tatheory rating summations show the managerial school to bethe most highly rated, even ahead of the buyer behavior school(second). The authors state, "We believe it is imperative thatwe examine critically the managerial perspective and integrateits more worthy elements into the theoretical realm" (p. 25).We agree.

In Chapter 4, on the noninteractive-noneconomic schools,the buyer behavior school is recognized for its major contri-butions to the discipline, but is also severely challenged. Theauthors write, "Unfortunately, as with other schools of thoughtthat have generated too much interest, the buyer behavior schoolsoon began to lose contact with the broader marketing disci-pline. This separation between marketing and buyer behavioris currently the subject of heated debate that shows no clearsigns of resolution" (p. 26). The buyer behavior school is ratedrelatively well on the metatheory criteria, however, and iscredited with adding to the respectability of the discipline. Wehope these analyses, both pro and con, will stir further debatein the marketing discipline. The macromarketing school, de-fined as focusing on environmental variables, is separated fromthe "activist school," which encompasses study of the effectsof marketing on the environment. Both schools have made ma-jor contributions, but the unrealized potential in the marketingdiscipline remains great. The authors note that though interestin consumerism has waned, intemational competitiveness hascome to the forefront. This historical review and analysis isexcellent.

Chapter 5 on the interactive-noneconomic schools of thought,presents the organizational dynamics, systems, and social ex-change bodies of literature. Because of the paradigm on whichthe book is structured, the institutional school is discussed pre-viously and the behavioral dimensions of channels are em-phasized in this chapter. Though the loss of integration can bedebated, the summary of this school is well done, the leadingcriticism being the limited attention to operational definitionsand empirical tests. The systems school is a collection of ap-plications of social systems and living systems perspectives,as well as information systems and the use of mathematicaland simulation systems modeling. As rated, the greatest strengthof the systems school is its holistic, integrative perspective,but the lack of consensus among systems contributors and theabsence of a forceful champion have hindered the full devel-opment of this school. Finally, though representing the socialexchange perspective as a school might be questioned, a fiurryof writing over the past 20 years has affected the thinking ofmarketing scholars and, importantly, the boundaries of themarketing discipline. This writing, though controversial, hascontributed toward developing a general theory of marketing.We agree with the authors that additional attention should begiven by the exchange school to specification, testability, andempirical support.

Overall, the identification of leading contributors to the 12schools of marketing thought is superb and the content is pre-sented very well. For readers who have "lived" in these schoolsover the past 30 or more years, it is tempting to add detail andrichness. However, the skeleton of each school is well con-structed and, within the space and length constraints, the au-thors do remarkably well. The call for a new theoretical anal-ysis of the managerial and systems schools is an exceptionallyimportant conclusion, in addition to the overall observation thatmarketing authors should pay more heed to structure and spec-ification. The authors' proposal for a "marketing laws con-vention," though sure to be casually rejected by many readers,is a profound recommendation and warrants implementation.

This book provides a compact yet comprehensive reviewof the evolution of marketing thought in this century. Mar-keting history is needed, for we must understand our roots and

the foundations of knowledge as we go forward toward gen-erating theories in marketing. In an age when most scholarsare forced to retire to their own narrow world of research in-terests, this type of book is like a breath of fresh air. Noteveryone will agree wholly with the authors' classification andevaluation of the schools of thought or with certain other po-sitions they present. The book is a good place to start, how-ever, particularly for new doctoral students, who can benefitfrom the panoramic "view of the forest." It is also worthwhilefor mature scholars who may have developed a myopic viewof marketing after long being immersed in their research niche.

GERALD E. HILLSUniversity of Illinois at Chicago

LEE HERTZMANGovernors State University

SUMARIA MOHAN-NEILLUniversity of Illinois at Chicago

NEIL YOUNKINIllinois Benedictine College

The Sources of InnovationBy Eric von Hippel (New York: OxfordUniversity Press, 1988, 218 pp., $27.00)The Sources of Innovation's unique contribution is the empir-ical discovery that innovation is distributed across differentplayers in an industry and not limited to the manufacturer. Fur-thermore, contrEiry to all expectations, users generate more in-novations than manufacturers, suppliers, and others in manyindustries.

In many ways, von Hippel's contribution to innovation-dif-fusion literature is comparable to Michael Porter's contributionin competitive strategy. Porter, through case studies and otherempirical research, convincingly demonstrated that competi-tion is not localized among competitors but is distributed acrosssuppliers, new entrants, substitute technologies, and users, vonHippel, through case studies and survey research, demon-strates that the source of innovation varies significantly acrossindustries. For example, 90% of all innovations in pultrusionprocess and 77% in scientific instruments were generated byusers, whereas 92% and 90% of all innovations in plastics ad-ditives and engineering plastics were generated by the manu-facturers. Finally, 56% of all innovations in wire terminationequipment were generated by the suppliers.

Both the managerial and public policy implications of thesefindings are enormous. For example, managerially they sug-gest a more cooperative approach to developing innovationsamong suppliers, manufacturers, and users, probably throughstrategic alliances. Similarly, they suggest that govemmentalincentives may not work well unless they are targeted to thecorrect source of innovation in a given industry.

