Service response to economic decline: Innovation ...

JBR-08794; No of Pages 11 Journal of Business Research xxx (2015) xxx–xxx

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Journal of Business Research

Service response to economic decline: Innovation actions for achieving strategic renewal☆ Carlos Martin-Rios a,⁎, Eva Parga-Dans b a b

Ecole hôtelière de Lausanne, HES-SO, University of Applied Sciences Western Switzerland, Switzerland Universidad de A Coruña, Spain

a r t i c l e

i n f o

Article history: Received 7 May 2014 Received in revised form 21 December 2015 Accepted 21 December 2015 Available online xxxx Keywords: Economic downturn Strategic renewal Organizational innovation Service firms Process theorization

a b s t r a c t This paper develops process theory on how service firms deal with persistent economic decline and the practices they adopt to overcome it. It examines how a knowledge-based service activity — commercial archeology — attempts to overcome environmental constraints of increasing complexity and economic downturn, as it unfolded over an 8-year period. This longitudinal, multimethod field study illustrates how confronting an external crisis may actually lead surviving firms to attempt innovation actions, a critical factor in achieving organizational renewal. Findings suggest that the renewal ability of highly dynamic services hinges on which innovation activities firms select and adopt, whether they implement them effectively, and the consequences of such implementations. This article contributes to the development of theory about the role of organizational innovation in service adaptation by offering insight into the link between strategic renewal and innovation activities. © 2015 Published by Elsevier Inc.

1. Introduction All business organizations experience external economic threats. Literature shows that firms that purposively address conditions of economic decline with operational and strategically planned actions have a better chance of renewal and sustainable success (McKinley, Latham, & Braun, 2014). Defined as a firm's ability to disrupt inertia by modifying or replacing its resource base to ensure long-term performance and survival (Agarwal & Helfat, 2009), several authors (e.g., Schmitt, Barker, Raisch, & Whetten, 2015) have emphasized the strategic renewal concept as a means to cope with decline. Studies document how financial, managerial, and operational actions enable firms to deal with external decline situations (Mone, McKinley, & Barker, 1998). Those studies typically address responses by manufacturing firms to short-term external threats (Ndofor, Vanevenhoven, & Barker, 2013). Less is known, however, about how services, particularly knowledge-based service providers

☆ The authors thank the Instituto Ciencias del Patrimonio (CSIC, Spain) for its support in securing interviews with CEOs, senior managers and scholars. We particularly wish to thank Susana Pasamar, Universidad Pablo de Olavide and Jon Sundbo, Roskilde University for reading and comments of the manuscript. The authors are indebted to Achim Schmitt Ecole hôtelière de Lausanne, whose comments and suggestions improved the paper in many ways. We thank Marta Elvira and participants of the 2012 Madrid Work & Organization Workshop as well as Niclas Erhardt and faculty of the University of Maine for their helpful comments and suggestions. ⁎ Corresponding author: Ecole hôtelière de Lausanne, HES-SO, University of Applied Sciences Western Switzerland, Route de Cojonnex 18, 1000 Lausanne 25, Switzerland. Tel.: +41 21 785 18 20; fax: +41 21 785 11 21. E-mail address: [email protected] (C. Martin-Rios).

(Castellacci, 2008), fare in the face of external crisis and the practices they adopt to overcome it. Due to the distinctive nature of its business and organization, services may deploy specific innovation actions that entail strategic renewal. These strategic transformations become even more relevant amid persistent economic depression, during which incremental actions might not be enough to guarantee firm survival (Schmitt et al., 2015). Most of the empirical literature in the field has focused on identifying relationships between crisis and specific management actions (resource acquisition, product re-positioning and service output) (e.g., Bohman & Johansson, 1998). Focusing on the strategic renewal processes associated with economic threats offers the opportunity to examine how service innovation — encompassing product, process, and organizational innovations — facilitates adaptation and renewal. This raises the following question: In knowledge-based services, what is the nature and dynamics of strategic renewal activities in coping with economic turbulence and uncertainty? Spanish commercial archeology is the empirical context of the analysis. This paper reports longitudinal field research on innovation initiatives leading to service renewal of Spanish archeological firms. Our mixed method approach combines qualitative and quantitative data drawn from different sources (in-depth interviews, survey data, archival data, and qualitative case comparisons) and at different times (2005–2013) in the same design, together with a participatory approach that relies on expert opinion (Shah & Corley, 2006). Commercial archeology is characterized as science-based, human-capital intensive (Miozzo & Soete, 2001), and advanced-knowledge provider (Castellacci, 2008). It is a recent activity that emerged after the

http://dx.doi.org/10.1016/j.jbusres.2015.12.058 0148-2963/© 2015 Published by Elsevier Inc.

