Understanding organizational innovation
from its practice
Valencia, 21st February 2013
Maria Larraza Malkorra
Faculty of Social and Human Sciences – University of Deusto
Introduction - widening innovation
From To
• Technology
• R&D
• Oslo Manual – 3rd edition
• Organizational Innovation as a
commonly acknowledged source of
competitive advantage
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Innovation
Concept
Process
Applied to
ORGANIZATIONAL
INNOVATION (OI)
Still ambiguous (Lam, 2005)
Still methodologically challenging (Kirner et al. 2008)
Understanding and diffusion still restricted
• Linear
• Sequential
• Predictable
• Complex, self-referential, feedback
loops
• Requiring social and organizational
changes
Why is OI still ambiguous?
Two literature streams: Organizations // Innovation (Lam, 2005)
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1. Structural forms and innovativeness
2. Innovation as organizational learning and
knowledge creation in organizations
3. Organizations capacity to change & adapt
All related but separated
Lack of consensus about
a common conceptual
framework
Differentiating from Organizational Change • Oslo Manual 2005
– Implementing on business practices, work organization or external relations
– New to the firm
– Strategic reason
• Som et al., 2012: Strategic reason oriented to considerable improvement of competitive advantage or economic performance
Elements also
appearing at
organizational change
literature
(Van de Ven, 1992;
Poole, 2004)
Why is OI still methodologically challenging?
• Empirical basis for its measurement is weak and scattered
– Lack of reliable scales
– Intangibility of OI’s goals
Armbruster et al., 2006
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• Complexity for measuring OI’s effects
– Different aggregation levels
– Long life cycles
– Internal differences on the extent of implementation
– Multidimensional relationship between OI and its outcomes
Kirner et al., 2008
Purpose of this research
Deeply understand organizational innovation:
– How is the process developed and interpreted in practice?
5
Generate new theoretical insights about organizational innovation for
further research and diffusion
Looking for references
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• Management theory – process perspective vs. variance
– Applied to Organizational Change - resulting in 4 models, not
directly applicable to OI Van de Ven, 1992; Poole, 2004
• Innovation theory – different modes of innovation processes
– Generation: creating a new opportunity or making use of an
existing one in novel ways
• Creative process covering all efforts and activities combining
new and known ideas
– Adoption: assimilation of a product, service or technology
created elsewhere and new to the adopting organization
• Two sub-processes: initiation (from awareness to planning)
and implementation (practicing until it is part of routine)
Damanpour and Wischnevsy, 2006
Methodology
• Research design proposal, applying process perspective to study OI
Inductive, longitudinal, field-based case study, well suited for
developing Grounded Theory
Eisenhardt, 1989; Glaser and Strauss, 1967
– It pays attention to the reality and evolution of the field study
– Without previous hypothesis
– Looking for results along the collection and systematic analysis
of field data
– Useful for feedback processes driving change dynamics over
time Tripsas, 2009
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Introduction to Grounded Theory (GT)
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Purpose
• Develop theories about barely known phemomenon
• Based on data directly collected on the field
Difference From mere description to theory
Focus on Behaviours - the engine of the meanings
Use on business
research Elusive and misunderstood
Features
• NO deep initial literature review
• NO hypotheses
• NO linearity: constant comparative cycle
• Fieldwork and data analysis: in paralell
• Ends with saturation, confirmability & final theory
Developing GT on organizational innovation research
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Field settings:
- Basque Industrial SME
- Theoretical sampling
Data sources applied
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2nd round
Analytical process developed
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Organization of incidents - screenshot
Partially covered
for confidentiality
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Tag cloud example – “internal dynamics” cathegory
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Timeline example
Analytical process developed
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Initial theory from Ennera case (1/2)
• Evolution from a project based workplace organization (until 2010)
to a functionally departamentalized model (2011)
– Further vertical decision-making process
– Partially developed due to deeply rooted horizontal
communication processes and business practices
– New to the organization innovation
• Main challenge arising in 2012:
– Formalizing business practices
– While keeping informal and family-like organizational culture
– Self-generated methods combined with commonly known ones
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Initial theory from Ennera case (2/2)
• Main driver for OI process - their strategic goal:
– Gain a competitive advantage in the renewable energy market
– offering a technology-based value-added servie
– mainly differentiated by their particular approach to market:
honest, transparent and coherent
• It is the reference to build their own organizational method
– No defined idea of a model to deploy
– No plans, no implementation steps
– OI process based on a sequence of actions and decisions
evolving on a trial and error dynamic
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Process in progress
Final theory – initial results
It emerges when theoretical explanation is found to the first theory
• Ennera’s OI is interpreted afterwards as the implementation of new
methods in
– Its business practices and workplace organization (interrelated)
– Currently with some hints about innovation on external relations
– New to the firm, with potential to be new to the market
– Driven by a broad strategic goal
• Ennera is developing a OI generation process combining self-
generated ideas with generally known ones, as part of a creative
process towards a previously unknown organizational model
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Limitations
• Work in progress
• Researcher as the main reseach tool – risk of bias:
– Immersion is a must to understand meanings in the field
– Requires data triangulation, rigour on field notes and own
consciousness
– To reach confirmability
Kawulich, 2005; Peñaloza&Cayla, 2006
• Applicability will be based on
– facilitating transference to other contexts
– opening future research tracks
Williams et al., 2005
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Conclusions
• Oslo Manual’s definition is relevant to clarify OI, but:
– Not enough differentiation from Organizational Change
– “New to the firm” degree fits
– But diffusion potential might be limited
– Strategic goal might be broad and not organizationally defining
• Generation / adoption innovation process distinction
– Is also applied to non-technological innovation
– Can help understanding better OI phenomenon
• Grounded Theory is a suitable methodology for studying OI
– Can be applicable to future research on management or
innovation processes
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Thank you!
Maria Larraza Malkorra
Blog: www.marialarraza.com
E-mail: [email protected]
Faculty of Social and Human Sciences – University of Deusto
