Rethinking the Dutch Innovation Agenda: Management and Organization Matter Most

In this essay, we challenge the present dominant emphasis in the Dutch Innovation Debate on the creation of technological innovations, the focus on a few core technologies, and the allocation of more financial resources. We argue that managerial capabilities and organizing principles for innovation should have a higher priority on the Dutch Innovation Agenda. Managerial capabilities for innovation deal with cognitive elements such as the capacity to absorb knowledge, create entrepreneurial mindsets, and facilitate managerial experimentation and higher-order learning abilities. These capacities can only be developed by distinctive managerial roles that enhance hierarchy, teaming and shared norms. Utilizing these unique managerial capabilities requires novel organizing principles, such as managing internal rates of change, nurturing self-organization and balancing high levels of exploration and exploitation. These managerial capabilities and organizing principles of innovation create new sources of productivity growth and competitive advantage.The dramatic fall back of the Netherlands in the league of innovative and high productivity countries of the World Economic Forum-Report can be mainly attributed to the present lack in the Netherlands of these key managerial and organizational enablers of innovation and productivity growth. We provide various levers for building unique managerial capabilities and novel organizing principles of innovation. Moreover, we describe the necessary roles that different actors have to play in this innovation arena. In particular, we focus on the often neglected but important role of strategic regulations that speed up innovation and productivity growth. They are the least expensive way to boost innovation in organizations in both the Dutch private and public sector. Finally, we discuss the implications for the Dutch Innovation Agenda. It should start with setting a challenging ambition, namely the return of The Netherlands within the WEF- league of the top-ten most innovative and productive countries of the world. Considering the under-utilization of available knowledge stemming from technological innovations, managerial and organizational determinants of innovation should receive first priority. These determinants have a high strategic relevance and should receive more public recognition. We suggest to organize an annual innovation ranking of the most outstanding Dutch firms, to develop an innovation audit that measures firms’ non-technological innovation capacity, and to create an overall innovation policy for fast diffusion of new managerial capabilities and adequate organizing principles throughout the Dutch private and public sector.In conclusion, we add five new items to the Dutch Innovation Agenda:1. Prioritize administrative innovationsInvestments in management and organization determinants of absorption of knowledge and its successful application (administrative innovation) should have a higher priority than investments in technological innovations.2. Build new managerial capabilities and develop novel organizing principlesFor these administrative innovations to succeed, firms have to build managerial capabilities (broad knowledge-base, absorptive capacity, managerial experimentation, higher-order learning) and various management roles (hierarchy, teaming, shared norms) to increase the assimilation of external knowledge and the utilization for innovation. Moreover, they have to develop novel organizing principles that increase internal rates of change, nurture self-organization and synchronize high levels of exploration and exploitation.3. Set levers of innovation by creating selection environments that favor innovation and by redefining the roles of key actors Management has to create a proper organizational context to foster entrepreneurship and innovation (internal selection environment). Governmental agencies have to focus on innovation and productivity enabling strategic regulations (external selection environment). Moreover, research institutes, business schools, and consulting firms should not only focus on technological knowledge, but also on managerial and organizational knowledge for innovation. In the end, private small and large firms and public institutions have to recognize that they all must contribute to the national goal of increasing innovation and productivity growth.4. Create a new challenging national ambition: return of the Netherlands within the top-10The Netherlands has to return to the top-ten most innovative and productive countries in the world as reflected in international rankings such as the World Economic Forum’s Global Competitiveness Index.5. Proliferate an awareness and passion for innovation:Create public awareness and recognition of the societal relevance of outstanding managerial capabilities and organizing principles to innovation and productivity growth:o Initiate a Dutch innovation ranking in terms of management and organization;o Develop proper assessment tools for innovations in management and organization;o Enhance reporting on the progress on managerial and organizational innovation as part of modern corporate governance and as part of outstanding annual reports.These issues may contribute to rethinking the fundamental sources of innovation, productivity growth and sustainable competitive advantage of the Dutch economy.dynamic capabilities;knowledge transfer;exploitation;exploration;mANAGEMENT;mindsets;organizing pinciples;srategic rgulation;strategy innovation

Building Flexible Organizations for Fast-moving Markets

By considering flexibility as a valuable strategic option in turbulent environments, this article distinguishes four types of effective response to strategic change. From this typology different trajectories of revitalization are derived. On the basis of this typology, the article describes a method for diagnosing organizational flexibility and guiding the transition process, the Flexibility Audit & Redesign (FAR) method. This method was applied successfully within the Dutch Postbank NV, Philips Semiconductors and the Dutch National Gas Corporation. The findings suggest that a viable corporation has to oscillate between ‘planned’ and ‘flexible’ forms. In this process of change, the corporation has to prevent itself from overshooting and becoming extremely rigid or chaotic

The Influence of Top Management Team’s Corporate Governance Orientation on Strategic Renewal Trajectories

Using the upper echelons perspective together with corporate governance and strategic renewal literature, this paper investigates how top managers’ corporate governance orientation influences a firm’s strategic renewal trajectories over time. Through both a qualitative analysis (1907-2004) and a quantitative analysis (1959-2004), we investigate this under-researched question within the context of a large incumbent firm: Royal Dutch Shell plc. Our results indicate that top managers having an Anglo-Saxon corporate governance orientation are more likely to pursue exploitative and external-growth strategic renewal trajectories, while those having a Rhine corporate governance orientation are more likely to pursue exploratory and internal-growth strategic renewal trajectories. We also found a positive moderating effect of the proportion of shareholders from the Anglo-Saxon countries on exploitative and external-growth strategic renewal trajectories. Our findings indicate that top managers’ corporate governance orientation can be an important antecedent of strategic renewal and of organisational ambidexterity, both of which influence corporate longevity.corporate governance;strategic renewal;exploitation and exploration;Royal Dutch Shell;top management team;upper echelons perspective

