Difficult differences pave the creative road from diversity to performance

In this article, we argue that engagement with differences is important for the relationship between diversity and organizational performance. This importance is explained by the increased potential for creativity and innovation coming out of working in diverse teams. We recognize that difference and diversity can act as a double-edged sword for creativity and also contend that such differences are a fundamental condition for novelty and value to emerge. It is because of differences and not despite them that we create at individual, group, and organizational levels and a European approach to this topic – given Europe's history and philosophical traditions – recognizes the major role played of creative tensions and even conflict in innovation and in society more broadly. In this paper, we review literature that relates creativity and business performance, creativity, and diversity and examine the role of disagreement and tension, both conceptually and based on empirical evidence. We conclude by stressing the point that creativity often comes out of difficult differences, a European lesson that is easily forgotten, in Europe as well as globally.     

Planning for a rapidly changing environment in SAS

The author describes how Scandinavian Airlines achieved a turnaround from unprofitability and loss of market share. The creation and development of a corporate culture revitalized personnel and initiated a new management role, business-oriented rather than administrative. Punctuality became a specific goal and won for SAS the reputation of being Europe's most punctual airline. The change process is likely to continue into the future and the new internal management systems will change to meet these needs.     

How does a component from a supplier with high reputation for product innovation improve the perception of a final offering? A process perspective

An excellent reputation for product innovation (RPI) is an intangible asset for any company and promises a sustainable competitive advantage. This study empirically analyzes the spillover effects of a high component supplier's RPI to the offering of the original equipment manufacturer (OEM). The results show that there are positive effects to be gained from the innovativeness of a component supplier, which increases the perceived performance of the final offering containing the supplier's product. In addition, the study demonstrates that such a strategic partnership between a component supplier and an OEM has the potential to influence the purchase intention of the final consumer in a positive manner, thereby creating value for both parties. Contributions are made to a better understanding of strategic options for such a partnership and to an on-going discussion on RPI and the importance of intangible attributes in innovation management.     

Inclusive innovation and the role of technological capability-building: The social business Grameen Danone Foods Limited in Bangladesh

This article examines how a least developed country-based social business first creates operational capabilities (OCs) and then, over time, builds innovative capabilities (ICs) to fulfil a social need, be self-sustainable and achieve inclusive innovation. This relationship is examined in Bangladesh's Grameen Danone Foods Limited (GDFL) by integrating the technological capability and inclusive innovation theoretical frameworks and by using data gathered through extensive fieldwork. Broadly, our findings show how GDFL built and accumulated basic and intermediate ICs to undertake innovative activities in all areas of operation. Specifically, our findings scrutinize the process in which a social business develops and organizes its resources to initially build OCs and engage in the creation of ICs through various learning mechanisms to deliver inclusive innovation. From this process, we also observe a set of unpredicted positive spillovers to the community, which expands the inclusiveness effect. The findings also suggest that having a social orientation, triggers the use of different resources from within and outside the firm to achieve inclusive innovation. We conclude by discussing the study's implications for scholars, policy-makers and managers of multinational's social businesses. We also highlight future research areas, and crucially those related to key emerging conceptual limitations of inclusive innovation and development.     

Comparing a new technology with its predecessor—Steel making

This paper examines the physical and economic performance of a major innovation in steel making, the Basic Oxygen Furnace, and compares it with the performance of the traditional, open-hearth process. Evaluations are based on actual records from five American plants, covering three different time periods, and are set against engineering and management expectations as to the innovation's effects. Interviews with managers and technical personnel complemented the statistical findings. The analysis considers: how the attractiveness of the innovation was determined ex ante; the relative accuracy of the expected technological and economic expectations; the interactions of the innovation with the surrounding production system; and the objectives of post-installation technical and managerial adaptations.     