Please cite this article as: Martin-Rios, C., & Parga-Dans, E., Service response to economic decline: Innovation actions for achieving strategic renewal, Journal of Business Research (2015), http://dx.doi.org/10.1016/j.jbusres.2015.12.058

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C. Martin-Rios, E. Parga-Dans / Journal of Business Research xxx (2015) xxx–xxx

introduction of private sector principles into archeological services (from excavation, restauration, and preservation to management and display of cultural heritage). Before the global financial crisis in 2008 (Guillen & Suarez, 2010), construction-related activities (housing certification) accounted for a sizable proportion of profits, whereby cultural heritage management was funded by public agencies. Soon after the crisis broke out, margins were compressed. Spanish archeological industry experienced an unremitting downturn during 2008–2012 with about 50% of firms exiting the market. To address our research question, we apply process theorization (Langley, 1999) to the strategic renewal framework grounded in the work of Agarwal and Helfat (2009). Process theorization facilitates understanding how (and why) events develop over time by means of conceptualizing and detecting patterns among the events under study. Thus, a process theory of strategic renewal applies as a response of archeological firms to decline, since the underlying framework is evolutionary in nature. The unique contribution of this paper lies in providing evidence of within-industry heterogeneity in strategic renewal efforts and outcomes. It shows how certain archeological firms respond to environmental scarcity by means of discontinuous transformations that help reinvent their service offering. A crucial element of these responses is their reliance on non-technological innovation, particularly organizational innovation (hereinafter OI) (Camison & Villar-Lopez, 2014). We propose that OI constitutes the main discontinuous transformation for services that face environmental turbulence and economic hardship over a sustained period. The implications of this study are quite extensive, given that archeological firms, as advanced-knowledge providers, find themselves deeply affected by managerial challenges in terms of anticipating and reacting to changes in the environment, particularly in the treatment of cultural heritage as a commodity to generate added value (Castañer, 2013; Martin-Rios & Parga, 2015).

2.1. Organizational Innovation and decline Empirical evidence on the renewal of services is limited. Research points out the relevance of innovation capabilities, in terms of changes in organizational practices, leadership, or external relationships (Jimenez-Jimenez & Sanz-Valle, 2011). For example, Zuñiga-Vicente and Vicente-Lorente (2006) suggested that, in services, innovation diversification was negatively associated with organizational failure. Service innovation includes a range of innovative activities from technological (product and process) to non-technological, OI conceptualized as the introduction of a new practice, process or structure that improves the effectiveness or performance of the adopting firm (Birkinshaw, Hamel, & Mol, 2008). These include the adoption of new ways of organizing work processes, alternative ways of managing employees, and fostering internal and external relationships (Armbruster, Bikfalvi, Kinkel, & Lay, 2008). The literature claims that the adoption of technological innovations alone cannot sustain service competitiveness; the full benefit of those innovations is only achieved if specific OI is also adopted (Ettlie & Rosenthal, 2011; Martin-Rios & Parga, 2015). Successful OI is challenging as it questions existing practices and ingrained assumptions about the status quo (Frambach & Schillewaert, 2002). It is also far-reaching, difficult to imitate, and a potential source of competitive advantage for services (Camison & Villar-Lopez, 2014; Ganter & Hecker, 2013, 2014; Hervas-Oliver & Sempere-Ripoll, 2015). Addressing the adoption of innovation pathways is critical to understanding how service firms respond to environmental crisis and attempt renewal. This is especially the case for added-value services, which are remarkably sensitive to economic and environmental dynamics. These businesses supply science- or knowledge-based services, involving high levels of service and organizational interdependence (Castellacci, 2008). For companies that provide advanced-knowledge services, renewal may relate to innovation activities. However, in the absence of previous studies, the process of service renewal in the context of economic downturn to affect remains to be determined.

