Conflict, Contract, Leadership and Innovation: An Interdisciplinary View
The competitive market is able to regulate simple innovative processes. In those of a more complex nature whose principal players may belong to either the same or a different firm a different form of organization is required: one which coherently defines rules and resources designed to avoid, in conditions of uncertainty, tensions arising between the different players which prevent their coordination. In this essay, the hypothesis that such organizations require both contract and leadership will be presented and discussed. The contract is required to en-sure ex-post efficiency, avoiding wastage of resources, and ex-ante efficiency, i.e. mutual commitment between the different players in the innovative process. Leadership is required to progressively manage the conflicts that occur between contrasting visions of how best to proceed that emerge from different specializations, legitimized through a shared commitment. Notwithstanding such characterization, leadership may also not assume the same functions of contract. The contract may not be sufficient and require leadership, but strong leadership cannot replace contract. In such a case, there would be a risk of disengagement. An initial application of this simple model (leadership and contract) seems encouraging against competing theories conceiving contract or leadership as sufficient conditions for innovation.
Volume (Year): 1 (2011)
Issue (Month): 6 (October)
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