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How a Smart Follower Becomes a Top Performer: An Institutional Innovation Perspective on Competitive Advantage

Author

Listed:
  • Jacques Brook

    (Maastricht School of Management, the Netherlands)

Abstract

The 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.

Suggested Citation

  • Jacques Brook, 2011. "How a Smart Follower Becomes a Top Performer: An Institutional Innovation Perspective on Competitive Advantage," Working Papers 2011/13, Maastricht School of Management.
    • Handle: RePEc:msm:wpaper:2011/13
    as

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    References listed on IDEAS

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    1. Catherine M. Banbury & Will Mitchell, 1995. "The effect of introducing important incremental innovations on market share and business survival," Strategic Management Journal, Wiley Blackwell, vol. 16(S1), pages 161-182.
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    JEL classification:

    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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