Incumbent Organizations Research Articles

Knowledge spillovers between R&D-driven incumbents and start-ups in open innovation: a systematic review and nomological network

Purpose This study aims to examine the combinations of internal and external knowledge flows between research and development (R&D) incumbents and start-ups in the context of open innovation. While there is a growing body of knowledge that has examined how, in a knowledge economy, a firm’s knowledge and innovation activities are closely linked, there is no systematic review available of the key antecedents, perspectives, phenomenon and outcomes of knowledge spillovers. Design/methodology/approach The authors have conducted dual-stage research. First, the authors conducted a systematic review of literature (97 research articles) by following the theories–contexts–methods framework and the antecedent-phenomenon-outcomes logic. The authors identified the key theories, contexts, methods, antecedents, phenomenon and outcomes of knowledge spillovers between R&D-driven incumbents and start-ups in the open innovation context. In the second stage, the findings of stage one were leveraged to advance a nomological network that depicts the strength of the relationship between the observable constructs that emerged from the review. Findings The findings demonstrate how knowledge spillovers can help incumbent organisations and start-ups to achieve improved innovation capabilities, R&D capacity, competitive advantage and the creation of knowledge ecosystems leading to improved firm performance. This study has important implications for practitioners and managers – it provides managers with important antecedents of knowledge spillover (knowledge capacities and knowledge types), which directly impact the R&D intensity and digitalisation driving open innovation. The emerging network showed that the antecedents of knowledge spillovers have a direct relationship with the creation of a knowledge ecosystem orchestrated by incumbents and that there is a very strong influence of knowledge capacities and knowledge types on the selection of external knowledge partners/sources. Practical implications This study has important implications for practitioners and managers. In particular, it provides managers with important antecedents of knowledge spillover (knowledge capacities and knowledge types), which directly impact the R&D intensity and digitalisation driving open innovation. This will enable managers to take important decisions about what knowledge capacities are required to achieve innovation outcomes. The findings suggest that managers of incumbent firms should be cautious when deciding to invest in knowledge sourcing from external partners. This choice may be driven by the absorptive capacity of the incumbent firm, market competition, protection of intellectual property and public policy supporting innovation and entrepreneurship. Originality/value Identification of the key antecedents, phenomenon and outcomes of knowledge spillovers between R&D-driven incumbents and start-ups in the open innovation context. The findings from Stage 1 helped us to advance a nomological network in Stage 2, which identifies the strength and influence of the various observable constructs (identified from the review) on each other. No prior study, to the best of the authors’ knowledge, has advanced a nomological network in the context of knowledge spillovers between R&D-driven incumbents and start-ups in the open innovation context.

Keeping up with the decarbonization: Conceptualizing and investigating incumbents’ responses to transition pressures in the post-Paris world

Incumbents are central regime actors who simultaneously adapt to transitions and actively shape them. This study has two objectives: advance the conceptualization around these actors’ behaviors in contemporary transition processes and demonstrate a novel research approach to study this behavior in practice. The focus is on incumbents’ responses to transition-related external pressures. These responses are studied by reviewing related work from organization and management literature, as well as conducting an empirical case study in the aviation sector. The theoretical and empirical insights are combined through flexible pattern matching into a conceptual framework, which simultaneously accommodates a holistic view of different types of responses incumbents use to navigate the complex operating environment, while also supporting particularity that goes beyond strategy talk. For the empirical investigation, this research utilizes incumbent airlines’ transition risk work as a source of information on what external pressures these actors themselves perceive and the responses they operationalize. The empirical case study illustrates how by distinguishing between standard, inconsistent, and unconventional response areas that incumbents take part in, even a snapshot analysis of a contemporary transition phenomenon can reveal what is happening in socio-technical regimes. The analysis also pinpoints how responses have two important characteristics that signify the importance of acknowledging the variety of responses that incumbents have at their disposal: multi-functionality and parallelity. Together, the insights of this paper can support the study and understanding of the complex, heterogeneous, and nuanced behavior of incumbent organizations, and encourage more research efforts on transitions in the making.

