relationships as source of innovations in advertising industry: comparative study of polish and...

RELATIONSHIPS AS SOURCE OF INNOVATIONS IN ADVERTISING INDUSTRY

COMPARATIVE STUDY OF POLISH AND JAPANESE APPROACHES

Y. Hara, K. Hosoi,G. Leszczyński, M. Zieliński

Combining the Social and Technological Aspects of Innovation: Relationships and NetworksThe 28th IMP Conference

Thursday, September 13, 2012

Polish approach?

Japanese approach?

RELATIONSHIPS AS A SOURCE OF INNOVATIONS IN ADVERTISING INDUSTRY


STARTING POINT

•Traditional approach to innovation process places the source of ideas inside the company while open innovation approach treats customer as an external source of new ideas for the company (Von Hippel, 1978, Hyland et al., 2006, Chesborough 2003, Bjork and Magnusson 2009).

• Process of innovation requires collaboration of actors, activities and resources at intra- and inter-firm levels (Rothwell 1994).

• That concept is based on well established relationships, which, in turn, require trust between the company and the partners with whom it cooperates for innovation. Mutual trust between partners is on the top of the list of factors that affect performance of collaboration (Gulati, 1995, Dyer and Hatch, 2004)

• However sometimes distrust is usual.


SCOPE OF THE STUDY

PurposeThe main reason for taking this subject have been concerns raised by managers in relation to the possible use of customer relationships in the exploration and development of innovation in service companies. Therefore the paper deals with the issue of low innovativeness of Polish service companies.

Literature addressedThe impact of external actors on innovation of the company was discussed in the literature related to new product development (Wuyts et al., 2004), innovation (Laursen & Salter, 2006), business-to-business relationships (Håkansson et al., 2009; Chen et al. in 2011; Salunke et al. 2011). The recognized contribution of services to economic growth contributed to the studies of innovation within services (de Jong et al., 2003; Hauknes, 1998; Howells & Tether, 2004; Miles, 2005). However the impact of distrust relationships on collaboration with customer still needs clarification.

Advertising companiesAdvertising companies were chosen for that study because this industry is defined as a “co-creation service” one, where a high level of participation of the customer is required to create the service and the service itself is advisory and problem-solving (Bolton and Saxena-Iyer, 2009).


SERVICE INNOVATIONAa and Elfring (2002) define service innovation as: new combination of services or service elements, reproduction of service, involvement of customer, adoption of technology.

Mager and Sangiorgi (2005) suggest 3 dimensions of service innovation: • market - pricing and offering strategies are developed• organizational and production - processes and organizational models are invented• relational - the social and cultural aspects of service experience include the users’

perspective

The presumed advantage of collaborating with customers for service innovation relates to:generation of service ideas and information about user requirements

• comments on new concepts• assistance on development and testing of prototypes • assistance in diffusion (Chen et al. 2011)

We are focused on cases of involvement of customer, inclusion of his perspective and integration of new knowledge in innovation process in advertising companies.


RESEARCH FRAMEWORKAn open innovation model directs our attention to:

• Social capital of advertising companies that is created by the sum of the actual and potential resources embedded within, available through and derived from the network of relationships possessed by an individual or social unit (Nahapiet and Ghoshal 1998).Parties that have high social capital should exchange information more easily and with bigger number of parties (Wu et al 2008)

• Learning orientation, which allows incorporation of the innovative potential inherent in the relationships. Innovative companies are characterized by openness to comments and recommendations from the environment, particularly communicated by customers (Kanter 1988).

Both inter- and intra-organizational cooperation needs relationships based on trust because it enables sharing of information. The impact of trust/distrust on social capital and learning orientation is discussed.


METHODLOGYCASE STUDY IN TWO COUNTRIES



Ad industryFocal point is:•Trust•Learning orientation•Social capital•Innovation process




1.Interviews in Poland (Case 1&2) 1.Interviews in Japan (Case 3)



2.Discussing on Japanese case 2.Discussing on polish case


1.Interviews in Poland (Case 1&2) 1.Interviews in Japan (Case 3)


CONTEXT

Poland

• transition → market economy

• services: 54,5% of GDP

• one of lowest level of innovation among OECD countries, below EU average

• lowest trust and collaboration among EU countries

• Polish managers expect quick results of their actions because of the short-term orientation

Japan

• market economy

• services: 75,7%

• one of the most innovative economies

• focused on giving and receiving results in a long time


CASE 1

Opportunities

short time relationshipslack of trust

Customer is not perceived as a source of innovation

exploitative learning orientation


CASE 2

Customer is kept out of the process of innovation

lack of trustlack of faith in the customer’s knowledge

short time relationships


CASE 3


CASE 3Clan


CASE 3Clan

Always working with same Clan members


CASE 3Clan


Foster trust


CASE 3Clan


Foster trust

Incremental innovation


CASE 3

Changing network

New knowledge

Radical innovation


CASE 3

Changing network

New knowledge

Radical innovation

Outside Agent


JAPANESE PERCEPTION OF POLISH APPROACH

Japanese respondents were surprised on distrustful relationship in Polish advertising industry. They said that they couldn’t create good works without the trust. Trust and cooperation with others is a basic and minimum request to do creative works in Japanese advertising industry.

lack of trust and loyalty

a lot of time is spent to define contract

linear and intra innovation process Thursday, September 13, 2012

POLISH PERCEPTION OF JAPANESE APPROACH

The Polish managers from both researched agencies were surprised by the importance of customer relationships that are the deciding factor in selection of the agency. Cooperation with thirds parties agencies is impossible in Polish circumstances. The Japanese concept of clans seems to be very interesting, however this solution may be difficult to transfer to Polish market

Personnel exchange (clans)

Foster the trust, contracts are not needed

Network model of innovationThursday, September 13, 2012

CONCLUSIONS• Customer is not regarded as a source of innovation in both countries, but his role is different due to

trust/distrust

• Customer role:

• in Poland at the beginning and at the end of process,

• in Japan - customer’s perspective included, customer involved in the process

• In polish ad agencies lack of trust limits the possibilities of collaboration with customer and other actors

• Reinforcement of trust needs time, so companies might focus on development of social capital or modification / development of their learning orientation

• Contracts should include elements of collaborations based on clans

• Further research on development of relationships without confidence is needed

• The presented observations are exploratory in nature, but they formed the basis to apply for a grant to Polish Ministry of Science


THANK YOU


relationships as source of innovations in advertising industry: comparative study of polish and...

Business

dene service innovation

service innovation aa

development of innovation

process of innovation

studies of innovation

open innovation approach

open innovation model

service elements