Academic journal article International Journal of Management

Configuration and the Capability of Firms to Innovate: A Theoretical Framework

Academic journal article International Journal of Management

Configuration and the Capability of Firms to Innovate: A Theoretical Framework

Article excerpt

This paper contributes to the debate on the relationship between supply network configuration and innovation by presenting a conceptual model. This model aims to shed light on a relational capability: the lead firm's capability to sustain synchronously multiple types of innovation by leveraging the supply network configuration. The relationship between network attributes and multiple innovations is specified with respect to the fashion industry. Several hypotheses are presented in order to explore the influence of both the diversity and density of the lead firm's supply network on the firm's stylistic and process innovations. This framework departs from the current dominant logic of analysing each innovation type separately and explores the network configurations enhancing the joint generation or adoption of multiple innovation types.

Introduction

The study of the relationship between the configuration of a firm's supply network and its innovation capability is an outstanding management issue (Pittaway et al, 2004). Recent findings on the topic confirm two interesting key points: (1) the supply network configuration and its impact on innovation and competitiveness depends on the distinctive set of relational capabilities for network management of the lead firms (e.g., Capaldo, 2007); (2) all network configurations constantly change and adapt, depending on the strategic requirements of partners and the context within which the network operates (e.g., Kash and Rycroft, 2002).

In exploring these topics, researchers tend to consider the relationships between network characteristics and specific typologies of innovation (e.g., product or process innovation), addressing that the supply network configuration differs according to the different forms of innovation required by the lead firm (Liao, 2007).

The tendency to consider types of innovation as distinct phenomena is a consequence of 'analytic' thinking (Ackoff, 1999) and also reflects the dominance of an industrial organisation perspective in the studies of innovation (Tiróle, 1988). As empirical findings only partially support this perspective - also occasionally providing inconsistent results (Fritsch and Meschede, 2001) - recent works advocate a deeper analysis of the relationships between network configuration and firm-level innovation capability (Damanpour, 2010).

This study aims to fill this gap by proposing a theoretical framework investigating the relational capabilities of the lead firms to sustain synchronously multiple types of innovation by leveraging their supply network configuration. To deepen the analysis, we have chosen to concentrate on a specific industrial setting: the fashion industry.

The fashion industry seems an interesting research setting for two main reasons: on the one hand, as Sproles (1981) states, 'the very survival of the fashion industry depends on regular style changes. Annually or seasonally a substantial portion of consumers must be persuaded or must freely choose to replace older fashions neither worn nor functionally obsolete' (p. 118); on the other hand, fashion firms are constantly engaged in process innovation as they try to improve the efficiency of the development, launch and delivery of new collections in order to face market volatility, intense competition and changing customer requirements, actually with no accelerating technological change (Sharifi and Zhang, 1 999; Christopher et al, 2004). Moreover, the innovative performance differential of fashion firms is a function of the firm's ability to internally build new capabilities but is also largely dependent on the firm's ability to leverage the supply network as an important source of product and process innovations (Lorenzoni and Lipparini, 1999).

With regard to the specificities of this context, a theoretical model and hypotheses are presented to answer two major research questions: (1) How does supply network configuration impact on the innovation capability of the lead firm? …

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