Jon Sundbo: The Strategic Management of Innovation. A Sociological and Economic Theory. .

Jon Sundbo: The Strategic Management of Innovation. A Sociological and Economic Theory. . – book review

Jaana Woiceshyn

2001, Cheltenham and Northampton: Edward Elgar. 218 pages.

Hundreds of books have been written about innovation and innovation management. What does The Strategic Management of Innovation by Jon Sundbo contribute to that literature? This book is not a reader, nor a description of innovation processes in particular firms or industries. Rather, it offers a systematic sociology-based theory of innovation in firms. This is its distinguishing characteristic and primary value.

The author’s premise is that innovation is a sociological phenomenon — with economic consequences — and therefore a sociological theory (complemented by economics and management science) is needed. Whereas competing theories argue that innovations are driven by entrepreneurs (e.g. Schumpeter 1934) or technological and economic trajectories (e.g. Freeman 1974), the strategic innovation (SI) theory holds that the whole organization is involved in creating innovations, often in response to markets. This makes them unpredictable social interaction processes, and therefore the strategic guidance of top management is needed in order for firms to reap economic rewards from their innovations. The result is a broad theory integrating innovation determinants of economics-based theories with organizational and managerial factors and drawing on Sundbo’s research on service firms.

The book is divided into four parts. Part I (Chapters 2-5) provides the conceptual and analytical framework for the SI theory. The author systematically lays the foundation and motivation for the theory and explains how it differs from economics-based innovation theories. He defines his terms, methodological and epistemological approach (alternating between deduction and induction) and provides a taxonomy of innovations. He contrasts reproduced changes (including radical and incremental innovations) with non-reproduced changes, which are reactions to changes or problems and often are not shared widely or repeated in the organization. I found this section particularly valuable in establishing the premises of the SI theory and expanding the typical product vs. process and radical vs. incremental categories of innovation.

Part II (Chapters 6-10) contains the elements of the SI theory. The theory’s main assumption is that innovation is primarily determined by market but it is produced by firms’ internal processes, led by management based on their interpretation of the environment. Two types of external driving forces put pressure on the finn and provide opportunities for innovation. Trajectories (e.g. in technology, services, general management ideas) and actors (e.g. shareholders, competitors, customers) influence innovation processes, but this influence is modified by the firm’s strategy. The management’s scope for innovation is determined by the firm’s stock of resources and capabilities (the ability to organize the innovation process); but the management also shapes these by its strategic ability to procure the stock and activate capabilities. This is all familiar to readers knowledgeable about strategic management theory; however, here it is explicitly applied to innovation. Finally, innovation requires a dual organization: the managerial structure that inspires and limits innovations, and the loosely coupled interactive structure of other employees that is often the source of innovative ideas.

Part III (Chapters 11-15) integrates the elements of Part 11 and offers a firm-level model of innovation activities as a social process. The author divides the innovation process into three phases familiar from innovation process literature: initialization, development and implementation. A chapter is devoted to each of these phases, and the role of managerial structure and the loosely coupled interactive structure in each phase are discussed in detail. The initialization phase deals with creating innovative ideas, the development phase concerns selection of the right ideas and their development, and the implementation phase deals with getting users to accept innovations. The final chapter in this section discusses creating a learning organization, for two purposes: to manage non-reproduced small changes and to make the systematic (reproduced) innovation process more efficient. This chapter also contains the book’s sole case study that describes conditions of and barriers to development of a learning organiza tion. Although all parts of the book offer insights to both researchers and managers, this is the most managerially relevant with its suggestions for the innovation and learning processes.

Part IV (Chapters 16-17) moves the theory to the macro-level of society and is the least developed in the book. The author justifies its inclusion by the need to identify innovation determinants that then can be influenced by policy and by the need to offer an optimal economic model of innovativeness in society. The proposed model of the innovation system is comprehensive as it includes the human determinants (individual, management and organizational characteristics), the culturally-based determinants (the education system) and the necessary inputs such as knowledge and technology development. However, most of these factors are quite cursorily described, and the author acknowledges that an operational model integrating them is needed. The optimal model of innovation in society is based on the balance between ‘entrepreneurial selfishness’ and ‘interactive sociability’ — I disagree, since there is no conflict between self-interest and ‘sociability’ — and an equal distribution of innovation roles of entrepren eurs (oriented on action), analysts (oriented on knowledge) and interactors (oriented on interaction). This part seems to contain the foundations for Sundbo’s next book; the space might have been better used for concrete examples illustrating the firm-level SI theory.

Amazingly, all this is packed into 202 pages (albeit in a relatively small font). This is possible, as the SI theory is presented in a dense, abstract form.

The author draws from his empirical research and tells us that he has ‘zigzagged’ between data and theory, but provides few examples. This sets certain demands on the reader who is forced to provide his or her own examples to keep the theory grounded to reality and to ‘validate’ it in his or her own mind. The book thus offers value in the form of comprehensive integrative theory to both experienced innovation researchers and managers who can supply their own examples to make the SI theory real and retainable. Novices in both groups would benefit from supplementing the abstract theory with many concrete examples from other sources.

Jon Sundbo has done a commendable job in combining sociological and strategic (and economic) perspectives on innovation. Having studied innovation for many years, I benefited from the integrated approach of this book. It treats innovations as the complex phenomena they are, yet does it systematically by discussing and uniting both the elements and processes of innovation. It provides a framework that allows researchers and managers to take a holistic view of innovations by highlighting all the key elements, processes and their interaction.

References

Freeman, C.

1974

The economies of industrial innovation. London: Pinter.

Schumpeter J.

1934

The theory of economic development. Boston, MA: Harvard University Press.

COPYRIGHT 2003 Walter de Gruyter und Co.

COPYRIGHT 2003 Gale Group