Like all good scholars, von Hippel tries to develop a theoryof distributed innovation. His fundamental explanation is thatthe source of innovation is a function of expected profits oreconomic rents accruing to a given source. In other words,users will be the dominant innovators if they are likely to gainmore profits than manufacturers or suppliers and vice versa.

The book consists of nine chapters and a lengthy appendix.Chapter 1 provides a good overview of the book. In fact, it isdetailed enough to tempt the reader not to read the rest of thebook. Chapter 2 focuses on users as innovators, which is the

Book Reviews/139

subject of the original research work for which von Hippel isrecognized for his contributions. Chapter 3 discusses all soureesof innovation including the users. As would be expected.Chapters 2 and 3 have a lot of overlap but it is occasionallyminimized by the different contexts of industries.

Chapter 4 is devoted to developing an economic explana-tion for the source of innovation. It asserts that who investsin developing an innovation depends on who is likely to gaintemporary profits from that innovation, von Hippel suggeststwo preconditions of control, (1) how difficult it is to switchthe roles among suppliers, manufacturers, and users (i.e., thedegree of vertical integration in an industry) and (2) whetherthe innovator can make money by licensing the invention ordiscovery rather than by developing it independently. In otherwords, lack of economic altematives is a second preconditionfor a source to invest in new product or process development.

Chapter 5 is a feeble attempt to prove that the economichypothesis is working in five separate empirical tests. Unfor-tunately, from a metatheory viewpoint, the validity of the hy-pothesis is not convincing. There is simply too much specu-lative interpretation of the data in support of the economictheory.

In a somewhat disconnected way, von Hippel introducesanother concept in Chapter 6: informal trading of technical know-how among competing parties. Apparently, the author has dis-covered in his empirical research that there is considerable co-operation among competitors within an industry in terms ofsharing or trading proprietary technical know-how. He ana-lyzes this situation in four steel minimills and finds that it oc-curs. Unfortunately, this chapter stands by itself without anyconnection to the author's earlier research or the economic ra-tionale for the sources of innovation. In fact, it tends to con-tradict previous explanations based on economic self-interest.

Chapter 7 is an attempt to develop yet another explanationfor shifting the source of innovation between suppliers, man-ufacturers, and users as a function of changing the expectedprofits each party can make from that innovation. Chapter 8reports an experimental study on lead users as sources of in-novation and a potential test of different expectations amonglead versus nonlead users as sources of innovation.

Finally, Chapter 9 is an attempt to provide managerial andpublic policy implications of distributed sources of innova-tions. An Appendix summarizes various research studies con-ducted by the author and his colleagues.

The main strength of the book is the discovery that productor process innovation is not limited to the manufacturer, butis distributed among the suppliers and decidedly the users. Asecond major discovery is that lead users are even more proneto innovation than other users.

The weakest part of the book is the author's attempt totheorize the empirical findings. To claim that who innovates

is solely a function of who benefits most is not only simplistic,but also a highly rational model of corporate behavior. It is indirect contrast to other findings and observations that suggestmost technological breakthroughs are accidental and occur de-spite the organization culture and structure. In fact, many ex-perts strongly suggest that product or process innovation re-quires skunk works, bootlegging, sabotage, and maniacs. Thisactivity does not match the rational or purposeful corporatebehavior hypothesized by the author.

A second weakness of the book is its organization. Thechapters do not fit together to develop a cohesive study or theme;there is too much repetition among chapters. Finally, the au-thor has the irritating habit of putting long sentences in paren-theses.

Despite the shortcomings, the book makes a contributionto the field. Like Michael Porter in the strategy literature, vonHippel is perhaps the first scholar in the innovation literatureto point out that innovation takes place in many uncommonplacesfor example, among the users. This major discoveryhas obvious managerial and public policy implications.

JAGDISH N. SHETHUniversity of Southern California

FORTHCOMING BOOK REVIEWS1. "The Collective Works of Kenichi Ohmae." Reviewed

by Rajan Varadarajan (Texas A&M University).a. Ohmae, Kenichi (1982), Mind of a Strategist: The

Art of Japanese Business. New York: McGraw-HillBook Company, 304 pp., $23.50.

b. Ohmae, Kenichi (1985), Triad Power: The ComingShape of Global Competition. New York: The FreePress, 192 pp., $21.95.

c. Ohmae, Kenichi (1987), Beyond National Borders:Reflections on Japan and the World. Homewood,IL: Dow Jones Irwin, 150 pp., $19.95.

2. Ames, Charles B. and James D. Hlavacek (1989),Market Driven Management. Homewood, IL: DowJones Irwin, 186 pp., $29.95. Reviewed by A. CoskunSamli (University of North Florida).

3. Huber, Peter (1988) Liability: The Legal Revolution andIts Consequences. New York: Basic Books, 288 pp.,$19.95. Reviewed by J. Scott Armstrong (Universityof Pennsylvania)

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140/Journal of Marketing, January 1990