Achieving Ambidextrous Digital Innovations in Incumbent Organizations

Achieving Ambidextrous Digital Innovations in Incumbent Organizations

Fuelling Organised Crime: the Mexican War on Drugs and Oil Theft

Abstract We show that the Mexican war on drugs pushed drug cartels into large-scale oil theft. We propose a simple model in which government crackdowns on one criminal sector induce criminal organisations to invest in a new sector. When entering the new sector, challenger organisations with a residual share of the market in the traditional sector may leapfrog incumbent organisations. We bring the model to the data using detailed information on drug cartel presence, oil pipelines and illegal oil taps across Mexican municipalities. In line with the model predictions, municipalities with oil pipelines witnessed a greater increase in cartel presence than municipalities without pipelines after the crackdown on drugs, and the effect is driven by challenger criminal groups. Within the subset of municipalities with oil pipelines, we observe more illegal oil taps where the political party in favour of anti-drug trafficking policy won local elections by a small margin. Because of specialisation in different criminal sectors, municipalities with pipelines did not witness a surge in violence, but they did experience a decline in socioeconomic conditions.

Managerial framing in light of discontinuous change: Revolutionists, evolutionists, and mediators

This study examines the critical role of middle and frontline managers in an incumbent organization navigating discontinuous change, emphasizing the balance between exploring new opportunities and exploiting existing ones. While top managers set the strategic ambidextrous direction, the on‐the‐ground manifestation and tension management fall predominantly to the middle and frontline managers. We introduce a novel typology, classifying these managers as Evolutionists, Revolutionists, or Mediators, each with distinct cognitive framings. Our findings underscore the importance of understanding and moderating these cognitive framings to facilitate successful ambidextrous implementation. Key managerial implications include the need for heightened awareness of tension points, strategic resource allocation, mitigation of extreme cognitive framings, and the significant value of Mediator managers in steering ambidextrous strategies. This research paves the way for a deeper understanding of individual‐level ambidexterity and provides crucial insights for organizations to innovate in times of discontinuous change.

Digital Skills Mobilization within Incumbent Organizations: The Agentic Role of Digital Champions

AbstractIn a world increasingly influenced by digital technologies, incumbent organizations are urged to equip their employees with digital skills to unlock the transformative power of digitalization for their strategy and business model. Yet, extant research lacks guidance on how to mobilize and implement effective initiatives to develop digital skills in incumbents. Therefore, through an in‐depth case study of a utility company, this paper explores how an incumbent can mobilize its digital skills to embrace digital transformation. Based on the process perspective of resource mobilization, we shed light on the mechanisms for searching, accessing and transferring digital skills, namely: (i) unearthing dormant digital skills; (ii) awakening digital skill‐holders; and (iii) disseminating digital skills. In the investigation of these mechanisms, we uncover the agentic role of digital champions, who become an organizational capability for mobilizing digital skills in incumbents. We also document how digital technologies, as operant resources, can transversally support all stages of the mobilization of digital skills aimed at developing and leveraging digital skills in incumbents. In doing so, we explore the role of digitalization, both as the content of resource mobilization, in terms of digital skills, and as the means through which mobilization is enacted, in terms of digital assets and initiatives. Based on the findings of this study, we contribute to knowledge at the interface between digitalization and resource mobilization in the broader context of digital transformation.

To reform or to replace? Succession as a mechanism of institutional change in intergovernmental organisations

Given high costs of negotiating formal international institutions, states are widely expected to adapt, reform, and repurpose existing institutions rather than create new ones. Nevertheless, during the past century some 60 intergovernmental organizations (IGOs) have been directly replaced by a legal successor. Why do states sometimes dissolve an existing IGO only to replace it with a new one that takes over the incumbent organization’s mandate and assets—a practice known as institutional succession? We offer a theory of institutional succession and illustrate with examples. Against the dominant belief that creating new IGOs is a choice of last resort, we argue that reform and succession are equally expedient tools for achieving institutional change but address different negotiating hurdles. By creating a new institution (as opposed to amending an existing one) succession bypasses veto players that may stunt reform. However, succession suffers from potential diseconomies-of-scale (since not every member of an existing IGO may join the successor) which reform does not. Depending on which negotiation hurdle prevails, reform will be preferred to succession or vice versa. Our analysis advances existing understandings of institutional contestation and change within the life cycle of an international organisation.

