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Corporate Foresight: Antecedents and Contributions to Innovation Performance

Authors:

Abstract

In this paper we explore the current understanding of corporate foresight as a system for creating understandings of possible futures, factors that drive the need and usage of corporate foresight as well as how corporate foresight can contribute to a firm's innovation performance. Drawing upon still limited research on corporate foresight, we find that 1) there is still little consensus on the concept of corporate foresight, 2) the need for corporate foresight can originate from both internal and external factors, and 3) innovation performance can be positively influenced by a number of factors through corporate foresight. Resulting is a comprehensive theoretical framework incorporating these findings. While research on corporate foresight is still scarce, in particular quantitative research, we call for more quantitative research for which our theoretical model may function as a basis.
This paper was presented at The XXV ISPIM Conference Innovation for Sustainable Economy &
Society, Dublin, Ireland on 8-11 June 2014. The publication is available to ISPIM members at
www.ispim.org.
1
Corporate Foresight: Antecedents and Contributions
to Innovation Performance
Tymen Jissink*
Aarhus University, School of Business and Social Sciences,
Department of Business Administration, Bartholins Allé 10, 8000
Aarhus C, Denmark.
E-mail: tyji@asb.dk
Eelko K.R.E. Huizingh
Rijksuniversiteit Groningen, Faculty of Economics and Business,
Strategic Innovation Management, Netelbosje 2, 9747 AE Groningen,
the Netherlands.
E-mail: k.r.e.huizingh@rug.nl
René Rohrbeck
Aarhus University, School of Business and Social Sciences,
Department of Business Administration, Bartholins Allé 10, 8000
Aarhus C, Denmark.
E-mail: rrohr@asb.dk
* Corresponding author
Abstract: In this paper we explore the current understanding of corporate
foresight as a system for creating understandings of possible futures, factors
that drive the need and usage of corporate foresight as well as how corporate
foresight can contribute to a firm’s innovation performance. Drawing upon still
limited research on corporate foresight, we find that 1) there is still little
consensus on the concept of corporate foresight, 2) the need for corporate
foresight can originate from both internal and external factors, and 3)
innovation performance can be positively influenced by a number of factors
through corporate foresight. Resulting is a comprehensive theoretical
framework incorporating these findings. While research on corporate foresight
is still scarce, in particular quantitative research, we call for more quantitative
research for which our theoretical model may function as a basis.
Keywords: Corporate foresight; environmental uncertainty; environmental
complexity; environmental dynamism; strategic orientation; value contribution;
innovation performance; firm performance
This paper was presented at The XXV ISPIM Conference Innovation for Sustainable Economy &
Society, Dublin, Ireland on 8-11 June 2014. The publication is available to ISPIM members at
www.ispim.org.
2
Introduction
As futures are inherently uncertain, firms face difficulties in making strategic decisions to
ensure future firm performance. When an organization is faced with an external
environment that is highly uncertain and unanalysable, it may have to rely on
interpretations of this environment in order to survive (Daft and Weick 1984). Firms may
thus benefit from adopting corporate foresight that provides understandings of possible
futures to come, in order to support decision making and innovation in firms by (Alsan
and Oner 2003). Corporate foresight has been proven to be beneficial for competitiveness
and innovation, most notably in the case of Shell during the 1973 oil crisis (Wack 1985).
However, corporate foresight as a formalized practice in firms is still only employed to a
very limited extent (Rohrbeck and Schwarz 2013). This raises the question whether
organizations actually need corporate foresight or whether its contributions to
performance acknowledged. These questions can be related to both contextual factors of
the organization, as well as organizational characteristics. Scholars have put forward that
the need for corporate foresight arises from different contextual factors, such as
environmental uncertainty (Vecchiato 2012), and organizational factors such as strategic
orientations (Becker 2002).
However, the limited usage of corporate foresight by organizations may also be
related to the ill-understood and perceived value contribution by the organization and
prevents the adoption of corporate foresight by organizations (Rohrbeck and Schwarz
2013). Nevertheless, other studies, in particular case studies, have identified that insights
derived from corporate foresight led to organizational innovation and/or other
innovations (Costanzo 2004, Andriopoulos and Gotsi 2006). The study by Andriopoulos
and Gotsi (2006) found that organizations can use foresight as a way to stimulate
innovation; constantly monitoring the environment to discredit or validate potential
futures gives way for new innovation avenues. As the notion of innovation having a
positive influence on performance has generally been accepted in literature (Manu and
Sriram 1996), it would be interesting to posit corporate foresight as a system to improve
innovation performance, and by that ultimately firm performance.
As literature lacks a theoretical framework that includes both antecedents and
outcomes of corporate foresight, we aim to synthesize recent relevant findings in the field
of corporate foresight in a holistic theoretical framework, addressing the questions of 1)
in what kind of business environments is corporate foresight mostly needed? (i.e. the
context of the business environment), 2) what kind of firms tend to be engaged in
corporate foresight? (i.e. what are the organizational antecedents to corporate foresight),
and 3) how does corporate foresight influence innovation performance and firm
performance? (i.e. the outcomes of corporate foresight).
The paper is structured as follows. First, a small introduction to corporate foresight as
a system in an organization is given to explain the core concept. Second, contextual
factors and organizational factors are discussed in relation to corporate foresight and
propositions proposed for their relationship with corporate foresight. Third, the
relationship of corporate foresight with innovation performance is discussed and
relationships are proposed. Lastly, the practical and theoretical contributions are given, as
well as a conclusion and future research directions.
Corporate foresight as a system
Coates (1985, p. 30) defined foresight as the “overall process of creating an
understanding and appreciation of information generated by looking ahead”. More
specifically, we define corporate foresight as follows:
Corporate foresight refers to an organizational system that provides an organization
with understandings of possible and desirable long-term futures through the acquisition,
interpretation and diffusion of future-related information to facilitate organizational
responses towards those futures.
With our definition, we clearly separate corporate foresight from formal planning and
actions resulting from this planning. As such, corporate foresight is an input into strategy-
making which, in turn, directs strategic planning and action. This means that corporate
foresight only enriches the context in which strategic decisions are made (Voros 2003).
