Strategic Innovation Management Based on Three Dimensions

This thesis examines innovation development needs of firms in a remote rural region. The perspective of the study is in strategic innovation management and three dimensions of innovation development: innovation environment, value delivery and innovation capability. The framework is studied with a theoretical and methodological approach in the context of the development of a regional innovation system and the defining of innovation development needs. The thesis is based on existing innovation management literature, expanding it by examining the features of the three dimensions. The empirical data of the study comprise 50 purposefully selected firms within the region of Pielinen Karelia located in Eastern Finland. Most of the firms (70%) included in the study represent manufacturing firms, and over 90% are small and medium-sized enterprises. The research data consist of two questionnaires and an interview, which were done during 2011 in the connection of a regional development project. The point of view of the research is in regional development and harnessing the innovation capability of the firms within the region. The principal research approach applies soft systems methodology. The study explores the means to foster the innovativeness of firms from the viewpoints of innovation environment, innovation capability and value delivery. In closer detail, the study examines relations between the innovation capability factors, differences in innovation development needs within the value delivery system, between sectors and between firm size categories. The thesis offers three major contributions. First, the study extends earlier research on strategic innovation management by connecting the frameworks of innovation capability, innovation environment and value delivery process to the defining of innovation development needs at the regional level. The results deepen knowledge especially concerning practice-based innovation, peripheral regions and smaller firms. Second, the empirical work, based on a case study, confirms the existence of a structural connection integrating five factors of innovation capability. Statistical evidence is provided especially for the positive impacts of the improvement of absorption capability, marketing capability and networking capability, which are the main weaknesses of firms according to the study. Third, the research provides a methodological contribution by applying the innovation matrix in the defining of the innovation development needs of firms. The study demonstrates how the matrix improves possibility to target policy instruments and innovation services more efficiently through indicating significant differences between the innovation support needs regarding various time horizons and phases of innovation process.

The Impact of National Innovation System on Entrepreneurial Venture Creation Process

The important role of entrepreneurship in countries’ economic development and overall society well-being is widely recognized by researchers, experts as well as policy makers. Every phase of the process of starting a new business is related to the interaction with at least one player of country innovation system and therefore the efficiency of this interaction may have an influence on the success of whole entrepreneurial process and consequently on the willingness of potential entrepreneurs to engage into this process. The study proposes a System Dynamics model for studying the impact of National Innovation System (NIS) on the entrepreneurial venture creation process. The developed model also takes country population aspect into account and provides results for estimation the effect various demographic tendencies on the process performance. The special impact is made on possible ways to facilitate the development of entrepreneurial framework conditions. Business incubators are seen as one of the effective tool for accomplishing such task. The study also provides the result for estimation of possible impact arising from properly functioned Business Incubators.

Entrepreneurship, Service Innovation, International Expansion and Performance in SMEs: Empirical Evidence from Finnish ICT Industry

The thesis aims to clarify the mixed results of prior literature regarding the performance impacts of entrepreneurship and human capital through service innovation and international expansion. The thesis examines the factors affecting degree of internationalization (DOI) and performance in ICT SMEs. These factors are entrepreneurial orientation (EO), human capital and service innovation (SI). The data was collected via questionnaire from Finnish ICT SMEs. The results suggest that EO consist of three dimensions that have different impact in DOI and SI. Also DOI has inverted U-shaped relationship with international performance, whereas DOI-profitability relationship is linear. The results of the study suggest that SMEs should not blindly increase their DOI, and that strategic focus is important.

