How Does Innovation Emerge in a Service Ecosystem?

[We’re pleased to welcome authors Jennifer D. Chandler of California State University, Fullerton, Ilias Danatzis of Freie Universita¨t Berlin, Carolin Wernicke of CRM Solutions GmbH, Melissa Archpru Akaka of the University of Denver, and David Reynolds of the University of Warwick. They recently published an article in Journal of Service Research entitled “How Does Innovation Emerge in a Service Ecosystem?,” which is currently free to read for a limited time. Below, They reflect on the motivation and impact of this research:]

Were there any specific external events—political, social, or economic—that influenced your decision to pursue this research?

We wanted to study how a divisive or hostile idea could possibly evolve into an innovation. The timing was good to investigate online privacy and personal data issues because the Facebook / Cambridge Analytica scandal had just occurred. We were intrigued by the struggles of the developers and engineers as they went about their everyday tasks; we saw how they negotiated with one another regarding their personal opinions regarding privatization of the internet. We knew that managers in many other companies and industries struggled with these same issues in the massive move toward online cloud computing and service innovation.

In what ways is your research innovative, and how do you think it will impact the field?

This research is innovative because the topics of online privacy and data monetization are controversial, intense, and timely. Also, the theoretical idea that innovation is a nonlinear systemic process that can sometimes breakdown is thought-provoking. We are trying to emphasize that, no matter the outcome, innovation is about stimulating discussion and creating feedback loops so that the next time a good idea comes around, it can prosper. To explain this, we bring in the concepts of plasticity and institutional reconciliation to explain why ideas do not always emerge as innovations. Furthermore, we discuss that some ideas may not flourish simply because of timing and/or the contexts in which they are originated. Our findings suggest that innovators shouldn’t spend all their time on product development or in labs; rather, innovators should be out there cultivating their service ecosystems and nurturing shared norms and meanings.

What advice would you give to new scholars and incoming researchers in this particular field of study?

We would like to share that this manuscript is based on 4 years of data collection and that the authors were strewn across 3 different countries. Collaboratively, we went back and forth between the data analysis and theoretical development many, many times before we were satisfied. The attention to detail required to generate the theoretical framework stemmed from tenacity and persistence. At times, some of us on the team wanted to give up while others wanted to continue pushing forward to an “A” level journal. It was truly a team effort.

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Reflection on Institutions and Entrepreneurship Quality

[We’re pleased to welcome authors Dr. Farzana Chowdhury of University of Texas-Rio Grande Valley, David Audretsch of Indiana University, and Maksim Belitski of the University of Reading. They recently published an article in Entrepreneurship Theory and Practice entitled “Institutions and Entrepreneurship Quality,” which is currently free to read for a limited time. Below, Dr. Farzana briefly describes the motivation and significance of their research.

ETP_72ppiRGB_powerpointDuring 2012-2013 a group of researchers from Indiana University came across a continuing debate on the quantity and quality of entrepreneurial activity. We found that most of the studies to date considered it important to consider not just the quantity but also the quality of entrepreneurship because not all entrepreneurship contributes equally to economic activity.

Theory and empirical research suggested that entrepreneurship is an activity related to pursue and exploit market opportunities. These opportunities define the type of entrepreneurship activity which differs significantly across regions and countries. Recent research also debated that firm entry small business growth and other indicators are not necessarily per se good indicators reflecting the quality of entrepreneurship. Thus, we identified the need to develop a standardized and empirically tested measure of the quality of entrepreneurial activity across countries and to find a way how formal and informal institutions could enhance the quality of entrepreneurship.

Over the subsequent year, the authors participated in a professional development workshop (PDW) at the annual meetings of the Academy of Management in Philadelphia on the links between institutions and the individual choice made by individuals to become an entrepreneur.  Although important research published in two of the premier scholarly journals in the academic field of entrepreneurship,  The Journal of Business Venturing and Entrepreneurship: Theory and Practice had previously analysed this decision, little was known about how entrepreneurship quality is influenced by the corresponding rates of return –- or profit rates – associated with the various types of entrepreneurial activities, which in turn is shaped by the quality of existing political and legal institutions.

Our work focuses on the relationship between the quality of institutions and the quantity and quality of entrepreneurship across countries with different levels of economic development. The research impacts the field of institutional economies and economics of entrepreneurship by combining North’s (1990) institutional theory with Williamson’s (2000) institutional hierarchy approach, Whitley’s (1999) national business systems (NBS) perspective and Baumol’s (1990) theory of the productivity of entrepreneurship to explore the interactive and dynamic relationships between the formal and informal institutions and the quality and quantity of entrepreneurship. From the empirical perspective, the work contributes to understanding what types of institutions should be improved if entrepreneurship policy targets the quality of entrepreneurship activity. Most importantly the strength of the relationship still depends on the level of the country’s level of economic development. Our work provides a ranking of countries in descending order by quantity and quality of entrepreneurial activity which is complementary to the standard measures of entrepreneurial activity provided by the Global Entrepreneurship Monitor.