2. Literature 3. The research process Adverse environmental conditions, including difficult-to-foresee external events or “competence-destroying change” (Volberda & Lewin, 2003), such as changes in customer demand or persistent economic downturn, pose severe challenges to industries and firms. Organizations face dramatic shifts in its external economic environment that render existing strategies ineffective and lead to decline. Organizational decline refers to whenever a firm's performance or resource base deteriorates over a sustained period (Mone et al., 1998). Strategic renewal enables organizations to innovate and adapt by fundamentally altering aspects of its strategy and organization. Agarwal and Helfat's (2009) theoretical model of strategic renewal included incremental and discontinuous renewal activities. Incremental renewal includes experimentation and incremental alterations to some particular firm's core businesses. Strategic renewal further encompasses discontinuous strategic transformations. These include replacing multiple dimensions, including the business model, resources and capabilities, technological base, organizational structure, and organizational identity. Research shows that incremental actions alone are insufficient to spur renewal (Chowdhury, 1996). In contrast, transformation actions are the driver of strategic renewal in the aftermath of an economic slump (Makkonen, Pohjola, Olkkonen, & Koponen, 2014). Research investigates innovation practices as one strategically planned action (Martens, Matthyssens, & Vandenbempt, 2012). These studies focus on technological change initiatives related to new products, processes, and R&D activities in manufacturing firms (Kim & Pennings, 2009). Longitudinal research examining service decline and renewal is still in its infancy. Little theoretical headway has been made in this area; there is scarce evidence on how knowledge-based services respond to adverse external conditions, and in what ways innovation effects strategic renewal.

3.1. The research case The preservation of cultural and heritage assets became crucial after the huge destruction of such elements in the two World Wars and the passing of international accords, such as the European Valetta Convention (1992) to protect and manage heritage assets. Countries implemented a model of heritage management in line with their specific context and resources based on one of two main models. One is the “public management model” in use in the majority of industrialized countries, and the other is the commercial or “mixed management model”. The former gives priority to conservation actions by the public authorities and non-profit organizations (as is the case in France or Greece), while the latter rests on private initiative under the supervision of the governmental authorities. This commercial model is firmly established in Anglo-Saxon countries (Aitchison, 2009) as well as in Spain, where private initiative has only taken place recently. In Spain, national economic prosperity during the first half of the 2000s, coupled with the professionalization of the activity, resulted in the creation of an unprecedented number of new archeological firms (nearly double the number of companies compared with the US and UK). Early success, or a jump-start, in commercial archeology was mainly due to the passage of the Historical Heritage Law (1985) that requires to obtain legal permission (certification) prior to any intervention in the field, and the construction boom in 2000–2006, which led to an exponential increase in the demand for certifications. Whereas construction activity represented, on average, 7.7% of Spain's GDP in 1980–1990, it reached its peak in 2006 accounting for more than 12% of GDP. Enforcement of the law during the construction surge helped commercial archeology to nourish; public administrations handed certification over



to accredited archeologists, giving rise to the expansion of the commercial archeological activity. Business opportunities in the archeological sector were commonplace from 1999 to 2006. The global financial crisis of 2007 and the resulting 2008–2012 recession, seriously affected the Spanish economy, which faced a severe housing market correction, an industrial slump, and a banking crisis. The economic downturn had a negative impact on archeological activity, resulting in hazardous economic conditions and low rates of firm survival. With some delay, the number of archeological firms began to decline in 2008. The relative exhaustion of the prevailing business model led to an abrupt decline, resulting in the disappearance of a large number of companies and, for those remaining, the need to explore renewal actions associated with new business initiatives. 3.2. Research design and data collection This paper reports longitudinal field research on the innovation selection and adaptation dynamics to economic decline leading to service renewal. Carried out between 2005 and 2013, this is the first longitudinal study of the Spanish archeological industry. Table 1 describes the methodological approaches applied. Our mixed method approach captures a complete, holistic and contextual portrayal of the research question being studied by combining qualitative and quantitative data drawn from different sources and at different times in the same design (Shah & Corley, 2006). The use of multiple sources for the empirical inquiry allows the study to address a “broader range of historical, attitudinal, and behavioral issues” (Yin, 2003: 98). Access to such a wide variety of information sources facilitates triangulation (Denzin, 1978). The effectiveness of triangulation rests on the premise that the weaknesses in each single method will be compensated by the counter-balancing strengths of another (Jick, 1979), increasing confidence and validity in the findings (Eisenhardt, 1989). 3.3. Qualitative data Prior to data collection, an expert panel of five scientific experts and three accredited specialists in heritage management was convened and tasked with: 1) identifying socio-economic issues in the commercial archeological field, as well as cutting-edge trends in the archeological economic activity at large, and 2) developing and prioritizing recommendations for archeological firms in aspects related to strategic management, work organization and management, and innovation strategy. Conclusions helped us delimit the activity, design and validate a questionnaire, and define an interview protocol.