Innovation in a Non-Formal Adult Education Organisation – Multi-Case Study in Four Adult Education Centres

More than ever, education organisations are experiencing the need to develop new services and processes to satisfy expanding and changing customer needs and to adapt to the environmental changes and continually tightening economic situation. Innovation has been found in many studies to have a crucial role in the success of an organisation, both in the private and public sectors, in formal education and in manufacturing and services alike. However, studies concerning innovation in non-formal adult education organisations, such as adult education centres (AECs) in Finland, are still lacking. This study investigates innovation in the non-formal adult education organisation context from the perspective of organisational culture types and social networks. The objective is to determine the significant characteristics of an innovative non-formal adult education organisation. The analysis is based on data from interviews with the principals and fulltime staff of four case AECs. Before the case study, a pre-study phase is accomplished in order to obtain a preliminary understanding of innovation at AECs. The research found strong support for the need of innovation in AECs. Innovation is basically needed to accomplish the AEC system’s primary mission mentioned in the ACT on Liberal Adult Education. In addition, innovation is regarded vital to institutes and may prevent their decline. It helps the institutes to be more attractive, to enter new market, to increase customer satisfaction and to be on the cutting edge. Innovation is also seen as a solution to the shortage of resources. Innovative AECs search actively for additional resources for development work through project funding and subsidies, cooperation networks and creating a conversational and joyful atmosphere in the institute. The findings also suggest that the culture type that supports innovation at AECs is multidimensional, with an emphasis on the clan and adhocratic culture types and such values as: dynamism, future orientation, acquiring new resources, mistake tolerance, openness, flexibility, customer orientation, a risk-taking attitude, and community spirit. Active and creative internal and external cooperation also promote innovation at AECs. This study also suggests that the behaviour of a principal is crucial. The way he or she shows appreciation the staff, encouragement and support to the staff and his or her approachability and concrete participation in innovation activities have a strong effect on innovation attitudes and activities in AECs.

Professional sports and gambling regulation in Finland - Examining the institutional factors of gambling affecting professional sport clubs in Finland

This study examines how to institutional environment of gambling is currently in motion both in Europe and Finland. Furthermore, it examines the criticism by Finnish professional sport clubs directed towards the national gambling monopolies, especially Veikkaus Oy. This criticism addresses the acclaimed issue of low or non-existing sponsorship funds coming to the clubs despite the clubs’ duties to promote Veikkaus Oy in their stadiums etc. In essence the main research objective was to examine the interaction and institutional environments of both Finnish professional sport clubs and gambling regulation. This was done through three sub-objectives: 1) to analyze professional sport as business and its institutional environment 2) to analyze the institutions of gambling in their current state and their potential future 3) to evaluate the potential impact of an institutional change in gambling legislation to the professional sport clubs The findings from Finland were then compared to those of Denmark where an institutional change had occurred in gambling regulation. Empirical data was collected through multiple interviews. Interviewees represented sport clubs (7), sport association (1), sport league (1), Finnish monopoly representatives (2), commercial gambling providers (1), Danish monopoly system representatives (1), Danish sport club (1). In addition a vast amount of secondary data (e.g. Green and white books by EU, court decisions, a variety of studies etc.). Theoretically this study combines the aspects of institutional theory with the theory of professional sports as business. This proved to be a rather new approach and no published literature was found to have done specifically this. The findings of this study are twofold, on the European level it is clear that the momentum if towards a more liberated gambling market while Finland is at the moment trying to go the opposite direction and uphold its monopoly. From the sport club’s level the findings suggest that currently sport clubs do not directly benefit from the funds originated from Veikkaus Oy as these funds are more or less used on the association/league levels. However, the clubs themselves are also lacking in self-criticism as they are lacking in clear sponsorship packages/programs which Veikkaus Oy might be interested in participating. If liberation of the gambling market would occur it is highly possible that that the largest clubs in football and ice-hockey would be the main beneficiaries while smaller clubs and sports could possibly be worse off than currently. These interpretations were well supported by the findings from Denmark.

Launching the product innovation to a market: case study from a dairy industry

In the environment of ever-changing needs of customers, technologies and competitors, the survival of the company depends on how well it researches, develops and implements new products to the market. The need for development of new products relates to many factors: globalization, international competition which is now underway on a global scale, scientific advances and development of production, changes in consumer preferences and consumer behavior. In this study the focus is on the company form a dairy products industry. This study is aimed to defining the role of product innovation launch strategy in an overall enterprise strategy, and to select the optimal combination of its marketing tools. The main purpose of this study is to determine place and the role of innovative marketing based in the innovation process, and to determine launch and positioning strategies in the general concept of an innovative product. The object of the study is the Russian enterprise, which is aimed to achieve a competitive advantage through the continuous production of new products, upgrade existing ones and improve innovation management practices. Research showed that the differentiation strategy is suitable for launching the dairy industry product innovation to a market.