Furthermore, foresight is not about ‘getting the right prediction’ of a single future at a
single point in time, which is the underlying assumption of forecasting (Cuhls 2003), but
deals with the assumption that there are many different possible and desirable futures
(Martin 2010).
Literature has not accepted upon a single conceptualization of corporate foresight.
Rather, many different conceptualizations exist. Some scholars see corporate foresight
merely as a process of activities (Horton 1999, Becker 2002) while others see it as a
system of elements (Rohrbeck 2011, Paliokaitė and Pačėsa 2014). A well-developed and
comprehensive model on corporate foresight was introduced in the study by Rohrbeck
and Gemuenden (2008). In this study, they conceptualized corporate foresight as a system
of capabilities, each contributing differently to the creation of understandings of futures
and facilitation of organizational responses towards those futures.
In the systems-view on corporate foresight, the approach goes beyond merely
environmental scanning and intelligence gathering, or a set of methods and techniques to
create an understanding of possible futures. Rather, it seeks to connect itself to strategic
and innovation management as an anticipatory system to facilitate responses to insights
of possible futures (Battistella 2013). It can be understood as a holistic approach to
identify possible futures that are not narrow and/or shallow in the sense that it aims to
identify changes from related and unrelated environments to gain a broad understanding
of possible futures (Rohrbeck 2011). Such narrow or shallow views of the future are
usually acquired by merely interpreting simple trends (Voros 2003). Corporate foresight
can thus be considered a futures orientation of the organization; strong foresight
capabilities aiding in organizational anticipation, or even to an organizational "way of
life" (Hines 2002, p. 343).
While the systems view on corporate foresight is shared by other authors as well
(Ratcliffe 2006, von der Gracht et al. 2010, Battistella 2013), no consensus is reached on
its exact conceptualization. A well-developed conceptualization of corporate foresight as
a system by Rohrbeck (2011) is based on qualitative studies of industry’s best practices
with foresight in firms. This framework has also been used in subsequent (quantitative)
studies (Rohrbeck et al. 2009, Rohrbeck and Schwarz 2013). In this framework, corporate
foresight consists of the capabilities information usage, method sophistication, people &
networks, organization, and culture. This framework does not focus on foresight
methods, techniques or activities, but rather on organizational capabilities. The
This paper was presented at The XXV ISPIM Conference Innovation for Sustainable Economy &
Society, Dublin, Ireland on 8-11 June 2014. The publication is available to ISPIM members at
www.ispim.org.
4
capabilities in the framework reflect an organization’s corporate foresight system’s
strength in identifying, interpreting, and formulating responses to change. More
specifically, information usage reflects the capability of sensing weak signals in the
external environment in a broad-range of information sources. Method sophistication
reflects the extent to which an organization uses structured ways (i.e. methods and
techniques) to process acquired information on relevant trends, issues, and opportunities.
People & networks reflects the extent to which people involved with corporate foresight
have specific characteristics beneficial for foresight, such as having a broad knowledge
base, and strong internal and external networks. Organization refers to what extent an
organization has formal support and approaches in place to manage foresight and
informal approaches to support continuous foresight activities (e.g. continuous scanning
for change). Lastly, culture reflects whether the organizational culture is supportive of
corporate foresight; i.e. the cultural support for scanning, interpreting, and
communication activities. Overall, the five capabilities as identified by (Rohrbeck 2011)
highlight the main dimensions of corporate foresight, as such that an organization should
aim to fulfil the capabilities as best it can. However, all are essential for an effective
implementation of corporate foresight (Rohrbeck 2011).
Many studies to date have shown a focus on the methods and techniques as part of
corporate foresight, however, far less attention has been given to the organizational
aspects of corporate foresight (Battistella 2013). As the framework by Rohrbeck (2011) is
a well-developed and empirically derived and applied framework in literature, we have
opted to conceptualize corporate foresight in this paper according to this framework.
Figure 1 Conceptual framework of contextual and organizational factors, corporate
foresight, innovation performance, and firm performance
Context, organizational characteristics, and corporate foresight
While corporate foresight as an organizational phenomenon could be beneficial for any
type of organization, we address the questions of in what kind of business environments
corporate foresight would mostly be needed and what kind of firms tend to engage in
corporate foresight.
We build upon the findings of Becker's (2002) exploratory empirical study on
corporate foresight in European organizations. The study uncovered, amongst others,
both internal and external factors acting as antecedents to corporate foresight. We keep
the same dichotomy between external (context) and internal (organizational) antecedents
of corporate foresight. The conceptual framework of this paper is shown in figure 1.
Contextual
factors
Corporate
foresight
Organizational
factors
Innovation
performance
Firm
performance
Context and corporate foresight
Contextual factors aim to explain the need for corporate foresight being driven from
factors outside the organization’s boundaries and control. Only few studies have sought
to explore specifically the relationship between an organization’s environment and the
need for corporate foresight in detail.
The exploratory study by Becker (2002) found three contextual factors we included,
being 1) unpredictability of events in the external environment, 2) complexity of the
relation between technology and social/cultural context, and 3) uncertainty in the
environment as to what organizational responses to develop. Few other studies have seen
a specific focus on environmental factors and corporate foresight. For instance, Costanzo
(2004) studied specifically the need for corporate foresight in high-speed environments,
and uncertain environments by(Vecchiato 2012). While these studies have a more in-
depth focus on contextual variables and corporate foresight, many studies in the field of
corporate foresight commonly mention uncertainty and dynamism as typical drivers. We
seek to complement this by providing an in-depth review on the relationships between
contextual variables and corporate foresight.