The second data source, semi-structured interviews, aimed to trace the events associated with environmental crisis. 107 key informants were interviewed (Table 2). Data collection involved CEOs and management teams from selected firms, and experts from research centers, universities, and public authorities. Participation was voluntary and anonymity and confidentiality of responses were assured. The interviews ranged from 50 to 100 min. They were digitally recorded, with the interviewee's permission, and transcriptions were made of all relevant portions. A semi-structured interview template was used to guide the research. Specific questions were posed to practitioners and academics. Academics and industry experts addressed aspects pertaining to the economic, legal, and institutional environment; whereas professionals addressed the reasons why firms engaged in or resisted adaptation and renewal initiatives and several aspects of the innovation–economic crisis interaction. The third data source, in-depth case studies of four particular firms, was carried out in 2011–2012. Our objective was to obtain first-hand data from best practice cases in innovation initiatives to overcome economic decline. We surveyed ten experts to make a list of successful/unsuccessful firms in terms of innovation activities (i.e., more or less technological and/or non-technological innovation), strategies (i.e., new services versus traditional services) and financial results (i.e. greater market share and higher profit ratios since the beginning of the crisis) based on their qualitative perceptions. To ensure a common understanding of the concepts, definitions of innovation, strategy, and firm results extracted from our questionnaire were provided. Using the recall-method, each expert generated a list of firms. This so-called ‘quick list’ is an open field where the interviewee enters those firms s/he considers representative of each of the categories in sequential order. The result was a list of 31 firms (21 as relatively profitable and successful at innovating and 10 as unprofitable and non-innovative). To check the reliability of the list, we compared the financial results of the companies listed by the experts with a random sample of archeological companies. The “successful” companies on the list generated higher profits and return on investment. On the flip side, the “unsuccessful” firms registered downsizing and performance decrease until liquidation. We chose the three companies most frequently listed to complete a detailed case study of the determining factors, processes, and features of their pathways. We also choose an illustrative case of failure, one that endured financial strain without attempting strategic transformation until it filed for bankruptcy. Data on the four firms were collected from in-depth interviews at the selected firms, secondary sources (internal memos) and publicly available literature.

Table 1 Methodological approaches. Period

Method

Activities

Results

2005

Expert panel

Report from 8 experts

2005–12 2007–13

Qualitative interviews Identification firm population

- SWOT analysis - Define innovation model - Face-to-face and phone interviews Sources:

2008–09

Legal/administrative information

2008–09

Quantitative questionnaire

2011

Mini-questionnaire for experts

2011–12

Exemplary cases

-

3

Local, regional administrations Professional associations, unions, and others Iberian Balance Sheet Analysis System (SABI) Adverts, blogs, websites Snowball sampling technique Regulations on archeological heritage all administrative regions Data on each region's administration structure and competence Survey design Self-administered online Completed with phone interviews Response rate: 77% Quick-list (open field) survey to 10 experts in Spanish archeology - In-depth interviews and secondary information

107 semi-structured interviews - Directory 273 firms (2009) - Second directory 158 firms (2013)

Report on legal situation and regulatory differences in Spain Statistics from 217 firms on innovation initiatives

Selection of successful and non-successful company cases Success and failure case studies


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Table 2 List of interviews. Informant profile

Number

Companies CEOs (archeological firms) CEOs (construction firms) Entrepreneurs (spin-off) Academic sphere University Research institute International scholars Stakeholder groups Public administration Professional associations and unions Foundations, museums and non-profit organizations International experts Total interviews

