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Theoretical Background
Abstract
This chapter presents the review of literature based on which research gaps were identified and further research undertaken to fill those gaps. The literature review helped to conceptualise the previous research studies into a framework that provides overall visualisation of the research as disseminated in the book.
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The Online Labour Index (OLI) was launched in 2016 to measure the global utilisation of online freelance work at scale. Five years after its creation, the OLI has become a point of reference for scholars and policy experts investigating the online gig economy. As the market for online freelancing work matures, a high volume of data and new analytical tools allow us to revisit half a decade of online freelance monitoring and extend the index's scope to more dimensions of the global online freelancing market. While (still) measuring the utilisation of online labour across countries and occupations by tracking the number of projects and tasks posted on major English-language platforms, the new Online Labour Index 2020 (OLI 2020) also tracks Spanish- and Russian-language platforms, reveals changes over time in the geography of labour supply and estimates female participation in the online gig economy. The rising popularity of software and tech work and the concentration of freelancers on the Indian subcontinent are examples of the insights that the OLI 2020 provides. The OLI 2020 delivers a more detailed picture of the world of online freelancing via an interactive online visualisation updated daily. It provides easy access to downloadable open data for policymakers, labour market researchers, and the general public ( www.onlinelabourobservatory.org ).
To be competitive, small and medium-sized enterprises (SMEs) need to transform their business models. To overcome the liability of smallness, SMEs often need to collaborate with external partners—implement open innovation. The complex processes behind business model transformation and open innovation combined remain unexplored. Linking the literature on business model innovation, open innovation, and SMEs, we examine how open business models can be a solution for SMEs. In particular, taking a process perspective, we study business model transformations in several European SMEs using a two-dimensional typology of SME business model innovation, considering the radicalness of the transformation and SME openness toward external partnerships. We identify the triggers for SMEs’ business model innovation: market turbulence, market immaturity, competition, prior failure in open innovation, and scaling production. We also signify how SMEs address the challenges related to the open business model transformation.
The Covid‐19 crisis has hit SMEs particularly hard. Numerous business models (BM) have been limited or rendered downright impossible due to decreased social contact. SMEs can respond to this exogenous crisis via temporary business model innovation (BMI). This empirical study investigates these temporary BMs using a multiple case study approach based on five SMEs in Austria, Germany, and Liechtenstein who within a short period of time applied their core competencies and networks to integrate new BMs, which were in some cases very different from existing ones. These had a positive effect on strategic flexibility, and if desired can also be incorporated into the firm long‐term. The paper contributes to SME crisis management during the Covid‐19 pandemic by pointing out and developing a successful management mechanism that allows to survive a crisis or even improve during this time. Moreover, we contribute to BMI literature by explaining temporary BMI as a new form of BMI. It also makes clear to managers that temporary BMs add value to firms and create new revenue streams.
[Context] Software startups are engines of innovation and economy, yet building software startups is challenging and subject to a high failure rate. They need to act and respond fast in highly uncertain business environments. To do so, they need to identify crucial and actionable information that supports them in making correct decisions and reduce uncertainty. So far, the software startup literature focused predominantly on what information to measure from a metrics perspective. Thus, there is a lack of research investigating how to deal with information from an analytics perspective. [Objective] The current study aims at understanding how software startups are dealing with crucial information that could lead to meaningful actions. The overall research question that guides the study is: what analytics mistakes do software startups make? [Method] We investigated 22 failed software startups using their post-mortem reports as the main source. They were included in the study because the founding teams made mistakes related to information and analytics, which contributed to their startup failure to various degrees. We analyzed the collected data using thematic analysis. [Results] Ten types of mistakes made by the 22 failed startups when dealing with information are identified. These ten types are further grouped into four categories from an analytics process perspective, including information collection, information analysis, information communication, and information usage. [Conclusions] Our findings contribute to a better understanding of how software startups are dealing with information. It provides an opportunity for software startup teams to learn from the recurring mistakes of failed startups. Interesting future research avenues include defining patterns and antipatterns in software startup analytics by studying both failed and successful startups and doing an in-depth investigation of essential metrics for software startups.
Although research has shown that business model innovation (BMI) can create a firm's competitive advantage and enhance its performance, many small and medium-sized enterprises (SMEs) fail to obtain the expected outcomes when innovating their business model. Business Model Innovation (BMI) leads to irreversible fundamental changes in key components of a company's business model, which means it carries with it a high level of risk, ambiguity and uncertainty. Drawing on the data from a cross-industry sample of 563 European SMEs, we apply structural equation modelling to examine how a firm's performance is affected by innovating its business model. A conceptual model is developed to examine how organisational capabilities and implementation of a profit-or growth-oriented strategy, as materialised in BMI, affect a firm's overall performance. The results indicate that, while the direct link between BMI and firm performance is not significant, this path is fully mediated through efficiency growth, organisational capabilities and revenue growth. Furthermore, there are significant direct effects from efficiency growth, organisational capabilities and revenue growth on firm performance. These findings confirm the validity of the model and contribute to existing literature on BMI efforts in SMEs and provide guidelines to help company owners/managers implement informed decisions about the implementation of BMI based on their firm's strategies.
