Editorial – Innovation networks: the key role of actors

Editorial – Innovation networks: the key role of actors

Article Type: From: Journal of Business & Industrial Marketing, Volume 30, Issue 3/4

Introduction

Innovation as a collaborative phenomenon has led to the development of the concept of innovation networks (INs) (Dhanaraj and Parkhe, 2006; Von Hippel, 2007), where actors interact to develop innovations of a different and unique nature (Ahuja, 2000; Westerlund and Rajala, 2010):

An innovation network is [about] […] the linkages between organizations […] in order to create, capture and integrate the many different skills and the knowledge needed to develop complex technologies and bring them into the market (Calia et al., 2007, p. 427).

The IN is thus defined as an evolving system of mutual dependency based on resource relationships in which a systemic character is the outcome of interactions, processes, procedures and institutionalization.

Within the IN, resources are created, exchanged, transformed and combined through formal and informal relationships (Freeman, 1991). In the process of developing relationships, firms become highly interdependent on one another. The locus of innovation thus moves from individual firms to networks of interorganizational relationships (Perks and Jeffery, 2006) and actors addressing the “importance of other”.

From a firm perspective, interacting with customers or users (Gruner and Hornburg, 2000; Von Hippel, 1988) and working with suppliers as collaborative partners in technological development have proven to be important sources of innovation (Wynstra and Pierick, 2000). In this lens, innovation is the result of the interplay between several actors (Hagedoorn, 2006; Håkansson, 1987) that, in a global competition, not only focus on internal operations but also consider joint efforts throughout the value and delivery chains. The critical sources of innovation thus often reside in a company’s surrounding business network (Björk and Magnusson, 2009).

Innovation is more and more the result of sophisticated interactions between a number of actors (Tsai et al., 2009; Powell et al., 1996), which makes the innovative process complex, chaotic, non-linear and characterized by both diverging and converging directions (Van de Ven et al., 1999).

Actors coordinate day-to-day activities with various partners to create value for customers (Håkansson et al., 2009). As stated by Gulati (2010), “In order to redefine innovation more broadly than before, companies must involve more voices in the innovation process” (Hakansson and Snehota, 1989; Powell et al., 1996). Interaction and resource allocation occur through a network that involves different individuals and institutions engaged in reciprocal, preferential and supportive actions.

Analyzing innovation on a collective level, concern regarding actors’ heterogeneity and its effects on the innovation process emerges as relevant. However, in marketing studies, this topic has not been significantly developed, giving rise to the need for a call for papers on the topic. Innovation as a collective process involves a multitude of very heterogeneous business actors. Actors – such as companies, intermediaries, research centers, governmental institutions, trade unions, universities, laboratories, technology centers, development organizations, local and international associations – join together to achieve mutually defined goals.

Nonetheless, their goals can be very diverse, and, furthermore, the same actor may try to achieve different goals (Corsaro and Snehota, 2011) in the context of different interaction and innovation processes. The cooperation and the interaction between heterogeneous actors and their commitment produce something new or different (Estrin, 2009). Following this logic, firms shift more activities to external partners, and this requires increasing engagement with them in the innovation process, also leading to the blurring of boundaries between inter- and intraorganizational relationships (Hardy et al., 2003; Gittell and Weiss, 2004).

The Journal of Business & Industrial Marketing’s call for papers on the heterogeneity of actors in INs has attracted the interest of many scholars, to the point that we had to realize two special issues rather than one as initially planned. In total, we received 23 papers, of which eight have been rejected.

The first special issue strictly explores the effects of actors’ heterogeneous INs, while the second concerns organizational efforts to support INs.

Content review

The first special issue includes seven papers, which can be grouped into the following areas:

• exploring the different sources of heterogeneity among actors;

• exploring the various goals of actors in INs; and

• mediating actors’ heterogeneity.

