INNOVATION

Innovation and Management

Innovation and Management

Introduction

Innovation and business networks essentially belong together. Innovation and technology are often the driving forces behind the formation of business partnerships and networks (Johansson and Mattsson, 1992). In networks, an innovation should not be seen as the product of one actor, but as the result of interplay between several actors (Håkansson, 1987). The term “network” refers to a set of nodes and relationships that connect them (Fombrun, 1982).

Innovation is likely to be individually motivated, opportunistic, customer responsive, tumultuous, nonlinear, and interactive in its development, and, managers can plan overall directions and goals, but surprises are likely to abound (Biemans, 1990). Management of innovation is called controlled chaos (Quinn, 1985), it includes surprises and unexpected changes, but it can still be controlled to a certain extent. Companies' network competence is important for achieving innovation success in business networks (Ritter and Gemünden, 2003). Network competence involves relationship-specific tasks, initiation, exchange, coordination, cross-relational tasks, planning, organizing, staffing, controlling, specialist qualifications, and social qualifications (Ritter and Gemünden, 2003).

There is a clear pattern of growth in R&D partnerships in the economy (Haagedoorn, 2002). This is due to increased scientific and technological complexity, higher uncertainty surrounding R&D, increased costs of R&D projects, and shortened innovations cycles that favour collaboration (Haagedoorn, 2002). These partnerships, according to Hagedoorn (2002), enable companies to learn from variety of sources and partners in a flexible setting of (temporary) alliances for various company activities across the value chain.

The amount of R&D partnerships has increased particularly in high-tech sectors and other sectors where learning and flexibility are important features of the competitive landscape. IT has also facilitated the increase of innovation networks. IT makes possible new products, services, business concepts, organizations, and forms of cooperation. A virtual organization is a network and an example of a new kind of organization facilitated by IT (Mowshowitz, 1997; Christie and Levary, 1998; Hoogeweegen et al., 1999).

In some cases, innovative networked cooperation may take place even with competitors. This has been called “coopetition” (Bengtsson and Sören, 2000), and it may be encouraged by public R&D-funding and the desire to share substantial costs and risks in the case of products based on technological breakthroughs (Tidd, 1995). In contrast, the literature also includes findings suggesting that networked cooperation as such is no guarantee for successful innovation and products developed in partnerships are no more successful than those developed in-house (Campbell and Cooper's, 1999).

Indeed, the management of innovation networks is both important and challenging. However, in general, the knowledge of management methods in inter-organizational networks is still scarce (Ojasalo, 2004). Clearly, there is an evident need to examine this area further.

Innovation Management

In the literature, “innovation” may refer to an outcome of an innovative process or to the innovative process itself (Drucker, 1985). Yet, some authors have reserved the term “innovation” just for the result of the innovation process, and “innovation management” for the managerial activities that attempt to control the innovation process (Drejer, 2002).

The term innovation, most importantly, implies newness (Johannessen et ...