On the adoption decision and the intensity of use of complementary innovations: The intra firm diffusion of management practices across UK establishments

This paper contributes to the literature on the intra-firm diffusion of innovations by investigating the factors that affect the firm’s decision to adopt and use sets of complementary innovations. We define complementary innovations those innovations whose joint use generates super additive gains, i.e. the gain from the joint adoption is higher than the sum of the gains derived from the adoption of each innovation in isolation. From a theoretical perspective, we present a simple decision model, whereby the firm decides ‘whether’ and ‘how much’ to invest in each of the innovations under investigation based upon the expected profit gain from each possible combination of adoption and use. The model shows how the extent of complementarity among the innovations can affect the firm’s profit gains and therefore the likelihood that the firm will adopt these innovations jointly, rather than individually. From an empirical perspective, we focus on four sets of management practices, namely operating (OMP), monitoring (MMP), targets (TMP) and incentives (IMP) management practices. We show that these sets of practices, although to a different extent, are complementary to each other. Then, we construct a synthetic indicator of the depth of their use. The resulting intra-firm index is built to reflect not only the number of practices adopted but also the depth of their individual use and the extent of their complementarity. The empirical testing of the decision model is carried out using the evidence from the adoption behaviour of a sample of 1,238 UK establishments present in the 2004 Workplace Employment Relations Survey (WERS). Our empirical results show that the intra-firm profitability based model is a good model in that it can explain more of the variability of joint adoption than models based upon the variability of adoption and use of individual practices. We also investigate whether a number of firm specific and market characteristics by affecting the size of the gains (which the joint adoption of innovations can generate) may drive the intensity of use of the four innovations. We find that establishment size, whether foreign owned, whether exposed to an international market and the degree of homogeneity of the final product are important determinants of the intensity of the joint adoption of the four innovations. Most importantly, our results point out that the factors that the economics of innovation literature has been showing to affect the intensity of use of a technological innovation do also affect the intensity of use of sets of innovative management practices. However, they can explain only a small part of the diversity of their joint adoption use by the firms in the sample.

Strategy tools as boundary objects: a strategy-as-practice perspective

This review is structured in three sections and provides a conceptual framework for the empirical analysis of strategy tools as they are used in practice. Examples of strategy tools are SWOT analysis or Porter’s Five Forces, among others. Section one reviews empirical research into the use of strategy tools, classifying them according to variations in their use. Section two explains the concept of boundary objects as the basis for our argument that strategy tools may be understood as boundary objects. Boundary objects are artefacts that are meaningfully and usefully incorporated to enable sharing of information and transfer of knowledge across intra-organizational boundaries, such as laterally across different strategic business units or vertically across hierarchical levels. Section three draws the two bodies of literature together, conceptualizing strategy tools in practice as boundary objects. This review contributes to knowledge on using strategy tools in practice.

Organizing to reorganize:doing end-to-end management in practice

This paper takes a practice perspective on organizing, re-conceptualizing coordination mechanisms as dynamic activities that are under continuous construction and modification in order to socially accomplish intra-organizational relationships and activities. The paper is based on the case of Servico, an organization undergoing a major reorganization of its value chain in response to a change in government regulation. We examine the specific performances through which the ostensive and abstract character of a coordination mechanism, ‘end-to-end management’, is defined and refined into a set of activities that actors can use to effect the re-organization of relationships between two divisions during the delivery of a critical regulatory goal. We find six cycles of iteration between the ostensive and performative nature of end-to-end, which progressively help to organize three phases in the reorganization of Servico; absence, presence and formalization. The discussion examines the processual evolution of these cycles and phases and their implications for the way that reorganization occurred. We draw these findings together in a process model that makes contributions to the literature on organizing, on ostensive and performative routines, and on organizational restructuring.

Strategic planning as communicative process

This paper looks at how a strategic plan is constructed through a communicative process. Drawing on Ricoeur’s concepts of decontextualization and recontextualization, we conceptualize strategic planning activities as being constituted through the iterative and recursive relationship of talk and text. Based on an in-depth case study, our findings show how multiple actors engage in a formal strategic planning process which is manifested in a written strategy document. This document is thus central in the iterative talk to text cycles. As individuals express their interpretations of the current strategic plan in talk, they are able to make amendments to the text that then shape future textual versions of the plan. This iterative cycle is repeated until a final plan is agreed. We develop our findings into a model of the communication process that explains how texts become more authoritative over time and, in doing so, how they inscribe power relationships and social order within organizations. These findings contribute to the literature on the purposes of largely institutionalized processes of strategic planning and to the literature on organization as a communications process.

A review of barriers to kerbside recycling household waste in the UK

The aim of this work is to use systematic review methodology to answer the question “What are the current barriers to kerbside recycling of household waste in the UK?” A systematic search of electronic databases and journals was undertaken to identify academic published work. A critical scoping review of research published between 2000 – 2008 profiles theory and research design. The systematic review identified twelve relevant papers, of which seven contain original data. To define the current barriers the explanations of barriers were systematically aggregated into four main categories: household / individual behaviour; services / local situation; attitudes / motivation; information and knowledge. The purpose of the work is to inform future marketing campaigns which will assist the UK to reach the statutory targets of waste diversion. The synthesis will be useful to environmental professionals working in waste authorities and researchers and students. The framework offers an opportunity to develop better marketing and communications strategies to help more people recycle more things more often and will inform future recycling policy development.

