The Brazilian Multinationals' Approaches to Innovation

Brazilian multinationals, born in a country where the environment is non-conducive to the scientific breakthrough type of innovation so stimulated in other countries, are increasingly expanding in international markets, where innovativeness is an intrinsic component of competitiveness. Aiming to study Brazilian multinationals' approaches to innovation, a new analytical framework was developed assuming that the internationalization process relies on the firm's innovative capability. In turn, innovative capabilities are derived from core competences and competence formation at firm level is influenced by the characteristics of the national environment. A survey involving 61 Brazilian multinationals led to the identification of four approaches to innovation, the competences that enable each one of them and the country-of-origin effects over competence development. That led to the explanation of why firms that do not show the expected strength in R&D, but are able to combine skillfully their organizational competences, manage to develop innovative capabilities which allow them to internationalize successfully. The overall outcome suggests that the dynamic relationships among institutions – competences – innovation – internationalization are setting new grounds for the international expansion of Brazilian firms.     

Understanding Drivers of Risk‐Adjusted Performance for Service Firms with International Operations*

This article investigates whether international operations of service firms increase performance while reducing risk. The article draws on a longitudinal dataset of 584 internationally operating service firms from the United States. Analysis indicates that international diversification is negatively related to risk‐adjusted performance. However, it is established that international diversification interacts with internationalization and positively influences risk‐adjusted performance. This finding offers significant promise for firms, as it indicates that international operations (if managed well), through exposure to varied foreign markets coupled with adequate global scope, can lead to firms’ increased risk‐adjusted performance. The results provide a mechanism for decision‐makers to better understand international operations of service firms and present a strategy for achieving success in international markets by effectively managing two important levers: internationalization and international market diversification.     

Modelling the effects of institutional support and international knowledge on competitive capabilities and international performance: Evidence from an emerging economy

This paper explores the process through which institutional support initiatives contribute to the international performance of firms from the small open economy of Malaysia. We examine both direct and indirect causal effects of institutional support (informational, training, trade mobility and financial aid-related support) on internationalization. We develop a model to address how institutional support initiatives affect the performance of export-oriented or so-called born global firms. From a survey of 250 firms from Malaysia, an emerging Southeast Asian market, we find that government support initiatives do not have significant impacts on firm performance unless examined based on processes of government support initiatives, international knowledge, commitment, competitive capabilities, and international performance. Government support initiatives play a critical role in export-oriented firms from small open economies (SMOPECs) in emerging markets by contributing to a number of contextual deficits that determine the international performance of a firm. This study provides guidelines for policy makers and business owners on how institutional support can facilitate the accumulation of knowledge about international markets, enhance commitment to exports and help firms gain competitive capabilities in the export market for greater success in international markets.     

Casting a Wide Net for Innovation: Mediating Effect of R&D Human and Social Capital to Unlock the Value from Alliance Portfolio Diversity

This paper examines the performance effects associated with different alliance portfolio configurations in terms of geographical location and partner type. Based on these distinctions, the authors hypothesize that more diverse alliance portfolios enable firms to gain and exploit innovation opportunities. Additionally, the mediating effects of R&D human and social capital on the R&D alliance portfolio diversity–innovation performance relationship are explored. The authors reason that the absorptive capacity of R&D intellectual capital determines a firm's potential gains from highly diverse alliance portfolios. From panel data of manufacturing firms in Spain for the period 2008–2013, the results confirm the inverted U‐shaped relationship between alliance portfolio diversity and firm innovation performance, implying that both insufficient and excessive alliance portfolio diversity may be detrimental to firm innovativeness. Additionally, R&D human and social capital partially mediates the R&D alliance diversity–innovation performance relationship, emphasizing the importance of internal capabilities to leverage the benefits of highly diverse alliance portfolios. These findings add a dynamic dimension to the conceptualization of alliance portfolios and how firms create value by balancing explorative and exploitative alliances.     

Strategic Network Orchestration in Emerging Markets: China's Catch‐up in the High‐Speed Train Industry

Transitioning from catch‐up in production to catch‐up in innovation capabilities is essential to emerging market firms (EMFs) achieving internationalization and a competitive advantage. While some EMFs are now positioned among the world's most advanced firms, many struggle to become independent innovators. Thus, understanding how EMFs can develop internal absorptive capacity and progress towards catching up in innovation capabilities remains important. Our study seizes this research opportunity and develops a network‐based explanation of catch‐up, which complements existing technological and organizational explanations. Specifically, we address the question of ‘How does the orchestration of collaborative networks enable EMFs to catch up in production and innovation capabilities?’ by describing an important yet under‐researched process of strategic network orchestration and showcasing the dynamic interdependencies between network orchestration and organizational learning. Our study provides a detailed account of Chinese high‐speed train (HST) development from 1990 to 2020 and opens the possibility for future research on network orchestration in emerging market contexts. This provides EMF managers with a set of actionable network orchestration mechanisms that can be used when designing and purposefully managing their strategic nets of domestic and foreign partners.     