Environmental dynamism has been argued to consist out of two environmental
characteristics: the rate-of-change (turbulence/velocity), and the unpredictability of
change (Miller and Friesen 1982). A more dynamic environment would imply a high rate
of unpredictable changes being brought about. A high rate-of-change thus implies a
continuous stream of changes in the environment. As such, changes arise quickly and
decisions to respond to these changes can be considered short-term. Costanzo (2004)
found that a high rate-of-change resulted in the need for corporate foresight to keep up
with this continuous stream of changes. However, Becker (2002) found that organizations
in low rate-of-change environments (i.e. chemicals industry) were more reliant on
corporate foresight than organizations in higher rate-of-change environments when paired
with long development cycles and high development costs. Corporate foresight can thus
be beneficial as an organizational system to gather insights from emerging developments
in the environment, irrespective of environmental rate-of-change. Based on the findings,
it is insufficient to propose that only environmental rate-of-change can act as a driver for
corporate foresight unless paired with the unpredictability of such changes. Only when a
changing environment becomes increasingly unpredictable, it calls for a more qualitative
and comprehensive approach to create an understanding of possible futures, rather than a
more quantitative forecasting or prediction approach (Becker 2002, Ratcliffe 2006). The
study by Becker (2002) found that organizations use corporate foresight as a way to
prepare for possible unpredictable events by providing future insights that could function
as an ‘early warning system’ to such events. In line with Vecchiato (2012), we would
propose that only environmental dynamism (as a function of rate of change and their
unpredictability) can drive the need for corporate foresight:
Proposition 1 Environmental dynamism has a positive effect on corporate foresight
Environmental complexity is related to difficulty of understanding the factors in an
organization’s environment that are related to decision-making (Duncan 1972). In this
sense, complexity is related to the extent of heterogeneity in the environment (i.e. having
many dissimilar actors and factors (Verdu et al. 2012), and the interdependence of these
factors between each other (Levinthal 1997). The heterogeneity and interdependencies
This paper was presented at The XXV ISPIM Conference Innovation for Sustainable Economy &
Society, Dublin, Ireland on 8-11 June 2014. The publication is available to ISPIM members at
www.ispim.org.
6
lead to futures becoming increasingly more difficult to understand, let alone predict, and
leads to difficulties for organizations in gathering sufficient information needed to
understand the complex interrelationships (Sia et al. 2004, Siggelkow and Rivkin 2005).
To understand such complexity, an organization needs to gain insight into its
environment by extensive wide-range search for information and generate knowledge on
what factors are key drivers of change and how these factors are interdependent;
something corporate foresight aims to do. Organizations that operate in simple
environments have less of a need to adopt a similar approach, and may even result in
resource wastage (Day and Schoemaker 2005). Corporate foresight thus has great
potential to raise awareness and generate knowledge about a complex environment by
ultimately coming up with reasonable interpretations of how the future may develop
(Becker 2002, Vecchiato and Roveda 2010, von der Gracht et al. 2010):
Proposition 2 Environmental complexity has a positive effect on corporate foresight
Environmental uncertainty has long been emphasized to be an issue in the process of
creating a successful future path for the organization by decision-makers (Vecchiato and
Roveda 2010). Environmental dynamism and complexity have been referred to as being
the two factors that create an uncertain environment (Duncan 1972, Verdu et al. 2012).
When an environment becomes increasingly uncertain (i.e. more dynamic and complex),
decision-making is reliant on beliefs and mental models to handle this uncertainty. Such
beliefs and mental models provide a frame of reference to base decision-making on
(Vecchiato and Roveda 2010). Corporate foresight can be considered a relevant means to
create and update organizational mental models of the environment and their way of
doing business in order to handle the high amounts of environmental uncertainty
(Vecchiato and Roveda 2010):
Proposition 3 Environmental uncertainty has a positive effect on corporate foresight
Organizational characteristics and corporate foresight
Organizational factors aim to explain the need for corporate foresight as being driven
from an organization’s characteristics. More specifically, we focus in this section on what
kind of organizations tend to engage in corporate foresight. In order to do so, we explore
the relationships of a variety of strategic orientations with corporate foresight. Some
studies mention certain strategic orientations in relation with corporate foresight (Becker
2002, Day and Schoemaker 2005, Rohrbeck 2011), however they use a variety of
descriptions for these strategic orientations. In this study, we adopt a range of well-
known strategic orientations from literature and examine their potential relationship with
corporate foresight.
The generic strategy typology by Miles et al. (1978) has emerged as one of the
dominant frameworks of strategic orientation (Slater et al. 2006), and provides a
generalizable view on what strategic orientations instigate the need for corporate
foresight. Also, this typology is highly suitable in our current research given its focus the
alignment between strategic orientation and the dynamics and uncertainty of the
environment (Miles et al. (1978). Next to this generic typology of strategic orientations
we included entrepreneurial orientation, market orientation, and technology orientation.
Research found that corporate foresight is very much embedded in entrepreneurial
activities, and still favours a focus on market and technology aspects (Becker 2002).
Miles and Snow generic strategies have not received specific focus in corporate
foresight literature, but can be applied nonetheless. Recent research identified strategic
orientations as antecedents to corporate foresight (Becker 2002, Day and Schoemaker
2005, Rohrbeck 2011). For instance, Becker (2002) refers to an ’innovation-leader’
strategy as a motive for corporate foresight, while Day and Schoemaker (2005) and
Rohrbeck (2011) refer to a strategy characterized by innovation and growth. Both
strategic orientations share many similarities with the ’prospector’ strategic orientation by
Miles and Snow. Prospectors aim to create future views beyond their own business area
to identify opportunities (Slater and Mohr 2006), and are more future oriented in their
decision making processes. Prospectors actively search for new opportunities and seek a
comprehensive approach to generate and evaluate a range of alternative opportunities
(Slater et al. 2006). Similar characteristics were found in the study by Andriopoulos and
Gotsi (2006) in which an organization used corporate foresight to identify new
opportunities, exploiting those opportunities, and consequently evaluated those newly
exploited opportunities using corporate foresight.
In contrast, defenders are have less a need to create future views and are less future
oriented in their decision making, and only exert some amount of environmental scanning
and interpretation. Defenders only focus on a narrow market segment and have less a
need for a comprehensive approach to generate possible future alternatives than
prospectors do (Slater et al. 2006). However, they still incorporate a certain extent of
environmental analysis and interpretation to defend their narrow market. This is
furthermore in line with Hambrick (1982), who argued that while the extent to which
either prospectors or defenders scanned the environment was not significantly different,
the internal processes with which it was analysed and interpreted would differ
significantly. Research has typically considered the prospector and defender types as
being two extremes (Hambrick 2003).With regard to the other two strategic orientations;
the reactor is not associated with any form of consistent business, while the analyser is
considered a hybrid of both prospector and defender.
