Justification of Research Context

The second task of this chapter is to discuss the research context of this study. This section will provide further justifications on the selection of the context of innovation management.

Accordingly, the following subsections will first discuss what innovation management as the research context mean and the boundary that this study have drawn by defining innovation management, and then further elaborate why innovation management has been selected as the research context in this study.

2.3.1 Innovation Management as Research Context

The term ‘context of innovation management’ has been and will be mentioned several times in this thesis, hence, it is necessary to justify the meaning and scope of ‘innovation management’ in this study. Arguably, innovation involves knowledge from multiple disciplines, such as engineering, economics and sociology (Dodgson et al., 2014). In addition

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to this understanding, scholarly knowledge regarding managing innovation often involves theories and ideas from other management areas. Taking the definition of Trott (2005, p. 15) as an example, innovation management is “the management of all the activities involved in the process of idea generation, technology development, manufacturing and marketing of a new (or improved) product or manufacturing process or equipment”. Although this definition does not include service innovation or business model innovation, it still reflects the fact that marketing of products or services, strategic management that enables innovation, and human resource management that facilitates innovation may all be affecting the success of managing innovation. Here, the successful developed product, process or service is regarded as innovation outcome.

However, it is still not clear that how the boundary should be drawn between innovation management and other management disciplines. According to the ‘Oxford Handbook of Innovation Management’, depending on its definition, innovation can both be regarded as an outcome and processes (Dodgson et al., 2014). Hence, innovation management is about establishing and managing internal processes or systems in organisations and based on managing these processes and systems to achieve positive innovation outcomes possibly in the forms of new products and services. Here, to ensure consistent using of wording, Table 2.2 provides an overview of the meaning of specific term this study will use relating to

‘innovation’.

Table 2.2 Distinction of ‘Innovation’ Related Terms

Terms Meaning

Innovation outcomes New products or services, improved products or services that have been commercialised

Innovation processes The internal processes of organisations that results in innovation outcomes

Innovation activities Activities and practices that are included in innovation processes

This way of describing innovation management helps to make the distinction clear between innovation management and other related management domains. Table 2.3 provides an overview of the relationship and distinction between innovation management and other management contexts. The relevance and difference of these disciplines with innovation management are derived by how this study views these different disciplines.

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Table 2.3 Overview of Management Disciplines Management

ž Organisational learning may be happening throughout the

ž The focus of organisational learning is broader than all aspects of the operations of an organisation, innovation is just one part of this broader scope

Marketing

management ž Marketing management is key for determine whether certain attention is paid on how this innovation comes into place To sum up these discussions, this study set the focus of the ‘context of innovation management’ as: (1) managing innovation activities for innovation outcomes and (2) managing internal organisational processes for innovation outcomes. In addition to this, product and service innovation will be included in the conceptualisation of ‘innovation’ in this study, whereas business model innovation is not. As a result, this defined context will be applied through the rest of the study.

2.3.2 Justification of Innovation Management in This Study

The previous subsection has discussed how this study considers innovation management as research context. This subsection will then further justify the implication of the context of innovation management in this study. Arguably, the most important reason to select the research context in innovation management is that studying exploration and exploitation in this context is more ‘tangible’. Comparing to the likes of organisational learning or strategic management, the outcomes of innovation are easier to be identified and captured, because this is often in the form of products, processes, and services. Therefore, if the dichotomy of exploration and exploitation is valid in practice, it will be easier to observe them based on innovation management.

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Besides, there are two additional reasons of setting innovation management as the research context. First, separating exploration and exploitation in innovation is questionable. A case in point arises from Drucker (1985, p. 67), who pointed out that tensions constantly exist between the need for certainty in decision making and the inevitable uncertainty of outcomes in relation to innovation. According to March (1991, p. 85), exploration is associated with uncertain outcomes, whereas exploitation is more likely to produce unambiguous results. In addressing this matter, Drucker (1985, p. 72) argues that successful innovation outcomes are the result of an accumulation of simple and focused experimental activities guided by a systematic management discipline. This means that innovation processes in its nature should include both exploration and exploitation, and therefore, exploration and exploitation should not be discussed separately. Second, organisational learning, for which this dichotomy was first proposed, is closely related to innovation management (see Table 2.2). Hence, there may be a good amount of literature discussing exploration and exploitation in innovation management.

As part of the scoping study, this study also reviewed the literature discussing exploration and exploitation in organisational learning, strategic management and marketing management. According to Lavie et al. (2010, p. 112), these are contexts where the dichotomy has been studied. This review can be found in Appendix I. The outcomes of this review suggested that current studies of exploration and exploitation have touched mainly upon topics, such as their conceptualisation, ways to manage them and how different approaches of managing them may influence organisations’ performance. This study has drawn two key points from this review. First, it appears that current studies did not provide further justification to the use of this dichotomy in management. As mentioned in Subsection 2.2.3, this may lead to conflict outcomes of studies. Second, studies in exploration and exploitation have dispersed into different management disciplines, and within in each management discipline the conceptualisation is slightly different. Hence, although focusing solely on one management disciplines may lose some comprehensiveness, it would be beneficial to conduct this study in one context and examine the dichotomy in greater detail.

Consequently, this study argues that the dichotomy of exploration and exploitation is worth challenging and setting the research context in innovation management is beneficial to accomplish this task. However, this argument still needs further evidence to support. This means that without an in-depth review of current studies around exploration and exploitation in innovation management, it may be hard to determine whether setting this research agenda can make any contribution. This review will be the focus of Chapter 3.

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