Internationalization Orientation in SMEs: The Mediating Role of Technological Innovation

This study examines the relationship between internationalization orientation and international performance of small and medium-sized enterprises (SMEs), and the mediating effect of technological innovation. Prior research suggests that internationalization is a prominent strategic choice for SMEs growth and profitability. However, there is still no explicit agreement on how internationalization affects international performance. Similarly, the role of innovation on performance has long been emphasized, but the implications of technological innovation on international performance are still eluding us. Our investigation of 116 SMEs in the United Kingdom reveals that internationalization orientation has a significant effect on their international performance, with SMEs adopting simultaneously an inward and outward international orientation achieving superior results. We further demonstrate that there is an inverted U-shaped relationship between technological innovation and international firm performance among SMEs. Meanwhile, we find that technological innovation positively mediates the effect of internationalization orientation on international firm performance, particularly for the SMEs exhibiting moderate levels of technological innovation activities. The findings of this study suggest that managers can improve international performance by combining inward and outward internationalization orientation with technological innovation activities in their strategic decisions.     

Foreign Competition and Innovation: The Mediating Role of Imitation

This study examines the extent to which foreign competition affects the innovation performance of domestic firms through imitation, given firms’ absorptive capacity. In analysing longitudinal firm‐level data from the UK, we find a mediating effect of imitation on the relationship between foreign competition and local firms’ innovation performance, and an inverted U‐shaped relationship between imitation and the innovation performance of local firms. Our findings further reveal that absorptive capacity moderates the mediating effect of imitation, diminishing innovation gains at moderate levels of imitation and mitigating the diminishing innovation performance at high levels of imitation.     

Internationalization of R&D and Innovation Performance in the Pharma Industry

This research investigates the effect of R&D internationalization and contingency variables on innovation performance. A number of prior studies addressing this question have concluded in diverse and inconsistent findings, which can be attributed only partly to sample selection and measurement discrepancies. Using a longitudinal dataset of global pharmaceutical firms, we partly solve this ambiguity in the R&D internationalization and innovation performance relationship. The results reveal an S-shaped relationship, suggesting the benefits of R&D internationalization ultimately overcome the costs after critical levels of R&D internationalization. This finding combines and unites prior findings of a U-shaped, followed by an inverse U-shaped curve. In addition, we find that the experience in conducting R&D internationally, but not the degree of general internationalization, moderates the relationship between degree of R&D internationalization and performance. This suggests that the effect is contingent on the knowledge of internationalization path of the firm but can flourish in the absence of overall internationalization as well. Implications for theory and practice are derived.     

The Effect of Absorptive Capacity on Innovativeness: Context and Information Systems Capability as Catalysts

The purpose of this study is to examine the relationship between absorptive capacity and company innovativeness and to identify potential contexts and capabilities that can act as catalysts for these relationships. We also examine the relationship between absorptive capacity and the existence and enhancement of innovativeness. These relationships are examined through an empirical investigation of 286 large Spanish companies. Our results show that absorptive capacity is an important dynamic determinant for developing a company's innovativeness. Moreover, this relationship is best explained by two related constructs. First, the company's unlearning context is a crucial determinant for both potential capacity and realized absorptive capacity. Second, the results also indicate a tangible means for managers to enhance their absorptive capacity through information systems capabilities.     

基于东方管理的服务创新与服务利润链实证研究:以通信服务业为例

创新已经成为国内通信服务企业的竞争利器,探讨创新影响企业内部运作、外部顾客满意度和企业绩效的路径和模式.本文以河南省新联通为例,运用调查研究方法和案例研究方法,探讨基于东方管理的服务创新与员工满意、顾客满意和绩效之间的关系.本文得到如下结论:(1)基于东方管理思想的"内部服务创新-员工满意-顾客满意-企业绩效"的服务利润链路径得到验证,但强度较弱,这表明东方管理思想和服务创新理论在国内通信服务企业的应用是有效的,但其作用有待提升;(2)内部和外部服务创新通过直接和间接两条路径影响企业绩效;(3)内部创新影响路径(内部服务创新→员工满意→顾客满意→企业绩效)的强度小于外部创新影响路径(外部服务创新→顾客满意→企业绩效)的强度,表明针对员工的内部服务创新还未成为当前国内通信服务企业创新的重点;(4)除了创新对绩效的间接影响外,内部服务创新和外部服务创新会直接影响企业绩效,这表明国内通信服务企业的创新可能仍倾向于绩效导向,而非顾客导向,即表现出行为短期化.     