A relational power perspective on the positional shift of peripheral players in an organisational field: The case of Mediapart in the French press field

Prior research in field theory has acknowledged the importance of power to the stability of field structure and to the reproduction of the benefits and advantages that powerful incumbent organizations have over powerless peripheral players. In this paper, we challenge such determinism by embracing a relational view of power in the field. We argue that when incumbents' use of power is perceived as hegemonic and in contradiction with field values and norms by peripheral players, the latter may act to contest such hegemonic power, leading them to achieve a positional shift. We conducted a qualitative study of the newspaper Mediapart in the French press field who succeeded in getting to the centre of the field by contesting the hegemony of incumbents. Our findings show three main strategies that allow peripheral players to achieve a positional shift in the field: reclaiming ownership, recentring authenticity and reaffirming legitimacy.

The Impact of Partner Organizational Structure on Innovation

Interorganizational partnerships can spur innovation, but their value may be diminished by friction in knowledge flows between firms. We consider how a partner’s organizational structure may influence the knowledge that is accessible via partnerships. We focus on how a partner’s structure trades off localized autonomy for its managers, which facilitates timelier decision making, and unified control, which facilitates integration. By shaping this balance, centralization of decision rights within the partner organization shapes access to its knowledge. Centralized structures generate wide-ranging internal knowledge pathways that enable access to a broader array of a partner’s knowledge. However, the reduced managerial autonomy afforded by centralization makes decision making more cumbersome, which constricts the rate of access to a partner’s knowledge. We find evidence of this tradeoff in the context of corporate venture capital relationships between incumbents and startups in the pharmaceutical industry. An increase in the incumbent’s diversity of knowledge or in the knowledge required by the startup enhances the value of a greater breadth of access, whereas the degree to which the startup can leverage social ties (affinity) or hierarchical fiat (authority) alleviates the costs of a reduced access rate. Each of these features makes an incumbent organization’s centralization more valuable to the startup. By highlighting this tension related to centralization, our findings suggest that new firms striving to maximize their partnership benefits may need to carefully consider their partners’ internal structures.

Corporate Experimentation: Antitode or Oxymoron?

Experimentation in entrepreneurship has become the basis for the most influential approaches, e.g., lean startup, to launch and develop new ventures. Recently, the ideas developed around experimentation, strongly rooted in the startup context, have begun to be adopted by incumbent organisations, with the promise that these experimentation approaches can benefit corporate entrepreneurship activities, i.e., entrepreneurship activities in the corporate context, despite the established and corporate bureaucratic processes and practices. While there is a growing and significant body of literature investigating experimentation in the startup context, there is no corresponding research exploring the peculiar implications of experimentation in corporate entrepreneurship. Furthermore, current indications for managers and practitioners on how to exploit the benefits of experimentation approaches in the corporate context appear unclear. This issue is more relevant today when companies have to face fast-changing customer needs and market trends, as well as the design of complex value propositions. Through an exploratory multiple case study - based on semi-structured interviews – involving three incumbent firms, this study explores how experimentation is conducted in incumbent organisations and used as a tool to support corporate entrepreneurship. This study provides detailed empirical evidence on how incumbents can adopt experimentation approaches in the corporate context, together with a set of specific managerial practices. Specifically, we document corporate experimentation challenges at three levels of analysis: (i) experimentation-level challenges; (ii) firm-level challenges, and (iii) network-level challenges. Based on the findings of this study, we contribute to research and practice on experimentation in corporate entrepreneurship.

Corporate Effectuation in the Digital Age: the Role of Absorptive Capacity and Digital Skills

Effectuation has become a highly influential decision-making logic for entrepreneurs. While most studies have viewed effectuation as an approach to managing resource constraints in the new venture context, few of them have directly investigated the effects of effectuation as an approach to absorptive capacity (AC) in the corporate context. Specifically, the relationship between the usage of an effectual logic and its impact on the knowledge of individuals remains underexplored in corporate entrepreneurship (CE), i.e., entrepreneurship in incumbent organisations. Moreover, in a digital world characterised by the growing proliferation of digital technologies, digital skills can support the learning and knowledge absorption process of individuals in incumbent organisations facilitating the development of corporate innovation. By using the survey data from employees of an incumbent firm, we test hypotheses developed to examine the relationship between effectuation and entrepreneurial orientation (EO) as well as the mediating role of AC and the moderator role of digital skills in this relationship. The empirical results generally support our hypotheses by showing that (i) effectuation positively influences AC, and (ii) digital skills have a positive moderating effect on the relationship between effectuation and AC. No significant results emerged concerning hypothesis (iii) AC mediates the relationship between effectuation and EO. Drawing upon the findings of this study, we reframe effectuation as a concrete activity that enhances knowledge absorption and enlarges the scope of opportunities, and in turn fosters entrepreneurial actions in organisations. In doing so, we advance the extant understanding of corporate effectuation in the digital era, providing also managerial implications.

