Innovation and Management: International Comparisons

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Innovation and Management:

International Comparisons

Editors

Kuniyoshi Urabe • John Child • Tadao Kagono

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1. An International Perspective on Innovation 3 1.1. A Definition of Innovation . 3 1.2. Two Patterns of Innovation 4 1.3. The Perspective of International Comparison 5 2. An Evolutionary Model of the Japanese Management System . . 8 2.1. A Critique of the Comparative Cultural Approach 8 2.2. An Evolutionary Model of the Japanese Management

System . 9

\] 3. The Modernized Type of Japanese Management System 10

3.1. The Evolutionary Process 10 3.2. Characteristics of the Modernized Japanese System in

Relation to Innovation 11 3.2.1. Separation between Capital and Management 12 3.2.2. Status Equalization 12 3.2.3. Stable Pay System 13 3.2.4. Internal Labour Market (Career Development System) . . 15 3.2.5. Joint Participation Type of Management/Labour Relations 15 3.2.6. Humane Values 18 4. Variations in the Future 19 Appendix 20

J "Kanban"/"Just-In-Time" Production System 20

Strategic Core Principle 20 "Creative Destruction" 21 Small Lot Production 23

\i Total Quality Control 23

Line Stop System 24 \/ Work Improvement Groups 24

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X Contents

T h e J a p a n e s e C o r p o r a t e S y s t e m a n d T e c h n o l o g y A c c u m u l a t i o n . . . 2 7

Hiroyuki Itami

1. Introduction 27

<J2. The Japanese Corporate System 28

3. The Nature of Technology and the Process of Technology

Accumulation 33 4. Direct Contributions of the Japanese Corporate System 37 4.1. Creation and Importation 38 4.2. Diffusion 39 4.3. Storage 40 4.4. Utilization 41 5. Indirect Contributions of the Japanese Corporate System . . . . 42 6. Closing Remarks 45 References 45 Dynamic Synergy and Top Management Leadership:

Strategic Innovation in Japanese Companies 47

Hideki Yoshihara

1. Growth by Diversification 47 2. Ex Post Dynamic Synergy 48 3. Unconventional Strategy 53 4. Leadership for Change 55 5. Reconsideration of Japanese Management 59 References 61 A Comparative Evolutionary Perspective on Strategy-Making:

Advantages and Limitations of the Japanese Approach 63

Robert A. Burgelman

1. Introduction 63 1.1. A Comparative Approach . 63 1.2. A Theory-Based Comparison 64 1.3. Overview 64 2. An Evolutionary Perspective on Strategy-Making 65 2.1. Conduct 65 2.1.1. Induced Strategic Behaviour Loop 66 2.1.2. Autonomous Strategic Behaviour Loop 67 2.2. External Context 69 2.2.1. External Context and the Strategic Process 70

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Contents XI

2.3. Performance 70 2.3.1. Performance and the Strategic Process 71 3. Strategic Evolution: A Comparative Analysis 72 3.1. Variation Amplification and Reduction 72 3.2. Organizational Learning 73 3.3. Environmental Context and Japanese Strategy-Making . . 73 3.4. Similarities and Differences: Discussion 74 4. Conclusion 77 References 78 Novel Product Concepts from Lead Users 81

Eric von Hippel

Abstract 81 1. Introduction 81 2. Marketing Research Constrained by User Experience 82 3. "Lead Users" Have Experience Needed by Marketing Research

in Fast-Moving Fields 88 4. Utilizing Lead Users in Marketing Research 90 4.1. Identifying Important Trend 90 4.2. Identifying Lead Users 91 4.3. Analyzing Lead User Data 94 4.4. Testing Lead User Data on Typical Users 97 5. Suggestions for Further Research 98 References 99

Part II: Process of Innovation

Factors Affecting the Creativity of Organizations - An Approach

from the Analysis of New Product Development 105

Toyohiro Kono

1. Introduction 105 1.1. Measurement of Creativity 106 1.2. Primary Creation and Secondary Creation 106 1.3. The Difference Between Creation and Innovation . . . 107 1.4. Creativity and Performance 108 1.5. Obstacles to Creativity 108 2. Factors Affecting the Creativity of Organizations 109 3. Organizational Structure I l l

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3.1. Specialized Creative Departments I l l 3.2. Creative Personnel 115 3.3. The Creative Organization Project Team 116 3.4. Alternate Use of Individual Thinking and Group

Interaction 117 3.5. Supporting Middle Managers and Supporting Top

Management 118 4. System of Creative Organization 119 4.1. Goal Setting 122 4.1.1. Corporate Philosophy which Encourages

Creativity 123 4.1.2. Clear Strategic Policy and Freedom Within the Policy . . . 123 4.1.3. Integration of Personal Interest With the Goals of the

Re-search 124 ! 4.2. Information Collection and Communication 125 1 4.2.1. Distinctive Specialized Knowledge 125

4.3. Encouragement to Look at the Subject from New Angles . 127

4.3.1. Welcoming New Ideas 127 ! 4.3.2. Collection of New Ideas 128 i 4.3.3. Encouragement to Challenge the Impossible 129 ! 4.4. System and Climate that Encourage Independence . . . . 130

4.4.1. Mixture of the First Runner and the Second

Runner Policy 130 j 4.4.2. Respect for Minority Opinion 130 i 4.4.3. Separation of Creative Department . . 132 i 4.5. Evaluation and Development 132 [ 4.5.1. Evaluation and Development System 132 ! 4.5.2. Permissiveness for Redundant Search 133 ' 4.5.3. Slack 133 5. Motivation 134

