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Profiles of Product Innovators Among Large U.S. Manufacturers

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Author Info

  • Noel Capon

    (Graduate School of Business, Columbia University, New York, New York 10027)

  • John U. Farley

    (The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104)

  • Donald R. Lehmann

    (Graduate School of Business, Columbia University, New York, New York 10027)

  • James M. Hulbert

    (Graduate School of Business, Columbia University, New York, New York 10027)

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    Abstract

    This paper identifies four groups among 113 Fortune 500 manufacturers that approach innovation quite differently. The groups are based on 27 measured elements of corporate environment, corporate strategy, and formal and informal organization. Both product innovation and financial performance differ significantly over the groups, and a group of 42 firms that invest heavily in innovation perform best financially. A smaller group of firms that are not innovative but which follow a strategy of acquisition perform nearly as well financially. Firms focusing research resources on process innovation perform poorly, although process research complements product research among the effective innovators. Particularly important for explaining both product innovation and financial performance of these firms are salient combinations of classic elements of good environment, good strategy and good organization---strong positions in growing markets, investment in research and development, open and creative organizational structures and supportive organizational climates.

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    File URL: http://dx.doi.org/10.1287/mnsc.38.2.157
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    Bibliographic Info

    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 38 (1992)
    Issue (Month): 2 (February)
    Pages: 157-169

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    Handle: RePEc:inm:ormnsc:v:38:y:1992:i:2:p:157-169

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    Keywords: innovation; Fortune 500; financial performance; environment; strategy; organization;

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    Cited by:
    1. Koberg, Christine S. & Uhlenbruck, Nikolaus & Sarason, Yolanda, 1996. "Facilitators of organizational innovation: The role of life-cycle stage," Journal of Business Venturing, Elsevier, vol. 11(2), pages 133-149, March.
    2. Bisbe, Josep & Otley, David, 2004. "The effects of the interactive use of management control systems on product innovation," Accounting, Organizations and Society, Elsevier, vol. 29(8), pages 709-737, November.
    3. Aldónio Ferreira & Carly Moulang & Bayu Hendro, 2010. "Environmental management accounting and innovation: an exploratory analysis," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 23(7), pages 920-948, September.
    4. Lee, Seung-Hyun & Makhija, Mona & Paik, Yongsun, 2008. "The value of real options investments under abnormal uncertainty: The case of the Korean economic crisis," Journal of World Business, Elsevier, vol. 43(1), pages 16-34, January.
    5. Wang, Cheng Lu & Chung, Henry F.L., 2013. "The moderating role of managerial ties in market orientation and innovation: An Asian perspective," Journal of Business Research, Elsevier, vol. 66(12), pages 2431-2437.
    6. Gopalakrishnan, S. & Damanpour, F., 1997. "A review of innovation research in economics, sociology and technology management," Omega, Elsevier, vol. 25(1), pages 15-28, February.
    7. Kotabe, Masaaki & Jiang, Crystal Xiangwen & Murray, Janet Y., 2011. "Managerial ties, knowledge acquisition, realized absorptive capacity and new product market performance of emerging multinational companies: A case of China," Journal of World Business, Elsevier, vol. 46(2), pages 166-176, April.
    8. Bruynseels, Liesbeth & Willekens, Marleen, 2012. "The effect of strategic and operating turnaround initiatives on audit reporting for distressed companies," Accounting, Organizations and Society, Elsevier, vol. 37(4), pages 223-241.
    9. O'Brien, C. & Smith, S. J. E., 1995. "Strategies for encouraging and managing technological innovation," International Journal of Production Economics, Elsevier, vol. 41(1-3), pages 303-310, October.
    10. Chen, Chung-Jen, 2009. "Technology commercialization, incubator and venture capital, and new venture performance," Journal of Business Research, Elsevier, vol. 62(1), pages 93-103, January.
    11. da Mota de Pina e Cunha, A.M., 1998. "Determinants of Product Innovation in Organizations: Practices and Performance in the Portugese Financial Sector," Open Access publications from Tilburg University urn:nbn:nl:ui:12-78353, Tilburg University.
    12. Coenders, Germà & Bisbe, Josep & Saris, Willem E. & Batista-Foguet, Joan M., 2003. "Moderating Effects of Management Control Systems and Innovation on Performance. Simple Methods for Correcting the Effects of Measurement Error for Interaction Effects in Small Samples," Working Papers of the Department of Economics, University of Girona 7, Department of Economics, University of Girona.
    13. Lee, Seung-Hyun & Beamish, Paul W. & Lee, Ho-Uk & Park, Jong-Hun, 2009. "Strategic choice during economic crisis: Domestic market position, organizational capabilities and export flexibility," Journal of World Business, Elsevier, vol. 44(1), pages 1-15, January.
    14. repec:pab:wpbsad:12.04 is not listed on IDEAS
    15. Romelaer, Pierre, 2002. "Innovation and management constraints," Economics Papers from University Paris Dauphine 123456789/3361, Paris Dauphine University.
    16. Saha, Souresh, 2014. "Firm's objective function and product and process R&D," Economic Modelling, Elsevier, vol. 36(C), pages 484-494.
    17. Paolo Pini & Grazia Santangelo, 2005. "Innovation types and labour organisational practices: A comparison of foreign and domestic firms in the Reggio Emilia industrial districts," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(4), pages 251-276.
    18. Joaquín García-Cruz & Juan Carlos Real, 2012. "Trust as a consequence of perceived commitment: Implications on organizational learning capability and product innovation," Working Papers 12.03, Universidad Pablo de Olavide, Department of Business Organization and Marketing (former Department of Business Administration).
    19. Khalid Abdul Wahid & Haruthai Numprasertchai & Yuraporn Sudharatna, 2013. "Construction of Knowledge Creation: A Conceptual Framework," Diversity, Technology, and Innovation for Operational Competitiveness: Proceedings of the 2013 International Conference on Technology Innovation and Industrial Management, ToKnowPress.
    20. Coombs, Joseph E. & Mudambi, Ram & Deeds, David L., 2006. "An examination of the investments in U.S. biotechnology firms by foreign and domestic corporate partners," Journal of Business Venturing, Elsevier, vol. 21(4), pages 405-428, July.
    21. Teresa Tiaojung Hsu & Kuen-Hung Tsai & Yi-Chuan Liao, 2013. "How Knowledge Integration Mechanisms Affect Product Innovation in the NPD Process?," Diversity, Technology, and Innovation for Operational Competitiveness: Proceedings of the 2013 International Conference on Technology Innovation and Industrial Management, ToKnowPress.
    22. Pla-Barber, José & Alegre, Joaquín, 2007. "Analysing the link between export intensity, innovation and firm size in a science-based industry," International Business Review, Elsevier, vol. 16(3), pages 275-293, June.

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