Competitive advantage is a significant concept both in studies of strategic management and in the practice of organizations. The dynamic reality of the market and competitors' innovation capacity make it difficult for companies to achieve their goals and maintain sustainable competitive performance. In small and medium-sized enterprises (SMEs), this difficulty is often compounded by a scarcity of strategic resources, which can considerably decrease their competitive advantage sources. In the present study, we discovered, through a systematic literature review (n = 70), a conceptual typology, with identification of five classes, categorized as (i) methodological procedures, (ii) organizational environment, (iii) organizational performance, (iv) resources/profile and (v) organizational research which were used to capture notions around dynamic capabilities and competitive advantage for SMEs. Likewise, as a result, a diverse selection of three clusters was found to show the positive influence (direct and indirect) of dynamic capabilities on competitive advantage and that performance variables mediate the impact on innovation capacity. Given this, we have answered two research questions related to the (i) discovery of state of the art and (ii) future research directions on Dynamic Capabilities and Competitive Advantage for SMEs.
This paper investigates how the time to a firm's first innovation affects the continued pace of innovation and how the networking behaviour of the firm moderates this relationship. In doing so, the paper develops a relationship among three constructs: time to innovation, pace of innovation, and networking. We draw on resource accumulation theory and network theories to develop our hypotheses, which are tested on a sample of 203 SMEs. The results indicate that the innovation pace of a firm depends on the capabilities developed. By developing innovation capabilities at an early age, firms are likely to drive market changes instead of being challenged by them. Firms that lag in the innovation process can compensate for this by actively networking for resources and capabilities.
Small and medium-sized enterprises (SMEs) are at the heart of a nation’s wealth creation, employment generation and economic development. To help SMEs stay competitive in a fast-changing environment, researchers have recently emphasized the relevance of business model innovation (BMI). However, BMI and its performance are not linear but rather a complex phenomenon that depends on contingency factors. Based on configurational theory, this study extends the BMI research to SMEs, exploring the management approaches and BMI capabilities that foster BMI in established SMEs. To achieve this objective, this study of a purposive sample of 78 Spanish SMEs adopts the fuzzy set qualitative comparative analysis (fsQCA) method. Results suggest three substantive conclusions. First, long-term managerial orientation is a key factor for the development of BMI in SMEs. Second, five BMI capabilities (sensing customer needs, sensing technological options, conceptualizing and experimenting, collaborating and BMI strategy) support, in combination with the management approach, the development of BMI in established SMEs. Third, open innovation (open flows of knowledge regarding market needs and the potential of technologies, as well as collaboration with customers) are concrete preconditions of business model innovation. Therefore, managers in SMEs need both to actively consider their management approach towards BMI, and to develop some key dynamic capabilities in their organizations to implement BMI, an approach also valid for post-Covid-19 management.
Purpose
Within a very short period of time, the worldwide pandemic triggered by the novel coronavirus has not only claimed numerous lives but also caused severe limitations to daily private as well as business life. Just about every company has been affected in one way or another. This first empirical study on the effects of the COVID-19 crisis on family firms allows initial conclusions to be drawn about family firm crisis management.
Design/methodology/approach
Exploratory qualitative research design based on 27 semi-structured interviews with key informants of family firms of all sizes in five Western European countries that are in different stages of the crisis.
Findings
The COVID-19 crisis represents a new type and quality of challenge for companies. These companies are applying measures that can be assigned to three different strategies to adapt to the crisis in the short term and emerge from it stronger in the long run. Our findings show how companies in all industries and of all sizes adapt their business models to changing environmental conditions within a short period of time. Finally, the findings also show that the crisis is bringing about a significant yet unintended cultural change. On the one hand, a stronger solidarity and cohesion within the company was observed, while on the other hand, the crisis has led to a tentative digitalization.
Originality/value
To the knowledge of the authors, this is the first empirical study in the management realm on the impacts of COVID-19 on (family) firms. It provides cross-national evidence of family firms' current reactions to the crisis.
Start-ups are important part of the world economy. Despite the astonishing rate of the start-up creation, their viability and success remain to be relatively low. Reasons behind the failure are diverse and complex. The leadership has been recognized as an important factor influencing the performance of start-ups. The paper argues that entrepreneurial leadership theory can effectively capture the complex processes in start-ups. Τhe paper explores a broader understanding of the entrepreneurial leadership by examining the context around which the entrepreneurial leadership occurs. Additionally, it includes leader and follower perspective in constructing the phenomenon. Lastly, the research reveals that it is important to view the Entrepreneurial leadership as a process developing along the stages of the start-up life cycle. The findings suggest that leadership is changing across the lifespan of the start-ups and distinct conditions and features are characteristic for the entrepreneurial leadership within each respective stage.
Purpose
The purpose of this paper is to provide a systematic review of the linkage between knowledge management, business model innovation and firm competence. The study attempts to summarize a few important and essential issues which future research should address.
Design/methodology/approach
Researchers have conducted an extensive review of the literature covering 50 journals from various databases like Scopus, ProQuest and Emerald. A total of 88 articles from 1997 to 2018 on knowledge management and business model innovation were selected and analyzed.
