Organizational Innovations

97 Pages·2012·0.7 MB·English

THESIS FOR THE DEGREE OF DOCTOR OF TECHNOLOGY

Organizational Innovations: A conceptualization of how they are
created, diffused, and sustained

ANNIKA STEIBER

Department of Technology Management and Economics
CHALMERS UNIVERSITY OF TECHNOLOGY
Gothenburg, Sweden 2012
Organizational Innovations: A conceptualization of how they are
created, diffused, and sustained

ANNIKA STEIBER

ISBN 978-91-7385-669-0

Doktorsavhandlingar vid Chalmers tekniska högskola.
Ny serie nr 3350
ISSN 0346-718X

©ANNIKA STEIBER. 2012

Published and distributed by:
Department of Technology Management and Economics
Chalmers University of Technology
SE-412 96 Gothenburg
Sweden
Telephone + 46 (0)31-772 1000

Reproservice
Gothenburg, Sweden 2012
Abstract
Organizational innovations are essential for firms’ long-term competitiveness. In spite of this,
there is less research on organizational innovations than on technical innovations. The
purpose of this thesis is to contribute to our understanding of how organizational innovations

are created, diffused, and sustained.
The journey started by exploring the creation and diffusion of organizational innovations
through a literature-review-based article and an empirical study on the organizational
innovation ‘TQM’. The journey continued with an empirical study elaborating upon the role
of the board in sustaining the organizational innovations ‘TQM’, ‘TPS’, and ‘Lean’. In each
empirical study, data were collected through interviews, supplemented by secondary data. The
three concepts ‘creation’, ‘diffusion’ and ‘sustainability’ of organizational innovations were
found to be three intertwined concepts, rather than three separate and sequential ones. One
reason was that organizational innovations were constantly re-invented through the processes
of creation, diffusion, and sustainability. In this context, the concept ‘Sustainability’ refers to

an improvement trajectory, rather than to a particular organizational innovation. The
improvement trajectory is path-dependent and directs the creation, diffusion and sustainability
of organizational innovations to and within a firm. Due to this complexity, a question was
raised about how the creation, diffusion and sustainability of organizational innovations can
be understood and conceptualized (RQ1). The answer is a conceptual model that integrates

the three concepts ‘creation’, ‘diffusion’ and ‘sustainability’ in a five-step process, circling
around a firm-specific improvement trajectory. The five steps are: ‘Desirability’, ‘Feasibility’,
‘First-Trial’, ‘Implementation’ and ‘Sustainability’. Each step is affected by three sets of
influencing factors: the external context and interpersonal diffusion channels, the firm-

specific internal context, and the characteristics of the innovation itself.

To find out how the characteristics of organizational innovations affect the applicability of the
conceptualization (RQ2), the conceptual model was tested on a different organizational
innovation ‘Google’, identified in an empirical study conducted at Google, known for its
focus on continuous innovation. The test showed that the conceptual model was valid also for
‘Google’ and was useful in identifying both similarities and differences in the creation,

diffusion, and sustainability of ‘TQM’/’TPS’/’Lean’ on one side and ‘Google’ on the other.

Keywords: innovation, organizational innovation, diffusion of innovation, creation of
innovation, sustaining innovation, innovation management, TQM, Toyota Production System,
Lean, Google.

i
ii
Acknowledgements
Without Sverker Alänge’s faith in me as a PhD student and as a fellow researcher, this thesis
would never have been planned and even less finalized. I also want to thank Mats Lundqvist
for believing in me and being a good coach and tutor in a process that many times seemed
lonely, introvert and impossible. Sverker and Mats, you were not only my tutors but also my
friends and colleagues, whom I discussed and argued with. By testing ideas and arguing for
findings and conclusions you gave me the insights I needed to write the “kappa” and papers.
Further, I want to thank Mölndal Hospital, Electrolux Storkök AB, Scania AB, Fagersta
Stainless AB, and Google Inc. for their support and positive attitude towards my research. I
am also grateful to these companies for giving me access to board members, CEOs, and other
key people within their organizations. Due to my promise of anonymity, specific names will
not be mentioned in this acknowledgement.
I also want to thank Bo Bergman for re-accepting me as a PhD student (after having spent 10
years in industry since my licentiate degree) and Ida Gremyr at Quality Sciences, Chalmers,
for the financial support that helped me survive during the last tough months. In addition, I
thank IMIT, SIQ and the Swedish Council for Work Life Research for their financial support
for earlier parts of my research.
Moreover, I am grateful to Charles Edquist and Staffan Jacobsson for providing helpful
comments on earlier articles, and to Kathleen Eisenhardt, AnnaLee Saxenian, Martha Russell
and David Nordfors for valuable and insightful interviews during the last phase. Further, I
want to thank Anette Hallin, Linus Dahlander, Maria Elmqvist, Tobias Fredberg and Susanne
Ollila for suggestions during the last phase.
I also want to thank Mats Magnusson as the external opponent and doctoral students present
at my final seminar for their valuable input. In addition, I am indebted to Ylva Carlgren for an
excellent transcription of my Google interviews, Jon van Leuven for excellent language
checks over the years and Yvonne Olausson for her never-ending commitment in having all
PhD courses signed off and for helping me with security card and parking permits.
Finally, I thank my husband for always supporting and believing in me and for his incredible
achievement of persuading Google Inc. to sign a contract with Chalmers University of
Technology. The contract gave Chalmers University of Technology, Sverker Alänge and
myself a unique opportunity that no other university or researchers in the world previously
had had.

