Abstract
Innovations have been found to frequently originate from outside of organizations (Quinn, 1985; Utterback, 1971). While both small and large firms may face obstacles to achieving innovation, pursuing innovations outside of the firm’s boundaries has been suggested to enable small firms to mitigate liabilities of smallness (Ketchen Jr, Ireland, and Snow, 2007). But is this assertion true in all cases? What about the entrepreneurial firm which extends itself too broadly or too deeply into pursuing innovations outside of the firm, straining its limited resources? This research proposes that entrepreneurial firms may not only experience diminishing returns to firm innovativeness when activities at the boundary of the firm are pursued too aggressively, but actually begin to experience negative returns to firm innovativeness. The conceptual model presented here proposes a unique relationship between the extent of boundary spanning activities and entrepreneurial firm innovativeness. A further contribution is the delineation of the three different boundary spanning objectives which drive the boundary spanning activities of the entrepreneurial firm.
Highlights
A condition of organization survival is effective interaction with the external environment of the organization.-- J
1.1 Background of the Research A firm’s external environment is home to a diverse set of knowledge sources that could potentially lead to commercializable innovations (Rothaermel and Alexandre, 2009)
McMullan and Hall (2005) found that using the assistance of counselors from a Small Business Development Center significantly influenced growth in new ventures up to a point; too much assistance proved to be a hindrance to sustaining high levels of growth. This example uses the dependent variable of firm growth, rather than firm innovativeness, but the findings suggest that the relationship would be similar between boundary spanning and firm innovativeness for entrepreneurial firms
Summary
A condition of organization survival is effective interaction with the external environment of the organization.-- J. Boundary spanning is the concept that firms have a boundary that is represented either by the interface between the firm and the market environment, or by the interaction between the departments within a firm (Lysonski, 1985; Sturdy and Wright, 2011). This interface between the external market environment and the firm itself has been historically linked to innovation (Aldrich and Herker, 1977; Tushman, 1977; Utterback, 1971). Entrepreneurial firms require frequent decisions about which opportunities should be pursued, and which are worth exploring further (Ravasi and Turati, 2005)
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