Contingency theory posits that each strategic orientation fits a certain set of
organizational characteristics to achieve the strategy and optimal performance (Slater et
al. 2006). Therefore, prospectors would show a more sophisticated approach to corporate
foresight in order to achieve its strategic goals and is expected to show the strongest need
for corporate foresight. While defenders are typically considered the extreme of
prospectors, they too can show signs of exhibiting corporate foresight, rather than being
negatively associated with it. We would thus expect that prospectors, analysers, and
defenders are positively associated with corporate foresight, with prospectors being most
strongly associated and defenders least strongly. As reactors have no intention of
incorporating future views into their decision making but rather react to changes as they
come their way, we would expect reactors to be negatively related to corporate foresight.
Proposition 4 Prospector, analyser, and defender strategic orientations have a
positive effect on corporate foresight
Proposition 5 Reactor strategic orientation has a negative effect on corporate
foresight
This paper was presented at The XXV ISPIM Conference Innovation for Sustainable Economy &
Society, Dublin, Ireland on 8-11 June 2014. The publication is available to ISPIM members at
www.ispim.org.
8
Entrepreneurial orientation reflects a collection of values and beliefs that are a
requisite for organizations to be entrepreneurial (Miller 1983). It reflects renewal of
market offerings, taking risks in trying out new products, and be more proactive than
competitors towards new market opportunities (Covin and Slevin 1991, Wiklund and
Shepherd 2005). An integral part of highly entrepreneurial firms is their proactive
behaviour to identify new opportunities and manage risk-taking (Covin and Miles 1999).
Furthermore, entrepreneurial organizations are more willing to commit to and engage in
creative processes and experimentationin other words, they are more open to new ideas
and change (Lumpkin and Dess 1996, Rauch et al. 2009).
As Godet and Durance (2011) argue, two important attitudes are needed for corporate
foresight: 1) take risks as the future is inherently uncertain, and 2) as corporate foresight
is concerned with identifying probable and desirable futures, an entrepreneurial
organization can construct its own desired future through combining proactivity with
foresight. Research by Becker (2002) argued that corporate foresight seems inevitable for
entrepreneurial and innovation-oriented organizations, as their strategies force them to
constantly monitor for new opportunities and threats to pro-actively respond to these to
secure or strengthen future competitive positions:
Proposition 6 Entrepreneurial orientation has a positive effect on corporate foresight
Market orientation is an organizational orientation that fosters behaviour aimed at
efficiently and effectively creating superior value to customers (Narver and Slater 1990).
A market oriented firm is one that shows a commitment to a set of processes, values, and
beliefs that reflect the philosophy of basing decisions on customers and competitors.
These decisions are based on a deep understanding of customer’s preferences and
behaviour, and competitor’s abilities and intentions (Day 1994). This strategic orientation
can be considered externally focused and leads to a greater need for the search of new
opportunities and threats (Spanjol et al. 2011).
As market orientation aims to get a deep understanding of both customers and
competitors, corporate foresight can be needed to gain such deep understandings
(Rohrbeck 2008). Through analysing exogenous factors such as government regulation,
technology, and competitors through corporate foresight, a market oriented firm can
identify consumer’s future needs and preferences (Kohli and Jaworski 1990, Huston
2004, Ruff 2006). Firms risk losing the foresight of innovating creatively when they
solely focus on satisfying current needs from customers and may lead to short-
sightedness, as consumers are inherently short-sighted (Hamel and Prahalad 1994).
Similarly, corporate foresight may be very beneficial to create a deep understanding
of competitors (Brenner 1996). Corporate foresight allows to create an understanding of
competitors’ market-oriented performance and what its future moves may be. Indeed,
research by Becker (2002) found that corporate foresight is widely used as a means to
gain market-related information and understandings. Therefore, it is expected that market
orientation is positively related to corporate foresight:
Proposition 7 Market orientation has a positive effect on corporate foresight
Technology orientation refers to an emphasis to employ state-of-the-art technologies,
as those who are technology oriented are driven by the philosophy of consumers
preferring technologically superior products/services (Gatignon and Xuereb 1997, Zhou
et al. 2005). Therefore, a technology oriented firm opts to use the latest technologies in its
products/services, and as such is committed to R&D and acquisition of new technologies
(Gatignon and Xuereb 1997). Technology-oriented organization can generally be
considered internally focused using existing knowledge and expertise to create new
technological solutions (Spanjol et al. 2011).
However, the internal focus does not necessarily lead to neglecting any external focus
on emerging opportunities and threats in the market (Gatignon and Xuereb 1997). As
technologies can be both seen as drivers of and driven by change in social and economic
areas, corporate foresight can provide valuable input into decision-making about future
R&D activities (Becker 2002). While firms can pursue both a focus on market- and
technology oriented strategies, it is generally the case that a firm’s set of resources and
capabilities lead to favouring one strategic orientation or the other (Spanjol et al. 2011).
In the case of technology-oriented firms, we would expect to see that their increased
focus on technologies leads to a decreased external focus and thus the need for corporate
foresight:
Proposition 8 Technology orientation has a negative effect on corporate foresight
Corporate foresight and innovation performance
Despite all interest for corporate foresight, it is not easy to identify corporate foresight’s
influence on performance. A key factor that limits our research abilities on the
relationship between corporate foresight and performance is that the effects are only
measurable or observable in the long-term (Horton 1999, Daheim and Uerz 2006).
Nevertheless, several studies have sought to uncover potential value contributions of
corporate foresight in a wide variety of fields (Becker 2002, Rollwagen et al. 2008,
Rohrbeck 2012, Rohrbeck and Schwarz 2013). Potential value contributions of corporate
foresight generally revolve around reducing uncertainty and identifying new
opportunities and threats.
