An exploratory study of organisational transformation in manufacturing SMEs

In a competitive environment organisations are driven to continuously change and adapt to emerging conditions in order to sustain competitive advantage. The reported decline of the manufacturing sector in the UK is believed to be the result, in part, of the failure of manufacturing organisations to adapt by transforming their businesses, particularly small and medium sized enterprises (SMEs). The field of change management is long established and contains a plethora of theories, frameworks, models, and discussions on organisational change and transformation, yet it seems that there is a disconnect between this body of knowledge and its implementation by practitioners. Since the majority of the work in this area is based on empirical analyses of large organisations, it could be argued that the assumption that it can be 'scaled down' to fit the SME context is invalid, as SMEs are well recognised as having distinctive characteristics that warrant specific investigation. Thus, the thesis is focused on providing insights into the transformation behaviour of manufacturing SMEs in order to further understanding of why these organisations struggle to transform. Using the content, process, context framework as its foundation, the transformations of four manufacturing SMEs in Scotland are analysed and discussed using an exploratory case study methodology. The findings suggest that the content of transformation in manufacturing SMEs reflects existing theory, however in addition content elements of ownership or leadership, new management team, and extension of product/service portfolio were in evidence. The process through which manufacturing SMEs transform aligns with the theory of punctuated equilibrium; however the punctuations themselves are not transformational. Leadership, appropriate knowledge and skills, access to resources, and external collaboration are contextual enablers to transformation, whereas culture is a barrier if not aligned to the new behaviours required. The discussions also led to a number of emerging propositions concerning the pace of transformation, patterns of constituent changes, and differences between family and non-family owned/managed organisations, which are presented as areas for future empirical investigation

Networking Innovation in the European Car Industry : Does the Open Innovation Model Fit?

The automobile industry is has entered an innovation race. Uncertain technological trends, long development cycles, highly capital intensive product development, saturated markets, and environmental and safety regulations have subjected the sector to major transformations. The technological and organizational innovations related to these transformations necessitate research that can enhance our understanding of the characteristics of the new systems and extrapolate the implications for companies as well as for the wider economy. Is the industry ready to change and accelerate the pace of its innovation and adaptability? Have the traditional supply chains transformed into supply networks and regional automobile ecosystems? The study investigates the applicability of the Open Innovation concept to a mature capital-intensive asset-based industry, which is preparing for a radical technological discontinuity - the European automobile industry - through interviewing purposely selected knowledgeable respondents across seven European countries. The findings contribute to the understanding of the OI concept by identifying key obstacles to the wider adoption of the OI model, and signalling the importance of intermediaries and large incumbents for driving network development and OI practices as well as the need of new competencies to be developed by all players.Peer reviewe

Successful new product development by optimizing development process effectiveness in highly regulated sectors: the case of the Spanish medical devices sector

Rapid development and commercialization of new products is of vital importance for small and medium sized enterprises (SME) in regulated sectors. Due to strict regulations, competitive advantage can hardly be achieved through the effectiveness of product concepts only. If an SME in a highly regulated sector wants to excell in new product development (NPD) performance, the company should focus on the flexibility, speed, and productivity of its NPD function: i.e. the development process effectiveness. Our main research goals are first to explore if SMEs should focus on their their development process effectiveness rather than on their product concept effectiveness to achieve high NPD performance; and second, to explore whether a shared pattern in the organization of the NPD function can be recognized to affect NPD performance positively. The medical devices sector in Spain is used as an example of a\ud highly regulated sector. A structured survey among 11 SMEs, of which 2 were studied also as in in-depth case studies, led to the following results. First of all, indeed the companies in the dataset which focused on the effectiveness of their development process, stood out in NPD performance. Further, the higher performing companies did have a number of commonalities in the organisation of their NPD function: 1) The majority of the higher performing firms had an NPD strategy characterized by a predominantly incremental project portfolio.\ud 2) a) Successful firms with an incremental project portfolio combined this with a functional team structure b) Successful firms with a radical project portfolio combined this with a heavyweight or autonomous team structure.\ud 3) A negative reciprocal relationship exists between formalization of the NPD processes and the climate of the NPD function, in that a formalized NPD process and an innovative climate do not seem to reinforce each other. Innovative climate combined with an informal NPD process does however contribute positively to NPD performance. This effect was stronger in combination with a radical project portfolio. The highest NPD performance was measured for companies focusing mainly on incremental innovation. It is argued that in highly regulated sectors, companies with an incremental product portfolio would benefit from employing a functional structure. Those companies who choose for a more radical project portfolio in highly regulated sectors should be aware\ud that they are likely to excell only in the longer term by focusing on strategic flexibility. In their NPD organization, they might be well advised to combine informal innovation processes with an innovative climate

