Organizing for Innovation in Large Firms
AbstractDetermining how a firm can best be organized to facilitate innovation is a topic of central importance to managers and academics alike and is thus the focus of this paper. Specifically, this paper focuses on two important components of organizing for innovation: design of R&D resource allocation systems and the use of external sources of technology. The study makes a theoretical contribution by developing the metaphor of the "internal market" as useful mechanism for resource allocation inside the firm. In addition, the research benefits from using a two-phase empirical approach. The first phase consists of four in-depth case studies of HP, ABB, Ericsson, and Xerox's global R&D organizations. For the second phase of the study, a questionnaire was developed to test the study's hypotheses on a sample of 103 large firms. The study's key findings are that increased use of external sources of technology results in increased efficiency, but decreased effectiveness. However, results also indicate that it is always important to perform environmental scanning activities. No strong relationships were observed between the use of internal markets as a resource allocation system and firm performance. The case studies reveal that this lack of relationship is likely because leading firms have learned to develop checks and balances to help overcome the weaknesses that their resource allocation system possesses.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Stockholm School of Economics in its series Working Paper Series in Business Administration with number 2000:5.
Length: 31 pages
Date of creation: 19 Apr 2000
Date of revision:
Contact details of provider:
Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, SE 113 83 Stockholm, Sweden
Phone: +46-(0)8-736 90 00
Fax: +46-(0)8-31 01 57
Web page: http://www.hhs.se/
More information through EDIRC
Internal market; Resource allocation; Research & Development;
Find related papers by JEL classification:
- O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
This paper has been announced in the following NEP Reports:
- NEP-ALL-2000-05-16 (All new papers)
- NEP-DEV-2000-05-16 (Development)
- NEP-FIN-2000-05-16 (Finance)
- NEP-IND-2000-05-16 (Industrial Organization)
- NEP-INO-2000-05-16 (Innovation)
- NEP-TID-2000-05-16 (Technology & Industrial Dynamics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Weel,Bas,ter, 1999. "Investing in Knowledge: On the Trade-Off between R&D, ICT, Skills and Migration," Research Memoranda 024, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology.
- Teece, David J., 1996. "Firm organization, industrial structure, and technological innovation," Journal of Economic Behavior & Organization, Elsevier, vol. 31(2), pages 193-224, November.
- Veugelers, Reinhilde, 1997.
"Internal R & D expenditures and external technology sourcing,"
Elsevier, vol. 26(3), pages 303-315, October.
- Veugelers, Reinhilde, 1997. "Internal R&D expenditures and external technology sourcing," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/101584, Katholieke Universiteit Leuven.
- Teece, David J., 1986.
"Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy,"
Elsevier, vol. 15(6), pages 285-305, December.
- Teece, David J., 1993. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," Research Policy, Elsevier, vol. 22(2), pages 112-113, April.
- Narula,Rajneesh, 1999. "Choosing between internal and non-internal R&D activities: some technological and economic factors," Research Memoranda 022, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology.
- Mansfield, Edwin, 1985. "How Rapidly Does New Industrial Technology Leak Out?," Journal of Industrial Economics, Wiley Blackwell, vol. 34(2), pages 217-23, December.
- Narula,Rajneesh & Hagedoorn,John, 1998.
"Innovating through strategic alliances: moving towards international partnerships and contractual agreements,"
025, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology.
- John Hagedoorn & Rajneesh Narula, . "Innovating through strategic alliances: moving towards international partnerships and contractual agreements," STEP Report series 199805, The STEP Group, Studies in technology, innovation and economic policy.
- Narula, Rajneesh & Hagedoorn, John, 1999. "Innovating through strategic alliances: moving towards international partnerships and contractual agreements," Open Access publications from Maastricht University urn:nbn:nl:ui:27-4301, Maastricht University.
- Iansiti, Marco, 1997. "From technological potential to product performance: an empirical analysis," Research Policy, Elsevier, vol. 26(3), pages 345-365, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Helena Lundin).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.