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Complex Incremental Product Innovation in Established Service Firms: A Micro Institutional Perspective

Author

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  • Vermeulen, P.A.M.
  • van den Bosch, F.A.J.
  • Volberda, H.W.

Abstract

Many product innovation studies have described key determinants that should lead to successful incremental product innovation. Despite numerous studies suggesting how incremental product innovation should be successfully undertaken, many firms still struggle with this type of innovation. In this paper, we use an institutional perspective to investigate why established firms in the financial services industry struggle with their complex incremental product innovation efforts. We argue that although the impact of micro institutional forces is often overlooked in innovation studies, these forces matter for innovation success. Our study complements the existing innovation literature and provides an additional explanation why incremental product innovation is highly complex and suffers from several liabilities in established firms. Using qualitative data from the Dutch financial services sector collected over the period 1997-2002, the paper illustrates how micro institutional forces at the business unit level affect complex incremental product innovation and how the interaction of these forces delivers their impact.

Suggested Citation

  • Vermeulen, P.A.M. & van den Bosch, F.A.J. & Volberda, H.W., 2007. "Complex Incremental Product Innovation in Established Service Firms: A Micro Institutional Perspective," ERIM Report Series Research in Management ERS-2007-075-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    • Handle: RePEc:ems:eureri:10713
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    Cited by:

    1. Jacqueline Corbett & Jane Webster & Tracy A. Jenkin, 2018. "Unmasking Corporate Sustainability at the Project Level: Exploring the Influence of Institutional Logics and Individual Agency," Journal of Business Ethics, Springer, vol. 147(2), pages 261-286, January.
    2. Tzeng, Cheng-Hua, 2018. "How foreign knowledge spillovers by returnee managers occur at domestic firms: An institutional theory perspective," International Business Review, Elsevier, vol. 27(3), pages 625-641.
    3. Thiago Maia Sayão de Moraes & Marcos de Moraes Sousa, 2024. "History Matters: The Institutionalization and Innovation Paradox in the Judiciary," Social Sciences, MDPI, vol. 13(5), pages 1-17, April.
    4. Kobarg, Sebastian & Stumpf-Wollersheim, Jutta & Welpe, Isabell M., 2019. "More is not always better: Effects of collaboration breadth and depth on radical and incremental innovation performance at the project level," Research Policy, Elsevier, vol. 48(1), pages 1-10.
    5. Yanica Dimitrova, 2018. "The Culture of Innovation Model," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 39-68.
    6. Ziyi Zhao & Banghao Zhou, 2022. "Latecomers’ Isomorphic R&D Strategy and the Relationship With Performance: A Study on Chinese Pharmaceutical Firms," SAGE Open, , vol. 12(2), pages 21582440221, May.
    7. Ahmad Arslan, 2012. "Impacts of institutional pressures and the strength of market supporting institutions in the host country on the ownership strategy of multinational enterprises: theoretical discussion and proposition," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 16(1), pages 107-124, February.

    More about this item

    Keywords

    complex incremental product innovation; financial services sector; micro institutional forces; neo-institutional theory;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics

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