How management innovation happens

Management innovation — that is, the implementation of new management practices, processes and structures that represent a significant departure from current norms — has over time dramatically transformed the way many functions and activities work in organizations. Many of the practices, processes and structures that we see in modern business organizations were developed during the last 150 years by the creative efforts of management innovators. Those innovators have included well-known names like Alfred P. Sloan and Frederick Taylor, as well as numerous other unheralded individuals and small groups of people who all sought to improve the internal workings of organizations by trying something new

Entrepreneurship In Multinational Corporations: The Initiative Process In Foreign Subsidiaries

This is an empirical study of initiatives in the subsidiaries of multinational corporations. An initiative is the subsidiary-driven creation of a value-adding activity. While previous research has focused on the world product mandates earned as a result of initiatives, or the corporate systems that facilitate subsidiary initiatives, this study is concerned with the internal processes that actively drive subsidiary initiatives. This issue is of vital importance to subsidiary managers who are looking for ways to enhance their value-added role in the corporation: it also has substantial implications for corporate strategy and for theoretical models of multinational management and entrepreneurship.;Two research questions drove this research: What forms do subsidiary initiatives take? and What is the initiative process? The research was undertaken using an inductive approach, building knowledge from an iterative combination of empirical evidence and theory. A total of 39 initiatives from six Canadian subsidiaries of U.S. multinational corporations formed the final sample. Data was gathered through over 100 personal interviews, but also from two questionnaires and archival and secondary sources.;There were two key findings. First, four distinct types of subsidiary initiatives were identified, labelled reconfiguration , local market , competitive bid and mandate extension . These four types were empirically validated, and conceptualized in terms of the market opportunities they tapped into. Second, the initiative process was analyzed in depth, and found to consist of four phases representing the increasing viability of the initiative. The process was found to be strongly influenced by the organizational context of the subsidiary, as predicted by Burgelman\u27s model of corporate venturing. The key contribution, however, is the observation that the internally-defined subsidiary context is a more critical driver of initiative than the externally-defined corporate context.;The implication for the management of multinational subsidiaries is that the assignment of subsidiary roles has limitations, because it assumes the opportunity set of the subsidiary can be prejudged and better understood from the centre than the periphery. Subsidiaries should have sufficient slack that opportunities can be identified and developed; and they should attempt to build an internal management context to foster the entrepreneurial spirit. Theoretical and managerial implications are developed around these core insights

Building Collaborative Networks for Innovation

Abstract included in tex

How Do Small Companies Attract the Attention of Their Corporate Parents?

Subsidiaries that are remote from their corporate headquarters need to take on initiatives and build their profile in order to attract positive attention from their parent companies.York's Knowledge Mobilization Unit provides services and funding for faculty, graduate students, and community organizations seeking to maximize the impact of academic research and expertise on public policy, social programming, and professional practice. It is supported by SSHRC and CIHR grants, and by the Office of the Vice-President Research & Innovation. [email protected] www.researchimpact.c

Corporate Entrepreneurship: Nothing Ventured, Nothing Gained?

Recent literature has suggested that adopting elements of the organization of independent venture capital (VC) firms may enhance the performance of corporate venture (CV) units (Chesbrough, 2000; Sahlman, 1990). This assertion has only been subject to minimal empirical research: typically restricted to small-sample qualitative studies or to examining the respective influences of independent VC firms and CV units on the performance of portfolio firms (Gompers & Lerner, 1998; Maula & Murray, 2001). A longitudinal survey of 95 CV units across three continents found mixed empirical support for the suggestion. Of the VC structures and practices investigated, strongest support was found for CV unit engagement with the VC community which was consistently associated with superior corporate venturing performance along both strategic and financial dimensions. VC-like equity-based compensation systems were not found to influence CV performance even where CV units were strongly focused on financial goals. Overall, the adoption of VC practices, partially mediated by venture unit performance, was positively associated with CV unit survival. These results suggest that selective adoption of elements of the VC model may enhance CV unit performance and survival

Knowledge Flows Within Multinational Corporations: Explaining Subsidiary Isolation and Its Performance Implications

Applying a new theoretical and empirical approach to intrafirm knowledge transfers, this paper provides some initial insight to the little-researched phenomenon of why some subsidiaries are isolated from knowledge-transfer activities within the multinational corporation (MNC). Knowledge transfer is framed as a problemistic search process initiated by the recipient unit. We show that knowledge flows from units that are perceived to be highly capable to units that perceive themselves to be highly capable. Knowledge flows are also associated with existing levels of communication and reciprocity. Taken together, these findings suggest that knowledge transfers in MNCs typically occur between highly capable members of an “in crowd,” and the isolated minority rarely, if ever, engages in knowledge-sharing activities. Finally, we show that the isolated minority underperforms other subsidiaries, suggesting the possibility of a “liability of internal isolation.