Findings
The study found that the integration of knowledge management and business model innovation leads to a sustainable competitive advantage. The relationship between knowledge management, business model innovation and firm competence seems to be fragmented because of various meaning and conceptualizations. The study endeavors to examine the relationship between the dimensions (knowledge acquisition, knowledge conversion, knowledge dissemination, knowledge application and knowledge reuse) of knowledge management and business model innovation (value proposition, assets and capabilities, revenue and cost architecture and actors in business networks). The study highlights that chief knowledge officers have a vital role to play in enhancing knowledge management orientation of a company so that knowledge regarding new ways of value creation and value capture is heard within an organization.
Research limitations/implications
This study provides a distribution schema of knowledge management and business model innovation articles based on different search criteria by highlighting different future research avenues. The study is believed to serve as a basis and be a valuable tool for researchers to understand the current and future scenarios about knowledge management and business model innovation. Researchers also acknowledge the limitations of this study with regard to exclusive search criteria, which might affect its generalizability.
Practical implications
The study argues that better knowledge sharing between departments could benefit value creation and therefore drive the organization toward business model innovation which would automatically boost firm competence. The study has made an attempt to highlight the role of Chief Knowledge Officer with regard to business model innovation. Therefore, the proposed model developed in this review will help the organization to better understand the role of knowledge management and business model innovation.
Originality/value
This is one of the first systematic reviews of knowledge management and business model innovation which provides a detailed understanding of the past and future research on the two.
Despite the robust literature on the nature of business models and their implications for firm performance, research on the organizational antecedents of business model innovations (BMIs) is still evolving. In this paper, we empirically examine the extent to which firm-level strategic agility predicts the adoption of three (value creation, value capture, and value proposition) types of BMIs. Furthermore, we propose that the relationship between firm-level strategic agility and BMI adoption is contingent on the degree of environmental turbulence. Finally, we explore the mediating role that BMI plays in the relationship between firm-level strategic agility and firm performance. Our analysis of data from 432 German firms in the electronics industry indicates that strategic agility is positively related to BMI and that this relationship is indeed strengthened by the degree of environmental turbulence. Additionally, our findings show that, while value proposition and value creation BMIs have positive relationships with firm performance, value capture innovation is negatively related to firm performance; these findings are contrary to our prediction. Finally, the results of our mediation tests indicate that BMI serves as an important intermediary mechanism through which firms’ strategic agility contributes to superior firm performance.
Abstract
The purpose of this article is to identify the role start-ups play in the Open Innovation context by reviewing the existing body of research. Since the Open Innovation literature of young ventures is still underrepresented, a stepwise review approach is applied, using the already more evolved findings of SMEs in order to derive similarities or differences. The findings indicate that if empirical studies with a similar research focus are conducted, also similar results are obtained in SMEs and start-ups. Generally, start-ups have a higher application depth of Open Innovation activities compared to large firms because it boosts their innovation performance which further enables them to overcome their liability of smallness and newness. Because of this importance combined with the limited number of quantitative studies available, ongoing research is required to further understand young SME’s role in the Open Innovation context.
Business model innovation (BMI) is one of the key activities, which has to be continuously undertaken in every enterprise to sustain competitiveness in today’s digital economy. Although the interest in business models (BM) has risen significantly since the late 1990s, little is known about BMI practices in small- and medium-sized enterprises (SMEs), representing a majority of enterprises in the European market. Our study addresses this research gap and focuses on the investigation of drivers and outcomes of BMI in SMEs. A partial least squares path modeling (PLS-PM) method was used to empirically test the model using data collected in 2017 from 71 SMEs in Slovenia. Results have shown that the innovativeness of enterprises and their business environment has a positive impact on the level of BMI activities in the enterprises. However, this is not the case of fast developing and rapidly changing information technology. In addition, the results show that the level of BMI has a positive impact on BMI outcomes and further on overall business performance. The results contribute to the body of knowledge in the field of BMI activities in SMEs and offer useful insights to SMEs that intend to innovate their business model(s) and government to create a supportive environment.
The role of a relatively small cadre of high-tech startup firms in driving innovation and economic growth has been well known and amply celebrated in recent history. At the same time, it is well recognized that, while the overall contribution of startups is crucial, the high-risk and high-reward strategy followed by these startups leads to significant failure rates and a low ratio of successful startups. So, it is curious to notice that literature tends to focus on successful startups and on quantitative studies looking for determinants of success while neglecting the numerous lessons that can be drawn by examining the stories of startups that failed. This paper aims to fill this gap and to contribute to the literature by providing a repeatable and scalable methodology that can be applied to databases of unstructured post-mortem documents deriving startup failure patterns. A further and related contribution is the analysis carried out with this methodology to a large database of 214 startup post-mortem reports. Descriptive statistics show how the lack of a structured Business Development strategy emerges as a key determinant of startup failure in the majority of cases.
Software startups have long been a significant driver in economic growth and innovation. The on-going failure of the major number of startups calls for a better understanding of state-of-the-practice of startup activities. With a focus on engineering perspective, this study aims at identifying the change in focus of research area and thematic concepts operating startup research. A systematic mapping study on 74 primary papers (in which 27 papers are newly selected) from 1994 to 2017 was conducted with a comparison with findings from previous mapping studies. A classification schema was developed, and the primary studies were ranked according to their rigour. We discovered that most research has been conducted within the SWEBOK knowledge areas software engineering process, management, construction, design, and requirements, with the shift of focus towards process and management areas. We also provide an alternative classification for future startup research. We find that the rigour of the primary papers was assessed to be higher between 2013-2017 than that of 1994-2013. We also find an inconsistency of characterizing startups. Future work can focus on certain research themes, such as startup evolution models and human aspects, and consolidate the thematic concepts describing software startups.