A Staged Service Innovation Model*

Drawing from the new product development (NPD) literature, service quality literature (SERVQUAL), and empirically grounded research with 53 service innovation decision makers, we develop a staged service innovation model (SIM) for decision makers. We tested the model using empirical data from 329 firms across five industries. The empirical results show that integrating prelaunch service quality training into new service development process leads to successful service innovation. The model developed in this article can be used as a decision support tool and diagnostic model for assessing service innovation ideas, evaluating performance of ongoing service innovations, allocating resources, and improving success rate of service innovations. Decision makers can use the measures developed in this study as a checklist to identify their strengths in delivering service quality to their own customers as well as areas of improvement. This article extends service innovation research by combining NPD and service quality development into a single study and opens the door to further work that could help improve the success rate of service innovations. The model can serve as a base model for future research extensions in service innovation research. A major takeaway for the academic reader is that the SIM demonstrates the value of using the SERVQUAL literature to understand how best to provide excellent quality that results in more fully satisfied customers and, ultimately, improved service performance.     

Uncovering the factors behind new ventures’ international performance: Capabilities,alertness and technological turbulence

This research is based on the perception that the explanation of International New Ventures' (INVs) performance demands a process view, going deeper than the standard approach, in empirical papers, of testing a direct relationship between company-level antecedents and performance. A three-tier model was developed to investigate the process leading to INVs international performance, emphasizing the role of entrepreneurial alertness. Based on the dynamic capabilities framework, entrepreneurial alertness was envisaged as the mediating element between firms' capabilities and their international performance. Empirical research confirmed the hypothesized model. Firms' capabilities (entrepreneurial orientation, foreign market knowledge, and absorptive capacity) significantly influence the level of entrepreneurial alertness, which impacts on the levels of self-reported satisfaction with the company's international performance. The paper makes four contributions to International Entrepreneurship literature. First, it highlights the key role played by entrepreneurial alertness in explaining INVs' international performance. This is convergent with the dynamic capabilities view on firms' ability to sense and seize specific international business opportunities. Second, this study considers entrepreneurial alertness as a capability that is not limited to the entrepreneur, but it is an organizational capability. Third, it shows that entrepreneurial alertness does not exist in the vacuum, is based on a set of base capabilities, namely entrepreneurial orientation, foreign market knowledge, and absorptive capacity, that simultaneously leverage the INVs to sense possible opportunities and constrain the focus of opportunities to international markets, as a key element to foster INVs' higher performance. Fourth, it underlines the role of technological turbulence as a moderator of the relationship between entrepreneurial alertness and INVs' international performance.     

Dynamic Capability Building in Service Value Networks for Achieving Service Innovation

Service organizations increasingly create new service offerings that are the result of collaborative arrangements operating on a value network level. This leads to the notion of “elevated service offerings,” our definition of service innovation, implying new or enhanced service offerings that can only be eventuated as a result of partnering, and one that could not be delivered on individual organizational merits. Using empirical data from a large telecommunications company, we demonstrate through structural equation modeling (SEM) that higher‐order dynamic capabilities in services are generated as a result of collaboration between stakeholders. Furthermore, it is through collaboration and education of the stakeholders that additional higher‐order capabilities emerge (customer engagement [CuE], collaborative agility [CA], entrepreneurial alertness [EA], and collaborative innovative capacity), all of which influence the service innovation outcome. Our study also reveals empirical evidence for an ongoing process of continuous dynamic capability building in accordance with the changing dynamics of business. Managers of service organizations should recognize the potential embedded in these higher‐order skill sets, starting from collaboration, learning, and management of creative ideas for both strategic and operational benefits. Moreover, the capabilities of CA, EA, and CuE are even more important in managing the flexibility, timely delivery, and reliability of service offerings. Managers should take measures to inculcate, promote, and manage these dynamic capability skill sets to foster innovation in services.     

Innovativeness as an Unintended Outcome of Franchising: Insights from Restaurant Chains

A growing trend in improving innovation outcomes is to go outside the firm's boundaries. One mechanism by which firms extend organizational boundaries is through franchising their channels. Yet, the effects of franchising on innovation outcomes have been overlooked in the literature. We propose that a firm's emphasis on franchising will affect its organizational innovativeness, conceptualized as product and process innovativeness, independently and with other firm characteristics—franchising experience, firm size, financial leverage, and slack resources. We find support for our hypotheses using a nonlinear seemingly unrelated regression model estimated using panel data from 38 U.S. restaurant chains between 1992 and 2005. The positive effect of the emphasis on franchising on product innovativeness is stronger for firms with high financial leverage, but weaker for firms with high slack resources. For process innovativeness, the effect is stronger for firms with high financial leverage but weaker for large firms, and for firms with high franchising experience and high slack resources. The findings indicate that a firm's emphasis on franchising has contingent effects on product and process innovation outcomes. Thus, franchising emerges as a competing mechanism (to alliances and joint ventures) that extends organizational boundaries and affects organizational innovativeness.     