Tapping into Digital Technologies in Corporate Entrepreneurship: an Exploratory Multiple Case Study

Digital technologies can enable entrepreneurial processes and outcomes. However, current implications for scholars and practitioners on how to exploit the emerging digital technologies for entrepreneurship in the corporate context, i.e., corporate entrepreneurship, remain unclear. This issue is even more relevant today where the growing pervasiveness of digital technologies finds increasing applicability in corporate entrepreneurship activities. This present study contributes to the academic debate on corporate entrepreneurship in the digital era by offering an exploratory multiple case study – based on semi-structured interviews – that involved four incumbent organizations to deepen the knowledge of the role played by digital technologies in corporate entrepreneurship. We provide empirical evidence on how incumbents can exploit the enabling role of digital technologies to foster corporate entrepreneurship activities. Specifically, we document three enabling mechanisms of digital technologies in corporate entrepreneurship: (i) increasing the number and heterogeneity of inputs for corporate entrepreneurship activities; (ii) increasing the visibility of actors and resources involved in corporate entrepreneurship activities; (iii) accelerating innovation adoption rate in incumbent organizations. The outcome of this study is a framework that discusses the managerial actions required to support incumbents in making corporate entrepreneurship more prolific through digital technologies. In doing so, this study contributes to research on corporate entrepreneurship in the digital era. Results are of interest also to managers and practitioners, providing them practical insights to exploit the enabling role of digital technologies for corporate entrepreneurship activities.

A survey on incumbent digital transformation: a paradoxical perspective and research agenda

PurposeDigital transformation (DT) is a major challenge for incumbent organisations, as research on this phenomenon has revealed a high failure rate. Given this consideration, this paper reviews the literature on DT in incumbent organisations to identify the main themes and research directions to be undertaken.Design/methodology/approachThe authors adopt a systematic literature review (SLR) and computational literature review (CLR) employing a machine learning algorithm for topic modelling (LDA) to surface the themes discussed in 103 peer-reviewed studies published between 2010 and 2022 in a multidisciplinary article sample.Findings The authors identify and discuss the five main themes emerging from the studies, offering the state-of-the-art of DT in established firms' literature. The authors find that the most discussed topics revolve around the DT of healthcare, the process of renewal and change, the project management, the changes in value performances and capabilities and the consequences on the products of DT. Accordingly, the authors identify the topics overlooked by literature that future studies could tackle, which concern sustainability and contextualisation of the DT phenomenon.Practical implications The authors further propose managerial insights which equip managers with a revolutionary mindset that is not constraining but, rather, integration-seeking. DT is not only about technology (Tabrizi B et al., 2019). Successful DT initiatives require managerial capabilities that foster a sustainable departure from the current organising logic (Markus, 2004). This study pinpoints and prioritises the role that paradox-informed thinking can have to sustain an effective digital mindset (Eden et al., 2018) that allows for the building of momentum in DT initiatives and facilitates the renewal process. Indeed, managers lagging behind DT could shift from an “either-or” solutions mindset where one pole is preferred over the other (e.g. digital or physical) to embracing a “both-and-with” thinking balancing between poles (e.g. digital and physical) to successfully fuse the digital and the legacy (Lewis and Smith, 2022b; Smith, Lewis and Edmondson, 2022), enact the renewal, and build and maintain momentum for DTs. The outcomes of adopting a paradox mindset in managerial practice are enabling learning and creativity, fostering flexibility and resilience and, finally, unleashing human potential (Lewis and Smith, 2014).Social implicationsThe authors propose insight that will equip managers with a mindset that will allow DT to fail less often than current reported rates, which failure may imply potential organisational collapse, financial bankrupt and social crisis.Originality/value The authors offer a multidisciplinary review of the DT complementing existing reviews due to the focus on the organisational context of established organisations. Moreover, the authors advance paradoxical thinking as a novel lens through which to study DT in incumbent organisations by proposing an array of potential research questions and new avenues for research. Finally, the authors offer insights for managers to help them thrive in DT by adopting a paradoxical mindset.