Impact of subsidiaries' cross-border knowledge tacitness shared and social capital on MNCs' explorative and exploitative innovation capability

As subsidiaries' cross-border knowledge increases in tacitness, it becomes more difficult for subsidiaries to articulate and for multinational corporations' (MNCs') headquarters to integrate and apply. Herein, dynamic capabilities and social capital theory frame structural and relational social capital as capabilities that improve the productivity of subsidiaries' cross-border knowledge tacitness shared on MNCs' headquarters explorative and exploitative innovation capability. The hypotheses are tested on a data set consisting of survey data collected from 220 senior managers or executives at the headquarters of Taiwan-based MNCs. Interestingly, structural social capital between headquarters and subsidiaries strengthens the negative association between subsidiaries' cross-border knowledge tacitness shared and explorative innovation capability; relational social capital attenuates the negative association between subsidiaries' cross-border knowledge tacitness shared and both explorative and exploitative innovation capability. Stated differently, different types of social capital can facilitate (i.e., relational social capital) or impede (i.e., structural social capital) innovation capability when cross-border knowledge tacitness is high. The validity and managerial implications of these findings are explored through interviews with senior managers or executives of MNCs headquarters or subsidiaries. Theoretically, this study emphasizes the importance of understanding relationships between subsidiaries and MNCs' headquarters to understand the association between subsidiaries' resources and MNCs' headquarters innovation capability.     

Lessons from the ‘made in Switzerland’ study: What makes a world-class manufacturer?

Many executives are currently striving to develop world-class manufacturing operations to ensure that they remain competitive in increasingly global markets. To do this, they are adopting a range of practices, from organisational changes such as empowerment and teamwork to the use of techniques such as pull production. Their goal is to substantially improve performance: faster cycle times, reduced manufacturing costs and greater customer satisfaction.The question of how far companies have moved towards world-class manufacturing is at the heart of the ‘Made in Switzerland’ project, a major benchmarking study of Swiss manufacturing practice and performance. The study was carried out in 1995 by IMD faculty and researchers working with consultants from IBM Switzerland. It is part of the internationally-based ‘Made in Europe’ project comprising similar studies in the UK, Germany, The Netherlands and Finland.The central hypothesis of the studies is that the adoption of best practice leads to high performance. The objective is to establish a benchmarking database for participating manufacturers around the world. The studies, which are highly structured, examine six areas of manufacturing practice and performance in detail and assess the relationship between them at individual plants. The areas covered in the study are quality, organisation and culture, concurrent engineering, logistics, lean production and manufacturing systems.Plants in each country are grouped according to their position on the practice and performance indices and then studied in order to pinpoint the issues and challenges facing the manufacturers within that group. Less than three per cent of the 800 plants currently on the ‘Made in Europe’ database are considered ‘world-class’. Yet for manufacturers striving to reach this level of performance, this small minority can provide some valuable insights for the way ahead.This article discusses many of the issues raised by the analysis described above, with particular reference to the ‘Made in Switzerland’ study. In the first section, it looks at the key lessons arising from the Swiss study and what insights these can provide for manufacturers, not only in the Swiss market, but across Europe. In the second section, it looks at how the study can be used for benchmarking and provides manufacturers with some general recommendations to help them focus their improvements and move closer to becoming world-class.     

External knowledge search,absorptive capacity and radical innovation in high-technology firms

Open innovation and absorptive capacity are two concepts based on the idea that companies can leverage the knowledge generated externally to improve their innovation performance. The aim of this paper is to analyse the joint effect of open innovation and absorptive capacity on a firm's radical innovation. Open innovation is expressed in terms of external search breadth and depth strategies and absorptive capacity is described by distinguishing between potential and realized absorptive capacity. In order to test our hypotheses, we carried out empirical research in firms operating in high-technology industries. The results indicate that internal routines and processes for absorbing external knowledge help explain radical innovation as they show a significant effect of potential and realized absorptive capacity. Also, there is a moderating effect of absorptive capacity on open innovation. Specifically, potential absorptive capacity exerts a positive effect on the relationship between external search breadth and depth and radical innovation. Realized absorptive capacity moderates the influence of external search breadth. These findings confirm the complementary nature of absorptive capacity and open innovation search strategies on radical innovation.     

Towards an adaptive framework of low-end innovation capability – A systematic review and multiple case study analysis

Low-end innovations, defined as new products or services that expand a market by addressing consumers with a low willingness or ability to pay, have a dual purpose – they can be a prerequisite for firm survival and growth and a major driver of societal change. To overcome the scattered nature of existing low-end innovation research and its lack of an explicit capability conceptualization, which limits academia's ability to move extant knowledge about the domain forward and limits firms' abilities to reliably produce successful low-end innovations, we present the results of a systematic review of the literature (99 journal articles) and a multiple case study analysis (7 cases). The resulting framework helps understand what constitutes a low-end innovation capability. The findings show that firms need a specific and interdependent capability set consisting of internal dimensions (low-end culture and commitment, integrated cost-reducing innovation, high volume scaling), interface dimensions (distant customer needs acquisition, iteration, total solution development) and external dimensions (access creation, low-end support networking) to cope with low-end markets' unique characteristics. The study also identifies market- and firm-specific contingencies for each capability dimension and analyzes the relationship between low-end and “regular” innovation capability.     