We look into how corporate foresight can contribute to innovation performance which
is defined as the degree of success an organization attains by achieving goals related to
new products or services (Montoya-Weiss and Calantone 1994). The importance of
innovations for organizational performance has long been emphasized since Schumpeter
(1934) presented his theory on economic development. However, the study of Rohrbeck
and Schwarz (2013) finds that the few organizations that do employ corporate foresight
have limited knowledge on- or are unable to explain how it has contributed to their
innovation performance, and thus perceive very limited value contributed by corporate
foresight only 32% of the top performing firms reported positive corporate foresight
contributions in the field of innovation management, making this a worthwhile research
avenue.
Innovation performance is argued to be linked to an organization’s corporate foresight
capability (von der Gracht et al. 2010, Rohrbeck and Gemünden 2011, Paliokaitė and
Pačėsa 2014). The study by Rohrbeck and Gemünden (2011) provides insight in how
corporate foresight can take on three distinct roles that translate future insights for the
innovation process to consequently improve innovation performance. These roles are the
1) initiator triggering new innovation initiatives, 2) strategist providing guidance and
alignment of innovation activities with strategy, and 3) opponent challenging
This paper was presented at The XXV ISPIM Conference Innovation for Sustainable Economy &
Society, Dublin, Ireland on 8-11 June 2014. The publication is available to ISPIM members at
www.ispim.org.
10
innovation projects to ensure innovativeness. More specifically, corporate foresight as
initiator ensures that an innovation portfolio is fed with information about and ideas for
new customer needs, emerging technical trends, and new concepts introduced by
competitors and ensures innovation novelty and ability to compete in the marketplace.
Corporate foresight as strategist aims to assess current innovations and their place in
future, keeping those innovations up-to-date with information about emerging
opportunities and threats, and ensures innovation projects are aligned with the
organization’s strategy. Corporate foresight as opponent aims to challenge current ideas,
assumptions, and innovations to ensure state of art R&D projects and assesses the
innovativeness of ongoing innovation projects in the future, and ensures that the
organization invests in the right innovations. It is therefore expected that all three roles
would see a positive contribution to innovation performance, and leads to the following
propositions:
Proposition 9 Corporate foresight as initiator role has a positive effect on innovation
performance
Proposition 10 Corporate foresight as strategist role has a positive effect on
innovation performance
Proposition 11 Corporate foresight as opponent role has a positive effect on
innovation performance
While these roles cover many aspects related to innovation performance, we found
that corporate foresight can contribute in other areas as well. Before the establishment of
an innovation, corporate foresight can provide an organization with lead time on
innovations (von der Gracht et al. 2010). By gaining important information on possible
future events, threats, and opportunities through corporate foresight before competitors
do, it can provide lead-time on possible innovation projects. Organizations that learn
quicker than its competitors can react quicker to future customer needs than those who do
not (Woodruff 1997). Many authors argue that lead time is the most powerful source of a
competitive advantage and with that the most effective tool to appropriate returns from
innovations (Stalk 1988, Kim and Mauborgne 1997):
Proposition 12 Corporate foresight as an ability to increase innovation lead time has
a positive effect on innovation performance
After the establishment of an innovation, corporate foresight can contribute to ongoing
assessments of an innovation’s future novelty and success in the marketplace by reducing
uncertainty of the innovation’s launching environment (i.e. market demands,
technological trends, competitor moves). Corporate foresight allows the organization to
spot relevant threats and opportunities and address them in an appropriate way
(Kuhlmann 2001). For instance, Grupp and Linstone (1999) view foresight as being
helpful in establishing feedback loops between expected future demand and present day
investments; investments related to the established innovation itself. Through this,
innovations can be adjusted or even terminated, and consequently leads to an increased
innovation performance:
Proposition 13 Corporate foresight as an ability to reduce uncertainty surrounding
an innovation and its launching environment has a positive effect on innovation
performance
The importance of innovation for firm performance is well recognized in the
innovation literature (Darroch 2005). In this paper we refer to firm performance as the
financial success of innovations of both services and products (Im and Workman Jr
2004). This positive relationship between innovation performance and firm performance
has been studied by several authors (Atuahene-Gima 1996, Han et al. 1998). They argue
that innovation is a crucial factor for firm performance, and we would consequently
propose similarly:
Proposition 14 Innovation performance has a positive effect on firm performance
Contributions, conclusion, and future research
Theoretical contributions
We have provided a clear definition and scope of corporate foresight for future research
to operate within, and posit it as an organizational system aimed at gaining insights about
possible futures that facilitate organizational responses towards those futures. Our
theoretical framework shows that corporate foresight can be seen as a function of both the
firm’s environment calling for corporate foresight in order to make sense of it, and
strategic orientations that may need corporate foresight to achieve its strategic goals.
Corporate foresight can also function system to gather insights from the environment, and
translate them into usable inputs for the innovation process to consequently improve a
firm’s innovation performance. Having put forward different ways of how corporate
foresight can contribute to innovation performance more explicitly, we have aimed to
complement the still ill-understood corporate foresight innovation link (Rohrbeck and
Schwarz 2013).
Practical contributions
A first practical implication is that corporate foresight is affected by several
organizational and environmental factors. Managers must be aware of the factors in our
theoretical framework and should assess whether corporate foresight is needed and fits
with their context, both internally as part of the organization’s functioning, and externally
as part of the business environment. Otherwise, it may lead to wasting resources and
suffer from information overload (Day and Schoemaker 2005).
A second practical implication is that managers can gain insights into how corporate
foresight can contribute to innovation projects, either before, during, or after the
innovation process. This lack of insight has been a major factor in holding back
organization’s adoption of corporate foresight practices (Rohrbeck and Schwarz 2013).
This paper was presented at The XXV ISPIM Conference Innovation for Sustainable Economy &
Society, Dublin, Ireland on 8-11 June 2014. The publication is available to ISPIM members at
www.ispim.org.
