Share This Article:

Exterior Sourcing and Technology Distinctness as Indicators for Radical Innovations: Evidence from Patents in Information Technology Industry

Abstract Full-Text HTML Download Download as PDF (Size:290KB) PP. 193-201
DOI: 10.4236/ti.2011.23020    4,136 Downloads   7,410 Views   Citations
Author(s)    Leave a comment

ABSTRACT

We hypothesized and tested the role of looking beyond a firm’s focal industry on technology distinctness and both of their impacts on radicalness of innovations. We used patent filings from 1996 through 2009 (N = 192,070) from the IT industry within the S & P-500 database. We also classified exterior sourcing as high and low, and divided technology distinctness as high, medium, and low. We found that when innovations are primarily sourced exteriorly, there is a negative relationship with technology distinctness. We also found that the relationship between technology distinctness and radicalness is stronger at lower levels of exterior sourcing than at higher levels. Further, when exterior sourcing is unable to create highly distinct technologies, the relationship between technology distinctness and radicalness goes from sparsely significant to significantly negative.

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

A. Datta, "Exterior Sourcing and Technology Distinctness as Indicators for Radical Innovations: Evidence from Patents in Information Technology Industry," Technology and Investment, Vol. 2 No. 3, 2011, pp. 193-201. doi: 10.4236/ti.2011.23020.