National programmes to promote youth training

The importance of education and training to this country's national performance is increasingly recognized. The introduction of the Youth Training Scheme, offering a year's workbased foundation training to 16- and 17-year-old entrants to the labour market, marks a major advance on Britain's poor record in this field. This article describes the Scheme's aims and mode of operation, traces its long gestation and reviews the progress during its first year. It relates the Scheme to wider national objectives for the development of training and to complementary initiatives in education, and discusses how it might be evaluated.     

Business models and dynamic capabilities

Business models, dynamic capabilities, and strategy are interdependent. The strength of a firm's dynamic capabilities help shape its proficiency at business model design. Through its effect on organization design, a business model influences the firm's dynamic capabilities and places bounds on the feasibility of particular strategies. While these relationships are understood at a theoretical level, there is a need for future empirical work to flesh out the details. In particular, studies that provide a better understanding of business model innovation, implementation, and change will also shed light on important aspects of dynamic capabilities.     

CEO satisfaction and intended strategic changes: The moderating role of performance cues

How do CEOs react to attainment discrepancies in their organizations' performance? Scholars have generally argued that (only) when performance falls below a certain aspiration level do CEOs intend to change the organization's strategy. However, empirical evidence on this issue is ambiguous and inconclusive. We address this puzzle directly by studying how CEOs' cognitive interpretations of performance (their satisfaction with the firm's performance) affect the magnitude of intended strategic changes, and we explore the moderating effect of the context (performance compared to the industry) on this relationship. Using a sample of medium-sized organizations, we find that CEOs' satisfaction with performance is negatively related to intended strategic changes, as expected, but only in contexts of poor performance compared to the industry. The negative relationship becomes less pronounced when performance compared to the industry reaches a certain threshold and even appears to reverse when the latter is extremely high. Moreover, exploratory post hoc analyses tentatively suggest the existence of two alternative intended change trajectories: contractive as a reaction to dissatisfaction and poor performance, and expansive as a response to satisfaction and high performance. These findings help to contextualize the effects of attainment discrepancies in light of conventional performance feedback theory and alternative theoretical perspectives.     

Accounting for an enterprise's wellbeing

Business enterprise today is being called upon to exercise significantly wider “social responsibility” than has traditionally been the case. As a result, individuals, communities and national governments are beginning to call for statements of “social account” which reflect a company's performance in the eyes not only of financial shareholders, but also of other stakeholders in the community at large. This paper, therefore, attempts to extend fundamental accounting principles, which have traditionally embraced only monetary stocks and flows, towards physical, social and psychological exchanges. It therefore provides a foundation both for the development of the accountant's/auditor's traditional role and for a means of communication between interest groups within and without the enter-prise. The paper does not attempt to develop thoroughgoing quantitative measures to the same degree of specificity as conventional financial accounts; rather it aims to develop a novel framework, to which both management practitioners and theorists may apply their own specific refinements.     

Executive turnover – Firms’ subsequent performances and the moderating role of organizational characteristics

I apply context-emergent turnover (CET) theory to investigate how different organizational characteristics moderate the effect of executive turnover on firm performance. I suggest and investigate different organizational characteristics as contextual factors. I find that executive turnover reduces future sales and employment growth, and show that three organizational characteristics (the firm's age, top management tenure, and employee tenure) moderate this effect. These results contribute to our understanding of the role of context in moderating executive turnover. Previous studies that examined the performance effects of executive turnover have often struggled to prove the causality between this event and a firms' post-turnover performance conclusively. The problem is that executive turnover is often correlated with a firm's current performance and expected future challenges. I address this endogeneity problem by exploiting the exogenous variation in firms' performances following 516 top managers' unexpected deaths. I use a matched sample to investigate which organizational characteristics that mitigate the negative effect on the firms' subsequent performances resulting from these executive turnovers. I obtained this sample randomly from a comprehensive dataset containing yearly observations of all Danish firms from 1995 to 2007.     