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How Do Industrial Influences Affect Executives?

06GOM10_Covers.indd[Editor’s Note: We are pleased to welcome  Sabina Nielsen of Copenhagen Business School, who collaborated with Siebel Yamak and Alejandro Escribá-Esteve to publish their paper “The Role of External Environment in Upper Echelons Theory: A Review of Existing Literature and Future Research Directions.” The paper will appear in Group and Organization Management and can be read now in the journal’s OnlineFirst section here.]

In doing this research, we were intrigued by the fact that Upper Echelons research has been developed mostly along the line of TMT-firm performance while it has been less able to unveil environment-TMT relationships. Whereas the role of the external environment has been recognized from the inception of upper echelons theory, existing reviews (Carpenter, Geletkanycz, & Sanders, 2004; Fınkelstein, Hambrick, & Cannella 2009) have paid scarce attention to the external context in which top management teams (TMTs) are embedded. Consequently, applying institutional and industrial organization theories, we have developed a cross-level conceptual model outlining the direct, mediating and moderating effects of the external environment on upper echelons and have outlined possible avenues for future research.

First, an updated UE conceptual model needs to take into account the country or transnational level context in which organizations are embedded. We argue that both industry and institutional contexts are important levels of analysis that may help advance our understanding of the antecedents and consequences of top management teams’ (TMTs) composition and behavior. Second, while the effects of industry characteristics on executives and their actions are recognized, theorizing about such effects has been underdeveloped (exceptions include studies on managerial discretion, CEO tenure and CEO succession which all focus on individual level of analysis). Therefore, to contribute to the upper echelons literature, we reviewed all empirical papers investigating TMT- environment relations and identified gaps in TMT-environment research. For instance, the co-evolution of various dynamic aspects of the industry and institutional environment and TMT composition as well as the impact of mediating mechanisms needs to be explored. Furthermore, research on the impact of transnational institutions on TMT processes, values and composition appears to be quite limited. Similarly, there is a lack of research on the influence of TMTs on state policies, transnational institutions and non-governmental organizations. Future research should explore the social and political mechanisms that TMTs may use to influence the institutional environment. We believe that combining institutional theory and upper echelon theory may bring in the impact of human agency in the institutional creation of meaning. Briefly, our research gives valuable insights on untapped research topics in upper echelons.

Read “The Role of External Environment in Upper Echelons Theory: A Review of Existing Literature and Future Research Directions” in Group and Organization Management.

sabina-nielsenSabina Nielsen is professor in strategic leadership and diversity at Copenhagen Business School, Denmark. Her research is at the intersection of strategy and international management with a particular focus on the composition, dynamics and decision-making of top management teams and boards of directors. She is currently serving as a representative-at-large of the Global Strategy Group at the Strategic Management Society.

sibelyamak_000 Sibel Yamak is professor of management and director of the Social Sciences Graduate School at Galatasaray University. Her publications, have focued on business elites, top management teams, governance, and corporate social responsibility. Sibel is currently an editorial board member of British Journal of Management, Society and Business Review, and YAD.

 thCA2UBJLIAlejandro Escribá-Esteve is associate professor of strategic management at the University of Valencia in Spain. He is currently member of the Board of the European Academy of Management and chair of the 2014 EURAM conference. Since 2009, Alejandro has been co organizer of the Track on Top Management Teams at the European Academy of Management and co-chairs the series of EIASM international workshops on Top Management Teams and Business Strategy.

Tackling a Wicked Management Problem

A new study in SAGE Open makes no bones about climate change as a wicked management problem. Urging a dynamic approach, the study zeroes in on Ghana as an opportunity for adapting water management to climate change.

John FitzGibbon and Kenneth O. Mensah, both of the University of Guelph, published “Climate Change as a Wicked Problem: An Evaluation of the Institutional Context for Rural Water Management in Ghana” on May 25, 2012 in SAGE Open. To read more recent articles, click here.

The abstract:

Understanding complexity suggests that some problems are more complex than others and defy conventional solutions. These wicked problems will not be solved by the same tools and processes that are complicit in creating them. Neither will they be resolved by approaches short on explicating the complex interconnections of the multiple causes, consequences, and cross-scale actors of the problem. Climate change is one such wicked problem confronting water management in Ghana with a dilemma. The physical consequences of climate change on Ghana’s water resources are progressively worsening. At the same time, existing institutional arrangements demonstrate weak capacities to tackle climate change–related complexities in water management. Therefore, it warrants a dynamic approach imbued with complex and adaptive systems thinking, which also capitalizes on instrumental gains from prior existing institutions. Adaptive Co-Management offers such an opportunity for Ghana to adapt its water management system to climate change.

To learn more about SAGE Open, please follow this link.

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