Academic journal article Journal of Competitiveness Studies

Understanding Innovation from an Information Processing View

Academic journal article Journal of Competitiveness Studies

Understanding Innovation from an Information Processing View

Article excerpt

ABSTRACT

This paper develops all-encompassing framework to explain different types of innovations. This framework explains innovations in terms of ambiguities in technology and the market, where the various types of innovations are the result of organizations' abilities to resolve such ambiguities. The framework developed here utilizes the information processing framework propagated by Daft and Lengel (1986). Further, according to the organizations' values and cultures, which can be either flexible or controlling, this paper shows how organizations are more suited to one particular type of innovation than another. This leads to a contingency model. This article ends by pointing towards a symbiosis between various types of innovations.

Keywords: Innovation, Radical innovation, Disruptive innovation, Information processing view, Ambiguity.

INTRODUCTION

According to Drucker, innovation is the "search for and exploitation of new opportunities for satisfying human wants and human needs." His definition of innovation does not necessarily involve cutting edge scientific or engineering solutions. He refers to McDonald's burger as an example of such an innovation (Drucker, 1985). However, there are others who emphasize the leading role of scientists and engineers. Dugan and Gabriel's (2013) explanations of the processes of innovations in organizations like DARPA (Defense Advanced Research Project) and Maclaurin's (1950) discussions of Marconi's struggle to exploit the business potential of radio wave technology at the turn of twentieth century are examples of such arguments.

Therefore, it is suggested that there can be different kinds of innovations. "Radical innovation" employs new engineering and scientific principles, while "incremental innovation" improves on established products and designs (Henderson & Clark, 1990; Dugan & Gabriel, 2013; Dewar & Dutton, 1986; Slater et al., 2013; Ettlie, 1984; Chandy & Tellis, 1998; Veryzer, 1998).

Still, there are occasions when excellent cutting edge products are undercut and overwhelmed in the markets by seemingly low-tech or inferior substitutes. For example, Xerox found itself in this situation when dominance of its best quality photocopier was challenged by lower end products with inferior copy qualities (Henderson & Clark, 1990; Christensen, 2006). Christensen (2006) calls this "disruptive innovation." Still others show that some innovations can be disruptive (creating new markets and serving new customers) as well as radical (incorporating new scientific or engineering knowledge) at the same time (Govindarajan & Kopalle, 2006; Veryzer, 1998).

Of course, innovations can be of different types (Abernathy & Clark, 1985; Henderson & Clark, 1990; Veryzer, 1998; Atuahene-Gima & Ko, 2001; Chandy & Tellis, 1998). Such "inconsistencies" and "contradictions" between the definitions and descriptions provide the opportunity to develop a more "encompassing" framework of innovation (Van de Ven, 1989).

This article develops such a framework utilizing the concepts of information processing as developed by Daft and Lengel (1986). They have extended the framework of organizations' information processing activities by incorporating the concept of processing unanalyzable (i.e., ambiguous) information, as well as analyzable (Daft & Lengel, 1986; Pich et al., 2002; Rice, 1992). This paper describes different types of innovations as organizations' abilities to resolve ambiguities related to markets, as well as technologies (Daft & Lengel, 1986; Santos & Eisenhardt, 2009). Further, Daft and Lengel (1896) go on to assert that certain organizational characteristics (structure and strategy), which make them very effective in processing one type of information, can also render them totally ineffective in other situations (Daft & Lengel, 1986; Perrow, 1967; Daft & Macintosh, 1981). …

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