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Dynamic capabilities and sustained innovation: strategic control and financial commitment at Rolls-Royce plc

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  • William Lazonick
  • Andrea Prencipe

Abstract

Rolls-Royce plc is currently a powerful competitor in the turbofan engine industry, notwithstanding its own troubled history and the relative lack of international success of British companies in high-technology manufacturing over the past half-century. This paper seeks to contribute to the development of a theory of innovative enterprise by analyzing the roles of strategy and finance in sustaining the innovation process at Rolls-Royce over four decades from the mid-1960s. Through an analysis of 'strategic control' and 'financial commitment' as conditions of innovative enterprise at different stages in Rolls-Royce's evolution, we adduce evidence that innovation depends in part on who strategic managers are and how they gain control over financial resources. Copyright 2005, Oxford University Press.

Suggested Citation

  • William Lazonick & Andrea Prencipe, 2005. "Dynamic capabilities and sustained innovation: strategic control and financial commitment at Rolls-Royce plc," Industrial and Corporate Change, Oxford University Press, vol. 14(3), pages 501-542, June.
  • Handle: RePEc:oup:indcch:v:14:y:2005:i:3:p:501-542
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    Citations

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    Cited by:

    1. Andrea Prencipe & Stefano Brusoni, 2005. "Making Design Rules: A Multi-Domain Perspective," SPRU Working Paper Series 136, SPRU - Science Policy Research Unit, University of Sussex Business School.
    2. Claude DUPUY (GREThA UMR CNRS 5113) & Matthieu MONTALBAN (GREThA UMR CNRS 5113) & Sylvain MOURA (GREThA UMR CNRS 5113), 2009. "Finance and Industrial Dynamics (In French)," Cahiers du GREThA 2009-24, Groupe de Recherche en Economie Théorique et Appliquée.
    3. Lazonick, William, 2006. "Corporate Governance, Innovative Enterprise, and Economic Development," WIDER Working Paper Series 071, World Institute for Development Economic Research (UNU-WIDER).
    4. Lin, Hai-Fen & Su, Jing-Qin & Higgins, Angela, 2016. "How dynamic capabilities affect adoption of management innovations," Journal of Business Research, Elsevier, vol. 69(2), pages 862-876.
    5. Nicholas Crafts & Alan Hughes, 2013. "Industrial Policy for the Medium to Long-term," Working Papers wp455, Centre for Business Research, University of Cambridge.
    6. Simon Deakin, 2013. "The Legal Framework Governing Business Firms & its Implications for Manufacturing Scale & Performance: The UK Experience in International Perspective," Working Papers wp449, Centre for Business Research, University of Cambridge.
    7. Kaivanto, Kim & Stoneman, Paul, 2007. "Public provision of sales contingent claims backed finance to SMEs: A policy alternative," Research Policy, Elsevier, vol. 36(5), pages 637-651, June.
    8. William Lazonick, 2010. "The Chandlerian corporation and the theory of innovative enterprise," Industrial and Corporate Change, Oxford University Press, vol. 19(2), pages 317-349, April.
    9. Belloc, Filippo, 2010. "Corporate governance and innovation: an organizational perspective," MPRA Paper 21495, University Library of Munich, Germany.
    10. Crafts, Nicholas, 2012. "Creating Competitive Advantage: Policy Lessons from History," CAGE Online Working Paper Series 91, Competitive Advantage in the Global Economy (CAGE).
    11. repec:gam:jsusta:v:9:y:2017:i:5:p:730-:d:97397 is not listed on IDEAS
    12. Rosa Jordá-Borrell & Francisca Ruiz-Rodríguez & Reyes González-Relaño, 2015. "Factors and taxonomy of technology purchase (TP) by internationalized innovative companies in peripheral European regions," Papers in Regional Science, Wiley Blackwell, vol. 94, pages 139-174, November.
    13. Dominic Chai & Simon Deakin & Prabirjit Sarkar & Ajit Singh, 2014. "Corporate Governance, Legal Origin & the Persistence of Profits," Working Papers wp465, Centre for Business Research, University of Cambridge.

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