Corporate Innovation and Competitive Environment

International Entrepreneurship and Management Journal 1, 313–333, 2005c© 2005 Springer Science + Business Media, Inc. Manufactured in The United States.

Corporate Innovation and Competitive Environment

MORTEN HUSE [email protected] School of Management, BI, Oslo, Norway, & Bocconi University, Milan, Italy

DONALD O. NEUBAUM [email protected] State University, College of Business, USA

JONAS GABRIELSSON∗ [email protected], Lund University, Lund, Sweden, & Norwegian School of Management, BI, Oslo, Norway

Abstract. Empirical studies have shown that the characteristics of the competitive environment influencethe corporate innovation activities of U.S. firms. This study attempts to internationalize these studies in twoways. First, it examines the environment-corporate innovation relationship in Norwegian manufacturingfirms. Second, it examines how the firms’ corporate innovation activities are influenced by their internationalactivities. Results indicate that environment and internationalization are positively related to corporateinnovation, but models developed using U.S. firms may not be generalizable to firms from other countries.

Keywords: corporate innovation, internationalization, environment

Authors have long argued for the importance of understanding entrepreneurship fromthe perspective of a firm’s behavior (Covin and Slevin, 1991; Guth and Ginsberg, 1990;Slevin and Covin, 1994; Wiklund, 1999; Zahra and Covin, 1995; Zahra, Jennings andKuratko, 1999). Corporate innovation (CI) is an important dimension when this per-spective is used. CI consists of product, process and organizational forms of innovation(Butler, 1988; Knight, 1967; Zahra, 1991) that stem from incubative, acquisitive andimitative sources (Burgelman and Sayles, 1986; Link, 1988; Pisano, 1990). CI is increas-ingly becoming the key to success in today’s globally competitive markets (Zahra andGarvis, 2000). Emerging global markets and rapid technological development makestrong demands on the ability of companies to develop and utilize its resources and ca-pabilities. By being engaged in CI, the company can meet these pressures and competevigorously, renew its operations, create new revenue streams and improve shareholders’value.

The relationship between a firm’s external environment and CI has long been a sub-ject of interest in the management literature, and several studies have shown that thecharacteristics of the external environment influence the type and source of firms’ CIactivities (Covin and Slevin, 1989; Guth and Ginsberg, 1990; Lumpkin and Dess, 2001;

∗Corresponding author. Jonas Gabrielsson, CIRCLE, Lund University, P.O. Box 117, S- 221 00 Lund,Sweden. Tel.:+46 (0) 709 95 64 47.

314 HUSE, NEUBAUM AND GABRIELSSON

Tsai and MacMillan, 1991; Zahra, 1991, 1993a, 1996). A general finding in these studiesis that conditions in the firms’ competitive environment, such as dynamism, hostilityand heterogeneity, are antecedents of CI activities. For example, firms operating in tur-bulent and fast changing industries are usually characterized by rapid and frequent newproduct creation and high levels of R&D spending and patenting (Covin and Slevin,1989; Guth and Ginsberg, 1990; Lumpkin and Dess, 2001). Moreover, in a series ofstudies Zahra (1991, 1993a, 1996) has showed that firms competing in dynamic andgrowing environments put a greater emphasis on product and process technology intro-ductions compared to firms competing in stable, non-rivalrous environments. Hence,it appears as if conditions in the firms’ competitive environment play a profound rolein influencing CI activities.

However, despite the important contributions of the above mentioned studies, theseand other similar studies share two important limitations. First, while some studies haveconsidered the CI activities of non-U.S. firms (e.g., Hisrich, 1988; Manu, 1992) moststudies of CI have focused exclusively on U.S. firms (Giamartino and McDougall, 1993).Few, if any, have examined the environment-CI relationship in non-U.S. firms (Zahra etal., 1999). CI and environment-CI relationships, however, can be influenced by culturalfactors or differences in the market structures of different countries (Morris, Davis andAllen 1994; Porter, 1990; Shane, 1994). Countries vary along several dimensions whichmay influence CI, such as political systems, innovation climate and culture (Boyacigillerand Adler, 1991; Hofstede, 1983; Mueller and Thomas, 2000). Despite these differencesmanagement education and literature in many countries are based on studies using U.S.samples. Managers operating in other countries need to understand whether findingsfrom U.S. studies are generalizable to other countries and cultures (Zahra et al., 1999).Thus, there is a need to determine if the relationships between the environment and CIidentified in previous studies hold in non-U.S. settings. This study attempts to addressthis shortcoming on past studies by examining the environment-CI relationship usinga Norwegian sample.

Second, while some studies have analyzed the relationship between the environmentand the firm’s international activities (e.g., Hakansson and Johansson, 2001), few stud-ies have analyzed how a firm’s international activities are associated with firms’ CIactivities. This shortcoming is surprising given the evidence that internationalizationand innovation are becoming increasingly intertwined (Hakansson and Johansson,2001) and as innovation has become a major source of international competitive ad-vantage (Hitt, Hoskisson and Ireland, 1994; Zahra and Garvis, 2000). These competi-tive advantages can include comparative advantages by obtaining access to lower costproduction factors in other countries, as well as the firm’s ability to obtain economiesof scale in production, marketing or purchasing through high level of export. From aresource-based view, firms engaged in international activities possess a different stockof organizational resources, which may increase their ability to innovate (Kotabe, 1990).

Based on the discussion above, we will argue that there are shortcomings in ourknowledge of how characteristics of the external environment influence the CI activi-ties of firms outside U.S., as well as how a firm’s international activities are associatedwith firms’ CI activities. This study, therefore, addresses the following two questions:

CORPORATE INNOVATION AND COMPETITIVE ENVIRONMENT 315

Figure 1. The research model of the study.

(1) Can previous theory and measures of the environment-CI relationship be general-ized to a non-U.S. setting? (2) Are a firm’s international activities related to the firm’sCI? The perspective taken in this study is illustrated in Figure 1.

The remainder of this paper is divided into four sections. First, the study’s theoryand hypotheses are introduced. The categories of CI and the environment are pre-sented, followed by a discussion of how the environment and international corporateactivities are hypothesized to be associated with CI. Second, an explanation of thestudy’s methodology is provided. Third, the results are discussed and compared tostudies using U.S. samples. Finally, the paper concludes with a discussion of the study’simplications, limitations, and future research questions.

Theory and hypotheses

Types and sources of corporate innovation

Innovation is often conceptualized as the outcome of novel and creative (re) combina-tions of existing knowledge and resources (Penrose, 1959; Prahalad and Hamel, 1990;Schumpeter, 1934). These innovations can assume many forms, such as new productsor services, new production methods, or new organizational systems or structures; theycan also be internally generated or acquired from outside sources (Damanpour, 1991;


Utterbach, 1996). The literature, therefore, recognizes that CI consists of a full rangeof activities and is a multidimensional concept (Garcia and Callantone, 2002). Thispaper supports this multidimensional view of CI by examining both the types and thesources of innovation commonly recognized in the literature.

