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Linking Customer Interaction and Innovation: The Mediating Role of New Organizational Practices

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  • Nicolai J. Foss

    (Center for Strategic Management and Globalization, Copenhagen Business School, 2000 Frederiksberg, Denmark; and Department of Strategy and Management, Norwegian School of Economics and Business Administration, N-5045 Bergen, Norway)

  • Keld Laursen

    (DRUID, Department of Innovation and Organizational Economics, Copenhagen Business School, 2000 Frederiksberg, Denmark)

  • Torben Pedersen

    (Center for Strategic Management and Globalization, Copenhagen Business School, 2000 Frederiksberg, Denmark)

Abstract

The notion that firms can improve their innovativeness by tapping users and customers for knowledge has become prominent in innovation studies. Similar arguments have been made in the marketing literature. We argue that neither literatures take sufficient account of firm organization. Specifically, firms that attempt to leverage user and customer knowledge in the context of innovation must design an internal organization appropriate to support it. This can be achieved in particular through the use of new organizational practices, notably, intensive vertical and lateral communication, rewarding employees for sharing and acquiring knowledge, and high levels of delegation of decision rights. In this paper, six hypotheses were developed and tested on a data set of 169 Danish firms drawn from a 2001 survey of the 1,000 largest firms in Denmark. A key result is that the link from customer knowledge to innovation is completely mediated by organizational practices.

Suggested Citation

  • Nicolai J. Foss & Keld Laursen & Torben Pedersen, 2011. "Linking Customer Interaction and Innovation: The Mediating Role of New Organizational Practices," Organization Science, INFORMS, vol. 22(4), pages 980-999, August.
    • Handle: RePEc:inm:ororsc:v:22:y:2011:i:4:p:980-999
    DOI: 10.1287/orsc.1100.0584
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