Organizational antecedents to bootlegging and consequences for the newness of the innovation portfolio

Abstract

AbstractLiterature on strategy, innovation, and portfolio management has recently shown increased interest in the concept of planned emergence. This builds on an understanding that organizations' innovation is triggered both by deliberate top‐down management approaches as well as emergent bottom‐up processes. However, little is known on how to effectively plan emergence. In this context, bootlegging has been mentioned as a potential approach, describing instances in which employees choose to innovate without the knowledge and permission of top managers. Whereas past research has focused on the individual employee, we shift the perspective to the overall tendency of bootlegging in organizations. We investigate which organizational conditions facilitate the propensity of bootlegging becoming a widespread practice in an organization, and how this tendency is associated with the organization's innovativeness. Drawing on the theory of creative deviance, we argue that organizations deploying management practices fostering emergent and induced innovation initiatives increase structural strain and thereby bootlegging tendency in such organizations. As more innovation initiatives are elaborated outside the formal process, the number and diversity of ideas outside the strategic scope should increase. Higher bootlegging tendency is thereby proposed to be associated with higher portfolio innovativeness. Empirical evidence from the study of 930 respondents in 124 firms supports the notion that management practices supporting emergent innovation initiatives increase bootlegging tendency, which in turn increases newness of the organization's innovation portfolio. Management practices inducing a particular innovation direction are, in contrast, less prone to trigger structural strain with lesser effects on bootlegging tendencies of the organization. In sum, we contribute to the literature by providing evidence on bootlegging as a promising approach to enable “planned emergence”. We illustrate how different types of management practices can be used to regulate deviance in the organization to achieve higher degrees of newness of the organization's innovation outcomes.