As indicated in Figure 1, when examining how the environment influences innova-tion the need to view CI from a multidimensional perspective is particularly important(Garcia and Callantone, 2002; Zahra, 1993b). Firms pursue different strategies in dif-ferent environments (Covin and Slevin, 1989; Miller and Friesen, 1984). An environ-mental condition which stimulates a firm’s emphasis on one dimension of CI may notnecessarily lead to equal attention being given to another dimension of CI (Lumpkinand Dess, 2001; Stetz, Howell, Stewart, Blair, and Fottler, 2000). The mix of CI ac-tivities will vary as firms pursue distinct combinations of these activities in differentenvironments (Kreiser et al., 2002; Zahra, 1993b). Even in stable environments, firmscontinually adopt different types of innovations over time (Hage, 1980).

CI types refer to the nature or focus of innovations the firm pursues to achieve itsobjectives. Innovations can be distinguished in three ways: (1) the development of newproducts and services, (2) the adoption of new technologies with the intent to improvemethods of production, and 3) the establishment of novel organizational structuresand administrative systems (Damanpour, 1991; Kamm, 1986). Each of these types ofCI reflects drastically different activities, yet the firm must simultaneously juggle allthree types of innovation to be successful (Kamm, 1986).

Product innovation represents a firm’s efforts to create new products or services, ormodify those products or services the firm already possesses (Butler, 1988; Porter, 1985).These innovative efforts are focused on extending or revising the product or service linethe firm presently offers in an effort to meet certain market needs. Product innovationcan be used to respond to customer needs, introduce new product features or styles,or extend the life of an existing product. Process innovation reflects the firm’s inter-est in altering the manner in which its products or services are created (Butler, 1988;Schroeder, 1990). Process innovation can include changes in the raw materials used,new task specifications or work flows, or changes in the machines used in production orservice delivery (Utterbach and Abernathy, 1975). Process innovation can either lowerthe firm’s costs of delivering goods and services to its customers or increase the quality,efficiency or effectiveness of the goods and services the firm provides. Organizationalinnovation reflects the firm’s attempts to encourage innovation through various organi-zational systems (Damanpour, 1987; Van de Van, 1986). The firm’s structure, decisionmaking processes, and incentives and training programs can be altered through theintroduction of novel administrative systems to foster innovative behavior.

Innovation may also arise from various sources. Innovation sources refer to the man-ner in which firms acquire, develop, or gain access to innovations. Several internal andexternal sources of innovations are available (Pisano, 1990). The three major sourcesof innovation examined in this study are: (1) incubative innovation, (2) acquisitiveinnovation, and (3) imitative innovation.

Incubative innovation focuses on the internal creation and generation of innovationsthrough the organization’s own efforts. Incubative innovations are generally developed


in the firm’s own R&D labs. These innovations represent risky research investmentsand it may take several years before they can be adopted or implemented by the firm.Acquisitive innovation involves gaining access to innovations by searching for sourcesoutside the firm. These innovations can be acquired through a variety of mechanisms,such as purchases, licensing agreements, or joint ventures (Burgelman and Sayles, 1986).Through acquisitive innovation, the firm may gain quick access to the innovations itneeds. Imitative innovation involves a firm’s attempts to copy or imitate the products,services or processes of its rivals or firms in other industries (Mansfield, 1988). Theseinnovations are identified and then integrated into the firm’s current practices. As withacquisitive innovation, imitative innovation may enable the firm to adopt innovationsmore quickly and with less risk than if the firm could use incubative innovation activi-ties.

Relationships between the environment and innovation

Organizations depend on the environment for resources and for the justification of theircontinued existence (Pfeffer and Salancik, 1978). Because the environment is complexand volatile, long-term competitiveness requires organizations to constantly be opento signals regarding current and future conditions of the environment, and to applythis knowledge to change their own behavior and positioning in its markets in a timelyway. One question this study attempts to answer is how the dimensions of the externalenvironment affect the types and sources of innovation utilized by firms. External envi-ronmental conditions attract the attention of managers and can subsequently influencethe firm’s strategic choices (Zahra, 1993a). The environment, while difficult to control,is assumed to influence managerial action and organizational outcomes (Covin andSlevin, 1989; Keats and Hitt, 1988). During the pursuit of CI initiatives, before takingaction managers must interpret and consider the specific conditions of the environment.

While there is considerable debate regarding the method to adequately measure anexecutive’s perceptions of the external environment (Boyd, Dess and Rasheed, 1993),three of the most commonly accepted dimensions of the environment are heterogeneity,dynamism, and hostility (Dess and Beard, 1984; Keats and Hitt, 1988; Miller andFriesen, 1984). These three dimensions have been used in several studies of U.S. firms’CI activities (e.g., Zahra, 1991). The use of these environmental dimensions, therefore,will allow a more direct comparison of the environment-CI relationships in U.S. andnon-U.S. samples.

Heterogeneity. Heterogeneity is the amount of diversity, multiplicity and complexityin the firm’s competitive environment. Firms competing in heterogeneous environmentsconfront a greater number of customer wants, tastes and needs (Miller and Friesen,1984). Zahra (1991) found a positive relation between environmental heterogeneity andinnovation in a study of Fortune 500 firms. Since heterogeneity increases the numberof opportunities and threats, firms in these environments tend to aggressively pursueinnovation. New business opportunities can be particularly important in heterogeneousenvironments (Peterson and Berger, 1971; Wilson, 1966).


Heterogeneous markets are hypothesized to be positively associated with the varioustypes of innovation that was previously identified. The pressure to meet the diverseneeds of heterogeneous markets is likely to encourage product innovation initiatives.Process innovations may enable the firm to meet consumers’ diverse needs in a cost-effective manner. Likewise, since meeting multiple demands is critical to success inheterogeneous markets, firms can increase their ability to meet these numerous demandsby introducing or adopting organizational systems that stimulate innovation. Theseorganizational innovations, therefore, will be emphasized in heterogeneous markets.

As with the types of innovation, the sources of innovation may be positively as-sociated with environmental heterogeneity. Any source of innovation which increasesthe firm’s ability to fill the diversity of needs found in heterogeneous markets will bevalued by the firm. Market heterogeneity will push the firm to gain access to as manynew innovations desired by the market as possible; the source of the innovation is notparticularly important. Incubative measures can be initiated by the firm to address thediversity in the market segments. In heterogeneous environments, firms are readily ableto learn from one another, which support imitative innovation (Keats and Hitt, 1988).Keats and Hitt (1988) also note that joint ventures and other organizational arrange-ments are frequently used by firms to reduce the uncertainty posed by heterogeneity.Acquisitive innovations, therefore, are likely to be associated with market heterogeneity.Each of these sources of innovation can increase the firm’s ability to fulfill a multitudeof product and market demands. This discussion leads to the following hypotheses:

H1: Environmental heterogeneity will be positively associated with the types andsources of corporate innovation. The more heterogeneity, the more innovation.

