Company innovation system: an exploration based on examples from Arcelik and Vestel

Abstract

We conceptualize the company as an innovation system. The systems approach to innovation has received limited attention at the company level. While it is widely accepted for nations, sectors, regions and technologies, and while some company-level building blocks have been proposed, the dominant approach at company level is to regard innovation as a process. A company innovation system consists of interacting components with the purpose to produce innovation. Those components can be actors, resources or institutional characteristics. The components can be configured and reconfigured for different purposes. An innovation process is therefore one of the many possible configurations within a system. A systems approach emphasizes part-whole interactions and evolutionary dynamics. We explore the concept of company innovation system using case examples of two Turkish electronics manufacturers: Arcelik, with its Telve Turkish coffee machine, and Vestel with its 3D Smart TV. We find that using the company innovation system approach, we can map innovation systems at the company level, we can indicate the relationships between the components of the system and we can identify system characteristics such as open versus closed, archetypical configurations, where new combinations come from, coordination mechanisms and exploration versus exploitation. As such, we can address questions about the company’s innovation management that are difficult to address by using a process approach. We conclude that the company innovation system approach provides additional and complementary insights to the existing company-level innovation approaches.