39 32 4 3 35 13 13 9 33 15 7 5 6 107

3.4. Data analysis We aimed to develop process theory rather than identifying relationships between a set of discrete variables. Process theory and process data help to focus on processes of renewal initiatives variation, selection, and retention among services (Pentland, 1999; Van de Ven & Poole, 1995). Its evolutionary perspective, or what Tsoukas and Chia (2002) refer to as "organizational becoming", is suitable for the analysis of knowledge-based service adaptation to turbulent contexts. The analysis was carried out using a temporal bracketing strategy (Langley, 1999). Similar to other process theory studies (Burgelman, 1994), our approach was driven by both received theory (deductive) and actual data (inductive). A subset of interview accounts served to create an outline of the critical events, helping trace the course of archeological activity in Spain. Secondary sources of information, such as media reports, were then used to validate the details of the proposed timeline. We conducted our event history analysis around a thematic analysis to identify patterns of choice and implementation emerged and developed over time. Successive rounds of interviews were then used to probe firms' transformation processes and innovation initiatives and to understand why these particular practices were implemented at different times. Rather than focusing on incremental adaption, we deliberately chose to analyze strategic, discontinuous transformation. We applied the guidelines suggested by Glaser and Strauss (1967) to analyze the data collected, developing empirically grounded sets of categories from the interviews. Data was arrayed following the technique for cross-case pattern sequencing (Eisenhardt, 1989) and tabular displays (Miles & Huberman, 1994). Data was analyzed via the opencoding procedure, grouped into secondary or axial codes and represented here as themes. A comprehensive list of descriptive codes from the interviews was generated. These initial codes captured the characteristics of the external environment during that period and how organizational actors at all levels (board, management team, employees) anticipated strategic actions in order to recover from economic turbulence and uncertainty. Next, these descriptive open codes were reduced by sorting and grouping codes into meaningful analytical categories (axial coding). We follow an iterative process, first developing patterns, then comparing these ideas to new data from the sites, using the new data to decide whether to retain, revise, or discard the inferences. Finally, categories were analyzed and grouped into broader analytical categories, representing the overall theoretical foundation in order to understand strategic renewal actions for transformation and recovery. 3.5. Quantitative data analysis The absence of reliable records on the population of archeological firms required us to define and quantify the sector beforehand. Our database is the first attempt to quantify the Spanish archeological industry.

Then, we administered a survey to owners and CEOs of archeological firms in 2009. A total of 217 responses was obtained (79.5% response rate). Our survey sought to identify the innovation initiatives of Spanish archeological firms, and to recognize whether the adaptation and innovation strategies had any relationship with the initial economic downturn faced by the firms sampled. The questionnaire covered a pool of adaptation initiatives and, particularly, all aspects of innovation activities as defined in the literature (OECD, 2005). In order to operationalize OI, we followed a typology defined in the literature (Armbruster et al., 2008; Birkinshaw et al., 2008) according to four dimensions: a) new business practices and activities; b) new ways of organizing work (organization methods and procedures or new methods of organizing external relations); c) new human capital capabilities (including new HRM practices); and, d) new organizational culture (organizational values, communication plans, employee involvement, and leadership style). The survey also included questions about the relevance and consistency of distinct innovation modes, and the organizational consequences of combinations of technological and OI. Statistics on firm demographics (number of employees, qualification, experience, and turnover) and organizational phenomena (implementation of innovations) were calculated from the survey data. 4. Findings This section explores the ways in which archeological firms initially succeeded and were then forced to evolve in response to a period of economic adversity (2008–2012). The process theory themes and critical events taking place were related to three stages: the burgeoning growth of the activity, organizational decline, and adaptation and renewal through innovation actions, particularly OI. Table 3 provides illustrative quotes from informants, helping trace the decline and renewal process of Spanish archeological firms. 4.1. The burgeoning growth of commercial archeology Spanish archeological firms' emergence and development took place amid a rather complex institutional environment comprised of five different stakeholders or institutional actors (Fig. 1). First, legal and administrative public offices responsible for heritage assets facilitate and constrain business activity by passing regulations, defining protocols for heritage management, and requesting services as potential clients. Second, the academic sphere (universities and research centers) stimulates the sector through official education, research, and the transfer of knowledge to companies, at the same time, firms exchange knowledge and demand human capital to academia. Third, the productive sphere (suppliers of goods and services, engineering, construction companies, and other relevant players such as museums, churches and foundations), which apart from being the owners of archeological and cultural assets often demands services and funds activities for archeological management and cultural diffusion. Finally, there is the general public, the end consumers of the cultural and heritage value chain, who gradually becomes a source of demand for cultural tourism, visits to exhibitions, sites, or museums. Archeological firms supply new services tailored to the public, which offers business opportunities but also creates managerial challenges, particularly in the treatment of cultural heritage as a commodity to generate added value. Within this regulatory and institutional framework, archeologists formed private companies in order to capture gains arising from market specialization and division of labor. The institutional context led to a variety of possibilities for firms to offer archeological services. Since the beginning of this commercial activity, firms forged strong links with public administrations to enforce legal requirements. Results from our survey to firms show that, for the 2001–2010 period, the construction industry represented the sole client for firms (close to 85% of the sample firms). Other potential actors (e.g. church, general public) played a less important role in those early stages of the activity. Yet, the volume of archeological activity grew exponentially. Firms perceived this