Dynamism. Environmental dynamism refers to the extent of the unpredictability ofchange within the firm’s environment (Boyd et al., 1993; Zahra, Neubaum and Huse,1997). This change can arise from many sources, including the introduction of newproducts, processes and technologies, and from changes in the regulatory or compet-itive landscapes. Earlier studies have found that environmental dynamism encouragesinnovation and entrepreneurial behavior (Miller, 1983; Miller, Droge and Toulouse,1988; Zahra, 1991). Organizations and the people in them learn through interactionswith the environment (Cohen and Levinthal, 1990) and changes in the external en-vironment may open many new windows of opportunity, thus spurring a company’squest for innovation to benefit from these developments (Zahra, 1991).

Environmental dynamism is likely to stimulate the firm to increase its CI activities.Environmental changes and volatility can encourage innovation as firms attempt totake advantage of new opportunities created by change. Dynamism can also depletethe firm’s competitive advantages; one way to sustain advantages is to continually up-grade them through innovation initiatives (Porter, 1985). Dynamism can create newopportunities in the market, which may direct the firm to consider product innovationto take advantage of these new opportunities (Miller and Friesen, 1982). Environmen-tal change can cause the firm to search for new means for remaining competitive whichfoster process innovation activities. Innovation can also be of particular importance


in dynamic environments as the firm can use novel organizational systems to induceinnovative behavior. The innovations which arise through the adoption of these ad-ministrative mechanisms can help the firm keep pace with their changing environment.

The sources of innovation may also be positively associated with environmentaldynamism in the firm’s environment. In an effort to keep abreast with the dynamicenvironment, firms will seek a variety of innovations. Through their own incubativeinnovation efforts, firms may introduce change within their own markets. Although it ispotentially time consuming, incubative innovation is likely to be high in dynamic envi-ronments. Since the pace of change is rapid in dynamic environments, firms must gainaccess to new products and technologies quickly (Haskins and Petit, 1988). Both acquis-itive and imitative sources of innovations enable firms to rapidly adopt new innovations.Any method, therefore, which enables the firm to gain access to new technologies andinnovations will be valued. The following hypothesis, therefore, is presented:

H2: Environmental dynamism is positively associated with the types and sources ofcorporate innovation. The more environmental dynamism, the more innovation.

Hostility. Environmental hostility indicates the amount of unfavorable externalforces for a firm’s business that threaten its mission or outputs. Hostile environmentsare those where the conditions facing the firm are perceived as harsh and threatenthe firm’s ability to effectively compete (Miller and Friesen, 1982; Zahra et al., 1997).Characteristics of a hostile environment can include intense competitive pressures, lowmargins and a harsh business climate which offers few opportunities to exploit (Covinand Slevin, 1989).

In hostile environments, firms are hypothesized to increase their innovation activi-ties. Aggressive entrepreneurial firms can match the competitive requirements of thehostile environment by creating and maintaining a competitive advantage (Covin andSlevin, 1989). Firms may also rely on innovation activities in an effort to lower theirproduction costs or increase their marketing and distribution efficiency in the faceof intense competition within their industry. All types of innovations are likely to bepursued by firms which view their environments as hostile. Product innovation canenable the firm to shift its product focus and compete in market segments which maybe less hostile or rivalrous (Keats and Hitt, 1988). Process innovations can be usedto lower production costs, which will allow the firm to become more competitive asenvironmental hostility increases. Hostility often shrinks firms’ profit margins, whichmay pressure firms to more seriously consider process innovation efforts. Hostility mayalso force the firm to implement organizational mechanisms to increase their ability tointroduce innovations or initiate self-renewal programs (Covin and Slevin, 1989).

As with the types of innovation, all sources of innovation are likely to be pursued inhostile environments. The pressures to remain competitive encourage firms’ to pursueinitiatives through incubative innovation. Similarly, hostile environments may forcefirms’ to quickly respond to the innovations introduced by their competitors. In thiscase, acquisitive and imitative sources of innovation enable the firm to match the com-petitive moves of rivals or firms in adjacent industries.


The support for a positive relationship between environmental hostility and inno-vation has not been unambiguous. Zahra (1991) found strong positive relationshipsbetween environmental hostility and innovation. Other studies have indicated only aweak impact (Covin and Slevin, 1989; Miller, 1987). The arguments lead, however, tothe following hypothesis:

H3: Environmental hostility is positively associated with the types and sources of cor-porate innovation. The more environmental hostility, the more innovation.

Internationalization and innovation

The second research question this article addresses concerns the relationship between afirm’s international activities and its propensity to engage in CI. Firms become involvedin international business for a variety of reasons, and several theoretical justificationshave been forwarded to explain this phenomenon. These explanations include mar-ket failures (Buckley and Casson, 1976), increased knowledge of international mar-kets (Johansson and Vahlne, 1977), and the product life cycle theory (Vernon, 1966).Regardless of the reasons for becoming international, firms engaged in internationalcompetition can gain advantages over their purely domestic competitors by expandingthe firm’s knowledge base (Johansson and Vahlne, 1977) thereby increasing the abilityto revitalize and renew the firm’s products and strategies (Zahra and Garvis, 2000).

There are several reasons why internationalization is proposed to be positively as-sociated with CI (Hitt et al., 1994). First, international activities provide potential forfirms to achieve greater return on their innovations. The costs of pursuing large scaleR&D activities may require a large customer base that can only be realized by a firmcompeting in numerous international markets (Kobrin, 1991). A firm can capitalizeon the resources that may exist in various locations (Porter, 1990) thereby revitalizingits business by entering new economic regions or foreign markets (Zahra and Garvis,2000). Thus, international activities will provide incentives for firms to innovate. Fur-thermore, international activities allow companies to interact more closely with eachother and thereby handle critical problems in a way that in the long run is benefi-cial for all parties involved. The international marketplace can become a virtual R&Dlab for the firm as experiences in international markets provides a rich base for tap-ping various global sources of innovation (Kotabe, 1990, 1992). Firms with extensiveinternational activities are embedded in a network of relationships that provides a po-tential base for interaction among knowledge bases and technologies (Hakansson andJohansson, 2001). These firms are exposed to a wider variety of products, services,and production methods and may attempt to integrate these novel experiences intotheir existing operations. International experiences, therefore, are likely to provide thefirm with a stronger foundation to pursue innovation activities in a more extensivemanner.

The reasoning above suggests that innovation activities of internationally active firmscan be influenced by the firm’s increased access to new technologies and innovations.


These justifications have led researches to propose that international diversification ispositively associated with innovation (Hitt et al., 1994). While this, of course, remainsan empirical question, this study attempts to add to the literature and determine ifinternationalization is positively associated with the types and sources of CI. Thefollowing hypothesis, therefore, is presented for empirical testing.

H4: International activities are positively associated with the types and sources ofcorporate innovation. The more international activities, the more innovation.