12
Conclusion and future research
In this paper we have identified both contextual and organizational factors that drive
the need for corporate foresight, as well as contributions of corporate foresight to
innovation performance, and ultimately firm performance. Together with proposed
directions of the relationships between the antecedents, corporate foresight, and the
outcomes, we hope that this framework may act as an instrument to guide further
research in the field of corporate foresight, and hopefully lead to more supporting
(quantitative) research on the matter.
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... Scholars posit that the concrete value of CF is difficult to quantify, not represented in KPIs and measurable only on the long-term (Jissink et al., 2014;Rohrbeck & Schwarz, 2013). Once studying the outcomes of CF, extant literature is concerned with the question of how CF affects the innovation of a firm (see Fergnani, 2022;Marinković et al., 2022;Rohrbeck et al., 2015, for a review), however with a strong focus on innovation performance (Jissink et al., 2014) or innovation capacity (Rohrbeck & Gemünden, 2011). ...
... Scholars posit that the concrete value of CF is difficult to quantify, not represented in KPIs and measurable only on the long-term (Jissink et al., 2014;Rohrbeck & Schwarz, 2013). Once studying the outcomes of CF, extant literature is concerned with the question of how CF affects the innovation of a firm (see Fergnani, 2022;Marinković et al., 2022;Rohrbeck et al., 2015, for a review), however with a strong focus on innovation performance (Jissink et al., 2014) or innovation capacity (Rohrbeck & Gemünden, 2011). Further, Iden et al. (2017) find that companies often engage in foresight activities for the purpose of improved innovation processes. ...
... In their aspiration to contribute to a widespread application of foresight in companies, scholars studied the effect of CF on the innovation performance (e.g., Jissink et al., 2014) or innovation capacity (e.g., Rohrbeck & Gemünden, 2011) of companies. By doing so, they neglect the relevance of an innovation climate that creates an atmosphere in which individuals feel comfortable and encouraged to engage in innovating activities (Ahmed, 1998). ...
Article
Full-text available
Corporate foresight (CF) can be considered a future-oriented capability that incorporates perceiving and prospecting. Extant CF-related studies tackle the CF−innovation relationship but do not provide details on how CF relates to innovation climate. As we assume that the innovation climate of companies is a relevant antecedent to innovation, we conduct a quantitative empirical study with 147 upper-tier managers to investigate how CF and the respective training of managers relate to a corporate's innovation climate. Results show that strong perceiving and prospecting positively influence the innovation climate, whereby prospecting is of particular importance. Further, we find that training managers in future-oriented capabilities is only under certain circumstances (i.e., low prospecting) beneficial to the innovation climate in companies. K E Y W O R D S corporate foresight, foresight, innovation, innovation climate, scenario planning
... The Maturity Model for the Future Orientation of a Firm provides a comprehensive and empirically derived framework for corporate foresight whereas the larger part of research in the domain focuses on methods, tools or specific aspects of foresight systems (Jissink, Huizingh & Rohrbeck, 2014b). In the following section, insights from the previously described cases are used to discuss the Maturity Model for corporate foresight from a relational view, including three supplemental interviews that were not included in previous publications about the EIT Digital case. ...
... Rather than a processoriented understanding of foresight as advocated by some scholar such as Becker (2002); Horton (1999); Müller (2008), Rohrbeck defines corporate foresight as an ability, thereby following the definition of several prior authors (Tsoukas & Shepherd, 2004;Krystek, 2007;Slaughter, 1998). Specifically, he defines corporate foresight as a system that integrates multiple organizational capabilities instead of analyzing single techniques, activities, methods, or other single structural elements (Jissink et al., 2014b;. The model was developed based on qualitative case studies with multiple firms that have foresight systems in place, and has been applied in further studies, including theory-testing works Paliokaitė & Pacěṡa, 2015;. ...
... in Rohrbeck's dissertation and succeeding research in this research stream (Jissink et al., 2014a(Jissink et al., , 2014b. ...
Thesis
Firms are facing an increasingly complex environment and highly complex product and service landscapes that often require multiple organizations to collaborate for innovation and offerings. Research in this dissertation was based on the expectation that corporate foresight activities will increasingly be embedded in interorganizational settings and a) can draw on such settings for the benefit of themselves and b) may contribute to shared visions, trust building and planning in these network organizations. The goal of this dissertation is to contribute to the corporate foresight research field by investigating capabilities, practices, and challenges particularly in the context of interorganizational settings and networked organizations informed by the theoretical perspectives of the relational view and dynamic capabilities. The EIT Digital is a central case of this dissertation, supplemented with insights from three additional cases. Research draws on the rich theoretical understanding of the resource-based view, dynamic capabilities, and particularly the relational view to further the discussion in the field of corporate foresight—defined as foresight in organizations in contrast to foresight with a macro-economical perspective—towards a relational understanding. Further, Rohrbeck’s Maturity Model for the Future Orientation of Firms is used as conceptual frame for corporate foresight in interorganizational settings. The analyses—available as four individual publications complemented by on additional chapter—are designed as exploratory case studies based on multiple data sources including an interview series with 49 persons, two surveys (N=54, n=20), three supplementary interviews, access to key documents and presentations, and observation through participation in meetings and activities of the EIT Digital. This research setting allowed contributing to corporate foresight research and practice by 1) integrating relational constructs primarily drawn from the relational view and dynamic capabilities research into the corporate foresight research stream, 2) exploring and understanding capabilities that are required for corporate foresight in interorganizational and networked organizations, 3) discussing and extending the Maturity Model for network organizations, and 4) to support individual organizations to tie their foresight systems effectively to networked foresight systems.
... In this regard, CSF facilitates open innovation, by targeting potential partners whose capabilities and visions complement the firm's own competences and images of the future [22], [28]. Thus, CSF practices in organizing can enable a faster lead time, contribute to ongoing assessments of the novelty, performance and potential market success of new products, in ways that can help firms learn and react faster to further market needs [36], [82]. ...
... Activities that engage external experts through brainstorming, expert panels or future workshops/conferences can help reduce blind spots in the focal firm's peripheral vision [34], [68]. The result of the perceiving practices is the sensing and identification of what can be described as weak and strong signals of change, ahead of the competition [36], [60]. This may involve the leveraging of the embodied knowledge of the innovation network, orchestrated by the focal firm to improve its understanding of the "product concept," which involves the integration of both technologies and the user's performance expectations. ...