References

[1] C. M. Christensen, and J. L. Bower, “Customer Power, Strategic Investment, and the Failure of Leading Firms,” Strategic Management Journal, Vol. 17, No. 3, 1996, pp. 197-218. doi:10.1002/(SICI)1097-0266(199603)17:3<197::AID-SMJ804>3.0.CO;2-U
[2] W. Mitchell, “Whether and When? Probability and Timing of Incumbents’ Entry into Emerging Industrial Subfields,” Administrative Science Quarterly, Vol. 34, No. 2, 1989, pp. 208-230. doi:10.2307/2989896
[3] C. A. O’Reilly, J. B. Herreld and M. L. Tushman, “Organizational Ambidexterity: IBM and Emerging Business Opportunities,” California Management Review, Vol. 51, No. 4, 2009, pp. 74-99.
[4] J. S. Sidhu, H. W. Volberda and H. R. Commandeur, “Exploring Exploration Orientation and Its Determinants: Some Empirical Evidence.” Journal of Management Studies, Vol. 41, No. 6, 2004, pp. 913-932. doi:10.1111/j.1467-6486.2004.00460.x
[5] Y. Tsai, J. Y. Lin and L. Kurekova, “Innovative R & D and Optimal Investment under Uncertainty in High-Tech Industries: An Implication for Emerging Economies,” Research Policy, Vol. 38, No. 8, 2009, pp. 1388-1395. doi:10.1016/j.respol.2009.06.006
[6] C. Soosay and P. Hyland, “Exploration and Exploitation: the Interplay between Knowledge and Continuous Innovation,” International Journal of Technology Management, Vol. 42, No. 1-2, 2008, pp. 20-35. doi:10.1504/IJTM.2008.018058
[7] P. N. Golder, R. Shacham and D. Mitra, “Findings—Innovations’ Origins: When, by Whom, and How Are Radical Innovations Developed?” Marketing Science, Vol. 28, No. 1, 2008, pp. 116-179.
[8] A. Malhotra, A. Majchrzak, R. Carman and V. Lott, “Radical Innovation without Collocation: A Case Study at Boeing-Rocketdyne,” MIS Quarterly, Vol. 25, No. 2, 2001, pp. 229-249. doi:10.2307/3250930
[9] M. Rice, D. Kelley, L. Peters and G. C. O’Connor, “Radical Innovation: Triggering Initiation of Opportunity Recognition and Evaluation.” R & D Management, Vol. 31, No. 4, 2001, pp. 409-420. doi:10.1111/1467-9310.00228
[10] C. A. Di Benedetto, W. S. DeSardo and M. Song, “Strategic Capabilities and Radical Innovation: An Empirical Study in Three Countries,” IEEE Transactions on Engineering Management, Vol. 55, No. 3, 2008, pp. 420-433. doi:10.1109/TEM.2008.922645
[11] K. B. Dahlin and D. M. Behrens, “When is an Invention Really Radical? Defining and Measuring Technological Radicalness,” Research Policy, Vol. 34, No. 5, 2005, pp. 717-737. doi:10.1016/j.respol.2005.03.009
[12] B. Achilladelis, A. Schwarzkopf and M. Cines, “The Dynamics of Technological Innovation: The Case of the Chemical Industry,” Research Policy, Vol. 19, No. 1, 1990, pp. 1-34. doi:10.1016/0048-7333(90)90032-2
[13] D. Harhoff, F. Narin, F. M. Scherer and K. Vopel, “Citation Frequency and the Value of Patented Inventions,” The Review of Economics and Statistics, Vol. 81, No. 3, 1999, pp. 511-515. doi:10.1162/003465399558265
[14] C. A. O’Reilly and M. L. Tushman, “Ambidextrous Organization,” Harvard Business Review, Vol. 82, No. 4, 2004, pp. 71-81.
[15] M. L. Tushman and C. A. O’Reilly, “Ambidextrous Organizations: Managing Evolutionary and Revolutionary Change,” California management Review, Vol. 38, No. 4, 1996, pp. 8-30.
[16] M. L. Tushman and C. A. O’Reilly, “Winning through Innovation: A Practical Guide to Leading Organizational Change and Renewal,” Harvard Business School Press, Boston, 2002.
[17] D. C. Galunic and K. M. Eisenhardt, “The Evolution of Intracorporate Domains: Divisional Charter Losses in High-Technology, Multidivisional Corporations,” Organization Science, Vol. 7, No. 3, 1996, pp. 255-282. doi:10.1287/orsc.7.3.255
[18] D. Leonard-Barton, “Core Capabilities and Core Rigidities: A Paradox in Managing New Product Development,” Strategic Management Journal, Vol. 13, No. S1, 1992, pp. 111-125. doi:10.1002/smj.4250131009
[19] M. A. Hitt, R. E. Hoskisson, R. A. Johnson and D. D. Moesel, “The Market for Corporate Control and Firm Innovation,” The Academy of Management Journal, Vol. 39, No. 5, 1996, pp. 1084-1119. doi:10.2307/256993
[20] S. Ghoshal, “Global Strategy: An Organizing Framework,” Strategic Management Journal, Vol. 8, No. 5, 1987, pp. 425-440.
[21] M. Makri, M. Hitt and P. Lane, “Complementary Technologies, Knowledge Relatedness, and Invention Outcomes in High Technology Mergers and Acquisitions,” Strategic Management Journal, Vol. 31, No. 6, 2010, pp. 602-628.
[22] J. G. March, “Exploration and Exploitation in Organizational Learning,” Organization Science, Vol. 2, No. 1, 1991, pp. 71-87. doi:10.1287/orsc.2.1.71
[23] L. Fleming, “Recombinant Uncertainty in Technological Search,” Management Science, Vol. 47, No. 1, 2001, pp. 117-132. doi:10.1287/mnsc.47.1.117.10671
[24] C. Phelps, “A Longitudinal Study of the Influence of Alliance Network Structure and Composition on Firm Exploratory Innovation,” Academy of Management Journal, Vol. 53, No. 4, 2010, pp. 890-913. doi:10.5465/AMJ.2010.52814627
[25] R. Katila and G. Ahuja, “Something Old, Something New: A Longitudinal Study of Search Behavior and New Product Introduction,” Academy of Management Journal, Vol. 45, No. 6, 2002, pp. 1183-1194. doi:10.2307/3069433
[26] J. Scott, “Social Network Analysis: A Handbook,” Sage, Thousand Oaks, 1991.
[27] Z. Simsek, “Organizational Ambidexterity: Towards a Multilevel Understanding,” Journal of Management Studies, Vol. 46, No. 4, 2009, pp. 597-624. doi:10.1111/j.1467-6486.2009.00828.x
[28] G. Ahuja and C. M. Lampert, “Entrepreneurship in the Large Corporation: A Longitudinal Study of How Established Firms Create Breakthrough Inventions,” Strategic Management Journal, Vol. 22, No. 6-7, 2001, pp. 521-543. doi:10.1002/smj.176