Method

Sample and data

To test the study’s hypotheses, an associative cross sectional field survey (Wallace, 1983)was designed, and survey data were collected from Norwegian manufacturing compa-nies. Norway is a small country, and its firms tend to be highly internationalized. Thecountry’s gross national product per capita is among the highest in the world. Norwayis a social democratic society, and compared to the U.S., there is a high percentage ofpublic ownership. Management and corporate innovation education and literature inNorway are very much inspired from the research findings gathered in studies of U.S.firms. These issues made Norway an interesting country for the purpose of compar-isons. The data (n = 277) came from Norway’s 1000 largest manufacturing companiesand represented eight two-digit SIC groups. Initially, the 1000 firms on OkonomiskLitteratur’s (1992) list of Norway’s largest industrial firms were considered. Ninety-sixcompanies, however, were excluded because they were conglomerates or because of amerger or bankruptcy. Two mailings, three weeks apart, were used. During this timetwelve undeliverable questionnaires were returned. Of the 892 remaining firms, 277returned completed questionnaires for a response rate of 31 percent. The mail surveytargeted the CEO, who was considered the most informed individual about the firm’senvironmental and CI issues. On the occasions where a person other than the CEOresponded, an analysis of the respondent’s title indicated that he or she was among thecompany’s most senior executives.

No significant difference was found when comparing responding and non-responding firms on size (measured by the number of employees). The Norwegianfirms included in this study are among the largest in the country. The results may notbe the same for firms of other sizes. Large companies, however, were chosen so that theresults from this study could be compared to CI studies of U.S. firms.

Measures

Survey data were collected on four sets of variables: the company’s perception of itsenvironment, the extent of its internationalization activities, its CI activities, and control


variables. The environment and innovation variables were constructed to mirror, asmuch as possible, those utilized in U.S. studies (e.g., Zahra, 1991, 1993a). A five-pointresponse format was used (1 = very low vs. 5 = very high). The measures were validatedby factor analyses and estimations of Cronbach’s alpha (Nunnally, 1978). In each case,responses to multiple items were averaged; the average was then used in subsequentanalyses. Table 1 presents the descriptive statistics of the variables.

Environment. The CEOs responded to measures of environmental heterogeneity(three items; alpha = 0.59), dynamism (six items; alpha = 0.59), and hostility (sixitems; alpha = 0.73). Heterogeneity items were: “Number of market segments or groupswhich you serve,” “Diversity of your customers’ needs and buying habits,” and “Num-ber of markets in which you compete”. Dynamism items were: “Rate of obsolescencein production technology,” “Unfavorability of demographic changes,” “Industry-widespending on advertising,” “Intensity of industry-wide promotion efforts,” “Compe-tition based on service,” and “Competition based on quality”. Finally, the items forhostility were: “Unfavorability of governmental regulations,” “Unfavorability of mar-ket conditions,” “Unfavorability of market changes,” “Unfavorability of competitiveconditions,” “Competition based on price” and “Rate of bankruptcy in the industry”.

Internationalization. The internationalization measures should capture the extent ofthe firm’s activities that are conducted in foreign countries. Two variables were used tomeasure various aspects of a firm’s international activities: (1) the natural log of thepercentage of total production taking place in foreign countries (“International pro-duction”) and (2) the natural log of the number of countries the firm exported to (“No.of export countries”). Variables measuring other aspects of a firm’s international ac-tivities might have been used, e.g., R&D in other countries, the firm’s import or exportintensity, number of employees in other countries, composite measures international-ization, etc. Different measures might lead to different results. These limitations shouldbe considered when interpreting the results of the study. Correlations between variousinternationalization measures were, however, computed. Correlations higher than .50were found between “No. of export countries” and the percentages of employees inother countries (.50), and the percentages of sales to (.72) and income from (.73) othercountries. Correlations higher than .40 were found between “international production”and percentages of R&D budgets spent in other countries (.42) and the percentages ofemployees in other countries (.75).

Corporate innovation. CEOs responded to measures of product innovation (sevenitems; alpha = 0.83), process innovation (six items; alpha = 0.87), organizational in-novation (eight items; alpha = 0.87), incubative innovation (four items; alpha = 0.73),acquisitive innovation (five items; alpha = 0.78), and imitative innovation (seven items;alpha = 0.84). The individual items for each of these measures of innovation can befound in the appendix.

Control variables. Our sample consists of companies of various sizes. Company sizehas been suggested to have an effect on CI activities (Cohen, Levin, and Mowery,1987; Ravenscraft and Scherer 1982;). Size has also been considered to affect a firm’sinternational activities (Manu, 1992). We therefore choose to include company sizeas a control variable in the study, measured by the natural log of the firm’s number


Tabl

e1.

Des

crip

tive

stat

isti

cs.I

nter

corr

elat

ions

amon

gth

est

udy’

sva

riab

les.

12

34

56

78

910

1112

1314

Size

and

indu

stry

1.C

ompa

nysi

ze–

2.P

rod.

inn.

oppo

rtun

itie

s.0

3–

3.T

ech.

oppo

rtun

itie

s.0

2.4

3–

Env

iron

men

t4.

Het

erog

enei

ty.1

5.1

5.0

4–

5.D

ynam

ism

.10

.23

.05

.34

–6.

Hos

tilit

y.0

3.0

4−.

08.3

4.2

4–

Inte

rnat

iona

lact

ivit

ies

7.N

oof

expo

rtco

untr

ies

.28

.14

−.01

.37

.25

.07

–8.

Inte

rnat

iona

lpro

duct

ion

.27

.13

−.12

.17

.13

.00

.38

–In

nova

tion

sour

ces

9.In

cuba

tive

.16

.33

.19

.24

.13

.04

.27

.19

–10

.A

cqui

siti

ve.1

9.1

6.0

3.2

2.3

3.0

7.3

9.2

6.2

6–

11.

Imit

ativ

e−.

04−.

05−.

04.1

0.0

8.0

9.0

7.0

7.0

0.2

8–

Inno

vati

onty

pes

12.

Pro

duct

.14

.34

.14

.35

.33

.03

.34

.24

.49

.37

.13

–13

.P

roce

ss.1

8.2

3.3

8.1

9.1

5−.

06.3

0.0

8.4

1.3

9.0

5.4

6–

14.

Org

aniz

atio

nal

.13

.21

.14

.22

.27

−.00

.20

.05

.56

.41

.19

.40

.39

–M

ean

4.97

3.25

3.48

3.02

2.79

3.05

1.54

.59

3.68

2.11

2.55

3.09

2.60

3.32

St.d

evia

tion

1.14

.94

.87

.79

.52

.70

1.26

1.22

.67

.75

.66

.75

.81

.80

Pea

rson

’spr

oduc

tm

omen

tco

rrel

atio

nco

effic

ient

s.C

orre

lati

ons

have

tobe

.09

tobe

sign

ifica

ntat

p<

.05

(1-t

aile

d).

N=

277.


of employees in 1992. Figures from Okonomisk Litteratur’s (1992) list of firms wereused.