Exploring the different sources of heterogeneity among actors

The paper entitled “Actors’ Heterogeneity and the Context of Interaction in Affecting Innovation Networks”, by Daniela Corsaro and Chiara Cantù, opens the special issue and provides a broad observational perspective on the topic. The authors empirically demonstrate that actors’ heterogeneity in INs can occur at different levels: competencies, knowledge, goals, power and position and perceptions. By analyzing the case of a new developmental solution at Intellimech, the Italian consortium of mechatronics, the paper explored the role of actors’ heterogeneity and the contextual interaction in INs, adopting two levels of analysis. On the collective macro level, the researchers considered the set of actors in the network; on the micro level, they concentrated on each individual business actor as part of the wider network.

The two levels corresponded to two different phases of the Intellimech project. During the first heterogeneous phase, actors collaborated to develop an innovative outcome that could potentially be of value for all of the actors involved; in the second phase, the collective outcome was applied to the specific context of each single actor and thereby became a solution. To stress the relevance of the two phases, the authors have relabeled them in terms of de-contextualizing (de-contextualizing of the innovative outcome with respect to the different actors’ specific features) and re-contextualizing (re-contextualizing of the innovative outcome into the specific context of the actor).

By combining the actor dimension (six elements of heterogeneity) and the context dimension (de-contextualizing and re-contextualizing), the authors identified the 12 processes that characterize the collective innovation processes. These processes are: overlapping, coordination, cross-fertilization, temporal alignment-space, awareness, mediation, conforming, adaptation, leveraging, consolidation, reconfiguring and contamination and concentration. For instance, focusing on the actors’ goals, the research shows that generally these goals tend to diverge, notwithstanding actors’ attempts to realize at least a partial overlapping among their goals that supports business actors to act in a coordinated way and thus increase the effectiveness of their collective action.

The findings also demonstrate a certain level of diversity in actors’ perceptions. For instance, actors involved in the projects had different perceptions of time; in other words, they viewed the timing of the project differently. As stated by some authors, the essence of duality is rhythm […]:

[…] the actors oscillate between searching for information (what resources might be brought to the solution), and practicing and performing the combining of resources that are currently on the table, in order to solve problems (Mason, 2011, p. 152).

The authors conclude that actors’ heterogeneity appears to matter in unique and different ways with respect to the different contexts in which the innovative process takes place. The paper also focused on the role of the single actor in INs and, in particular, on how the two actors’ personas identified by Cantù et al. (2012) – provider and user – coexist with respect to different contexts considered.

Exploring the various goals of actors in INs

The area of research includes the following papers.

Focusing on the heterogeneity in actors’ goals, the paper by Frida Lind, “Goal Diversity and Resource Development in an Interorganizational Project”, discusses goal diversity and resource development in an interorganizational project composed of four members with different goals: two research departments, one firm and one cooperative. The case illustrates how the actors’ goals are nested in different ways and how the goals are and become related to the resources developed during the project. The authors conclude that designing projects with actors who have diverse sets of resources has enormous potential, but such projects need to ensure that the goals and resources eventually match through processes which can emerge during the course of the project. The paper contributes to literature on the organization of collaborative efforts in interorganizational projects between actors with very different goals. The implications for marketing and purchasing managers are relative to differences in goals and when to establish interorganizational collaboration in instances of collaborative projects.

The second paper, “Actors’ roles in interaction and innovation in local systems: a conceptual taxonomy”, by Simone Guercini and Andrea Runfola, presents a concept-based study of the role of the focal firm in local entrepreneurial communities, with the aim of formulating a taxonomy to aid in determining such firms’ contributions to innovation. The paper investigates the role of the actor with regard to the innovation processes performed in both its network and its local system. The basic assumption underlying this paper is that a focal firm, rather than carrying out a single, well-defined role, can leverage a complex set of roles that define its specific “profile”. Accordingly, the push for innovation that a focal firm is able to exert depends on this set of roles, in the sense of taking on one or the other, or a combination of such roles, which are, moreover, determined by the nature of the interactions undertaken by the focal firm with other actors, both internal and external, in the local system. At a more in-depth level, the authors outline how the role of a network actor in the process of innovation is derived from the roles it plays in the interactions it is involved in, and not vice versa. The role of the local system in innovation processes depends on the interactions of the local system actor and the role it plays in such interactions. In addition, the paper outlines how the interactions and roles performed by local system actors define the type of local system with respect to the process of innovation.