[29] M. L. Weitzman, “Recombinant Growth,” The Quarterly Journal of Economics, Vol. 113, No. 2, 1998, pp. 331-360. doi:10.1162/003355398555595
[30] J. B. Sorensen and T. E. Stuart, “Aging, Obsolescence, and Organizational Innovation,” Administrative Science Quarterly, Vol. 45, No. 1, 2000, pp. 81-112. doi:10.2307/2666980
[31] D. A. Levinthal and J. G. March, “The Myopia of Learning,” Strategic Management Journal, Vol. 14, No. S2, 1993, pp. 95-112. doi:10.1002/smj.4250141009
[32] F. T. Rothaermel, M. A. Hitt and L. A. Jobe, “Balancing Vertical Integration and Strategic Outsourcing: Effects on Product Portfolio, Product Success, and Firm Performance,” Strategic Management Journal, Vol. 27, No. 11, 2006, pp. 1033-1056. doi:10.1002/smj.559
[33] B. H. Hall, A. Jaffe and M. Trajtenberg, “Market Value and Patent Citations,” The RAND Journal of Economics, Vol. 36, No. 1, 2005, pp. 16-38.
[34] D. M. Decarolis and D. L. Deeds, “The Impact of Stocks and Flows of Organizational Knowledge on Firm Performance: An Empirical Investigation of the Biotechnology Industry,” Strategic Management Journal, Vol. 20, No. 10, 1999, pp. 953-968. doi:10.1002/(SICI)1097-0266(199910)20:10<953::AID-SMJ59>3.0.CO;2-3
[35] L. Rosenkopf and A. Nerkar, “Beyond Local Search: Boundary-Spanning, Exploration, and Impact in the Optical Disk Industry,” Strategic Management Journal, Vol. 22, No. 4, 2001, pp. 287-306. doi:10.1002/smj.160
[36] P. G. Audia and J. A. Goncalo, “Past Success and Creativity over Time: A Study of Inventors in the Hard Disk Drive Industry,” Marketing Management, Vol. 53, No. 1, 2007, pp. 1-15.
[37] R. M. Grant, “Towards a Knowledge-Based Theory of the Firm,” Strategic Management Journal, Vol. 17, Winter Special Issue, 1996, pp. 109-122.
[38] P. J. Lane and M. Lubatkin, “Relative Absorptive Capacity and Interorganizational Learning,” Strategic Management Journal, Vol. 19, No. 5, 1998, pp. 461-477. doi:10.1002/(SICI)1097-0266(199805)19:5<461::AID-SMJ953>3.0.CO;2-L
[39] B. L. Basberg, “Patents and the Measurement of Technological Change: A Survey of the Literature,” Research Policy, Vol. 16, No. 2-4, 1987, pp. 131-141. doi:10.1016/0048-7333(87)90027-8
[40] W. M. Cohen, A. Goto, A. Nagata, R. R. Nelson and J. P. Walsh, “R & D Spillovers, Patents and the Incentives to Innovate in Japan and the United States,” Research Policy, Vol. 31, No. 8-9, 2002, pp. 1349-1367. doi:10.1016/S0048-7333(02)00068-9
[41] P. C. Grindley and D. J. Teece, “Managing Intellectual Capital: Licensing and Cross-Licensing in Semiconductors and Electronics,” California Management Review, Vol. 39, No. 2, 1997, pp. 8-41.
[42] R. Katila, “New Product Search over Time: Past Ideas in Their Prime?” Academy of Management Journal, Vol. 45, No. 5, 2002, pp. 995-1010. doi:10.2307/3069326
[43] R. Katila and G. Ahuja, “Something Old, Something New: A Longitudinal Study of Search Behavior and New Product Introduction,” Academy of Management Journal, Vol. 45, No. 6, 2005, pp. 1183-1194. doi:10.2307/3069433
[44] M. E. Sobel, “Asymptotic Confidence Intervals for for Indirect Effects in Structural Equation Models,” Sociology Methodology, No. 13, 1982, pp. 290-310.
[45] O. Granstrand and S. Sj?lander, “The Acquisition of Technology and Small Firms by Large Firms,” Journal of Economic Behavior & Organization, Vol. 13, No. 3, 1990, pp. 367-386. doi:10.1016/0167-2681(90)90006-Y
[46] G. Ahuja and R. Katila, “Technological Acquisitions and the Innovation Performance of Acquiring Firms: A Longitudinal Study,” Strategic Management Journal, Vol. 22, No. 3, 2001, pp. 197-220. doi:10.1002/smj.157
[47] T. J. Gerpott, “Successful Integration of R & D Functions after Acquisitions: An Exploratory Empirical Study,” R & D Management, Vol. 25, No. 2, 1995, pp. 161-178. doi:10.1111/j.1467-9310.1995.tb00909.x
[48] M. A. Schilling and C. C. Phelps, “Interfirm Collaboration Networks: The Impact of Large-Scale Network Structure on Firm Innovation,” Management Science, Vol. 53, No. 7, 2007, pp. 1113-1126. doi:10.1287/mnsc.1060.0624
[49] L. Fleming, and O. Sorenson, “Technology as a Complex Adaptive System: Evidence from Patent Data,” Research Policy, Vol. 30, No. 7, 2001, pp. 1019-1039. doi:10.1016/S0048-7333(00)00135-9
[50] O. Sorenson and L. Fleming, “Science and the Diffusion of Knowledge,” Research Policy, Vol. 33, No. 10, 2004, pp. 1615-1634. doi:10.1016/j.respol.2004.09.008
[51] O. Sorenson, J. W. Rivkin and L. Fleming, “Complexity, Networks and Knowledge Flow,” Research Policy, Vol. 35, No. 7, 2006, pp. 994-1017. doi:10.1016/j.respol.2006.05.002
[52] L. Capron and W. Mitchell, “Selection Capability: How Capability Gaps and Internal Social Frictions Affect Internal and External Strategic Renewal,” Organization Science, Vol. 20, No. 2, 2009, pp. 294-312. doi:10.1287/orsc.1070.0328
[53] R. Agarwal and C. E. Helfat, “Strategic Renewal of Organizations,” Organization Science, Vol. 20, No. 2, 2009, pp. 281-293. doi:10.1287/orsc.1090.0423
[54] W. M. Cohen and D. A. Levinthal, “Absorptive Capacity: A New Perspective on Learning and Innovation,” Administrative Science Quarterly, Vol. 35, No. 1, 1990, pp. 128-152. doi:10.2307/2393553
[55] D. G. Sirmon, M. A. Hitt and R. D. Ireland, “Managing Firm Resources in Dynamic Environments to Create Value: Looking Inside the Black Box,” Academy of Management Review, Vol. 32, No. 1, 2007, pp. 273-292. doi:10.5465/AMR.2007.23466005

  
comments powered by Disqus

Copyright © 2019 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.