The Impact of Corporate Venturing on a Firm’s Competence Modes

In this conceptual paper we investigate how corporate venturing influences an organization’s competences. The impact of various types of corporate ventures on the portfolio of strategic options of a firm’s competence modes (Sanchez, 2004a; Sanchez and Heene, 2002) will be assessed by distinguishing two fundamentally different dimensions of corporate venturing, technology and product (Block & MacMillan, 1993). We argue that the level of product and factor market dynamism mediates the effect of corporate venturing on a firm’s competence modes. Corporate ventures that significantly increase the level of product or factor market dynamics will lead to an increased flexibility in all five competence modes. These ventures will have a direct effect on the lower-order competence modes and an indirect, lagged effect on higher-order competence modes through feedback loops. The developed framework and the propositions contribute to managing the ability of a firm to change its coordination-, resource and operating flexibility in order to sustain value creation.flexibility;corporate venturing;competence-based management;product and factor market dynamism

Change for change’s sake?

__Abstract__ In today’s increasingly volatile business environment, senior managers have to stay one step ahead by making the necessary internal organisational and strategic decisions, before it is too late to react to external changes

Investigating Managers' Exploration and Exploitation Activities: The Influence of Top-down, Bottom-up, and Horizontal Knowledge Inflows

This paper develops and tests hypotheses on the influence of a manager’s knowledge inflows on this manager’s exploration and exploitation activities. Based on a survey among managers of a leading electronics firm, the findings indicate, as expected, that top-down knowledge inflows of a manager positively relate to the extent to which this manager conducts exploitation activities, while they do not relate to a manager’s exploration activities. Furthermore, as expected, bottom-up and horizontal knowledge inflows of a manager positively relate to this manager’s exploration activities, while they do not relate to a manager’s exploitation activities. We contribute to current literature on exploration and exploitation by focusing on the manager level of analysis, and by adding the importance of knowledge flow configurations to the literature on the impact of organizational factors upon exploration and exploitation.Exploitation;Exploration;Bottom-up;Horizontal;Knowledge inflows;Manager-level;Top-down

Coevolutionary Competence in the Realm of Corporate Longevity: How Long-lived Firms Strategically Renew Themselves

Understanding the phenomena of corporate longevity and self-renewing organizations has become an important topic in recent management literature. However, the majority of the research contributions focus on internal determinants of longevity and self-renewal. Using a co-evolutionary framework, the purpose of this paper is to address the dynamic interaction between organizations and environments in the realm of sustained strategic renewal, i.e. corporate longevity. To this end, we will focus on the competence of long-lived firms to coevolve due to the joint effect of managerial intentionality and environmental selection pressures. Building on coevolutionary framework, we develop a conceptual framework that highlights an organization’s coevolutionary competence. Two longitudinal case studies are presented illustrating the arguments.strategic renewal;corporate longevity;competence-based management;adaptive open systems;coevolutionary competence

Absorptive Capacity: Antecedents, Models and Outcomes

This chapter focuses on the gap between the speed of proliferation of theoretical and empirical contributions and the speed of accumulation of the acquired scientific knowledge regarding absorptive capacity. To contribute to narrowing this gap, we will in particular review the conceptual developments of the absorptive capacity construct. Based on the seminal contributions of Cohen & Levinthal (1989, 1990) we will provide a brief overview of the various conceptual attributes of this construct, like the definition, antecedents and consequences, and levels of analysis involved. Next, we will assess the refinements, extensions and reconceptualizations of this construct in the literature. Furthermore, from the perspective of viewing models as mediating instruments between theory and empirical phenomena (Morgan and Morrison, 1999), we will analyze efforts to build conceptual models. Finally, we will address the progress made, select key problems and we will formulate future research directions to improve the multilevel and transdisciplinary characteristics of absorptive capacity.innovation;absorptive capacity;knowledge

Investigating the Development of the Internal and External Service Tasks of Non-executive Directors: The Case of the Netherlands (1997-2005)

During the last decade, globalization and liberalization of financial markets, changing societal expectations and corporate governance scandals have increased the attention for the fiduciary duties of non-executive directors. In this context, recent corporate governance reform initiatives have emphasized the control task and independence of non-executive directors. However, little attention has been paid to their impact on the external and internal service tasks of non-executive directors. Therefore, this paper investigates how the service tasks of non-executive directors have evolved in the Netherlands. Data on corporate governance at the top-100 listed companies in the Netherlands between 1997 and 2005 show that the emphasis on non-executive directors’ external service task has shifted to their internal service task, i.e. from non-executive directors acting as boundary spanners to non-executive directors providing advice and counseling to executive directors. This shift in board responsibilities affects non-executive directors’ ability to generate network benefits through board relationships and has implications for non-executive directors’ functional requirements.

MANAGEMENT INNOVATION: A JOURNEY INTO THE CORE OF RESEARCH IN MANAGEMENT

As innovation is considered central to firms’ competitive advantage, innovation research has become a cornerstone of strategic management inquiry. However, the vast majority of research attention is dedicated to understanding how firms can stimulate technological innovation. An emerging (or rather resurrecting) research trend espouses the benefits of management innovation. Management innovation refers to the introduction of management practices, processes and structures that are intended to further organizational goals (Birkinshaw, Hamel and Mol, 2008). The emergent dialogue consists of conceptual work (e.g., Birkinshaw et al., 2008), historical outlines of various management innovations (e.g., Mol and Birkinshaw, 2007) and empirical studies (e.g., Damanpour, Walker and Avellaneda, 2009; Vaccaro, Jansen, Van Den Bosch, and Volberda, 2010)