The next paper, entitled “Is this network for you or for me? The pursuit of self and collective interests in a strategic network”, by Kristin Munksgaard, aims to provide a more comprehensive understanding of the inter-relatedness of business goals among firms in strategic networks by exploring how different business goals coexist in networks. According to the author, goal formulation and joint network activities provide vital information to investigate how firms utilize their network for the purpose of accessing, capturing and integrating the efforts of others to achieve their own goals.

The authors develop a typology of business goals in networks. “Achievers”, “Wishers” and “Harvesters” appellations help to characterize the different types of goal formulation strategies in these networks. These are related to differences in firms’ perceptions of business opportunities based on joint network activities, as well as different opinions as to the value of the network outcome or effects. In this context, the “Achievers” formulate specific and tangible goals for participating in networks related to sales. Conversely, the “Wishers” consider the collective interest of the network essential. “Harvesters” join network activities for indirect or less tangible effects, such as knowledge sharing, learning from others and the creation of sound business connections. Reaching a goal or achieving a network outcome is perceived as realizable only through the firm’s own efforts. The main findings are related to negotiating and aligning interests among network members. Primarily, the negotiations take form both directly and indirectly; the utilization of team effects is dependent on firm capabilities to execute their own business as well as networking.

The fourth paper, “Divergent goals in supplier-customer co-development process: an integrated framework”, by Minna Oinonen and Anne Jalkala, emphasizes how innovations in business-to-business markets often result from co-development activities between multiple actors, all of which have their own goals for collaboration. The authors examine how the actors’ divergent goals are reflected in their perceptions of the supplier–customer co-development process. A grounded theory approach is adopted to reveal the actors’ perceptions of eight studied supplier – customer co-development processes, of which four also involve an expert partner.

Analysis of the actors’ goals and their perceptions of the co-development process reveals that the actors have divergent goals in the cases studied, and the actors are more strongly involved in those phases that support them in achieving their goals. Five phases emerge from the study in the actors’ joint perspective on the co-development process from the eight cases examined:

1. need matching dialogue;

2. seeking governance consensus;

3. interactive ideation;

4. iterative co-development; and

5. commercialization co-preparation.

The findings suggest that actors are more deeply involved in co-development phases that support the achievement of their goals, and they also perceive these phases of the process in greater detail. Because the supplier’s primary goal is to commercialize the innovation, it is often involved in the process from beginning to end, and often the supplier also coordinates the process.

Mediating actors’ heterogeneity

Innovation and organizational learning are critical in today’s competitive global environment. As such, access to and integration of external knowledge is key to an organization’s success, especially in a knowledge-intensive industry such as the biotechnology industry (Cohen and Levinthal, 1990; Grant, 1996; Grant and Baden-Fuller, 2004; De Clercq and Dimov, 2008). Firms can access external resources such as knowledge through interorganizational networks (Gulati, 1999). This knowledge can be found within the firm but is increasingly discovered outside the firm’s boundaries (Cohen and Levinthal, 1990; Hitt et al., 2000). As a result, a number of third parties, such as government-funded research centers, customers and/or suppliers, are an important source of knowledge to innovative firms. This means that effectively integrating external knowledge is crucial to an organization’s success, especially in a knowledge-intensive industry such as the biotechnology industry (De Clercq and Dimov, 2008).

However, the interactive nature of the innovation process calls for organizational structures and mechanisms to ensure appropriate interactions among the various institutions that make up the spatial systems of innovation. Often the innovation that is co-managed and co-realized by different actors required the combining of technological and managerial competencies.

