How a Smart Follower Becomes a Top Performer: An Institutional Innovation Perspective on Competitive Advantage
AbstractThe competitive advantage literature has tended to establish a strong relation between innovation leadership and high firm performance. However, we found that this is not always true. Inspired by the failure of many firms to be leaders in innovation, many other firms prefer to orient their corporate innovation strategy towards being a smart follower. Here their objective is to reduce the risks of innovations and to achieve a sustained competitive advantage. Smart followers move beyond the traditional notion of follower that focuses on the decision of not becoming a leader in particular technology domain and how to gain a cost advantage by learning from the leader. This paper discusses an institutional innovation framework based on a business system thinking approach. The objective is to assist the leadership in firms in synergizing capabilities in the interactions between the innovation dimensions. We found that firms that choose to be smart followers can become top performer if they pursue institutional innovation.
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Bibliographic InfoPaper provided by Maastricht School of Management in its series Working Papers with number 2011/13.
Length: 24 pages
Date of creation: Oct 2011
Date of revision:
Innovation Strategy; Institutional Innovation; Competitive advantage; Business model innovation; technology innovation; process innovation; service and product innovation; social and sustainable innovation; performance.;
Find related papers by JEL classification:
- M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executive Compensation
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-01-25 (All new papers)
- NEP-BEC-2012-01-25 (Business Economics)
- NEP-CSE-2012-01-25 (Economics of Strategic Management)
- NEP-ENT-2012-01-25 (Entrepreneurship)
- NEP-INO-2012-01-25 (Innovation)
- NEP-KNM-2012-01-25 (Knowledge Management & Knowledge Economy)
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