As the sample consisted of firms from many industries, two variables were used tocontrol for industry variations. A condition distinguishing between various industriesin relation to innovation is the extent to which technological and innovation oppor-tunities in the industry (Slevin and Covin, 1994; Zahra, 1996). We, therefore, usedvariables to control for these variances in each industry. Measures capturing productinnovation opportunities and the technological opportunities were gathered from theCEOs. The following items were used to measure the two variables respectively: “op-portunities for product innovation in your company’s major industry,” “opportunitiesfor technological innovations in your company’s major industry”.

Even though we tried to use measures that reflected the same concepts describingthe environment and corporate innovation that were used in studies of U.S. samples,we were unable to use the exact same items. The extents of these differences, however,are small and are unlikely to impact the conclusions.

Analyses

The first step was to examine the intercorrelations among the independent variables.The correlations between the predictor and control variables were low or moderate (seeTable 1). The highest correlations were between the two variables measuring indus-try innovation opportunities (.43), between the two variables measuring internationalactivities (.38), and between heterogeneity and “No. of export countries” (.37). Thecorrelation table indicates the measures’ independence.

Hierarchical multiple regression analyses were used so that the unique effects of theenvironmental variables, and the firm’s international activities on the firm’s CI activities,above and beyond those associated with the control variables, could be captured. Threesteps were thus used in the regression analyses. The six innovation variables (product,process, organizational, incubative, acquisitive, and imitative innovation) were treatedas dependent variables. The other variables were entered in three steps. In the first step,the control variables were entered. Change F step one indicates the importance of thecontrol variables. In the second step, the environmental variables were entered. ChangeF step two indicates the additional contribution of the environmental variables. In thethird step, the internationalization variables were entered. Change F step three indicatesthe additional contribution of the internationalization variables. A main limitation inthis study is that it uses a cross-sectional design, and accordingly, causal inferencesshould not be made.

Results

Table 2 displays the results from the regression analyses. The table reports the standard-ized partial regression coefficients (beta), adjusted Rsquares, F-values, and changes inF-values for each step.


Table 2. Multiple regression analysis.

Incubative Acquisitive Imitative Product Process Orga.1 2 3 4 5 6

Step 1-ControlCompany size .07 .07 −.08 .02 .09’ .07Prod. inn. opportunities .25*** .05 −.09 .22*** .02 .11’Tech. opportunities .10 .01 .01 .04 .35*** .07

Step 2-EnvironmentHeterogeneity .13* .00 .06 .21*** −.09 .13’Dynamism −.02 .22*** .05 .17** .05 .19**Hostility −.01 −.01 .06 −.10’ −.09’ −.10

Step 3–International activitiesNo. of export countries .14* .28*** . 04 .26** .25*** .08International production .10’ .09 .08 .09’ −.05 .00Adj R2 .18 .21 .01 .26 .24 .12F full model 8.4*** 10.2*** 1.2 13.4*** 12.0*** 5.5***Change F step 1 14.7*** 6.5*** .5 14.2*** 20.0*** 6.5***Change F step 2 3.3* 9.5** 1.9 14.3*** 4.1** 7.3***Change F step 3 5.1*** 13.5*** 1.3 6.1** 8.5*** 0.8

Stardardized partial coefficients (beta-coefficients).N = 277, 1-tailed significance: ’ < .10, ∗ < .05, ∗∗ < .01, ∗∗∗ < .001.

Table 2 shows that the control variables (step 1) had a significant contribution inexplaining innovation in all the equations, except for imitative innovation (equation(3)). The environmental variables included in step two significantly increased the ex-planatory power in each of the equations, but for the equation concerning imitativeinnovation. Change F in step three shows that the international activities variablesincreased the explanatory power of the model above and beyond the effects of thecontrol and environmental variables in four of the six equations. The increase in F wasinsignificant in equation three (imitative innovation) and equation six (organizationalinnovation). The full model in all equations, except for equation three, was significantand explained between 12 and 26 per cent of the variance.

Hypotheses 1–3: Environment and innovation. Overall, the results suggest that thefirm’s environmental conditions are significantly related to innovation, but as indicatedby Slevin and Covin (1994), the various aspects of the environment are related to diverse“micro-strategy” variables. We found that environmental heterogeneity (Hypothesis 1)was positively related to incubative, product and organizational innovation. Environ-mental dynamism (Hypothesis 2) was positively related to acquisitive, product andorganizational innovation. Hypothesis 3 received no support as hostility was insignifi-cantly or negatively related to the six CI variables. An interesting feature was that noneof the environmental variables were positively related to process innovation. Hypothe-ses 1 and 2 were thus only partially supported. These results contradict the findings ofZahra (1991), which the current study the most closely resembles. Zahra’s (1991) find-ings indicated a strong positive relation between environmental hostility and innovation


types. We did not find any positive relation between hostility and the various innova-tion types. These results, therefore, suggest that the environment-innovation relationsidentified in studies using U.S. samples may not be generalizable to non-U.S. samples.

One reason why heterogeneity was not related to process innovation may be that envi-ronmental heterogeneity provides multiple opportunities for serving different productand market niches and may reduce the advantages of economies of scale and costleadership (Porter, 1980), which process innovation provides. Product innovation islikely to be related to serving new product and market niches, while process innovationmay be related to cost leadership strategies. Environmental dynamism followed an-other pattern. Dynamism was positively related to acquisition innovation. In dynamicenvironments, firms will seek innovation sources that give them access to new prod-ucts and technologies quickly (Haskins and Petit, 1988). Acquisition is the source thatgives the quickest access to innovation, while incubative innovation is the most timeconsuming. The positive relationships between dynamism and the types of innovationmay be explained by the need to rapidly search for new means to remain competitivein changing environments. Why we did not find any relationships between environ-mental hostility and innovation remains a core question to be answered. Perhaps thereduced profitability and resource levels under hostile conditions have negative effectson innovation which offset the increased motivation to innovate.

Hypothesis 4: International activities and innovation. Two measures of a corporation’sinternational activities were used. The number of countries the corporation exportedto (“No of export countries”) and the relative amount of the production that tookplace in other countries (“International production”). The relationships between “In-ternational production” and innovation were, in general, insignificant. The positiverelationships between “International production” and incubative and product innova-tion were significant at a .1 significance level. The “No of export countries” variablewas, however, generally significantly related to innovation. The relationships betweenacquisitive innovation, product innovation and process innovation were particularlystrong. Hypothesis 4, therefore, was partially supported.

The positive relationships between acquisitive innovation and “No of export coun-tries” may be due to the fact that internationalization provides greater opportunities forfirms to acquire innovation. Licensing agreements, joint ventures, and foreign direct in-vestments are acquisitive mechanisms frequently used by firms as they gain experiencein international markets (Glickman and Woodward, 1989). International experienceswill also expose the firm to a greater number of novel products, services, and features.This exposure may stimulate the firm’s propensity to engage in product innovation ac-tivities as these product innovations reflect the product knowledge gained in the globalmarketplace. Also, the risks and returns from product innovation can be spread moreeasily by the globally active firm (Hitt et al., 1994). The firm’s effort devoted to processinnovation is also likely to increase as the firm comes in contact with organizationswhich rely upon a wider variety of production and process methods. This exposure tonovel production methods could lead the firm to include these methods in their ownoperations.