... While our findings revealed that incorporating external collaborative partners' inputs in terms of complementary or differing knowledge, information, resources, perspectives, and ways of doing things into the foresight process not only remedies SF's deficiencies, namely its one-dimensionality [22], [45], but also enhances the effectiveness of SF with richer and broader data than that within organizational boundaries in managing innovation process. CSF enabled firms to prioritize opportunities in the context of various uncertainties and resource constraints and also to respond and act earlier than others [5], [36]. Insights gained through ongoing interaction with external knowledge sources drove firms constantly to renew and reconfigure their routines, practices, knowledge bases, and structures, in order to prepare for future competition. ...
Article
We integrate insights from open innovation and collaborative strategic foresight (CSF) to theorize collaborative innovation practice. Adopting a case-based approach, we draw qualitative insights from two Chinese pharmaceutical firms—one private and one state-owned, both engaged in new product development (NPD) projects. Focusing on how firms leverage CSF to support their NPD, we offer an interpretive account of how the two firms take different approaches to orchestrating their strategic partnerships to identify, explore, and exploit opportunities for innovation. This article sheds light on how focal firms, through SF practices of perceiving, prospecting, and probing, translate ideas and insights gained from collaborating partners into action to support their innovation processes. Expanding and shifting the focus of traditional strategic foresight from an inward-looking orientation to an outward-looking CSF, we show how focal firms could tap into distributed knowledge embedded in sources located beyond the theoretical boundaries of the firm. We argue that appropriately managed CSF at different stages of NPD could help companies to better sense, seize, and integrate potentialities and limits otherwise overlooked by their competitors. We reveal that the type of ownership, an unexplored factor, explains a firm's different CSF approaches (explorative versus exploitative) in innovation for NPD.
... The second reason is operational. Indeed, corporate foresight has been defined both as a set of activities-that is, the specific tools and techniques used in corporate foresight exercises-and as a set of firmlevel capabilities, so that, in the futures studies and foresight literature, there is still no complete consensus on its conceptualization (Jissink, Rohrbeck, & Huizingh, 2014;Rohrbeck, 2010). However, it seems that the conceptualization of corporate foresight as an activity (or activities) has won the majority of scholarship as futures studies and foresight scholars have primarily studied the effects of corporate foresight on organizational outcomes with quasiexperiments or ad hoc case studies. ...
... Therefore, in the spirit of futures studies, corporate foresight does not aim to predict the future where the organization will operate, but rather to create organizational futures through present choices matured through foresight practices (Jissink et al., 2014;Vecchiato, 2012bVecchiato, , 2015aVecchiato, , 2015b. These practices are participatory (Wright & Goodwin, 2009) and attuned to involving a variety of interests in the futures-creation process, including those of different cultures and future generations (Inayatullah, 2002). ...
... For the same reason, corporate foresight is also distinct from, while overlapping with, strategic decision-making. Indeed, it is an input to decisionmaking (Jissink et al., 2014;Stokke, Raltson, Boyce, & Wilson, 1990), and can be considered as complementary to it (Godet, 1990). It enriches it and informs it with insightful information on possible futures of the business environment while shaping and contributing to it. ...
Article
This article introduces the construct of corporate foresight to a strategy and management scholars’ audience. Corporate foresight is a dynamic, firm-level capability that allows firms to evaluate future scenarios of the business environment, including systematic doomsday collapses. Corporate foresight is defined, situated in the broader epistemological underpinnings of futures studies, theoretically inscribed in the dynamic capabilities’ framework, distinguished from related constructs, and deconstructed in its main components. Its main antecedents and outcomes are elaborated, and further research directions are discussed. It is argued that corporate foresight is of fundamental relevance to strategy and management scholarship due to four reasons: (a) corporate foresight can integrate with, enrich, and expand the dynamic capabilities framework by considering an additional, underinvestigated, future-oriented firm capability; (b) the emergence of corporate foresight is an organizational phenomenon, closely aligned with the contingency theory of the firm; (c) corporate foresight can favorably affect important organizational outcomes including learning, creativity, innovation, and performance via a mechanism to create competitive advantage that has not been previously explored by strategy and management scholarship; and (d) further investigating corporate foresight from a strategy and management point of view opens a rich research agenda.
... Other researchers (e.g., Chermack, 2004;Gary & Wood, 2011), elaborated on the question of how SF techniques, mental models, decision-making, and eventually firm performance are interrelated. One major concern of researchers is how SF fosters better decision-making in light of environmental uncertainty and dynamism (Jissink et al., 2014;Vecchiato et al., 2020). Rohrbeck and Schwarz (2013) have addressed the question of the value contribution of SF from a theoretical and empirical perspective. ...
... (Rohrbeck et al., 2015, p. 2) Foresight is considered relevant to decision-making, as it informs decision-making and choices about the future, creating value through first-mover advantages and strategic agility (Fergnani, 2022;Vecchiato, 2015). In this regard, foresight is an element of strategy-making and a practice that expands the information base of decision-making (Jissink et al., 2014). ...
Article
Full-text available
In a large empirical investigation of 400 managers in large U.S. and European corporations, we shed light on the effects of internal strategic foresight activities for decision-making, asking whether and how firms’ internal foresight activities add value to their decision-making. Enabling and supporting strategy conversations is conceptualized here as a central activity of strategic foresight. Our empirical investigation demonstrates that internal foresight activities have a sig- nificant and positive effect on strategy conversations within a firm. Against the assumptions of previous research, however, we cannot confirm the positive influence of strategy conversations in general on challenging the status quo in a firm or the overall helpfulness of strategic foresight activities in the context of decision-making. Future research should delve deeper into organiza- tional studies to gain a more nuanced understanding of the processes and factors influencing future-oriented decision-making, as well as identifying key enablers that facilitate these decisions.