Finding natural groups in data:an application to strategic group research

The best way of finding “natural groups” in management research remains subject to debate and within the literature there is no accepted consensus. The principle motivation behind this study is to explore the effect of choices of method upon strategic group research, an area that has suffered enduring criticism, as we believe that these method choices are still not fully exploited. Our study is novel in the use of a variety of more robust clustering and validation techniques, rarely used in management research, some borrowed from the natural sciences, which may provide a useful and more robust base for this type of research. Our results confirm that methods do exist to address the concerns over strategic group research and adoption of our chosen methods will improve the quality of management research.

The innovation value chain

Innovation events - the introduction of new products or processes - represent the end of a process of knowledge sourcing and transformation. They also represent the beginning of a process of exploitation which may result in an improvement in the performance of the innovating business. This recursive process of knowledge sourcing, transformation and exploitation we call the innovation value chain. Modelling the innovation value chain for a large group of manufacturing firms in Ireland and Northern Ireland highlights the drivers of innovation, productivity and firm growth. In terms of knowledge sourcing, we find strong complementarity between horizontal, forwards, backwards, public and internal knowledge sourcing activities. Each of these forms of knowledge sourcing also makes a positive contribution to innovation in both products and processes although public knowledge sources have only an indirect effect on innovation outputs. In the exploitation phase, innovation in both products and processes contribute positively to company growth, with product innovation having a short-term ‘disruption’ effect on labour productivity. Modelling the complete innovation value chain highlights the structure and complexity of the process of translating knowledge into business value and emphasises the role of skills, capital investment and firms’ other resources in the value creation process.

Exporting and productivity in business services:evidence from the United States

Does exporting make firms more productive, or do more productive firms choose to become exporters? Given the amount of resources devoted by governments to supporting exporters, this is an important question. There are reasons to expect exporting to boost productivity, both through the exposure to foreign competition which exporting brings, and through ‘learning by exporting’. However, the broad thrust of previous research is that more productive firms self-select into export markets, with relatively little evidence that exporting leads to higher productivity thereafter. This paper considers the link between exporting and productivity for a sample of firms in US business services. We find that larger, more productive firms are more likely to become exporters, but that these factors do not necessarily influence the extent of exporting. This conforms with previous literature that there is a self-selection effect into exporting. We then test for the effect of exporting on productivity levels after allowing for this selection effect. We model both the relationship between exporting and productivity, and a simultaneous relationship between export intensity and productivity after allowing for selection bias. In both cases we find a clear association, indicating that productivity is positively linked both to exporting and to increased exposure to international markets.

Technology flows, outsourcing and productivity:an analysis of UK trade and FDI

By engaging in trade and foreign direct investment (FDI) with foreign partners, a country can access the R&D and related knowledge stocks of other countries (by accident or by design) and so benefit from those stocks of knowledge at a cost lower than that which would be incurred by developing the knowledge internally. This should lead to beneficial ‘spillover’ effects on the productivity of domestic firms. However, the literature on technology spillovers from trade and FDI is ambiguous in its findings. This may in part be because of the assumption in much of the work that trade and FDI flows are homogeneous in their determinants and thus in their effects. We develop a taxonomy of trade and FDI determinants based on R&D intensity and unit labour cost differentials, and test for the presence of spillovers from inward investment and imports on an extensive sample of UK manufacturing plants. We find that both trade and FDI have measurable spillover effects, but the size of these effects varies depending on the technological and labour cost differentials between the UK and its trading partners. There is therefore an identifiable link between the determinants and effects of trade and FDI which the previous literature has not explored. We also find that absorptive capacity matters for spillovers from FDI, but not from trade. Overall, these findings suggest that the productivity effects of FDI are largely restricted to plants with high absorptive capacity, while the productivity effects of imports occur largely among higher-technology plants regardless of their absorptive capacity.

Innovation, ownership and profitability

There is lots of evidence that innovating firms are persistently more profitable than non-innovators, but little agreement on why this is the case. It may be because innovators are somehow able to protect their new products from the competition which normally erodes profits, or because innovating firms have superior capabilities and are able to introduce multiple innovations over time. And very little is known about the relationship between innovation, external ownership and profitability, despite the fact that foreign-owned firms are frequently highly innovative and very profitable. This paper considers the relationship between innovation, ownership and profitability for a panel of manufacturing plants in Ireland and Northern Ireland. We consider the link between innovation and profits separately for innovators and non-innovators, and for indigenous innovators and non-innovators and externally-owned plants. We also consider the determinants of innovation over the distribution of plant-level profitability, and find that the determinants of profitability – including innovation and external ownership – are quite different for low and high-profitability plants. We find support for the view that innovators and non-innovators have different profitability determinants, and that externally-owned plants have their profitability determined in a quite different way from indigenous enterprises. For indigenous non-innovators only the sector matters. Profitability in these enterprises is dictated largely by the industry they are in, with plants having virtually no means of differentiating their profitability from the norms of the industry. By contrast, indigenously-owned innovators are able to differentiate their profit performance from industry norms to some extent. Absolute size matters (negatively) and they get a strong boost from product innovation, but having a high market share does not matter for the profitability of indigenously-owned innovators. Externally-owned plants have a quite different set of profitability determinants from both of these groups. What matters for these plants is not the boost they get from innovating (there is none) but instead their position in the domestic market – a high market share boosts profitability. In policy terms our results suggest both optimistic and cautionary messages. On the positive side our results suggest that efforts to promote innovation activity among indigenously-owned plants are likely to have significant longer term benefits through their capability effects. For the development agencies in Ireland this is a reassuring result. On the more negative side, the lack of any relationship in our models between the innovation activities of externally-owned plants and their (profitability) performance raises potential concerns. This finding may reflect the lack of linkages between externally-owned plants and their Irish resource base, in turn raising some worrying issues about the ‘embeddedness’ of much FDI into Ireland and therefore its ‘stickiness’ in the face of Ireland’s increasing high relative cost base.