Discussion

There seem to be a general consensus in management theory and research that theexternal competitive environment is an important antecedent of CI. However, therehas been little empirical research on the association between various dimensions of thecompetitive environment and CI in non-U.S. settings. This paper attempted to addresstwo specific questions: (1) is the nature of the relationship between the competitiveenvironment and the CI activities of Norwegian manufacturing firms comparable tothose of U.S. firms, (2) what is the nature of the relationship between the extent of a firm’sinternationalization efforts and its innovation activities? These and other contributionsare presented in the paragraphs below.

Contributions

The most significant difference between the results obtained from the U.S. and theNorwegian sample is the relationship between environmental hostility and CI. Specif-ically, Zahra (1991) found that hostility was significantly positively associated withboth internal and external CI for the Fortune 500 firms in his study. In another studyof 102 U.S. manufacturing firms, Zahra (1993a) found that environmental hostilitywas positively associated with some dimensions of CI, such as product innovation.Similarly, Covin and Slevin (1989) and Zahra and Covin (1995) found that CI activ-ities were more strongly associated with higher performance in hostile environments.For the large Norwegian firms in this study, however, no positive relationship betweenhostility and CI existed. These results seem to suggest that the phenomenon of CI iscontext-specific and that models developed using samples of firms from one countrycannot necessarily be generalized to firms from other countries. While this surprisingdifference may be traced back to methodological factors, e.g., using a linear method totest for a nonlinear relationship (Fombrun and Ginsberg, 1990), differences in itemsused to measure variables, or the nature of the firms in the sample, a more likely sourceof this variation lies in the differences in national conditions, such as culture or industryinfrastructure.

Differences in the dimensions of national cultures may be responsible for the dif-ferent results found between U.S. and Norwegian firms (Antoncic and Hisrich, 2001;Hofstede, 1983; Tiessen, 1997). Specifically, the masculinity-femininity dimension (i.e.,masculinity represents an emphasis on materialism and decisiveness over service andintuition) and the individualism-collectivism dimension (i.e., individualism representsan emphasis on the self and the family over the group) described by Hofstede (1983) mayinfluence managers’ attitudes towards environmental hostility. According to Hofstede(1983), Norwegian and U.S. managers are fairly similar on the uncertainty avoidanceand power distance dimensions, which may influence issues related to dynamism andheterogeneity (Morris et al., 1994). Thus, if the relationships between the environmentand culture dimensions hold, similar relationships between CI and environmental het-erogeneity and dynamism are expected to be found in the two countries. This suggestion


was supported by the finding as U.S. and Norwegian managers reacted similarly to en-vironmental heterogeneity and dynamism.

Hofstede (1983), however, reported that Norwegian and U.S. managers varied signif-icantly on the masculinity-femininity and individualism-collectivism dimensions. Thedifferences between Norwegian and U.S. managers on these two dimensions, therefore,may partially explain the different reactions to environmental hostility identified inthe studies of managers from these two countries. Managers from cultures which scorehigh on the masculinity and individualism ends of these dimensions, such as those fromthe U.S., may feel more challenged by hostile environments than those managers fromcultures which score high on the femininity and collectivism ends of these dimensions,such as managers from Norway. This suggestion was supported by the results and bol-ster Giamartino et al. (1993) claim that models of U.S. entrepreneurship cannot alwaysbe generalized to include firms from other countries.

The results also highlight the contribution of international experiences to the firm’sinnovation activities (Zahra and Garvis, 2000). Our results emphasized the importanceof exporting experiences to a large number of countries. According to these results, in-ternationally active firms are more likely to introduce product and process innovationsand rely upon incubative and acquisitive sources of innovation. Since innovations areoften the cornerstone of a firm’s competitive advantage (Lengnick-Hall, 1992), theseresults suggest that firms which compete in the international markets are better posi-tioned to gain access to competitive advantages via innovation by the virtue of theirglobal experiences. Conversely, firms which desire to pursue exporting opportunitiesin multiple countries must focus on product and acquisitive innovation in order to ac-commodate local preferences. Internationalization, therefore, can provide immediateand long term benefits to the firm as international markets provide not only a currentcustomer base, but also a source and a means of adopting future innovations.

A third, more general contribution is made by this study. By making distinctions be-tween the various types and sources of innovations, this study clearly showed that dif-ferent environmental conditions and internationalization are uniquely associated withthe different types and sources of innovation. For example, heterogeneity was positivelyand significantly associated with product innovation, but not with process innovation,while dynamism was positively and significantly related to product, organizationaland acquisitive innovation, but not to incubative innovation. Export experiences werepositively related to most aspects of innovation including process innovation.

The primary managerial implication of this study concerns the relationship betweeninternationalization and the firm’s CI activities. Managers must recognize that thedevelopment and adoption of innovations are significantly related to their firms’ in-ternational business activities. International markets should not be viewed as simply asource for new customers or a location for new production facilities. International mar-kets, instead, should be viewed as potential source of corporate innovations. Increasedglobal activities are positively associated with greater product, process, incubative andacquisitive innovations. Managers, therefore, are admonished to integrate their firms’international strategy with the types and sources of innovation the firms pursue.


Limitations and directions for future research

As noted in the methodology section, the reader should be aware of several limitationsof this study. This study only focused on the types and sources of innovation. Other di-mensions of innovation, such as innovation planning or whether the firm concentrateson radical or incremental innovations, was not investigated and may deserve furtherattention. The firm’s environment and internationalization activities may dramaticallyaffect other aspects of CI not included in this study. Also, the results from this studymay not generalize to firms from other countries than Norway. The readers are alsowarned to consider the slight differences in this study and in prior studies when com-paring these results. Finally, this study did not examine how the proposed relationshipsmight impact performance. While increased international activities might spur CI, firmperformance may not necessarily be improved (Zahra and Covin, 1995; Zahra et al,2000). Future studies should examine the relationships between the environment, inter-nationalization, corporate innovation and performance. Also, Rsquares are a little low,particularly for Imitative and Organizational Innovation, which raises questions as towhether the current results would hold if additional variables were added in order toimprove model specification.

Several future research questions are raised by this study. First, the relationshipbetween a firm’s international experiences and its innovation activities needs furtherinvestigation. In particular, are certain international experiences, such as joint ventures,foreign R&D labs, or foreign production facilities associated with different aspectsof innovation? What is the nature of the innovation advantage that accrues to theinternationally experienced firm? This rich research area has only been examined ina cursory manner and more detailed investigations will increase our understandingof this seemingly important relationship. Second, models solely based on U.S. firmsmay inadequately represent the behavior of firms based in non-U.S. countries or thosecompeting in the global marketplace. Established models based on North Americantheory and constructs may thus not be directly applicable and relevant in other settings(Boyacigiller and Adler 1991; Zahra et al, 1999). Other models of corporate innovationshould be tested and verified using other non-U.S. samples and firms with differentlevels of international experiences. Cultural variables may also need to be included infuture studies.

