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Organisational Innovation, Governance Structure and Innovative Capacity In British and French Industry


  • Edward Lorenz


This study makes use of the results of a postal questionnaire sent to a sample of large private sector companies in Britain and France to address two key issues in the new institutional analysis of the firm. The first is the way the institutional environment supports and constrains the design of firm-level organisational devices and governance mechanisms. The second concerns the relation between the introduction of new organisational methods and the firm’s innovative capacity. Multiple correspondence analysis is used to describe the relation between the use of innovative work methods and pay policies. The analysis shows that the policies of the British sample of firms display greater ‘coherence’ than those of the French sample, in the sense that a more intensive use of the new organisational methods is more consistently associated with a more intensive use of the new pay policies. Ordered logit regression analysis shows that UK firms with positive expenditures on R&D are more likely to introduce new organisational methods than those not making such expenditures. This relation between the use of new organisational methods and investments in innovative capacity are not confirmed for the French case.

Suggested Citation

  • Edward Lorenz, 1999. "Organisational Innovation, Governance Structure and Innovative Capacity In British and French Industry," DRUID Working Papers 99-1, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  • Handle: RePEc:aal:abbswp:99-1

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    References listed on IDEAS

    1. Foss, Nicolai Juul, 1993. "Theories of the Firm: Contractual and Competence Perspectives," Journal of Evolutionary Economics, Springer, vol. 3(2), pages 127-144, May.
    2. Lorenz, Edward, 1999. "Trust, Contract and Economic Cooperation," Cambridge Journal of Economics, Oxford University Press, vol. 23(3), pages 301-315, May.
    3. Langlois, Richard N & Foss, Nicolai J, 1999. "Capabilities and Governance: The Rebirth of Production in the Theory of Economic Organization," Kyklos, Wiley Blackwell, vol. 52(2), pages 201-218.
    4. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
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    More about this item


    knowledge flow; innovation; organization.;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D


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