Business models, dynamic capabilities, and strategy are interdependent. The strength of a firm's dynamic capabilities help shape its proficiency at business model design. Through its effect on organization design, a business model influences the firm's dynamic capabilities and places bounds on the feasibility of particular strategies. While these relationships are understood at a theoretical level, there is a need for future empirical work to flesh out the details. In particular, studies that provide a better understanding of business model innovation, implementation, and change will also shed light on important aspects of dynamic capabilities.
This paper engages discourses about the nature of creative work through a case study of creative worker freelancing on Upwork, an online marketplace. The analysis begins by contextualizing the growth of freelancing in a transformation of capitalism to a mode of flexible accumulation. It is framed against neoliberal narratives about the creative economy, including promises of financial success and freedom from rigid Fordism. An exploration of the characteristics of technology-mediated work on Upwork, including contract structure, wages, consistency of work, risk-management strategies, and profiles of clients and freelancers follows. The findings suggest that despite the company’s emphases on efficiency, flexibility, and freedom from the physical office, freelancers face significant trade-offs in undertaking such work, notably its infrequency, barriers to high wages, and intense global competition. The discussion addresses structural drivers of precarity in the marketplace and of its ongoing success.
Purpose
Startup companies represent a powerful engine of open innovation (OI) processes. The purpose of this paper is to represent a first step in building a map of the state-of-the-art knowledge of the “startups in an OI context” phenomenon. Through the selection and analysis of relevant literature, this study aims at deepening our understanding of the theme and at providing directions for future research.
Design/methodology/approach
By using an explicit method for the review (Pittaway et al. , 2004) the authors selected a set of papers, which cover the knowledge domain object of this study. In total, 41 articles about “startups and OI” have been selected and the full papers have been analysed.
Findings
The analysed literature has been synthesized in seven sub-topics, which have been evaluated as the most relevant in explaining the phenomenon of startups in relation to OI. Implications for research, for managers and for policy makers conclude the paper.
Practical implications
The review produced valuable knowledge for both managers and policy decision-makers. The paper allows a better understanding of the role of startups in OI processes. This improved understanding can help managers of large firms as well as policy makers involved in OI in making their decisions. Besides, implications of OI strategies for startup managers have been singled-out.
Originality/value
Startup companies are intrinsically open organizations, necessarily engaged in innovation processes. Research at the intersection between the themes of OI and startups is gaining momentum. This review of the literature represents the first attempt to organize the scientific knowledge related to the intersection between the startups and OI phenomena systematically.
Over the last 15 years, business model innovation (BMI) has gained an increasing amount of attention in management research and among practitioners. The emerging BMI literature addresses an important phenomenon but lacks theoretical underpinning, and empirical inquiry is not cumulative. Thus, a concerted research effort seems warranted. Accordingly, we take stock of the extant literature on BMI. We identify and analyze 150 peer-reviewed scholarly articles on BMI published between 2000 and 2015. We provide the first comprehensive systematic review of the BMI literature, include a critical assessment of these research efforts, and offer suggestions for future research. We argue that the literature faces problems with respect to construct clarity and has gaps with respect to the identification of antecedent conditions, contingencies, and outcomes. We identify important avenues for future research and show how the complexity theory, innovation, and other streams of literature can help overcome many of the gaps in the BMI literature.
Software startup companies develop innovative, software-intensive products within limited time frames and with few resources, searching for sustainable and scalable business models. Software startups are quite distinct from traditional mature software companies, but also from micro-, small-, and medium-sized enterprises, introducing new challenges relevant for software engineering research. This paper's research agenda focuses on software engineering in startups, identifying, in particular, 70+ research questions in the areas of supporting startup engineering activities, startup evolution models and patterns, ecosystems and innovation hubs, human aspects in software startups, applying startup concepts in non-startup environments, and methodologies and theories for startup research. We connect and motivate this research agenda with past studies in software startup research, while pointing out possible future directions. While all authors of this research agenda have their main background in Software Engineering or Computer Science, their interest in software startups broadens the perspective to the challenges, but also to the opportunities that emerge from multidisciplinary research. Our audience is therefore primarily software engineering researchers, even though we aim at stimulating collaborations and research that crosses disciplinary boundaries. We believe that with this research agenda we cover a wide spectrum of the software startup industry current needs.
In today's business environment, digitalization plays a key role in establishing competitive advantage and developing new business models. However, little is known about business model innovation (BMI) processes and practices of small and medium-sized enterprise (SMEs) in their digital venturing. Thus, the aim of this paper is to address this research gap by investigating the process activities of SMEs in effectively building new business models through digitalization. Through a case study of 18 SMEs, document studies and 36 interviews, we explore the BMI processes during the case companies' digital transformation. The research results identify four critical BMI process activities: (1) assessing the environment in search of new opportunities, (2) conveying a sense of urgency, (3) exploring and testing new opportunities through experimentation and (4) handling decision-making with a combination of intuition and data. Finally, our study reveals managerial implications related to data-driven decision-making during BMI, constituting four managerial dilemmas: (1) prognosis and scenario-driven search myopia, (2) timing and sustainability, (3) radical shift from traditional experimentation to data-based methods and (4) using intuition versus data-driven decision-making.