Appendix

Individual items for each aspect of corporate innovation are as follows:

Innovation sources

Incubative innovation items were: “To encourage individual initiative and creativityamong employees,” “To emphasize internal development of new products,” “To createan internal organization culture that contributes to innovation,” and “To emphasizeinternal development of business ideas.”


Acquisitive innovation items were: “To buy innovative companies in the industry,”“To buy innovative companies in related industries,” “To buy innovative products thatare developed by other firms,” “To use licensing agreements to acquire new technology,”and “To acquire innovative technologies through joint ventures.”

Imitative innovation items were: “To imitate products or technologies that are of-fered by competitors,” “To copy the successful business ideas of competitors,” “To copythe successful new products of competitors,” “To copy the successful business practicesof competitors,” “To copy the strategies of competitors,” “To watch over the innova-tions of competitors and quickly imitate them,” and “To imitate the new products ofcompetitors.”

Innovation types

Product innovation items were: “To develop new products,” “To introduce radicallynew products in the company’s existing markets,” “To offer improvements or modi-fications of existing products,” “To develop new products for fast (one to two years)market introduction,” “To develop new products for existing markets,” “To increaseprofitability through products that did not exist three years ago,” and “To provide newvariants for existing product lines.”

Process innovation items were: “To invest heavily in technology related R&D,” “Todevelop completely new technology,” “To develop new technology in the market,” “Tobe the first with technological improvements,” “To invest heavily in product relatedR&D,” and “To emphasize international development of new technology.”

Organizational innovation items were: “To develop incentive systems for innova-tion,” “To train employees in creativity and innovation techniques,” “To develop newstructures to encourage innovation in the company,” “To use programs for manage-ment development to enhance innovation,” “To use groups from various departmentsto develop new products,” “To develop procedures to develop innovation techniques,”“To appoint champions for innovations and new business ideas,” and “To establishprocedures to enhance the ideas of employees for new business opportunities.”

References

Antoncic, B. & Hisrich, R.D. 2001. Intrapreneurship: Construct refinement and cross-cultural validation.Journal of Business Venturing, 16: 495–527.

Boyacigiller, N.A. & Adler, N.J. 1991. The parochial dinosaur: Organizational science in a global context.Academy of Management Review, 16: 262–290.

Boyd, B., Dess, G. & Rasheed, A. 1993. Divergence between archival and perceptual measures of the envi-ronment: Causes and consequences. Academy of Management Review, 18: 204–226.

Buckley, P.J. & Casson, M. 1976. The future of the multinational enterprise. New York: Holmes & Meier.Burgelman, R.A. & Sayles, L.R. 1986. Inside corporate innovation: Strategy, structure, and managerial skills.

New York: The Free Press.Butler, J.E. 1988. Theories of technological innovation as useful tools for corporate strategy. Strategic Man-

agement Journal, 9: 15–29.


Cohen, W.M., Levin, R. & Mowery, D. 1987. Firm size and R&D intensity: A reexamination. Journal ofIndustrial Economies, 35: 543–565.

Cohen, W.M. & Levinthal, D. 1990. Absorptive capacity: A new perspective on learning and innovation.Administrative Science Quarterly, 35: 128–152.

Covin, J.G. & Slevin, D.P. 1989. Strategic management of small firms in hostile and benign environments.Strategic Management Journal, 10: 75–87.

Covin, J.G. & Slevin, D.P. 1991. A conceptual model of entrepreneurship as firm behavior. Entrepreneurship:Theory and Practice, 16(1): 7–25.

Damanpour, F. 1987. The adoption of technological, administrative, and ancillary innovation: Impact oforganizational factors. Journal of Management, 13: 675–688.

Damanpour, F. 1991 Organizational innovation: A meta-analysis of effects of determinants and moderators.Academy of Management Journal, 34: 555–590.

Dess, G.G. & Beard, D. W. 1984. Dimensions of organizational task environments. Administrative ScienceQuarterly, 29: 52–73.

Fombrun, C. & Ginsberg, A. 1990. Shifting gears: Enabling and disabling forces on change in corporateaggressiveness. Strategic Management Journal, 11: 297–308.

Garcia, R. & Calantone, R. 2002. A critical look at technological innovation typology and innovativenessterminology: A literature review. Journal of Product Innovation Management, 19(2): 110–132.

Giamartino, G., McDougall, P. & Bird, B. 1993. International entrepreneurship: The state of the art. En-trepreneurship: Theory and Practice, 18(1): 37–42.

Glickman, N.J. & Woodward, D.P. 1989. The new competitors: How foreign investors are changing the U.S.economy. New York: Basic Books.

Guth, W. & Ginsberg, A. 1990. Guest editor’s introduction: Corporate entrepreneurship. Strategic Manage-ment Journal, 11(Special Issue): 5–16.

Hage, J. 1980. Theories of organizations. New York: Wiley.Hakansson, H. & Johanson, J. 2001. Business network learning. Amsterdam: Pergamon.Haskins, R. & Petit, T. 1988. Strategies for entrepreneurial manufacturing. Journal of Business Strategy, 9:

24–28.Hisrich, R. 1988. The entrepreneur in Northern Ireland: Characteristics, problems, and recommendations

for the future. Journal of Small Business Management, 26(1): 32–39.Hitt, M. Hoskisson, R. & Ireland, R. 1994. A mid-range theory of the interactive effects of interna-

tional and product diversification on innovation and performance. Journal of Management, 20: 297–326.

Hofstede, G. 1983. National cultures in four dimensions. International Studies of Management and Organi-zation, 13: 46–74.

Johanson, J. & Vahlne, J. E. 1977. The internationalization process of the firm—A model of knowledgedevelopment and increasing foreign market commitment. Journal of International Business Studies, 4:20–29.

Kamm, J. 1986. The portfolio approach to divisional innovation strategy. Journal of Business Strategy, 7(1):25–38.

Keats, B. & Hitt, M. 1988. A causal model of linkages among environmental dimensions, macro organiza-tional characteristics, and performance. Academy of Management Journal, 31: 570–598.

Knight, K.E. 1967. A descriptive model of the intra-firm innovation process. Journal of Business, 40: 478–496Kobrin, S. 1991. An empirical analysis of the determinants of global integration. Strategic Management

Journal, 12(Special issue): 17–37.Kotabe, M. 1990. Corporate product policy and innovative behavior of European and Japanese multina-

tionals: An empirical investigation. Journal of Marketing, 54 (2): 19–33.Kotabe, M. 1992. Global sourcing strategy: R&D, manufacturing, and marketing interfaces. New York: Quo-

rum Books.Kreiser, P.M., Marino, L.D. & Weaver, K.M. 2002. Reassessing the environment-EO link: The impact of

environmental hostility on the dimensions of entrepreneurial orientation. Academy of Management Pro-ceedings, G1–G6.