iii
iv
List of appended papers
This thesis is based on a “kappa”1 and four appended papers, described below. These are
referred to in the text by Roman numerals.

Paper I
Alänge, S., Jacobsson, S. and Jarnehammar, A. (1998). Some Aspects of an Analytical
Framework for Studying the Diffusion of Organizational Innovations, Technology Analysis &
Strategic Management, Vol. 10, No. 1, pp. 3-21.

Paper II
Alänge, S. and Steiber, A. (2011). Diffusion of Organizational Innovations: An empirical test
of an analytical framework, Technology Analysis & Strategic Management, Vol. 23, No. 8,
pp. 881- 897.

Paper III
Alänge, S. and Steiber, A. (2009). The board’s role in sustaining major organizational change
– An empirical analysis of three change programs, International Journal of Quality and
Service Sciences, Vol. 1, No. 3, pp. 280-293.

Paper IV
Steiber, A. and Alänge, S. (2012). A corporate system for continuous innovation: the case of
Google Inc. Submitted to European Journal of Innovation Management in March 2012.

1This “kappa” can be viewed as a fifth paper, including its own findings and conclusions. These findings and
conclusions are mainly based on those in the appended papers. This “kappa” is therefore more than a traditional
summary.

v
vi
Contents
1 Introduction ..................................................................................................... 1
1.1 Purpose ................................................................................................ 1
1.2 Historical outline of research ............................................................. 2
1.3 Research questions............................................................................. 3
2 Theoretical framework .................................................................................... 5
2.1 Organizational innovations ................................................................. 5
2.1.1 Characterization of some Major Organizational Innovations ... 7
2.1.2 Summary ..................................................................................... 12
2.2 The creation and diffusion of organizational innovations ............. 13
2.2.1 The creation of organizational innovations ............................. 14
2.2.2 The diffusion of organizational innovations ............................ 16
2.3 How to sustain organizational innovations ..................................... 23
2.4 Summary ............................................................................................ 26
3 Methodology .................................................................................................. 29
3.1 Scientific perspective ........................................................................ 29
3.2 Choice of method .............................................................................. 31
3.2.1 Selected method ......................................................................... 31
3.3 Data collection and analysis ............................................................. 32
3.3.1 Paper I ......................................................................................... 32
3.3.2 Paper II ........................................................................................ 33
3.3.3 Paper III ....................................................................................... 34
3.3.4 Paper IV ....................................................................................... 35
vii
3.4 Reliability and validity ....................................................................... 37
3.4.1 Internal and external reliability .................................................. 37
3.4.2 Internal and external validity ..................................................... 37
3.5 Reflections on the research process ............................................... 39
4 Summary of appended papers ..................................................................... 41
4.1 Paper I: Some Aspects of an Analytical Framework for Studying the
Diffusion of Organizational Innovations .................................................. 41
4.2 Paper II: Diffusion of Organizational Innovations: An empirical test of
an analytical framework ............................................................................ 43
4.3 Paper III: The board’s roles in sustaining major organizational
innovations ................................................................................................. 45
4.4 Paper IV: A corporate system for continuous innovation .............. 46
4.4.1 An open and dynamic corporate system ................................. 47
4.4.2 Comparison to selected research ............................................. 49
4.5 Summary of empirical findings from all papers .............................. 51
5 Discussion ..................................................................................................... 54
5.1 How can the creation, diffusion, and sustainability of organizational
innovations be understood and conceptualized (RQ1) .......................... 55
5.1.1 The creation and diffusion of organizational innovations ...... 55
5.1.2 Sustaining organizational innovations ..................................... 58
5.1.3 A conceptualization of the creation, diffusion and sustainability
of organizational innovations ............................................................... 59
5.2 How do the characteristics of an organizational innovation affect the
applicability of the conceptualization? (RQ2) .......................................... 62
5.2.1 The uniqueness of ‘Google’ and the difference from ‘TQM’/
‘TPS’/‘Lean’ ............................................................................................ 62
5.2.2 The applicability of the conceptualization ............................... 67
viii