Multimedia prototypes of varying degrees of fidelity and interactivity could be a powerful tool for early stage startups to validate their business model assumptions especially product value proposition. This grounds on the prototype's ability to enhance user experience (UX) thereby making their feedback more accurate and reliable. This article reports practical experiences with consultancy projects involving European early stage startups focusing on the cocreation process of value proposition innovation amid pandemic. This includes the challenges faced in interacting with onsite customers, multimedia prototyping as a tool to foster remote customer involvement, and different challenges involved in prototype-driven cocreation like intellectual property rights, federal laws, motivation rewards, tool selection, and balancing customer expectations. The involvement of remote customers is fostered by the combination of varying degrees of fidelity and interactivity. Higher fidelity and interactivity prototypes are more applicable when a startup has a continuously increasing customer base, better market understanding, and customers having better product understanding. The practical experience indicates that resource-constrained startups could be greatly benefitted from the adoption of multimedia prototyping in their market research. The multimedia prototype development technologies could be easily adopted in startup business practices owing to zero purchase cost, ease of use, and usefulness. Their adoption is expected to become a norm for the “new normal” as the role of multimedia prototypes is trivial for lean startups enhancing the value of design thinking as well as customer development processes. However, there is an urgent need to define a systematic process for the selection of prototype development tools meeting the business needs and their seamless integration in startup business practices, thereby leveraging across the wider spectrum of prototyping tools market.
The customer value proposition (CVP) is an important concept integrating theory and practice in business research and management. While recent studies have yielded important insight into the aspects of managing CVPs, an integrative approach is needed, for synthesis of understandings under a unifying framework. The paper introduces an integrative framework for managing CVPs, developed via a narrative-based approach in combination with conceptual differentiation and integration related to the domain of managing CVPs. This conceptual framework, illustrated via Discovery’s Vitality insurance, represents three components of considering this domain: 1) dimensions (strategic vs. operational and perceiving vs. proposing), 2) perspectives (customer, company, co-creation, and context), and 3) processes (identifying competitive CVPs, developing competencies and resources, facilitating value creation, and setting goals and measuring CVPs for competitive advantage). Via the framework, academic research can be better integrated, in ways resonating also with practitioners’ needs in the management of CVPs.
Purpose
Many industries accomplish green innovation for sustainable development, but it should play a significant role in the sustainable development and implementation of an organizations benefit. The purpose of this paper is to examine if green business innovation in terms of technology, organization, stakeholder and policies is able to develop competitive advantages.
Design/methodology/approach
This study was carried out in two stages and covered 4 variables and 21 indicators. Based on the experts’ opinions and literature review, a self-administered questionnaire was distributed among 113 experts of oil refining companies in Iran. The data were analyzed by the structural equation modeling technique.
Findings
The results indicated the effects of organizational factors, legislation, regulations and technology on green innovation. They also revealed the role of green innovation in reaching competitive advantages. Moreover, the relationship between stakeholder and green innovation was investigated.
Practical implications
The findings provide guidance on how firms can be better prepared for green innovation and get the most out of it and deal with the risks involved in green innovation, it is important that companies evaluate organization, technology and environment readiness and formulate corresponding strategies. Such a proactive approach can help enterprise control and minimize the risks of green innovation. A self-evaluation of the green innovation readiness of an enterprise helps the enterprise establish a mechanism to keep track of technological evolution.
Originality/value
This study contributes to the emerging field of green innovation which embed organization, technology, stakeholders, legislation and flows of the value created, delivered and captured in a value network. It also highlights the gaps in addressing the challenges of an innovative model for competitive advantages and suggests avenues for future research.
Managing customer heterogeneity (CH), i.e., differences among customers (e.g., consumers, business firms) is an important, yet challenging consideration for firms seeking innovation‐based competitive advantage. To facilitate better understanding of the opportunities and challenges that CH presents, we conducted a systematic literature review linking CH with innovation‐based competitive advantage. Initially, we synthesize extant CH literature to propose a multidimensional conceptualization and definition of the CH construct comprising three dimensions: customer need heterogeneity, customer knowledge heterogeneity, and customer relationship heterogeneity. Customer need heterogeneity refers to the extent to which customers’ needs/preferences for a product offering differ from each other, customer knowledge heterogeneity indicates the degree to which customers have different knowledge levels regarding how their needs can be satisfied, and customer relationship heterogeneity indicates the extent to which customers have different preferences toward engaging in relationships with the firm. Next, we present an integrative summary of the empirically tested as well as theoretically proposed links between each CH dimension and its antecedents/outcomes. Finally, we draw upon the paradox literature to identify specific tensions associated with each CH dimension and rely on the dynamic capabilities literature to suggest how these tensions can be effectively managed. Collectively, we contribute to the emerging resource‐based perspective of CH by offering a propositional model of how CH can be managed for innovation‐based competitive advantage.