... Second, strategic foresight must be anchored in strategic management-a Please cite as: Iden multidisciplinary area that should attract researchers from areas such as management, economics, organizations, sociology, and psychology. Third, although research on strategic foresight is still limited (Jissink, Huizingh, & Rohrbeck, 2014), there is a growing research interest in the field. The existing literature is nevertheless fragmented and not properly integrated. ...
... Research on motivation presents a variety of reasons why firms are adopting strategic foresight (Jissink, et al., 2014;Ruff, 2006). Our literature review revealed that strategic foresight programs in firms are motivated by the need to support decision making, improve long-term planning, enable early warning, improve the innovation process, and improve the speed in reacting to environmental change. ...
Article
Full-text available
Strategic foresight is a scientific field in rapid development judged from the increase in number of yearly publications the last decade. What characterizes the research in this field? To answer this question we undertook a systematic literature review searching two library databases, Business Source Complete and ScienceDirect, for scientific articles related to the topic ´strategic foresight´ in the context of the organization. The search revealed 59 publications published between January 2000 and October 2014. The articles were systematically organized and analyzed. This review provides the status of this emergent research field. Although we witness a growth of academic interest in strategic foresight, we argue that this scientific field is weakly organized and there is a lack of theoretical progress. We have analyzed the research subjects addressed in the 59 articles, and from this a taxonomy of eight categories. Three categories dominate in terms of frequency of articles: methods applied, organizing practices, and experiences gained. There is only limited research on motivation and use, value contribution, and innovation. Explorative research dominates, and a variety of theoretical perspectives has been used. Some attempts to build conceptual foundations can be observed, but in general, we found no single perspective that deserves loyalty on which a coherent theoretical foundation of strategic foresight is built. Strategic foresight has a great potential of contributing more to the success of a firm if the research moves from today's dominating explorative research to also include more explanatory research.
... Terminologies are being increasingly harmonized, dedicated conferences and special tracks at conferences are consolidating the academic debate and first papers that introduce components for theory testing are appearing. Jissink et al. (2014) propose a theoretical model to measure the impact of antecedents, such as strategic orientation on corporate foresight and the impact of corporate foresight on innovation performance [110]. A working paper suggests that the impact of corporate foresight is significant on both innovation and firm performance [61]. ...
... Terminologies are being increasingly harmonized, dedicated conferences and special tracks at conferences are consolidating the academic debate and first papers that introduce components for theory testing are appearing. Jissink et al. (2014) propose a theoretical model to measure the impact of antecedents, such as strategic orientation on corporate foresight and the impact of corporate foresight on innovation performance [110]. A working paper suggests that the impact of corporate foresight is significant on both innovation and firm performance [61]. ...
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Full-text available
The goal of this introductory article to the Special Issue on Corporate Foresight is to provide an overview of the state of the art, major challenges and to identify development trajectories. We define corporate foresight as a practice that permits an organization to lay the foundation for a future competitive advantage. Historically we distinguish and discuss four main phases 1) birth of the field (1950s), 2) the age of scenarios (1960s-1970s), 3) professionalization (1980s-1990s), and 4) organizational integration (2000- ). A systematic literature search revealed 102 articles on foresight, 29 of them on corporate foresight. Based on these articles and those in this Special Issue, we identify four main themes. Two more mature themes, namely ‘organizing corporate foresight’, and ‘individual and collective cognition’, and two emerging themes ‘corporate foresight in networked organizations’, and ‘quantifying value contributions’. In the conclusion we make a plea for establishing corporate foresight as a separate research stream that can adopt various theoretical foundations from a number of general management research traditions. To help the field move forward we identify three areas in which corporate foresight research can build on theoretical notions in general management, and can contribute to such on-going debates.
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Full-text available
This paper presents a theoretical exploration of the construct of corporate entrepreneur-ship. Of the various dimensions of firm-level entrepreneurial orientation identified in the literature, it is argued that innovation, broadly defined, is the single common theme underlying all forms of corporate entrepreneurship. However, the presence of innovation per se is insufficient to label a firm entrepreneurial. Rather, it is suggested that this label be reserved for firms that use innovation as a mechanism to redefine or rejuvenate themselves, their positions within markets and industries, or the competitive arenas in which they compete. A typology is presented of the forms in which corporate entrepreneurship is often manifested , and the robustness of this typology is assessed using criteria that have been proposed for evaluating classificational schemata. Theoretical linkages are then drawn demonstrating how each of the generic forms of corporate entrepreneurship may be a path to competitive advantage. V-'orporate entrepreneurship has long been recognized as a potentially viable means for promoting and sustaining corporate competitiveness.
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Considerable progress has been made in identifying market-driven businesses, understanding what they do, and measuring the bottom-line consequences of their orientation to their markets. The next challenge is to understand how this organizational orientation can be achieved and sustained. The emerging capabilities approach to strategic management, when coupled with total quality management, offers a rich array of ways to design change programs that will enhance a market orientation. The most distinctive features of market-driven organizations are their mastery of the market sensing and customer linking capabilities. A comprehensive change program aimed at enhancing these capabilities includes: (1) the diagnosis of current capabilities, (2) anticipation of future needs for capabilities, (3) bottom-up redesign of underlying processes, (4) top-down direction and commitment, (5) creative use of information technology, and (6) continuous monitoring of progress.
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The primary purpose of this article is to clarify the nature of the entrepreneurial orientation (EO) construct and to propose a contingency framework for investigating the relationship between EO and firm performance. We first explore and refine the dimensions of EO and discuss the usefulness of viewing a firm's EO as a multidimensional construct. Then, drawing on examples from the EO-related contingencies literature, we suggest alternative models (moderating effects, mediating effects, independent effects, interaction effects) for testing the EO-performance relationship.
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The article focuses on “Organizational Strategy, Structure, and Process,” by Raymond Miles and Charles Snow, and its effect on strategic management and organization theory. Miles and Snow's views are at the philosophical midpoint of business-level strategy—between the situationalists and the universalists. They proposed four basic types of strategy: defenders, prospectors, analyzers, and reactors. The concept of strategic equifinality, a configurational view of strategy, business risk, and the typology of strategy classification systems are mentioned.