Market innovation as an institutional reconciliation process: Two individual-level case studies

Abstract

Drawing on service-dominant logic’s institutional view of market innovation, this study investigated how the institutional reconciliation of institutional complexity at the individual level affects market innovation. Two case studies of product introductions were analyzed to determine how actors maintain prevailing institutional arrangements, adopt new institutional arrangements associated with firms’ value propositions, and create novel institutional arrangements. The results suggest that actors undergo an institutional reconciliation process comprising three stages—namely: engaging in reflexivity, mobilizing resources, and normalizing practices; notably, this process is recursive until actors align all practices with an institutional arrangement and these practices are routinized and reproducible, although this depends on institutional complexity. The results also revealed that different approaches to reconciling multiple incompatible institutional arrangements across contexts at the micro level impact the emergence of macro-level market innovation. Ultimately, these findings shed light on the uncertain outcomes of market innovation.