In recent years, an emerging stream of research suggests that firms should use technological innovation and business model innovation harmoniously to maximize firm performance. In order to enrich the scholarly conversation on the fit between technological innovation and business model innovation, drawing insights from the dynamic capabilities perspective, this paper examines the fit between value proposition innovation and technological innovation (exploitative versus explorative) for the performance of startups in the digital environment. Based on on-site survey data of 285 digital startups in one of the world's largest digital economies, we find that explorative innovation strengthens the positive impact of value proposition innovation on the performance of startups, whereas exploitative innovation weakens this positive effect. Furthermore, these moderating effects are magnified in a highly uncertain demand environment. These findings inject fresh insights into existing scholarly conversation on the fit between technological innovation and business model innovation by offering a dynamic capabilities perspective and by extending it to an increasingly digital business environment.
Start-ups are important part of the world economy. Despite the astonishing rate of the start-up creation, their viability and success remain to be relatively low. Reasons behind the failure are diverse and complex. The leadership has been recognized as an important factor influencing the performance of start-ups. The paper argues that entrepreneurial leadership theory can effectively capture the complex processes in start-ups. Τhe paper explores a broader understanding of the entrepreneurial leadership by examining the context around which the entrepreneurial leadership occurs. Additionally, it includes leader and follower perspective in constructing the phenomenon. Lastly, the research reveals that it is important to view the Entrepreneurial leadership as a process developing along the stages of the start-up life cycle. The findings suggest that leadership is changing across the lifespan of the start-ups and distinct conditions and features are characteristic for the entrepreneurial leadership within each respective stage.
Research summary
We examine how university entrepreneurship programs affect entrepreneurial activity using a unique entrepreneurship‐focused survey of Stanford alumni. OLS regressions find a positive relationship between program participation and entrepreneurship activities. However, endogeneity hinders causal interpretation. We utilize the fact that the entrepreneurship programs were implemented at the school level. Using the introduction of each school's program as an instrument for program participation, we find that the Business School program has a negative to zero impact on entrepreneurship rates. Participation in the Engineering School program has no impact on entrepreneurship rates. However, the Business School initiative decreases startup failure and increases firm revenue. University entrepreneurship programs may not increase entrepreneurship rates, but help students better identify their potential as entrepreneurs and improve the quality of entrepreneurship.
Managerial summary
Recently, many universities have developed programs to promote entrepreneurship. However, relatively little is known about the impacts of such university initiatives. In this article, we examine the two major initiatives that were established in the mid‐1990s—the Stanford Center for Entrepreneurial Studies at the Business School and the Stanford Technology Ventures Program at the Engineering School. We find that the Business School program had a negative to zero impact on entrepreneurship rates and participation in the Engineering School program had no impact on entrepreneurship rates. However, the Business School initiative decreased startup failure and increased firm revenue. University entrepreneurship programs may not increase entrepreneurship rates, but help students better identify their potential as entrepreneurs and improve the startup performance.
New ventures face both liabilities of newness and smallness, which may inhibit their innovation efforts and output. However, existing research has not clearly distinguished between the two liabilities, leaving it unclear how certain determinants differentially affect innovation performance in start-ups relative to older established small and medium sized enterprises (SMEs). Therefore, in this study we investigate the impact of R&D investments, external knowledge sourcing and public R&D subsidies on innovation effectiveness in new versus older small firms. Employing panel data from the Spanish Community Innovation Survey (CIS), we show that R&D investments have a lower contribution to the innovation performance of new ventures, compared to older small firms. In contrast, we find that external knowledge sourcing makes a higher contribution to the innovation performance of new compared to older small firms, but only in high-tech settings. However, we find no support for a differentiating effect of R&D subsidies in new versus established small firms. Effectively, our results highlight the limited effects of internal R&D investments and R&D policy instruments to promote the growth of innovative start-ups, while highlighting potential benefits of their openness to external sources of innovation. As such, these results have important implications for research, practices and policies that relate to innovation in new ventures and SMEs, while casting doubts on the effectiveness of some of the common strategy and policy instruments to stimulate performance in small innovative start-ups.
Digital entrepreneurs often exploit market opportunities across boundaries by constantly designing value propositions rather than innovating. We conceptualize this as a strategizing practice, which we aim to investigate further. This paper explores the mechanisms that digital entrepreneurs use to design and redesign value propositions to exploit market opportunities across boundaries by drawing on a two-year in-depth case study of a digital venture. We argue that at the heart of designing value propositions are the following four mechanisms: excogitating functionality, self-reverberating benefits, designating interdependencies, and conforming intentionalities. The paper argues that through the constant enactment of these mechanisms and a pattern that acts as a catalyst, it is possible to redesign the value proposition to transcend market boundaries without constantly developing new digital products. Our paper offers significant implications for digital technology entrepreneurship and strategizing literature by (a) capturing and theorizing the continual design of the value proposition as a strategizing practice to transcend market boundaries, (b) enunciating the mechanisms underpinning the design of the value proposition, and (c) introducing a new theoretical approach to the study of value proposition drawing on a practice perspective.