The Role of Universities in the Triple Helix model of innovation management within the biotechnology industry, Case example: Turku Science Park Network

Biotechnology has been recognized as the key strategic technology for industrial growth. The industry is heavily dependent on basic research. Finland continues to rank in the top 10 of Europe's most innovative countries in terms of tax-policy, education system, infrastructure and the number of patents issued. Regardless of the excellent statistical results, the output of this innovativeness is below acceptable. Research on the issues hindering the output creation has already been done and the identifiable weaknesses in the Finland's National Innovation system are the non-existent growth of entrepreneurship and the missing internationalization. Finland is proven to have all the enablers of the innovation policy tools, but is lacking the incentives and rewards to push the enablers, such as knowledge and human capital, forward. Science Parks are the biggest operator in research institutes in the Finnish Science and Technology system. They exist with the purpose of speeding up the commercialization process of biotechnology innovations which usually include technological uncertainty, technical inexperience, business inexperience and high technology cost. Innovation management only internally is a rather historic approach, current trend drives towards open innovation model with strong triple helix linkages. The evident problems in the innovation management within the biotechnology industry are examined through a case study approach including analysis of the semi-structured interviews which included biotechnology and business expertise from Turku School of Economics. The results from the interviews supported the theoretical implications as well as conclusions derived from the pilot survey, which focused on the companies inside Turku Science Park network. One major issue that the Finland's National innovation system is struggling with is the fact that it is technology driven, not business pulled. Another problem is the university evaluation scale which focuses more on number of graduates and short-term factors, when it should put more emphasis on the cooperation success in the long-term, such as the triple helix connections with interaction and knowledge distribution. The results of this thesis indicated that there is indeed requirement for some structural changes in the Finland's National innovation system and innovation policy in order to generate successful biotechnology companies and innovation output. There is lack of joint output and scales of success, lack of people with experience, lack of language skills, lack of business knowledge and lack of growth companies.

Open innovation: university-industry interaction in Russia

Innovation nowadays is one of the key elements of counties’ competitiveness. In the face of continuous world economic changes, open innovation business model implementation allows many companies to improve and accelerate their innovation processes through collaboration. Universities as traditional sources of knowledge might be involved in such kind of collaboration. In developing countries, which are in transition towards innovation-based economy, as Russia, open innovation business model can serve as a tool to speed up this transition. The Master’s Thesis explores the implementation of open innovation model in collaboration between companies and universities in global scale and particularly in Russia. The study is qualitative and it is based on integrative analysis of literature, secondary data and results of the survey, conducted among Russian universities. In the thesis a model for implementation of open innovation into Triple Helix model is elaborated. The study also explores not very common practice of reverse-directional interaction - from industry to university. The findings of this research show a necessity of solving the identified problems in parallel with implementation of open innovation concept in university-industry collaboration.

Roles of leadership in complex environments : Enhancing Knowledge Flows in Organisational Constellations through Practice-Based Innovation Processes

