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Studying on Dual-Innovation of Clustered Firms from Network Perspective

Author: LiuChunYu
Tutor: YangZuoZuo
School: Shandong University
Course: Business management
Keywords: clustered firm exploratory innovation exploitative innovation network structure network relationship network organization governance
CLC: F273.1
Type: PhD thesis
Year: 2008
Downloads: 886
Quote: 2
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Abstract


The balance between flexibility and efficiency often cause strategic dilemma in innovation management, the excessive tendency towards efficiency is associated with the losing flexibility in innovation, and induce firms to be trapped in "competence trap"; on the contrary, the bias towards flexibility will imply invest continuously without rewards, innovation will be trapped in "failure trap" as a result of lacking of supporting. As competition intensifies and pace of change accelerates, Firms needs to renew themselves by both exploiting exist competence and exploring new ones, so the notion of balance between exploratory innovation and exploitative innovation has emerged as an underlying theme in research on innovation. Yet this increasing crucial challenge has been accompanied by an ongoing inconsistence of organizing modes and managerial activity, so, the firms that attempt to achieve the balance between exploratory innovation and exploitative innovation just relying on their own resources and competence will find their located in an situation of resource scarcity, and even initiate operation in a mess; for this reason, going beyond the firm’s boundary and applying firm network in studying dualistic-innovation have a practical significance, it also obtains the supporting of innovation theory and social network analysis simultaneously. On one hand, combinatory of knowledge production and interacting of innovation activity call on the emergent needs for networking modes of innovation, innovation should be no more the activity just controlled by individualistic firm, but operate in the way of network of inter-firm relations; on the other hand, since the social network theory and social network method have been developed to assistant economics research, the rapid of increase of network research on innovation has attracted much attention in this area. As an analytic tool, social network analysis has become attractive and fully-fledged methodology, and gives tremendous support for innovation research. In addition to, owing to knowledge spillover and collective learning benefited from proximity of geography、culture and society which generated by geographic agglomeration of firms, as a result, there is a growing overall agreement about the need to investigate industrial cluster which be seen as special network organization. As remarked above, it is theoretically and practical significant to study the balance between exploratory innovation and exploitative innovation of clustered firm from the network perspective.There has been an impressing accumulation of studies focusing on exploratory innovation and exploitative innovation from network perspective, but these studies demonstrate different research dimensions and show a lack of systemic integration; apart from this, the amount of research on clustered firm is still limited. To make the matter worse , these research lack of empirical data. As a result, it is very essential to integrate exist research systematically. For this purpose, this paper is intended to study and interpret two issues as follows:First,, what are dominating factors influencing exploratory innovation and exploitative innovation of clustered firms, how they exert their mechanism of action? It is worth noting that main factors are analyzed not from internal perspective but from external network and closely related environment perspective.Second, How clustered firms can tame the antagonistic forces between exploratory innovation and exploitative innovation by making use of networking pattern? Two remedies are proposed. This issue also contains several sub-issues, first, it is issue that which coordinate schemes that clustered firms make choice between them base on their resource-analysis; second, it is issue that which operation mechanism is suitable for exploratory innovation or exploitative innovation respectively; third, it is issue that what co-evolution mechanism which clustered firms use to, promote the upgrading from exploitative innovation to exploratory innovation should be.The paper is structured as follows: section 1 provides an introduction of practical background, research issues, related notion, research framework, research method and innovation points. Section 2 presents related literature review and comments. Section 3 focuses on the research on the factors of industrial environment and networking backgrounds which influencing dualistic-innovation of clustered firms, and puts forward the hypothesizes; Section 4 is the empirical research that inspect and verify the authenticity of hypothesis proposed in section 3; section 5 concentrates on research on coordination mechanism of dualistic-innovation for clustered firms; section 6 is another empirical research that exam the theoretical derivation of section 4; followed by section 7, the conclusion and suggestion for government policy and further research.This paper synthesizes the theories from management, economics, sociology and other relating disciplines, on the basis of applying some interdisciplinary methodology such as game theory, social network analysis, mathematic model and complex network tools, this paper form systematic proposition hypothesis and theoretical framework, in order to verify the effectiveness of theoretical derivation, this paper also conducts empirical research through making use of many statistics and networking software packet like SPSS and UCINET, carrying out correlation analysis, principle component analysis and hierarchical regression analysis.The innovation points of this paper are listed below:First, unique researching perspective which combines the network characters with clustered attributes is selected, territorial environment, industrial environment and network environment which dualistic innovation of clustered firms is embedded are identified, analysis framework including network members cognition, network structure, network relationship and network organization governance is established, the researching system of social network theory is optimized, and the researching context of cluster innovation is enriched.Second, theoretic research is accompanied with empirical study, on the basis of differentiation of essence of exploratory innovation and exploitative innovation, from the industrial environment and network environment which dualistic innovation of clustered firms is embedded, this paper finds out the crucial influence factors of dualistic innovation and their action mechanism. "Paradoxical effects of operational environment and network " is solved to some extent.Third, theoretic research is accompanied with empirical study, research field of dualistic innovation is expanded from hierarchical organization to network organization, network resource and firms interaction are brought into analysis framework, coordination model of exploratory innovation and exploitative innovation basing on network is formed. Contradictory Problem between resource limitation, organization inflexibility and needs of coordination of dualistic innovation is solved. It deepens and improves the predecessor’s theory, it also posses practical significance to some extant.Four main conclusions are gained in this paper:First, different innovation posses different suitable industrial operation environment, knowledge category and network environment respectively. Environmental dynamics, implicit knowledge, cognitive distance, network density, externally-oriented network structure, critical network position, interaction frequency and informal governance have positive correlativity with exploratory innovation. On the contrary, environmental competitiveness, explicit knowledge, stability network structure, formal and enduring network relationship and formal governance have positive correlativity with exploitative innovation.Second, stability and enduring network relationship has significance not only for exploitative innovation but also exploratory innovation.Third, network organization is effective institutional arrangement for coordination of dualistic innovation of clustered firms. Form of network organization for exploratory innovation is similar to random networks, exploitative innovation network is formed on the basis of division system of industrial chain, its organization form is similar to scale-free networks. Focal firm plays a key role in upgrading process from exploitative innovation to exploratory innovation.Fourth, the crucial innovation problem of Chinese clustered firms is short of powerful supports for exploratory innovation, this is the "vulnerable spot" of innovation action of clustered firms.The results of theoretical exploration and empirical study in this paper are significant in carrying out the exploratory innovation and exploitative innovation of Chinese clustered firms.

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