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Table 3 Exemplary statements. Phases Dimensions

Burgeoning growth

Economic boom

Economic slump

(2000-2006)

(2007-2010)

(2011-2013)

“Things are going well. Our priorities in terms of funding are in construction and public works. We’re working on a lot of things involving a great deal of work output” (CEO, in 2005)

“[Firms] might end up longing for the old good times when they had resources to look for new opportunities, new markets, new inroads for archaeology to progress and develop” (Consultant, International expert, in 2010)

“This is a very closed and specialized collective, which traditionally hasn’t paid much attention to business matters—marketing, project management, profit analysis, quality control, and so on. Many firms lost their chance to gain management knowledge when it was the right time to do so” (Scholar, in 2010)

“Demand is at its highest. We need to work with archaeologists and specialists to carry out our [urban] development plans. While there’s the need to carry out projects, there’s work in heritage” (Public servant in 2006)

Collapse and turnaround

“Private construction gave us great results. In cities, rural areas, pipelines, diversions, roads and irrigation modernization favored the out crop of archaeological remains" (CEO, in 2008).

“In the last 10 years we excavated beyond our means. It has been so excessive that it created the bubble of archeology, until prodded by construction. A return to past activity levels is unthinkable. We should have taken into account that what was happening was not real (ex.CEO, 2012).

“It is a great time for archaeologists. We’re encouraged to start companies that employ surveyors, designers, computer scientists, laborers, and even security guards. The activityis beginning to consolidate" (Entrepreneur, in 2005). “Archaeology is starting to feel the effects of the crisis, of a downturn in private projects, but there’s still public investment. Companies are being created and getting on, although their profit margins are getting lower” (Specialist, in 2008) Organizational decline

“We’re at the point where everyone has to find their place; there’s work, but things are still uncertain. I think the market is too fragmentedwith way too many firms; but maybe not all of them will survive” (Director in professional association, in 2008) “I can foresee that in the coming years, based on the downturn in the general economic situation, firms will have to restructure themselves or re-invent completely because there will be money problems (private and public customers defaulting on payments, difficulties in getting credit from banks, etc.), and a lack of work to provide the level of employment we’ve seen in recent years” (Scholar, 2009)

“Things wentback to the way they were before, in which archaeology firms were snapping like hungry wolves to try and snatch mouthfuls that in other times they wouldn’t have even bothered with” (CEO customer firm,in 2011) “We were trying to restructure our entire offer of services and our role in the marketplace. It was important to look for ways to apply new technologies and business offerings” (CEO, in 2012) “We’vegot to change and diversify. Some companies were able to keep up their offer of excavations, but many others disappeared or had to merge” (Ex-CEO, in 2012)

“This situation is causing a lot changes in companies. They start up and disappear quickly in times of crisis. I’ve seen that a lot of companies are cutting things back to a minimum or have even disappeared, and others are on the verge of closing” (CEO, in 2010) “The product of our work is knowledge, we are knowledge based companies. Why don’t we do just like them? The next few years must show us the need to explore new organization and work systems based on managing knowledge, optimizing and automating work, fostering creativity and productivity, etc.” (CEO, in 2010)

Redesign and adaptation

“I’m not trained in management, I’m an archaeologist. But as a businessman above all my work is management. As we face economic challenges in the years ahead, it will become essential to have people around me who had that type of training” (CEO, in 2009) “In Spain we’ve got good archaeologists, they’ve demonstrated this by excavating, documenting, and publishing. We do it well. […] This crisis should show us to focus on what we know best instead of venturing into the unknown” (CEO, in 2010)

burgeoning growth to depend on partnerships with construction firms, which required specialized archeological knowledge in order for its projects to take shape. This created an expanding market for archeology companies. It also drove them to focus their business model on