Forthcoming in Journal of Business Venturing

ABSTRACT We develop a typology of corporate venture units, based on their strategic role in the corporation, and specifically on (a) their relative emphasis on exploration versus exploitation and (b) the internal versus external locus of opportunity they pursue. Following configurations logic, we argue that the structures and systems used by venture units will be a function of their strategic role, and that their performance will be higher when internal elements are aligned. We also argue that exploitation-oriented units will survive for longer than exploration-oriented units. Using primary data collected on 95 venture units during 2001-2003, we use configurational analyses to test and find support for our hypotheses. 2 EXECUTIVE SUMMARY Despite the decline in private equity investment following the early-2000 collapse in the dot-com sector, corporate venturing continues to be an important activity among large firms. It is, however, an activity fraught with complexity -including a rather bewildering array of contemporary corporate venturing forms -as well as one beset with many basic questions remaining still unanswered. One fundamental set of questions pertains to the performance and survival of different types of corporate venture units. In this paper we make an attempt to address this neglected research domain by investigating whether different types of corporate venture units do indeed demonstrate differences in performance and survival rates. We draw on well established concepts in the strategic management and corporate entrepreneurship literatures to identify 4 types of corporate venture unit. We categorize venture units based on two dimensions that relate to their strategic profile: (a) whether the new venture ideas lie inside or outside the formal boundaries of the firm (i.e. the locus of opportunity), and (b) whether the venture unit focuses primarily on exploring to develop new assets and capabilities for its parent firm, or whether it focuses on exploiting the existing assets and capabilities of the parent firm (i.e. the strategic logic of the venture unit). Hence, we identify four types of corporate venture unit: 1) Internal explorer units invest in opportunities that arise inside the parent firm and actively nurture and develop these so that, over time, they become sources of growth for the firm. 2) Internal exploiter units attempt to monetize the existing assets of the parent firm (such as patents, technologies, raw ideas and managerial talent) within a short time frame, frequently by spinning them out as new businesses. 3) External explorer units invest in external companies (typically independent start-ups) predicted to have growth potential in domains anticipated to be of future strategic importance to the parent firm. 4) External exploiter units invest in external companies with a view to generating financial returns through leveraging the existing assets of the parent firm. Using interview and survey data on corporate venture units gathered during the period 2001-2003, we find that each of the four venture unit types is associated with a unique organizational profile -that is, with a distinctive network of relationships, venturing activities, and management systems. Each organizational profile is aligned with achieving the strategic challenges of that particular venture unit type. Turning to our research question of whether the different venture unit types perform differently and have different survival rates, we find that two distinctive dynamics are at play for performance and survival. For the performance of corporate venture units, the fit of the venture unit's strategic profile and, particularly, the various elements of its organizational profile, are critical to its shortto medium-term performance. In other words, no single venture unit type performs best -even when examined across a stringent performance definition which includes technological, financial as well as entrepreneurial capability dimensions -rather, the better aligned the elements of its 3 strategic profile and (most importantly) the elements of its organizational profile, the better the performance of the venture unit, irrespective of its type. The critical challenges this poses for managers are two-fold: (a) ensuring that a venture unit has clear and consistent strategic objectives, and (b) ensuring that its networks of relationships, venturing activities, and management systems are internally-consistent to enable the achievement of its strategic objectives. For the survival of corporate venture units, the type of the unit is critical (and not fit with any ideal strategic or organizational profile). Specifically, venture units that are geared towards the exploitation of parent firm assets and capabilities -i.e. the internal exploiter and external exploiter venture types -tend to survive longer. Units that focus on exploratory roles are at increased risk of early termination, regardless of their performance track-records. Why might this be the case? Exploitation-oriented activities tend to drive out exploration-oriented activities both because exploration-oriented activities are more uncertain in their outputs, and because they operate on a longer time horizon than exploitation-oriented activities. Hence, corporate executives may find the performance of exploration-oriented units more difficult to assess objectively in the short-term than that of their exploitation-oriented counterparts. This suggests a difficult tension to be managed at the corporate level: balancing exploration and exploitation, given the structural imbalances in the predictability and timing of their outputs. For the managers and staff of exploratory venture units, the challenge is that much more pressing and immediate. Defending their records in the face of the often-changing demands of their corporate parents likely involves emphasising the long-term value such a unit can provide to the corporation, building networks of supporters in the parent company, and showcasing success stories.

Experiments in an Organisational Context

This special issue helps to shed new light on a large variety of methods, such as a method to learn from experiments driven by a company itself or a method to extend results from lab experiments to organisational situations. The papers illustrate how management science is able to articulate theoretical construction and empirical research through a variety of experimental approaches, and they attest to the scientific rigor and vitality of our scientific community. Furthermore, all the papers show how the experimental research in management research could be further conducted in environments such as IdeaSquare@CERN to improve understanding of managing and leading organisations

The sources of management innovation: when firms introduce new management practices

Management innovation is the introduction of management practices new to the firm and intended to enhance firm performance. Building on the organizational reference group literature, this article shows that management innovation is a consequence of a firm's internal context and of the external search for new knowledge. Furthermore the article demonstrates a trade-off between context and search, in that there is a negative effect on management innovation associated with their joint occurrence. Finally the article shows that management innovation is positively associated with firm performance in the form of subsequent productivity growth