Organizational Learning,Innovation and Internationalization: A Complex System Model

Research on organizational learning, innovation and internationalization has traditionally linked these concepts through linear causality, by considering any one of them as the cause of another, an approach that might be considered contradictory and static. This paper aims to clarify these relationships and proposes a dynamic theoretical model that has mutual causality at its core and is based on ideas originating in complexity theory. The final model results from case studies of two clothing sector firms. The authors consider that the three concepts constitute a complex system and can adapt and transcend, as any alteration can take the system to the edge of chaos. Adaptability is fostered by concentration, improvement and discussion. Transcendence is fostered by attention, dialogue and inquiry. The different paces of the two case study companies led their systems to two different models: the incremental complex adaptive system model and the global complex generative system model. The incremental model is characterized by adaptive learning, incremental innovation and low internationalization; and the global system is characterized by generative learning, radical innovation and global internationalization. The paper ends with an exploration of the academic and management implications of the model.     

Effect of green innovation on job satisfaction of electronic and electrical manufacturers’ employees through job intensity: personal innovativeness as moderator

Green innovation is currently receiving increased international attention as a result of the growing concern on natural resource degradation and environmental pollution among consumers, governments, and communities in general. Although previous studies have indicated the positive effects of green innovation on the performance of manufacturing firms, practicing green innovation may conflict with job satisfaction, which in turn could negatively impact the performance of firms. This study examines job intensity to investigate the effects of green product and process innovation on job satisfaction. In addition, the moderating effect of personal innovativeness is investigated. Data from a survey of 191 respondents in the Malaysian electronic and electrical (E&E) manufacturing firms were analysed using partial least squares technique. Results showed that green product and process innovation have a positive direct effect on job intensity and a negative indirect effect on job satisfaction through job intensity. Personal innovativeness negatively moderates the relationship between green process innovation and job intensity. Theoretical and practical contributions of this study are discussed as well.     

Relationship between Intellectual Capital and Knowledge Management: An Empirical Investigation

Two important streams of the literature have examined intellectual capital (IC) and knowledge management (KM). Surprisingly, they have developed in parallel, without any empirical research on the relationship between them. This article empirically examines how IC and KM affect each other, and also investigates their consequences, viewing three intermediate consequences (dynamic capabilities, efficiency, and innovativeness) to mediate their effects on firm performance. In addition, this article examines the effects of the organization's culture on IC and KM. To address these issues, a comprehensive model is developed and tested using a combination of survey and secondary data of 533 companies in Taiwan. The results support the theoretical model. Major findings include the following: IC affects KM and dynamic capabilities; KM facilitates innovation but not dynamic capabilities or IC; a learning culture facilitates IC and innovation but not KM; firm performance depends on efficiency and innovation, but not directly on dynamic capabilities; and efficiency does not depend on any of the other constructs in the study. The article's implications for research and practice are examined.     

Knowledge Management and Balanced Scorecard Outcomes: Exploring the Importance of Interpretation,Learning and Internationality

The topics of shared interpretation, organizational learning and firm internationalization have been studied extensively. Though considered important factors that shape the international competitive landscape, research synthesizing these interrelated areas has been limited to date. We use the balanced scorecard as a framework for assessing how organizational learning and sensemaking influence actions relating to a global marketing strategy and subsequent financial performance. Using data from 169 multinational corporations, findings indicate that a specific set of knowledge activities is related to balanced scorecard outcomes (e.g. customer performance, innovation and learning performance, and internal process performance). The hypothesized importance of customer performance is confirmed as the only balanced scorecard outcome significantly related to financial performance. A post hoc analysis revealed further insights for future research opportunities. Overall, these results suggest that firms can improve their competitive position by emphasizing shared interpretation within the organization and including balanced scorecard elements when assessing performance.     

Distribution system choice in a service industry: An analysis of international insurance firms operating in the United States

Service firms play an increasingly important role in the global economy. However, the internationalization strategies of such firms, and especially their distribution system choices, have been underexplored in the international management literature. One specific service industry that has internationalized rapidly in recent years is the insurance industry. This paper examines the determinants and performance implications of the choice by international insurance firms between two rival distribution systems: direct writing and independent sales agents. Drawing on the transaction cost theory-based literature on resource commitment, control, and risk, we develop hypotheses on the determinants of the choice between these two distribution systems and on the performance implications of this choice for insurance firms. Analyzing a sample of 168 distribution entries into the United States by insurance firms from six foreign countries over the 1992–2000 period, we find that cultural distance has a U-shaped effect on the probability of direct writing, and that an insurer's intangible assets have a positive effect on this probability. We also find that the direct writing system performs better in terms of profitability, but that the independent agency system performs better in terms of market share growth.