“The reason behind today’s successful firms is that they have known how to re-direct their activity towards the transmission of knowledge. Some of them have introduced innovation into the market, they’ve looked for an area that nobody was working in here” (Scholar, in 2011) “There’s been a before and after in terms of innovation. We’ve finally understood that we can’t always do the same thing. We’ve got to provide a dynamic work environment fostering new ways of working, new leadership and managerial competencies” (CEO, in 2012) “By means of changing organizationally we hope to create a stable infrastructure that allows us to bid for public funds and industrial projects. It’s difficult for us to undergo this type of transformation. Still, we’re convinced that we need to seek out alternatives to the previous model” (CEO, in 2011) “We need to build a strong organization uponwhich we can grow. To do so, we must be willingto cooperate, transfer knowledge collaboratively, invest in R&D, and to seek out new management models in collaboration with all those involved in, interested in or concerned about heritage” (Director of Foundation, in 2011)

providing a quick response to the increasing demand for these services — in a similar way to the situation in the US and UK (Aitchison, 2009) — resulting in over-reliance on basic services for the construction industry.


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Fig. 1. Institutional configuration of the archeological activity.

experts pointed out in the interviews, despite the favorable institutional and market environment, the apparent success of a particular business model did not encourage companies to seek out alternative market opportunities or to explore new services with the subsequent under-use of human capital. 4.2. Crisis and organizational decline Construction had been a major engine of economic growth in Spain (Guillen & Suarez, 2010). Its quick reversal of fortune, which began in mid-2007, led to the collapse of the real estate and construction sectors

9000

1'600'000

8000

1'400'000

7000

1'200'000

6000 1'000'000 5000 800'000 4000 600'000 3000 400'000

2000

200'000

1000 0

Public expenditure (€) and number of houses built

Volume of archaeological activity

This approach resulted in the ability to offer standardized services with high human capital intensity and low customization and to differentiate the service offering in terms of cost reduction. Such moves, however, often came at the expense or sacrifice of formal innovation efforts. The overwhelming majority of firms innovated very irregularly. Most innovation activities took place when they perceived a specific market need. The data reveals that innovation was largely concentrated in a few active firms that invested more in process innovation to standardize the service offering, to apply information technology, and to introduce marketing activities. Lack of financial resources and internal obstacles turned out to be the major factors hampering firms' incentive to invest in innovation. As a number of

0 2001

2002

2003

2004

2005

2006

2007

2008

Volume of archaeological activity

2009

2010

2011

2012

Houses built

Fig. 2. Spanish archaeological activity (bars, left axis) and difference between construction activity (building permits for new constructions) and public expenditure on archaeological sites (lines, right axis), for 2001-2012 period. Source: Archaeological data obtained from the Heritage Public Offices. Housing data obtained from the Ministry of Public Works and Transport (Spain). Public expenditure on heritage obtained from the Cultural Statistical Yearbook (Spain). Data estimated for 2011.



and spilled over into archeological activity. Fig. 2 shows how the volume of archeological activity (measured as the aggregate number of field activities) was strongly associated with the volume of construction work (measured as the number of houses built). The figure also highlights the steady decline in public funding for heritage initiatives (including archeological activity) starting in 2009. Due to the significant economic downturn, a large number of firms went bankrupt. The two censuses of firms populated show the effect of the economic slump on firm survival. Whereas the first census consisted of 273 firms in 2009, the second wave in 2013 offered a record of 158 firms — 58% of the original census. Most firms faced organizational decline in the first stage of the environmental shock. An excessive dependence on the construction sector, hampered by the underuse of their human capital, led to the dominant model becoming exhausted and left firms ill-suited to coping with or adapting to such rapid and turbulent change in market conditions. As one top manager from a successful firm pointed out: “The building boom catapulted us to success, and the recession has sunk us. This crisis isn't just affecting the business model; it's affecting the very foundations of the activity.” A large proportion of the remaining firms attempted to meet the competition by dropping their prices drastically. Struggling firms strived to shake off economic gloom. To achieve higher efficiency, most firms adjusted the scale of business by means of specialization, standardization, and cost reduction. A large proportion of CEOs of smaller firms expressed that they considered this shift necessary to secure contracts with governmental agencies. However, after some delay, all public funding for heritage activity (archeological sites, preservation and management of cultural artifacts, and research projects) plummeted to a level below public investment in 2000. Virtually all the top managers agreed that, initially, firms resisted change or attempted reactive adaptation measures. However, the constraints imposed by the institutional framework (together with the wider economic constraints) defined the opportunity set and thus the kind of firms that would elude decline and eventually survive. “What seemed to succeed failed, and what seemed to fail succeeded.” This statement from a young owner pointed toward the failure of traditional activity and the need for alternative service opportunities. The economic crisis might have brought about a mobilization towards renewal initiatives in archeological firms because they were facing urgent problems that could affect their survival. However, the initial adaptation responses took place in a narrow set of archeological firms. Interviews and survey data together indicate that firms tended to adapt in two ways: either specialize the existing business service or launch a new service (hereinafter referred to as “specialization” and “new service offering”). Rather than to support new product introductions, 10% of firms surveyed in 2009 and by 20% in 2012 undertook incremental renewal through service specialization. They attempted to overcome the crisis by restricting the service provided to a narrow set of highly specialized services in a niche archeological market (satellite-based surveying, geographical information technology, and remote sensing archeology). They devoted resources to buying advanced technology and to responding to new market demands: greater focus on quality management, simplified service operations, and cost-