The born global and international new venture revisited: An alternative explanation for early and rapid internationalization

We revisit the empirical origins of a popular research topic: the phenomenon of early and rapid internationalization. By means of a qualitative case study, we re-examine the samples of firms used in two of the seminal studies on ‘born globals’ and ‘international new ventures’. A dominant pattern characterizing both samples, but not reported by the original authors, was that incumbent organizations were involved in the founding of the new ventures. Given this unexpected finding, we empirically investigate how being reproduced from pre-existing organizations affected the internationalization pathways of the new ventures, collecting data that extend beyond the scope and time period examined in the original studies. Our analysis shows how the evolution of the relationship between old and new generations of organizations is critical to explaining how new venture internationalization proceeded. Although the incumbent’s presence prior to foundation enabled early and possibly even rapid internationalization, it was also the source of discontinuity and instability. Based on these findings, we offer a relational perspective on the incumbent’s involvement in founding and internationalizing new ventures. Our study illustrates how applying the methodology of a case study revisit can generate new theoretical insights in existing research fields.

Exploring adaptive mirroring in healthcare IT architectures

ABSTRACT Digital transformation is demanding for incumbent organizations such as healthcare, where legacy-based IT architectures challenge the establishment of effective digital services. We refer to this as the IT silo problem, where multiple non-consolidated IT systems are implemented to support expert practices. In this paper, we analyze this challenge using a mirroring lens. Our research question is, how can we create efficient digital services, utilizing the existing legacy systems in healthcare IT architectures? Our empirical evidence comes from a Norwegian case and contributes to the literature on IT architecture within Healthcare. First, we demonstrate how strict mirroring leading to sub-optimization and silofication is a major cause for the presence of IT silos. Second, we describe a process towards adaptive mirroring, and the resulting adaptive mirroring architecture. Adaptive mirroring is an architectural combinatory device that facilitates the design and use of efficient services, while also improving the flexibility of IT architectures.

Scaling organizational agility: key insights from an incumbent firm's agile transformation

PurposeThis paper aims to examine the key challenges experienced and lessons learned when organizations undergo large-scale agile transformations and seeks to answer the question of how incumbent firms achieve agility at scale.Design/methodology/approachBuilding on a case study of a multinational corporation seeking to scale up agility, the authors combined 36 semistructured interviews with secondary data from the organization to analyze its transformation since the early planning period.FindingsThe results show how incumbent firms develop and successfully integrate agility-enhancing capabilities to sense, seize and transform in times of digital transformation and rapid change. The findings highlight how agility can be established initially at the divisional level, namely with a key accelerator in the form of a center of competence, and later prepared to be scaled up across the organization. Moreover, the authors abstract and organize the findings according to the dynamic capabilities framework and offer propositions of how companies can achieve organizational agility by scaling up agility from a divisional to an organizational level.Practical implicationsAlong with in-depth insights into agile transformations, this article provides practitioners with guidance for developing agility-enhancing capabilities within incumbent organizations and creating, scaling and managing agility across them.Originality/valueExamining the case of a multinational corporation's exceptional, pioneering effort to scale agility, this article addresses the strategic importance of agility and explains how organizational agility can serve incumbent firms in industries characterized by uncertainty and intense competition.

Analisis Kualitatif Pengaruh Tata Kelola TI Terhadap Transformasi Digital dan Kinerja: Studi Kasus Asuransi A

The emergence of digital technology, innovation competition and government regulations Making BUMN 4.0 disrupt incumbent organizations must carry out digital transformation (DT). It turns out that many of TD's efforts fail to live up to expectations due to poor governance. Previous studies have proven the role of IT governance (ITG). Unfortunately, there are still few studies exploring the mechanism of hybrid ITG that affects DT and organizational performance (OP). Therefore, we propose a research question about how the 46 ITG mechanisms affect DT and OP in the Indonesian insurance industry. Insurance A was chosen because there is a strategic direction for TD acceleration as the basis for digitization. Case study method with qualitative data collection through semi-structured interviews and thematic analysis. This study resulted in 4 themes, 19 sub-themes, and 60 codes and succeeded in demonstrating the mechanism of hybrid ITG that affects DT and the dimensions of DT that affect the achievement of knockout targets through the perspective of BSC in the insurance industry. This research is expected to be a reference for further research as well as an implementation reference to oversee the journey of DT, especially in the insurance industry