Global challenges, complexity and continuous uncertainty demand development of leadership approaches, employees and multi-organisation constellations. Current leadership theories do not sufficiently address the needs of complex business environments. First of all, before successful leadership models can be applied in practice, leadership needs to shift from the industrial age to the knowledge era. Many leadership models still view leadership solely through the perspective of linear process thinking. In addition, there is not enough knowledge or experience in applying these newer models in practice. Leadership theories continue to be based on the assumption that leaders possess or have access to all the relevant knowledge and capabilities to decide future directions without external advice. In many companies, however, the workforce consists of skilled professionals whose work and related interfaces are so challenging that the leaders cannot grasp all the linked viewpoints and cross-impacts alone. One of the main objectives of this study is to understand how to support participants in organisations and their stakeholders to, through practice-based innovation processes, confront various environments. Another aim is to find effective ways of recognising and reacting to diverse contexts, so companies and other stakeholders are better able to link to knowledge flows and shared value creation processes in advancing joint value to their customers. The main research question of this dissertation is, then, to seek understanding of how to enhance leadership in complex environments. The dissertation can, on the whole, be characterised as a qualitative multiple-case study. The research questions and objectives were investigated through six studies published in international scientific journals. The main methods applied were interviews, action research and a survey. The empirical focus was on Finnish companies, and the research questions were examined in various organisations at the top levels (leaders and managers) and bottom levels (employees) in the context of collaboration between organisations and cooperation between case companies and their client organisations. However, the emphasis of the analysis is the internal and external aspects of organisations, which are conducted in practice-based innovation processes. The results of this study suggest that the Cynefin framework, complexity leadership theory and transformational leadership represent theoretical models applicable to developing leadership through practice-based innovation. In and of themselves, they all support confronting contemporary challenges, but an implementable method for organisations may be constructed by assimilating them into practice-based innovation processes. Recognition of diverse environments, their various contexts and roles in the activities and collaboration of organisations and their interest groups is ever-more important to achieving better interaction in which a strategic or formal status may be bypassed. In innovation processes, it is not necessarily the leader who is in possession of the essential knowledge; thus, it is the role of leadership to offer methods and arenas where different actors may generate advances. Enabling and supporting continuous interaction and integrated knowledge flows is of crucial importance, to achieve emergence of innovations in the activities of organisations and various forms of collaboration. The main contribution of this dissertation relates to applying these new conceptual models in practice. Empirical evidence on the relevance of different leadership roles in practice-based innovation processes in Finnish companies is another valuable contribution. Finally, the dissertation sheds light on the significance of combining complexity science with leadership and innovation theories in research.

Forest contractors entrepreneurial skills development in Finland by Forest Expertise and Innovation Network : project in 2009 - 2013

Julkaisumaa: 578 NO NOR Norja

Accounting for competition, governance and accountability during institutional change in not-for-profit and public sector organisations

Purpose The aim of this thesis1 is to analyse theoretically how institutionalisation of competitive tendering2, governance and budgetary policies cannot be taken for granted to lead to accountability among institutional actors3. The nature of an institutionalised management accounting policy, its relevance as a source of power in organisational decision making, and in negotiating inter-organisational relationships, are also analysed. Practical motivation The practical motivation of the thesis is to show how practitioners and policy makers can institutionalise changes which improve the power of management accounting and control systems4 as a mechanism of accountability among institutional actors and in negotiating relationships with other organisations. Theoretical motivation and conceptual approach The theoretical motivation of the thesis is to extend the institutional framework of management accounting change proposed by Burns and Scapens (2000) by using the theories of critical realism, communicative action, negotiated order and the framework of circuits of power. The Burns and Scapens framework needs further theorisation to analyse the relationship between the institutionalisation of management accounting and accountability; and the relevance of management accounting information in negotiating in inter-organisational relationships. Methodology and field studies Field research took place in public and not-for-profit health care organisations and a municipality in Finland from 2008 to 2013. Data were gathered by document analysis, interviews, participation in meetings and observations. Findings The findings are explained in four different essays that show that institutionalisation of competitive tendering, governance and budgetary policies cannot be taken for granted to lead to accountability among institutional actors. The ways by which institutional actors think and act can be influenced by other institutional mechanisms, such as inter-organisational circuits of power and intraorganisational governance policies, independent of the institutional change process. The relevance of institutionalised management accounting policies in negotiating relationships between two or more organisations depends on processes and contexts through which institutional actors use management accounting information as a tool of communication, mutual understanding and power. Research limitations / implications The theoretical framework used can be applied validly in other studies. The empirical findings cannot be generalised directly to other organisations than the organisations analysed. Practical implications Competitive tendering and budgetary policies can be institutionalised to shape actions of institutional actors within an organisation. To lead to accountability, practitioners and policy makers should implement governance policies that increase the use of management accounting information in institutional actors’ thinking, actions and responsibility for their actions. To reach a negotiated order between organisations, institutionalised management accounting policies should be used as one of the tools of communication aiming to reach mutual agreement among institutional actors.

