of the publisher.)

Most people hold the view that there is a constant struggle between environmental regulations and business competitiveness, but this view does not take into account the innovative abilities of businesses. Businesses are continually creating innovative solutions to cope with customers, competitors, and regulations. In fact, innovative responses to environmental regulations can help bring about greater productivity and improved products. Specific examples are discussed.

Managers in the 1990s are set to encounter two trends in the current market, namely, technology-orientation and market-orientation. The former establishes the product before setting out to find markets for it. The latter, on the other hand, depends on research for insights on consumer behavior and market trends. However, managers must realize that product development should entail the concept of strategic marketing in all phases of development. A new model which synthesizes engineering concepts with market-oriented approaches is presented., Technology and market-orientation are set to challenge managers responsible for new products Two important trends are facing managers in the 1990s. First, worldwide enterprises are creating new technology at an [...]

Deshpande and Webster have identified the linkage between corporate culture and innovation adoption as an important industrial marketing topic. In the present study, this relationship is examined by both qualitative and quantitative research methods. The linear regression model, which depicts the corporate culture of adaptive companies attempting to survive in a competitive international environment, demonstrates that corporate culture is predictive of technology adoption. Qualitative data collected through in-depth interviews supplement quantitative results. The divergent cultures and survival modes for innovative and noninnovative companies are presented. Theoretical and methodological implications for marketing research are discussed, and management implications for industrial marketers are presented. Benefits of juxtaposing qualitative/quantitative methods are illustrated. (Reprinted by permission of the publisher.)

The impact of implementation of significant incremental product innovations on the market share and business survival of an industry incumbent are investigated. For the study, archival sources are used to assess incremental innovations in the implantable cardiac pacemaker industry after 1963. Results support the view that effective incremental product development and fast production introduction are critical factors in improving business performance. Introduction of incremental product innovations while it is the industry incumbent is an important factor in ensuring the attainment of an attractive market share for the business and its survival in an established industry. Greater long-term market share can be achieved if the product line of a firm when it first entered the industry is sophisticated enough. Firms that were the first to adopt innovations introduced by their competitors were able to increase their market share although not as great as the market share of the firm that introduced the innovation.

This article examines the impact of downsizing on product innovation. It compares the experiences of product innovators in companies with a high degree of downsizing with those in companies with less downsizing. Higher downsizing hinders innovation by reducing people's ability to connect their product strategically to the firm. Specifically, downsizing breaks the network of relationships that innovators use to make these vital strategic connections. To overcome the negative consequences of downsizing on product innovation, managers should support innovation sponsors and champions, and retain 'old timers' who constitute the network. They should also bolster the network by building more connections among departments, and between new and established businesses. Finally, they should incorporate innovation directly into their firm's strategy. (Reprinted by permission of the publisher.)

J.D. Thompson's (1967) two domain model of how organizations deal with externally generated uncertainties is extended. The original model proposes a relationship between an organization's core activities and its rational efficiency-seeking activities and between the firm's boundary spanning activities and its natural system uncertainly resolving activities. Although the new model is based on Thompson's, it differs in that it considers internally generated uncertainties that stem from the innovation process. In addition, it agrees with T. Burns and G.M. Stalker (1961) that the firm's rational core activities are incompatible with organic boundary-spanning activities and that the two domains are governed by different modes of governance. The extended model examines these two domains of activities in the context of managing the innovation process.

The success of the UK's economic recovery will be largely determined by the strength of the country's manufacturing industry, and this makes it essential to be aware of the factors determining the industry's competitiveness and size. Innovation has a crucial role to play in both these areas, but there are currently a number of factors which are severely hampering the innovative potential of the manufacturing base. It is now time to develop an economic policy which aims to encourage the innovative potential of industry.

Entrepreneurs can resort to innovation for business success. A society can possess inherent cultural and structural characteristics that can promote entrepreneurship, resulting in innovation. However, certain negative structure attributes reduce the opportunities of aspiring entrepreneurs and discourage them from pursuing new business ventures, which leads to decreased innovation. Recommendations were given regarding what societies can do to provide the required positive structure.

A decision-making framework based on influence is employed to represent innovation as a process of change involving new product managers and innovation stakeholders. A sample of 107 new product managers in the electronic manufacturing industry were investigated for relationships between individual, organizational and new product antecedents. The results show that new product innovations have socio-political effects.

A study was done on 243 of Telecom Australia's customer-oriented management personnel who implemented two innovations in company policies. Telecom Australia has developed a new service policy called 'Fix-It-First-Time' and altered the front-line managers' functions. The innovations were found to have a significant effect on company personnel, customers and the front-line management's job security, since the innovations were implemented at a time when retrenchment and redundancy were prevalent.

Capital invested in new and innovative ventures promotes economic growth. The relationship between the lead venture capitalist (VC) and the venture's founding entrepreneur (E) is vital to the success of venture-capital-backed companies. The effect of innovativeness and venture stage on VC-E relations in 51 venture-capital-backed companies was studied, revealing increases in marketing innovativeness in greater openness-related ventures, technological innovativeness in ventures related to greater conflict in VC-E pairs, and occurrence of VC-E interaction in a venture's initial stages.

The demand made by the manufacturers, from 1990-1993, in Scotland and South East England, for crucial strategic business services, are explored. The source of supply of the services employed and the location of external suppliers for English and Scottish manufacturers are also examined. The restructuring strategies, predicted by the flexible firm model, are responsible for enhancing business service output. The internalization and externalization of business services are occurring simultaneously.

Article represents a part of a larger work pertaining to an analysis of Sterkoder, a Norwegian shipyard. It describes a marketing strategy of the shipyard gaining access to the Russian market. An explanation of the shipyard's productivity growth is provided. It develops a model for grouping measures of innovativeness to address the change toward total quality management. Top and middle management collide in their views toward the change. Sterkoder had to learn that the market gives direction not policy.

The effect of technology on organizations' strategic adjustment to their environment is examined within the Miles and Snow (1978) framework. The model assumes that firms develop stable strategies for adjustment involving entrepreneurial, engineering and administrative phases. The first involves the identification of new opportunities, the second operationalizes the former's results and the last institutionalizes the innovative capacity thus developed. The second phase necessarily involves technological choice of products, services and production and distribution processes. Firms' business strategies determine their technological gains: market analyzers maximize profits from innovations in the short-run; prospectors make heavy technological investments that pay only in the long-run; and defenders of market share profit from innovations both in the short- and long-term.

Management of organizational innovation is examined in the context of institutional, revolutional and evolutional strategies. Institutionalizing innovation differs from revolutionary innovation in that the former encourages innovation within a firm's present paradigm, while the latter calls for a complete change of perspective. In contrast, the evolutional approach involves managment of random, unplanned innovation. Simulations based on a learning model are used to evaluate these approaches in terms of organizational performance, resources and change. The results show that all these strategies have both unintended positive and negative effects, and that the degree to which innovation is accomplished is dependent on a complex interplay of factors.