The digital-based start-up industry in Indonesia has developed, but with a high failure rate. This research aims at elaborating the relationship between business model, entrepreneurial orientation, innovation, and sustainable performance on the digital start-up companies in Indonesia. The data were collected using offline and online surveys to 206 leaders or founders of digital start-up companies spread throughout Indonesia. Then, the data were then analysed using the structural equation model. The research results revealed that a business model had a significant role in achieving sustainable performance. A business model needs to be supported by customer participation and innovation. Innovation was more influential compared to customer participation in achieving companies’ sustainable performance. The indirect effect of customer participation and innovation on sustainable performance through the business model was greater than the direct effect not through the business model. The novelty of this research is the examination and analysis of the relationship between innovation, customer participation, business model, and sustainable performance in one model, and the use of digital start-up companies in Indonesia as the research analysis unit.
This study challenges and develops some of the key arguments underpinning dynamic capabilities research. Dynamic capabilities are identified in strategic management research as central to firm performance helping firms adjust to external dynamism. They are considered necessary since ordinary capabilities are typically described as inert, static, or as evolving only through unintended mutating or slipping. This study builds on routine theory that ascribe routines the ability to evolve, and draws on first-hand qualitative data from a Nordic firm. The study demonstrates mindfully evolving evolving ordinary capabilities play a role underestimated in dynamic capabilities research by helping firms adjust to environmental dynamism. We also spell out new roles for dynamic capabilities in relation to such mindfully evolving ordinary capabilities.
In today's business environment with fast growing communication
and information technologies, knowledge management (KM) capabilities are
a valuable source for innovation. However, little is known about the
particular KM capabilities that lead to business model innovation (BMI)
and whether their effect is dependent upon the firm's orientation towards
risk-taking. We examine the impact internal and external KM capabilities
have on BMI and how these effects are moderated by its risk-taking
tolerance. We empirically analyze a sample of 197 small and medium-sized
enterprises (SMEs) applying structural equation modeling (SEM) and fuzzyset
qualitative comparative analysis (fsQCA). The results from the SEM
indicate that particularly external KM capabilities stimulate BMI. This
relationship is strengthened for firms with a high risk-taking tolerance.
Internal knowledge is only effective for firms with a low risk-taking
tolerance. The fsQCA results substantiate these findings and refine the
SEM by providing particular antecedent conditions for high levels of BMI.
Purpose
Being innovative and bringing new products to the market fast is important for firms to stay competitive. Customers are important for providing input to product developments in industrial markets. The purpose of this paper is to increase understanding of how firms use Voice of the Customer (VoC) in product development and how VoC can complement other customer involvement methods.
Design/methodology/approach
The paper is based on a qualitative case study of a global leading and innovative firm, a maker of tools for the automotive industry. The study provides detailed insight into the implementation of VoC for product development.
Findings
The process of customer involvement in product development through VoC is explored. The study shows that by using the VoC method, firms can gather knowledge for input to product development projects while developing relationships with a larger number of customers. The findings point out that VoC can be modified to focus on customer needs related to product development as well as marketing efforts requiring cross-functional collaboration. The VoC method is suitable for combining with other customer involvement methods such as project involvement and pilot testing. Through VoC, firms have the chance to benchmark across industries and regions.
Research limitations/implications
The paper provides insights into the VoC process of customer involvement aimed at product development. The case study provides an illustration of how an industrial firm uses VoC in product development. The paper points out the importance of managing external (customer) involvement in product development and internal (cross-functional) collaborations.
Practical implications
A set of questions that firms can ask themselves before embarking on customer involvement has been developed. The paper shows that customers can be involved at a number of points in time, have a wide range of roles and contribute different knowledge. VoC is suitable for combining with other customer involvement methods.
Originality/value
The contribution of the paper consists of a case study illustrating how customer involvement in product development can be achieved through VoC. A number of customer involvement methods for product development are discussed for combining with VoC, showing how different methods are complementary in product development.
This study examines how B2B service firms organize and manage knowledge in order to deliver new value adding solutions and in turn competitive advantage, addressing calls for research into this important, yet neglected area. Specifically, this study: (1) examines the role of the antecedents of knowledge integration capability (KIC) in service innovation-led competitive advantage in project-oriented B2B service firms; and (2) models and empirically tests the links between KIC and service innovation, and in turn sustainable competitive advantage (SCA). Findings from our research of Australian and US project-oriented firms support our central theorization that the new knowledge acquired through external and internal sources per se is not sufficient, but should be integrated with existing knowledge in order to deliver innovative service solutions addressing clients' needs. Results from testing non-linear effects of new knowledge configurations on service innovation provide deeper insights into the suggested relationship. Our research contributes to calls for comprehensive frameworks of service innovation-led competitive advantage. We provide theoretical and managerial implications, and suggest areas for future research.
