A Social-Cognitive Perspective on Firm Innovation

By Xu, Yang | Academy of Strategic Management Journal, July 2011 | Go to article overview

A Social-Cognitive Perspective on Firm Innovation


Xu, Yang, Academy of Strategic Management Journal


INTRODUCTION

Innovation is the driving force of economic growth, but much confusion centers on how to encourage it. This paper reviews the literature on social networks and organizational learning and incorporates the cognitive and social factors that influence innovation research. A firm's social capital constitutes an important source of its innovation, and the cognitive understanding of a firm's management team or its entrepreneurs of innovation also contribute to this initiative. Accordingly, this paper addresses three related questions regarding cognition, social capital, and innovation. First, how do external social capital and internal cognitive structure influence each other in the process of undertaking innovation? Second, how does social capital influence a firm's innovation? Third, how do cognitive structures influence innovation? In examining these questions, I addresses one fundamental question in strategic management--How do firms achieve innovation?

Innovation involves both the generation and the exploitation of new products, processes, services and business practices. As a special kind of economic activity, innovation requires special kinds of informational and coordination mechanisms (Teece, 1992). Technological innovation is, of course, an important source of differentiation in organizations (Nelson & Winter, 1982). A firm's competitive advantage rests both on exploiting current technologies and resources so as to achieve efficiency, and on exploring new opportunities (March, 1991; Teece, Pisano, & Shuen, 1997).

Meanwhile, social capital has been defined as networks of relationships and assets located in these networks (Batjargal, 2003; Bourdieu, 1986; Burt, 1997; Coleman, 1988; Lin, 2001a). Dynamic industries find social capital crucially necessary to support innovative activities. In a competitive marketplace, the profitable commercialization of technology requires timely access to complementary assets, and the study of the effects of various social networks on innovation output can provide insights into this process. In a homogeneous social network, firms focus on logical extensions of their past successes. In a diverse social network, a firm's access to external heterogeneous knowledge and ideas can enhance its explorative innovations.

Cognition has been defined as the knowledge structures or mental templates that actors impose on an information domain to give it form and meaning (Lyles & Schwenk, 1992; Walsh, 1995). The process of innovation is influenced by the cognitive mechanisms through which people acquire, store, transform and use information. Innovative activities arise from the actors' actions; therefore, understanding why and how these persons act as they do becomes essential to understanding the innovation process itself. Since minds propel actions, managerial cognition lies at the center of the strategic management process (Stubbart, 1989). This paper incorporates the top management team's or the entrepreneur's cognitions in the creation of a firm's social capital and explores their effects on innovation output.

RESEARCH ON INNOVATION, SOCIAL CAPITAL AND COGNITIONS

Next I present a focused literature review of innovation research, social capital studies of innovation, and cognition studies of innovation. I then build a theoretical model based on the representative works reviewed in this section.

Innovation Research

Product and process innovations constantly disturbed the evolutionary process of enterprises (Nelson & Winter, 1982; Schumpeter, 1934). Innovative behavior is a strategic activity by which organizations gain and lose competitive advantage (Jelinek & Schoonhoven, 1990; Von Hippel, 1988). Innovation can involve the implementation of new combinations of different resources in a firm (Drucker, 1998; Hargadon, 2002). Two principal types of innovation include technological innovation and social innovation. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

A Social-Cognitive Perspective on Firm Innovation
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.