Overview
The article written by Chiang and Hung is a four-part exploration of
open search strategies and its subsequent value in inter-organizational
knowledge innovativeness. The research
is aimed at determining the effectiveness of companies in radical innovation
performance and incremental innovation performance. The first section is simply an introduction
to the article that provides some background to the topic, and outlines the
rest of the article. The second part of
the article the authors review previous research and its findings, and further
explain the relevance of how previous research has led to their two hypotheses. The first of which is that “Open
search breadth is positively related to the innovating company’s radical
product innovation performance (Chiang and Hung, 294).” Chiang and Hung go on to review more research
that led them to their second hypothesis, “Open search depth is positively
related to the innovating company’s incremental product innovation performance (294).” Section three of the article explains the
participants in Chiang and Hung’s research and the methods used to collect,
analyze, and process the data collected.
The authors attempted to collect information from 800 Taiwanese
electronics companies, and after a year, received full participation from 184 of
the companies, which the study was conducted on. The section also details the survey used
during research, and explains how the survey was coded and scored by the
authors. The final section of the
article is where the information collected is displayed in tables, and the
authors explain in detail the findings of their study.
Hypotheses Testing and Results
Chiang and
Hung explain all of their research and findings, and use statistical analysis
to determine whether or not their hypotheses are valid. They explain that open search breadth is
positively related to radical innovative performance, but that open search
depth is not significantly related. This
means that the more external sources a company taps for information and
knowledge, the more likely and more successful
they are at creating a radically new product in that market. The second hypothesis found that open search
depth is positively related to incremental innovative performance. This means that companies that intensively tap an external source for
knowledge (such as customers or suppliers) the more successful they are at
incrementally increasing the value of a product. Open search depth is concerned with the
intensity that a company uses to gauge the knowledge and expertise of an
external source, while open source breadth is concerned with how many external
sources a company draws influences from.
It should be noted that in order to be successful in either of these
areas, companies must maintain strong, positive relationships with these
external sources.
Managerial Implications
This is a
very small sample size, since it is only 184 Taiwanese electronics companies,
but I still think the findings are valid for managers. Research and development are important for a
business, but can be an expensive endeavor.
However, costs can be significantly reduced by exploring the knowledge
and expertise of external partners, competitors, and customers. Not only can it help to reduce costs for the
company, but it helps to develop new and innovative products that the public
want, and will drastically help companies to avoid creating duds that fail in
the market. Again, in order to be able
to access the knowledge and expertise of these external companies, it is
essential that a business keep a strong, trusting, positive relationship with
these external partners.
Works Cited
Chiang,
Yun-Hwa and Hung, Kuang-Peng. “Exploring
open search strategies and perceived innovation performance from the
perspective of inter-organizational knowledge flows.” R &
D Management. 40.3 (2010)
: 292-299. Web. 5
July 2012.
I think that this article could be helpful to many companies especially small businesses that are getting started. I read another article on this blog about small business and how they sometimes don't last but a year or two. Doing deeper research on innovation, forming positive relationship with external partners and how to develop a product that people will need and want for a long period of time could be helpful. Sometime I think people have a great idea and try to capitolize on that idea but don't do enough research on how to present the product. Also development of the product needs to be on point, in other words it has to be well made. So if you learn how to capture and maintain good relationships and add a innovation carefully planned product to the equation this should make a strong union between the company and their chosen partners. This will make them a strong competitor.
ReplyDeleteThis is terrific commentary, and in the beginning of the article, Chiang and Hung mention the applicability of their research to small businesses. The article actually provides their research broken down by many variables, one of which is the size of the businesses surveyed. The authors concluded that regardless of the size of your business, that each company should be trying to enhance innovative performance to be more successful.
DeleteInteresting research. I would have to agree that intensity and use of information from outside sources would only enhance a company's innovativeness and increase company value. One can always learn from others'successes (or mistakes) and new knowledge/expertise and apply it to their own situation to place themselves in a more favorable position. That may sound kind of simplistic, but that's the way I view it.
ReplyDeleteWith the possibility for a management job (hopefully!)in my future, I was thinking about how managers would use this info. I think innovation pursuits are sometimes tough for managers. Our textbook talks about how managers need to question, observe, experiment, and network to make better decisions in innovative pursuits. They have to be able to analyze all the outside information they are getting, find patterns within it, and then formulate new ideas within the scope of the firm's innovative initiatives. There's always risk in trying out a new idea, especially financial and personal risk, but it is the manager's job to reduce the risk through a careful analysis of each new innovative venture to see which idea is the best to try. And then it's also his job to keep the relationship strong between the partnering companies and his firm once an innovative pursuit is established. There's a lot of decision making, which will fall on his shoulders if the decisions do not succeed the way he envisions.
By learning from and using the knowledge base, successes and/or failures of other companies, the manager can make better decisions on innovative pursuits for his company -- which, if these pursuits are successful, will end up in a better competitive advantage and growth for the company. I hope I get a chance to try this out in the near future!
Maybe you should have written my implications for managers portion of my blog, haha. I don't think your analysis is simplistic at all, in all honesty, I thought the article was somewhat simplistic. It only makes sense that a company would better gauge their customer base by engaging them, and would make better innovative decisions by exploring the knowledge of their peers. The biggest problem that I can see mentioned in the article is time management. It's easy to say that a manager should gauge every outlet possible to better understand their product and business environment, but this is obviously very time-consuming and at some point you have to move forward with your projects and work.
DeleteI think the results make a lot of sense. Breadth was positively related to radical innovative performance. I think this is similar to successful brainstorming in a group. You don't really go into depth in any one idea or focus on a single person, you keep bringing in as many ideas from a broader range of sources so that you have more to choose from -- the chances of getting an innovative idea would be positively related to the amount of people brainstorming. Depth here would waste time and you would miss out by focusing too much.
ReplyDeleteAlternatively, depth was associated with incremental innovation. I think this one makes sense too, because your not trying to come up with a new innovation, your trying to improve upon one. So you would definitely want to intensively tap key sources to see where improvements can be made. Whereas, having breadth here would just make you lose focus and miss the potential innovations.
Great analogy to a brain-storming session, and you nailed the concepts down. I don't really have much feedback for your commentary since it seems like you understand the topic. I think you may have explained it better in your comment than I did in my entire blog.
DeleteGood read. I would have to agree that "Business Student's" was very good at explaining the purpose of the article.
ReplyDelete