5.1. Integration of the Needs of the Researcher with the ; Subject of Research 134 ; 5.2. Recognition 134 5.3. Dual Promotion Ladders :. 135 5.4. Freedom of Failure 135 j 6. Summary and Problems 136 :

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Contents XIII

Technology Bunching and Industrial Strategies 145

Michel Delapierre

1. The Crisis as a Constraint to Change 146 1.1. The Challenge to Industrial Corporations 146 1.2. The Emergence of New Modes of Operation 148 2. The Strategies of Technology Bunching 149 2.1. The Technology at the Starting Point 151 2.2. From Technologies to Products 153 2.3. The Valorization Process: Reaching the Market Place . . . 155 3. Technology Bunching and the New Industrial Fabric 158 3.1. The Building of a New Industrial Framework 158 3.2. Technology Bunching, National Competitiveness, and

Industrial Policy 159 References 162

Part III: Innovation and Organizational Change

Strategy Making as Craft 167 , Yvette and Henry Mintzberg

Appendix 1: Tracking Strategy: Henry's Research . . 190 Appendix 2: Tracking Strategy: Yvette's Story 191 References 196 Management of Change in the Firm - Theoretical Analysis and

Empirical Evidence 197

Horst Albach

1. Introductory Remarks 197 2. The Empirical Facts 199 3. Adaptation to Changes in the Firm's Environment 205 3.1. Low Cost of Adaptation 205 3.1.1. The Cobb-Douglas Production Function without Technical

Progress 205 3.1.2. The Cobb-Douglas Production Function with Technical

Progress 206 3.2. High Cost of Adaptation 209 3.2.1. The Putty-Clay Production Function 209 3.2.2. The Semi-Fixed Factors Production Function 212

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4. Promotion of Changes in the Firm's Environment . : 214 4.1. The Cobb-Douglas Production Function with Innovative

Effort 214 4.1.1. Average Production Function 216 4.1.2. Frontier Production Function 216 4.2. The Interactive Production Model with Marketing Effort . 217 5. Concluding Remarks 219 Appendix: The Econometric Model of the Firm 220 References 224 Restructuring Mature Industries: The Challenge for Europe 225

Charles Baden-Fuller and John M. Stopford

Abstract 225 Introduction 225 1. Conventional Models 227 2. Revised Assumptions 228 2.1. Turbulence 228 2.2. Exit Barriers 229 3. Reassessing Traditional Strategies 231 3.1. Low Cost - Share Building Strategies 231 3.2. Efficiency and Flexibility 233 4. Removing the Constraints Against Change 235 References 238 On the Inter-Relation Between Large and Small Enterprises in a

Socialist Economy: The Case of the GDR 243

Edwin Polaschewski

References 252

Part IV: Impact of Information Technology and Micro-Electronics

Information Technology and Organization 255

John Child

1. Introduction 255 2. Constraints on the Application of Information Technology to

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3. IT and the Potential for Organizational Development 259 3.1. Inherent Organizational Tensions 260 3.1.1. Control and Flexibility 264 3.1.2. Centralization and Decentralization 269 3.2. Organizational Complexity 273 3.2.1. Managerial Overhead 273 3.2.2. Segmentalism 277 3.3. The Management of Boundary Relations 282 4. The Relevance of the Strategic and Operational Context 285 4.1. General Strategic Contingencies 286 4.2. Specific Operational Contingencies 287 References 297 High Technology and Its Impact on Business Management 303

Tasuku Noguchi

1. Major Problems to Be Discussed 303 2. The Making of the Social Production System 308 3. Changes in Business Management 312 References 317 Adapting Organizations to Electronics - and

Micro-Electronics to Organizations: Experiences in the Federal Republic

of Germany 319

Alfred Kieser

1. Technological Determinism, Strategic Choice, and Quality of

Working Life . . . " 319 2. Theoretical Concepts: Technological Determinism and Strategic

Choice 321 3. Micro-Electronics and Organizational Change: Empirical

Evidence 325 3.1. The MESS-Project: A Tendency to Organizational

Conservatism 325 3.2. Sorge et al.: Organizational Strategies to Implement

CNC-Machines Are Shaped by Culture 327 3.3. Kern and Schumann: the Emergence of New Paradigms of

Organizational Design 328 4. A Concept to Consolidate Conflicting Empirical Results 329 5. Facilitating Organizational Innovation 333 References 335

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T e c h n o l o g y , I n n o v a t i o n , a n d L a b o u r - M a n a g e m e n t S t r a t e g i e s . . . . 3 3 7

Craig R. Littler

1. Introduction 337 2. The Innovation Perspective 337 3. The Analysis of Technology 341 4. __ New Technology and Work Relations 345 5. Japanization 353 6. Conclusions 355 References 356

Research Note

Development of the Studies of Socialist Enterprise in Japan and

"Innovation" of the Socialist Enterprise 361

Soichiro Giga

Introduction 361 1. "Innovation" of the Studies in the Socialist Enterprise 362 2. Characteristics of Studies of the Socialist Enterprise in Japan . . 362 3. Development of Studies of Socialist Enterprises in Post-War

Japan 363 4. "Innovation" of the Socialist Enterprise and "Innovation" in the

Studies of the Socialist Enterprise 364 5. Conclusion 365 References 366 The Authors 369