SMEs; Virtual research and development (R&D) teams and new product development: A literature review

Small and medium-sized enterprises (SMEs) are indeed the engines of global economic growth. Their continued growth is a major subject for the economy and employment of any country. Towards that end, virtual research and development (R&D) could be a viable option to sustain and ease the operations of SMEs. However, literature shows there has not been a great deal of research into the diverse characteristic of virtual R&D teams in SMEs. This article provides a comprehensive literature review on different aspects of virtual R&D teams collected from the reputed publications. The purpose of the literature review is to provide an outline on the structure and dynamics of R&D collaboration in SMEs. Specifying the rationale and relevance of virtual teams, the relationship between virtual R&D team for SMEs and new product development (NPD) has been examined. It concludes with identifying the gaps and feebleness in the existing literature and calls for future research in this area. It is argued to form of virtual R&D team deserves consideration at top level management for venturing into the new product development within SMEs

Technological collaboration : bridging the innovation gap between small and large firms

This paper analyses technological collaboration as an input to the innovation processes of SMEs. Technological collaboration may be a useful mechanism to offset some of the weaknesses in SMEs resource endowments and bring their innovation capabilities closer to that of their large counterparts. The results, based on a large longitudinal sample of Spanish manufacturing firms, show that technological collaboration is a critical factor in improving the capabilities and innovativeness of SMEs. While a general bridging of the gap between the innovativeness of SMEs and large firms was observed, the most significant advance was in product rather than process innovations

Models of internationalisation: The New Zealand experience

This paper examines the models of internationalisation adopted by thirty firms from New Zealand. Analysis of the international model is based on five key dimensions: firm sector and size; international market scope; market entry and servicing strategies; and speed of internationalisation. Drivers and constraints to internationalisation are also considered in the analysis. Evaluation of these dimensions over time finds evidence of both traditional ‘stages’ and emergent ‘born (again) global’ models of internationalisation, and reveals that over one third of these firms experience dramatic change to their international activities and resources initiated by divestment or change of ownership. We refer to the alternative internationalisation trajectory adopted by these firms as the ‘transformational’ model of internationalisation. The paper makes a contribution to the extant literature by providing synthesis of the New Zealand internationalisation and by building on our understanding of how patterns of internationalisation from a small open economy are changing in response to global environmental pressures

Virtual R&D teams in small and medium enterprises: a literature review

Small and medium enterprises (SMEs) are the driving engine behind economic growth. While SMEs play a critical role in generating employment and supporting trade, they face numerous challenges, the prominent among them are the need to respond to fasting time-to-market, low-cost and rapid solutions to complex organizational problems. Towards that end, research and development (R & D) aspect deserves particular attention to promote and facilitate the operations of SMEs. Virtual R & D team could be a viable option. However, literature shows that virtual R & D teaming in SMEs is still at its infancy. This article provides a comprehensive literature review on different aspects of virtual R & D teams collected from the reputed publications. The purpose of the state-of-the-art literature review is to provide an overview on the structure and dynamics of R & D collaboration in SMEs. Specifying the foundation and importance of virtual teams, the relationship between virtual R & D team and SMEs has been examined. It concludes with the identification of the gaps in the existing literature's and calls for future research. It is argued that setting-up an infrastructure for virtual R & D team in SMEs still requires a large amount of engineering efforts and deserves consideration at top level management

IT governance in SMEs: trust or control?

It is believed by many scholars that a small and medium-sized enterprise (SME) cannot be seen through the lens of a large firm. Theories which explain IT governance in large organizations and methodologies used by practitioners can therefore not be extrapolated to SMEs, which have a completely different economic, cultural and managerial environment. SMEs suffer from resource poverty, have less IS experience and need more external support. SMEs largely contribute to the failure of many IS projects. We define an out-sourced information system failure (OISF) as a failure of IT governance in an SME environment and propose a structure for stating propositions derived from both agency theory and theory of trust. The theoretical question addressed in this paper is: how and why do OISFs occur in SMEs? We have chosen a qualitative and positivistic IS case study research strategy based on multiple cases. Eight cases of IS projects were selected. We found that trust is more important than control issues like output-based contracts and structured controls for eliminating opportunistic behaviour in SMEs. We conclude that the world of SMEs is significantly different from that of large companies. This necessitates extra care to be taken on the part of researchers and practitioners when designing artefacts for SMEs