Pengujian Model Pengaruh Tata Kelola TI Terhadap Transformasi Digital dan Kinerja Asuransi B

The emergence of emerging technology disruptions, changes in stakeholder behavior towards digital, coupled with the Covid-19 pandemic has forced various incumbent organizations to transform digitally (TD). There are still many investments related to TD that fail to achieve the expected expectations due to the alleged lack of good governance implementation. Previous studies have examined the significant role of information technology (IT) on organizational performance. However, it is suspected that traditional IT Governance (TKTI) practices are not necessarily effective in the digital era. Only a few have examined the effect of IT governance (TKTI) on TD, and no one has examined the effect of TD on organizational performance (KO). Therefore, this study aimed to validate the effect of hybrid TKTI mechanisms (traditional and agile/adaptive) on TD, as well as the effect of TD on knockouts and their performance achievements through a balanced scorecard (BSC) perspective. The research method used is a survey by distributing Likert-scale online questionnaires to 11 roles related to BP in Asuransi B and succeeded in getting 50 relevant respondents. Data from the results of filling out the questionnaire were analyzed with the help of SmartPLS 3.0 tools. The test is carried out using Structural Equation Modeling (SEM) with a formative model, in the form of testing the inner model and outer model. The test results of this study indicate that both traditional and agile/adaptive TKTI mechanisms have a significant positive effect on BP. Then TD also proved to have a significant positive effect on KO. This research contributes to the knowledge base for further research on related topics, and can be an implementation reference to oversee the success of TD for practitioners, especially in the context of the insurance industry

Pengujian Model Pengaruh Tata Kelola TI Terhadap Transformasi Digital dan Kinerja Bank A

The disruption of the latest technology, changes in stakeholder behavior, and the COVID-19 pandemic forced incumbent organizations to digital transformation (DT). In fact, there are still many failed DT investments due to a lack of IT governance practices (ITG). Previous research shows the contribution of ITG in realizing the benefits of IT investment. This traditional ITG mechanism is thought to be not necessarily effective in the digital era. There is still little research on the influence of ITG on DT and Organizational Performance (OP). Therefore, this study examines the model of the effect of hybrid ITG, namely agile/adaptive and traditional on DT and the effect of DT on OP. The method used is a survey by distributing online questionnaires to 11 important roles related to DT and succeeded in getting 54 respondents. Data analysis using Structural Equation Modeling (SEM) approach assisted by SmartPLS. The results showed that the hybrid ITG mechanism, both agile/adaptive and traditional, had a significant positive effect on DT and DT also had a significant positive effect on OP Bank A's. This research contributes as a reference for similar research and can be a reference for implementing the ITG mechanism for the success of DT and the achievement of OP in organizations in general, especially the banking industry.

Three and a half decades of artificial intelligence in banking, financial services, and insurance: A systematic evolutionary review

AbstractThe banking, financial services, and insurance (BFSI) sector is one of the earliest and most prominent adopters of artificial intelligence (AI). However, academic research substantially lags behind the adoption of AI in practice. At the beginning of this century, AI research has been centered on the sector's credit risk. In the 2010s decade, expert systems were increasingly replaced by data‐driven, “algorithmic” AI. Big data enjoyed much hype in that decade, which diminished later mostly due to unsuccessful implementations. Much published research on big data actually relates to machine and deep learning but not to big data per se. These terms are often found to be conflated in research and practice. The insurance sector is substantially underrepresented in published AI research, and current research is dominated by banking and investments. Governance frameworks for “responsible AI” (RAI) are yet to be incorporated into practice by fintech companies as well as incumbent organizations. RAI is a particular issue for decentralized finance (DeFi). The most successful implementations of AI in BFSI practice, as well as dominant academic research areas, are in investments, securities, market making, customer relationships, lending, risk management, and compliance.