This study examined the innovation that leads to a competitive advantage in the frozen food
business in the context of small-sized and medium-sized enterprises (SMEs). The research
process consisted of three parts: 1) a literature study; 2) an empirical research study using
questionnaires as a data collection tool; and 3) an analysis and conclusion of the research
results using exploratory factor analysis (EFA), confirmatory factor analysis (CFA), and
structural equation modelling (SEM). The findings showed that innovation enhanced the
advantages in competition via external factors. These external factors were divided into two
groups: micro-oriented factors and macro-oriented factors. The external factors at the micro
level had more influence on the innovation development of the frozen food businesses than
those at the macro level. The results showed that entrepreneurs, especially SME entrepreneurs,
need to adapt and readily prepare themselves to face upcoming economic changes,
which are about to occur not only at the global level but also at the regional and the country
levels. In addition to the internal contexts within the organization, external factors are also
important, especially those that will lead to the development of innovation. Innovation will
become the strategic tool in this important competition for the improvement, creation, and
enhancement of business to create competitive advantages equal to or better than those in
foreign countries in order to realize sustainable development.
measure of the rate of innovation --research-and-development (R&D) expenditure per employee compared to new patents received per employee -- does not adequately capture a unique feature of SMEs, namely that owners and managers are often themselves innovators. For example, in Japan 52 per cent of SMEs' innovations reported in 1986 were created by employers, whereas in large firms 72 per cent of innovations were created by research technicians. Nevertheless, patchy evidence from Germany, the United Kingdom and the United States indicates that SMEs at least hold their own in terms of innovation compared to large firms. Perhaps most significantly, a recent study indicates that, while the total number of innovations is positively related to R&D expenditures, skilled labour and the degree to which large firms comprise the industry, in innovative industries innovative activity tends to emanate more from SMEs than large firms. This is probably because in industries where large firms dominate, SMEs need to be innovative to survive. There is much information to suggest that in technologies such as micro-electronics, new materials and biotechnology SMEs tend to be in the vanguard of innovation. Small and medium-sized enterprises as exporters. The contribution of SMEs to a national economy from exporting is generally small; for example, in Japan SMEs accounted for only 13 per cent of merchandise exports in 1990.
Purpose
This paper examines the influence of three dimensions of customer knowledge management—knowledge from customer, knowledge for customer, and knowledge about customer—on innovation capabilities (speed and quality) and new service market performance.
Design/methodology/approach
The model links three dimensions of customer knowledge management to two dimensions of innovation capabilities. Further, the model links two dimensions of innovation capabilities to new service market performance. Analysis was conducted through structural equation modelling using SmartPLS software, utilizing data from 253 managers representing 26 banks in Bangladesh.
Findings
The findings of this study show that knowledge from customer and knowledge for customer are the most influential predictors of new service market performance. Of the three dimensions of customer knowledge management, knowledge from customer turns out to be the strongest predictor of innovation quality and speed. Innovation quality has a greater impact on new service market performance than innovation speed. Innovation capability (quality and speed) plays a mediating role in this study.
Practical implications
Managing knowledge from, for, and about customer should be systematically considered as a synergy approach to firms’ processes and activities to co-create value with customers. In particular, managers should put more emphasis on knowledge from and for customer to enhance innovation capacity and achieve success in the development of a new service.
Originality/value
This paper empirically supports the significant influence of knowledge from, for, and about customer on innovation capabilities (quality and speed) and new service market performance. While the results provide guidance for researchers and practitioners, it also adds value to innovation-related research.
Purpose
The purpose of this paper is to provide state-of-the-art knowledge about business model innovation (BMI) and suggest avenues for future research.
Design/methodology/approach
A systematic literature review approach was adopted with thematic analysis being conducted on 92 articles.
Findings
The body of knowledge for this concept is in its infancy and is highly fragmented. This study therefore attempts to consolidate this fragmented knowledge. It reveals dominant themes, establishes coherence, and identifies conflicting arguments in the current literature. It also points out gaps in the research and highlights new directions for research.
Research limitations/implications
This study analyzed articles that were found based on a systematic literature review approach.
Practical implications
This study identifies some fundamental issues that managers need to understand regarding BMI.
Originality/value
The main value of this study lies in its synthesis of the current knowledge of BMI.
Purpose
The purpose of this paper is twofold: to connect strategic agility and business model (BM) innovation, and to explore how capabilities underlying strategic agility fit the SME context.
Design/methodology/approach
Qualitative in approach, the paper develops a longitudinal, in-depth, single case study focussing on how BM renewal occurs in the dynamic and increasingly important sector of temporary work agencies.
Findings
The findings suggest a partial fit of the existing strategic agility framework for SMEs. Two of the proposed meta-capabilities (leadership unity and resource fluidity) seem inherent to SMEs because they apply easily to this context, although they need to be downscaled. One meta-capability (strategic sensitivity) is less natural and therefore more critical for an SME. An additional meta-capability (resourcefulness) arises as very important for SMEs to be able to overcome some of their size-caused limitations.
Research limitations/implications
The contribution is limited by using a single case study from a specific sector and should be considered as exploratory and theory-grounding research in the field of SMEs’ strategic agility and BM renewal.
Originality/value
The originality of this paper is that it looks at the SME context in an industry with intensive change and dynamism, which is ideal for illustrating the objective. The authors contribute a model of strategic agility for SMEs.
Disruptive technologies tend to underperform on attributes that are considered as key attributes of incumbent technologies and require new value propositions to increase mainstream customer appeal. Yet, how do firms reconfigure their value proposition as a way to overcome the technological inferiority of disruptive technologies? This paper conceptualizes and empirically investigates the process of value proposition reconfiguration. Based on evidence on the commercialization of electric vehicles, it explores the tactics firms use to reconfigure value propositions to increase market acceptance from mainstream customers. The paper develops a framework showing three reconfiguration tactics: compensating, enhancing, and coupling tactics.