Lengnick-Hall, C. 1992. Innovation and competitive advantage: What we know and what we need to learn.Journal of Management, 18(2): 399–429.

Link, A.L. 1988. Acquisitions as sources of technological innovation. Mergers & Acquisitions, Nov.-Dec:36–39

Lumpkin, G.T. & Dess, G.G. 2001. Linking two dimensions of entrepreneurial orientation to firm perfor-mance: The moderating role of environment and industry life cycle. Journal of Business Venturing, 16:429–451.

Mansfield, E. 1988. The speed and cost of industrial innovation in Japan and the United States: External vs.internal technology. Management Science, 34: 1157–1168.

Manu, F.A. 1992. Innovation orientation, environment and performance: A comparison of U.S. and Euro-pean markets. Journal of International Business Studies, 23: 333–359.

Miller, D. 1983. Correlates of entrepreneurship in three types of firms, Management Science, 29: 770–991.Miller, D. 1987. The structural and environmental correlates of business strategy. Strategic Management

Journal, 8: 55–76.Miller, D., Droge, C. & Toulouse, J.M. 1988. Strategic processes and content as mediators between organi-

zational context and structure, Academy of Management Journal, 31: 544–569.Miller, D. & Friesen, P. 1982. Innovation in conservative and entrepreneurial firms: Two models of strategic

momentum. Strategic Management Journal, 3: 1–25.Miller, D. & Friesen, P. 1984. Organizations: A quatum view. Englewood Cliffs: Prentice HallMorris, M. Davis, D. & Allen, J. 1994. Fostering corporate entrepreneurship: Cross cultural comparisons

of the importance of individualism versus collectivism. Journal of International Business Studies, 25(1):65–89.

Mueller, S.L. & Thomas, A.S. 2000. Culture and entrepreneurial potential: A nine country study of locus ofcontrol and innovativeness. Journal of Business Venturing, 16: 51-75.

Nunnally, J. 1978. Psychometric theory. New York: McGraw-Hill.Okonomisk Litteratur. 1992. The largest firms of Norway. Oslo: Okonomisk Litteratur Norge AS.Penrose, E.T. 1959. The theory of the growth of the firm. Oxford: Basil Blackwell.Peterson, R. & Berger, D. 1971. Entrepreneurship in organizations. Administrative Science Quarterly, 16,

97–106.Pfeffer, J. & Salancik, G.R. 1978. The external control of organizations: A Resource-Dependence Perspective.

New York: Harper and Row.Pisano, G. 1990. The R&D boundaries of the firm: An empirical analysis. Administrative Science Quarterly,

35 (1): 153–176.Porter, M. 1980. Competitive strategy. New York: The Free Press.Porter, M. 1985. Competitive advantage. New York: The Free Press.Porter, M. 1990. The competitive advantage of nations. Harvard Business Review, 68 (March/April): 73–93.Prahalad, C.K. & Hamel, G. 1990. The core competence of the corporation, Harvard Business Review, 68(3):

79–93.Ravenscraft, D. & Scherer, F. 1982. The lag structure of returns to research and development. Applied

Economics, 14: 603–620.Schroeder, D. 1990. A dynamic perspective on the impact of process innovation upon competitive strategies.

Strategic Management Journal, 11: 25–41.Schumpeter, J.A. 1934. The theory of economic development: An inquiry into profits, capital, credit, interest,

and the business cycle. Cambridge: MA.Shane, S. 1994. Cultural values and the championing process. Entrepreneurship: Theory & Practice, 18(4):

25–41.Slevin, D.P. & Covin, J.G. 1994. Entrepreneurship as firm behavior: A research model. In J.A. Katz & R.H.

Brockhaus (Eds.), Advances in firm emergence, growth and entrepreneurship: Volume 2. Greenwich, CT: JaiPress.

Stetz, P.E., Howell, R., Stewart, A., Blair, J.D. & Fottler, M.D. 2000. Multi-dimensionality of entrepreneurialfirm-level processes: Do the dimensions covary? Frontiers of entrepreneurship research 2000, Wellesley, MA:Babson College.


Tiessen, T.H. 1997. Individualism, collectivism and entrepreneurship: A framework for international com-parative research. Journal of Business Venturing, 12: 367–384.

Tsai, W., MacMillan, I. & Low, M. 1991. Effects of strategy and environment on corporate venture successin industrial markets. Journal of Business Venturing, 6(1): 259–285.

Utterbach, J.M. 1996. Mastering the dynamics of innovation. Boston, MA.: Harvard Business School Press.Utterbach, J. & Abernathy, W. 1975. A dynamic model of product and process innovation. OMEGA, 3:

639–656.Van de Ven, A. 1986. Central problems in the management of innovations. Management Science, 32: 590–607.Vernon, R. 1966. International investment and international trade in the product cycle. Quarterly Journal of

Economics, 80: 190–207.Wallace, M. 1993. Methodology, research practice, and progress in personal ad industrial relations. Academy

of Management, 8: 6–13.Wiklund, J. 1999. The sustainability of the entrepreneurial orientation-performance relationship. En-

trepreneurship Theory and Practice, 24(1): 37-48.Wilson, J. 1966. Innovation in organizations: Notes toward a theory. In J.D. Thompson (Ed.), Approaches

to organizational design: 213–218. Pittsburgh, PA: University of Pittsburgh Press.Zahra, S.A. 1991. Predictors and financial outcomes of corporate entrepreneurship: An exploratory study.

Journal of Business Venturing, 6: 259–285.Zahra, S.A. 1993a. Environment, corporate entrepreneurship and company performance: A taxonomic

approach. Journal of Business Venturing, 8: 319–340.Zahra, S.A. 1993b. A conceptual model of entrepreneurship as firm behavior: A critique and extension.

Entrepreneurship: Theory and Practice, 17(4): 5–21.Zahra, S.A. 1996. Governance, ownership and corporate entrepreneurship: The moderating effect of industry

technological opportunities, Academy of Management Review, 39: 1713–1735.Zahra, S.A. & Covin, J. 1995. Contextual influences on the corporate entrepreneurship-performance rela-

tionship: A longitudinal analysis. Journal of Business Venturing, 10: 43–58.Zahra, S.A. & Garvis, D.M. 2000. International corporate entrepreneurship and firm performance: The

moderating effect of international environmental hostility. Journal of Business Venturing, 15: 469–492.Zahra, S.A., Jennings, D.F. & Kuratko, D.F. 1999. The antecedents and consequences of firm-level en-

trepreneurship: The state of the field. Entrepreneurship Theory and Practice, 24(2): 1–27.Zahra, S.A, Neubaum, D.O. & Huse, M. 1997. The effect of the environment on export performance among

telecommunications new ventures. Entrepreneurship Theory and Practice, 22: 25–47.Zahra, S.A, Neubaum, D.O. & Huse, M. 2000. Entrepreneurship in medium-size companies: Exploring the

effects of ownership and governance systems. Journal of Management, 26: 947–976.

Documents

Corporate Innovation and Competitive Environment