Moving to organizing for INs in a service context, in the past decade, manufacturers around the world have increasingly invested in integrating services into their core offering systems to respond to the increased complexity and turbulence of markets (Gebauer et al., 2011; Kowalkowski et al., 2013).

The evolution toward a service business orientation in manufacturing companies, also defined as the “servitization of manufacturing” (Vandermerwe and Rada, 1988), has raised the interest of researchers, who, in recent times, have focused on the drivers of servitization (Fang et al., 2008). In addition, the emphasis of the business model has evolved from a transaction- to a relationship-based model (Fang et al., 2008; Gebauer et al., 2011). Along an ideal continuum from products to services, companies are moving toward service organizations in which tangible products constitute only a fraction of companies’ value proposition (Oliva and Kallenberg, 2003).

Service innovation is seen as a continuous process performed by a group of actors who are interrelated in a dense network (Mele et al., 2010; Corsaro et al., 2012). It no longer reflects the content of the service offering, but, rather, the “service system, which is a configuration of resources including people, information and technology connected to other systems by value propositions” (Vargo and Lusch, 2008, p. 145). Consequently, innovation must be considered at a service-system level, and it occurs when service systems are enabled to co-create value differently.

Regardless of the various interpretations provided by managers and companies, the adoption of a service-transition strategy is a critical challenge facing companies (Oliva and Kallenberg, 2003; Jacob and Ulaga, 2008), which requires organizational principles, structures and processes that are new to the product manufacturer (Antioco et al., 2008; Ulaga and Reinartz, 2011).

The paper entitled “Innovative and networked business functions: customer-driven procurement”, by Annalisa Tunisini and Roberta Sebastiani, addresses such issues. According to the authors, most of the studies devoted to an understand of the growing servitization of companies’ offerings have given primary attention to the role played by companies’ functions and activities related to designing and delivering the service offerings – typically product development, operations, finance and sales and marketing (Fang et al., 2008). Little to no attention has been given to the changing role and activities of the purchasing function in the shift of companies’ business focus from products to services. However, procurement as a boundary function has increasingly played an efficient and effective role in connecting companies’ supply chain management with customer satisfaction strategies.

The paper highlights the evolving and articulated role of purchasing as a “mediator” between a company’s customers and suppliers, demonstrating the opportunities connected to the evolution of purchasing from a business function to a strategic business for companies.

By analyzing the IBM case, Tunisini and Sebastiani reveal that as a company’s business strategy becomes focused on client value, its success is strongly dependent on the development of customer-driven procurement. The evolution of the role of procurement is then accompanied by the growing integration between the company’s procurement and sales functions, as well as by the growing interconnection and interaction between the procurement function and the company’s clients.

In the paper entitled “The relationship between organizational characteristics and membership of a biotechnology industry board-of- directors-network”, by Thomas Crispeel, Jurgen Willems and Paul Brugman, the authors observe that biotechnology knowledge is produced and shared by a diverse set of organizations, including universities, not-for-profit research laboratories, academic spin-offs and large industrial conglomerates (Swann and Prevezer, 1996; Coenen et al., 2004). In this context of high technology and science-based industries, directors act as conduits for accessing and absorbing external knowledge spillovers (Audretsch and Lehmann, 2006).

Thus, with regard to knowledge and innovation, the role of the Board of Directors (BoD)’ network is revealed to be of particular interest. This network emerges when directors have a board position in two or more organizations (Dooley, 1969) and thus functions as a link between two different organizations. It is one of the most important interorganizational networks for the exchange of knowledge, and it facilitates interorganizational learning and innovation (Davis et al., 2003).

The authors designed five hypotheses to test the relationship between a biotechnology organization’s characteristics and its membership in one of the most important regional knowledge transfer networks: the BoD network in the Flanders and Brussels biotechnology industry. We conclude that some organizational characteristics influence the presence of a biotechnology organization in the regional BoD network.

Chiara Cantù, Daniela Corsaro and Annalisa Tunisini - Cattolica University, Milan, Italy

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