Innovating Beyond: Social Innovation as Extra-Organizational Innovation

Abstract

Today’s grand challenges call for innovations that enhance societal problem solving. Such innovations unlike conventional “organizational innovation” are not exclusively meant to improve innovators’ position in the marketplace through increasing customer satisfaction. Instead, the innovations need to (1) incorporate action on different levels of society, including policy or public discourse, and (2) address and involve a broader range of actors to lead to improved social outcomes. Social innovation is a prototype of such “extra- organizational innovation”. I use microfinance as a prime example of social innovation to theorize it as extra-organizational innovation by means of Giddens’ structuration theory. I develop a theoretical model and research propositions on innovation (a) mechanisms, (b) actors, and (c) effects that highlight how social innovation is systematically different from organizational innovation. I extend my theorizing to how structuration can help understand other new types of innovation that can be considered extra-organizational on at least one of the two accounts, the magnitude of actors or the multitude of levels of action involved. These types include open innovation, entrepreneurship as method and institutional innovation.