Managing innovation in oil and gas companies: A proposed framework for the management of innovation at Ecopetrol S.A.

Actually, the term innovation seems to be one of the most used in any kind of business practices. However, in order to get value from it, companies need to define a systematic and structured way to manage innovation. This process can be difficult and very risky since it is associated with the development of firm´s capabilities which involves human and technical challenges according to the context of a firm. Additionally, it seems not to exist a magic formula to manage innovation and what may work in a company may not work in another, even though in the same type of industry. In this sense, the purpose of this research is to identify how the oil and gas companies can manage innovation and what are the main elements, their interrelations and structure, required for managing innovation effectively in this critical sector for the world economy. The study follows a holistic single case study in a National Oil Company (NOC) of a developing country to explore how innovation performs in the industry, what are the main elements regarding innovation management and their interactions according to the nature of the industry. Contributory literature and qualitative data from the case study company (with the use of non-standardized interviews) is collected and analyzed. The research confirms the relevance and importance of the definition and implementation of an innovation framework in order to ensure the generation of value and organize as well as guide the efforts in innovation done by a firm. In this way based on the theoretical background, research´s findings, and in the company´s innovation environment and conditions, a framework for managing innovation at the case study company is suggested. This study is one of the few, if not only one, that has reviewed the way as oil and gas companies manage innovation and its practical implementation in a company from a developing country. Both researchers and practitioners will get a photograph of understanding innovation management in the oil and gas industry and its growing necessity in the business world. Some issues have been highlighted, so that future study can be focused in those directions. In fact, even though research on innovation management has significantly grown, there are still many issues that need to be addressed to get insight about managing innovation in various contexts and industries. Studies are mostly performed in the context of large firms and in developed countries, so then research in the context of developing countries is still almost an untouched area, especially in the oil and gas industry. Finally, from the research it seems crucial to explore the effect of some innovation-related variables such as: open innovation in third world economies and in state-own companies; the impact of mergers and acquisitions in innovation performance in oil and gas companies; value measurement in the first stages of the innovation process; and, development of innovation capabilities in companies from developing nations.

The third transformation of Japan: An institutional narrative on agglomeration economies in abenomics

Objective of the study The aim of this study is to understand the institutional implications in Abenomics in a spatial context, the contemporary economic reform taking place in Japan, which is to finally end over two decades of economic malaise. For theoretical perspective of choice, this study explores a synthesis of institutionalism as the main approach, complemented by economies of agglomeration in spatial economics, or New Economic Geography (NEG). The outcomes include a narrative with implications for future research, as well as possible future implications for the economy of Japan, itself. The narrative seeks to depict the dialogue between public discourse and governmental communication in order to create a picture of how this phenomenon is being socially constructed. This is done by studying the official communications by the Cabinet along with public media commentary on respective topics. The reform is studied with reference to historical socio-cultural, economic evolution of Japan, which in turn, is explored through a literature review. This is to assess the unique institutional characteristics of Japan pertinent to reform. Research method This is a social and exploratory qualitative study – an institutional narrative case study. The methodological approach was kept practical: in addition to literature review, a narrative, thematic content analysis with structural emphasis was used to construct the contemporary narrative based on the Cabinet communication. This was combined with practical analytic tools borrowed from critical discourse analysis, which were utilized to assess the implicit intertextual agenda within sources. Findings What appears to characterize the discourse is status quo bias that comes in multiple forms. The bias is also coded in the institutions surrounding the reform, wherein stakeholders have vested interests in protecting the current state of affairs. This correlates with uncertainty avoidance characteristic to Japan. Japan heeds the international criticism to deregulate on a rhetorical level, but consistent with history, the Cabinet solutions appear increasingly bureaucratic. Hence, the imposed western information-age paradigm of liberal cluster agglomeration seems ill-suited to Japan which lacks risk takers and a felicitous entrepreneur culture. The Japanese, however, possess vast innovative potential ascribed to some institutional practices and traits, but restrained by others. The derived conclusion is to study the successful intrapreneur cases in Japanese institutional setting as a potential benchmark for Japan specific cluster agglomeration, and a solution to its structural problems impeding growth.