The servant leadership advantage: When perceiving low differentiation in leader-member relationship quality influences team cohesion,team task performance and service OCB

How does servant leaders' unique ability to place each follower's needs above their own influence relationships between followers and impact their collective performance? In a study that integrates principles of servant leadership with the social comparison theoretical framework, we tested a group-level model to examine how servant leadership induces low perceived differentiation in leader-member relationship quality (perceived LMX differentiation) within a group, which strengthens team cohesion and in turn positively influences team task performance and service-oriented organizational citizenship behaviors (service OCB). Our sample comprised 229 employees nested in 67 work teams. Structural equation modeling results indicate that servant leadership significantly predicts low perceived LMX differentiation; perceived LMX differentiation is strongly related to team cohesion such that the lower the perceived differentiation, the stronger the team's cohesiveness. And, team cohesion is also strongly related to both the team's task performance and service OCB. Perceived LMX differentiation and team cohesion mediate the effect of servant leadership on both team task performance and service OCB.     

Leveraging global sources of knowledge for business model innovation

This article explores the concept of leveraging global knowledge for business model innovation, whereby knowledge is transferred across space and firm boundaries for the reconfiguration of an incumbent firm's business model. Considering the implications of an ever-increasing fragmentation of global value chains and the associated dispersion of global knowledge sources, we propose that supply chain partners at foreign locations can provide valuable knowledge that incumbents can leverage to change their business model. Integrating insights from global supply chain, business model, and organizational learning literature, we theorize and empirically test how different organizational capabilities enable firms to acquire knowledge from foreign partners, integrate external with internal knowledge, transform knowledge through experimentation, and finally apply global knowledge in the form of business model innovation. We conclude with suggestions for future research.     

Parkinson,Peter and probability: Implications for productivity

Improving productivity and effectiveness in society and organizations is a need which is not being met satisfactorily in most countries. Goals of society and organizations are defined in circular and spiral terms, one leading to the other, as encouraging the development of individual capabilities, achieving greater effectiveness, attaining a better quality of life, and enhancing human dignity. Parkinson's Law, Peter's Principle and Robinson's Law (“in a bureaucracy, work alters upon advancement”) illustrate in satirical form many truths about why organizations and society are not increasing their levels of goal attainment. Clues for overcoming this adversity are the treatment of such laws as probability concepts to demonstrate that future performance of a specific organization cannot be predicted, and the recognition that unstated assumptions—we know how to apply accumulated knowledge and the research approach should be followed—need to be converted to much different explicit ones. Evidence demonstrating why this is so and what ought to be done is reviewed. A planning and design approach based on an orientation of purposes-target-results is presented, and some different change principles that result from the approach are described.     

Work overload and intimidation: The moderating role of resilience

Work overload is a critical but understudied stressor at work, particularly for boundary-spanning positions. Recent studies have highlighted the need for more research on the identification of different predictors of the use of intimidation, a type of assertive impression management tactic. Relying on Lazarus's transactional theory, this study hypothesized and investigated a mediated moderation model that includes resilience, work overload, and its outcomes.This paper contributes to the organizational literature by examining the use of intimidation by salespeople as a reaction to stressful circumstances and the association between this tactic and salespeople's performance. The information provided by 248 employee–supervisor dyads confirmed the proposed model. Work overload has a positive association with intimidation, and the direct effect of work overload on intimidation depends on the level of an employee's resilience. Finally, the use of intimidation has a negative association with supervisor-rated performance.     

Antecedents and Outcomes of Political Tie Intensity: Institutional and Strategic Fit Perspectives

Although international nonmarket strategy research has highlighted the importance of political ties, it is still unclear why some foreign subsidiaries are more politically active than others and what conditions may render political practices beneficial in a host country. We argue that foreign subsidiary political tie intensity—the extent to which senior managers provide time and resources in informally dealing with government officials for nonmarket purposes—will be influenced by political institutions in their parent's home country, especially when the MNE parent attempts to protect foreign subsidiary resources. Additionally, we assert that fit between a parent's home country political institutions and foreign subsidiary political tie intensity will positively affect subsidiary performance. We employ primary data collected from 181 foreign subsidiaries in the Philippines and find support for our hypotheses. This study advances international nonmarket strategy research by highlighting how an MNE's home country political institutions shape subsidiary political networking and strategic performance outcomes in host country environments.