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Innovation and Imitation Barriers: the relationship between resource orchestration, imitation barriers for different process innovation contexts

Rouwmaat, Elco (2012) Innovation and Imitation Barriers: the relationship between resource orchestration, imitation barriers for different process innovation contexts.

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Abstract:Purpose - Companies and the economy in general thrive on innovations, either in the form of new products, new materials or new processes. The incentive for generating these innovations appears to be clear, because they are associated with increased profits for the developing companies. If competitors would be able to easily tap-in to some or all of these benefits created by an innovation, through imitation, the incentive for innovators to come up with innovations would be decreased or nullified. Process innovations and their imitations are generally more latent, and infringement of intellectual property rights is therefore harder to observe. It is therefore expected that companies who do develop process innovations, generate alternative barriers to imitation, in order to appropriate their investments. These alternative barriers to imitation tend to not be based on legislation, but originate as a result of a discrepancy in resource orchestration in both firms. This study therefore aims to explore the relationship between the creation of imitation barriers and the orchestration of resources in different process innovation contexts, with a specific focus on the development and diffusion trajectory of those innovations. Approach - This study is based on extensive literature research concerning the concepts of imitation barriers, resource orchestration and process innovation context. The developed theoretical framework was used to analyse a sample of ten cases in which a company developed and commercialised a process innovation. Data on these companies was generated by using an extensive questionnaire, developed by PwC, on resource orchestration during development and diffusion, involvement of stakeholders and factor mapping of success factors and barriers. In-case analysis per case and subsequent cross-case analysis of within group similarities coupled with inter-group differences was performed to unravel the relationship between the different concepts. Listing of subtle differences within case groups, clarified which relationships were exactly found and whether cases could possible by grouped based on other factors. Findings - The study shows that the relationship between resource orchestration, imitation barriers and process innovation context is nuanced and changes per individual case. Some relationships appear to hold for the whole sample. Firm characteristics always directly influence the orchestration of resources in a firm. Resource orchestration always directly influences the generated imitation barriers. Some imitation barriers in turn also influence subsequent resource orchestration, after they have been created. The relationship between the orchestration of resources and the generated imitation barriers can be mediated by both the characteristics of the innovation and the company’s meso and macro contextual factors. Cross-case analysis shows that certain types of imitation barriers are clearly associated with particular types of innovations. The process innovation characteristics are established as a result of the orchestration of resources and most of the time also by factors from the company’s meso and macro context. Finally, factors from the company’s meso and macro context can also directly generate imitation barriers. This was particularly the case for willingness barriers. Value - This study contributes to existing theory on this topic in different ways. First, it contributes to a deeper understanding of how imitation barriers deter competitors from imitation in practice. Secondly, it sheds light on the largely disregarded cognitive and willingness barriers to imitation and how these are effected by resource orchestration. Third, it highlights the largely neglected situation for start-ups and SMEs in creating imitation barriers. Fourth, it comes up with the notion of configurations of imitation barriers. Empirical evidence in this study shows that certain innovation types are more compatible with certain reinforcing sets of imitation barriers. Finally, this study puts specific emphasis on the domain of process innovations, which according to literature benefit most from unconventional barriers to imitation. Next steps - Policymakers should consider the limitations and hindrances that especially small firms face when acquiring patents on their process innovations. Moreover, subsidy programmes should be made more accessible for companies lacking a patent. Managers developing process innovations should focus on their core competences and seek cooperation for everything else. This study shows that open innovation practices, in which either customers or suppliers participate in development, not only contribute to quality of the innovation, but also facilitate some of the key imitation barriers. Furthermore, analysis shows that imitation barriers are only seldom created randomly. Managers are therefore advised to come up with a clear strategy for the creation of imitation barriers, at the start of the development trajectory. As most resource orchestration actions simultaneously affect process development and imitation barrier creation, both strategies should be made to fit with each other. Ideally, imitation barriers are in place at the point of implementation or market entry of the process innovation. Finally, some types of process innovations are inherently more compatible with particular configurations of imitation barriers. Managers should identify opportunities for creating imitation barrier early on in the development process. This way a strong configuration of mutually supportive imitation barriers can be established, which potential imitators will find hard to overcome.
Item Type:Essay (Master)
Clients:
Technical University of Berlin
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/62069
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