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Table 5 Main OI initiatives, percentage of adopting firms (data from 2009). Dimension

Percentage

Activities

New business practices

10%

New know-how: use of technology tools, consultancy services, or the promotion of best practices in heritage New knowledge not exclusively archeological (topology, environmental, pedagogy) to foster services Working methods (multi-disciplinary teams or cross level projects) to improve production capacity and service provision. Formal and informal interfirm cooperation levels or involve consumers in the service process. Hire personnel with PhD Hire personnel from other disciplines Training investment New workplace practices related to job empowerment, satisfaction and commitment Internal communication plans New organizational culture

8%

New ways of organizing work

12%

28%

New human capital capabilities New organizational culture

5% 7% 48% 6%

5% 7%

reduction work systems to help recoup expenses. Moreover, about 5% of the firms surveyed in 2009 and up to 17% in 2012 attempted discontinuous transformation and radically renewed their offering of archeology-related services as they shifted their focus from construction-driven services to addressing the general public as service users. To some specialists, including the director of a regional professional association, the shift towards heritage and cultural management services marked a turning point in the industry. Furthermore, our data suggests a relationship between renewal strategy (in the form of specialization and new service offering) and the development of innovation processes. However, there are innovation differences between both approaches. The results of the survey data reveal a taxonomy of service offering and innovation (Table 4). We clustered service offerings into three groups and assessed their perceived need for innovation. The first group (labelled as not innovative) includes traditional activity connected with excavations and archeological impact assessment. Little or no innovation takes place in this type of activity. A second group of firms (moderately innovative) goes into more novel business initiatives connected with specialization and related technological, mostly process innovation. A third group (highly innovative) offers new services focusing on the diversification of cultural activities, which involved discontinuous strategic transformations that stemmed from both technological and OI. Interviewed experts drew attention to the fact that as the economic crisis worsened it became essential not only to develop new or improved services in these companies but also to seek out innovative ways of managing and organizing work. Only a few leading firms adapted their organization and work dynamics to offer innovative service solutions. They did so by implementing innovations that were new to the industry and dramatically disrupted the archeological activity. A recurring theme that emerged from the interviews was that the

Table 4 Supply of archeological services, innovation actions, and percentage of firms in each category. Innovation actions Service activity phases (2008–2009) Time survey 1 (2012–2013) Time survey 2 Variation (percentage)

Non-innovative Traditional

Moderate innovative Specialization

Highly innovative New services

85%

10%

5%

63%

20%

17%

−22%

+10%

+12%


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archeological industry faced a “reinvent or perish” dilemma that required companies to actively transform their businesses. In the case of technologically-innovative firms, data shows that although they expected technological innovation to be effective in transforming their business, somehow they underestimated the power of OI, particularly in the case of those firms seeking to open up new market opportunities. We cover evidence that, contrary to popular belief, investment in technological innovation alone did not enable companies to fully recover financially. Foss, Laursen, and Pedersen (2011) argued that the link from customer knowledge to innovation is mediated by organizational practices. Firms that attempt to leverage user and customer knowledge in the context of innovation must design an internal organization appropriate to support it. Among the CEOs interviewed, there was general agreement that implementation of OI did help them to develop new organizational capabilities as a critical prerequisite for effective service diversification. This quote from a CEO reflects the view of many executives regarding the role of OI regarding the evolving nature of the archeological business: “The new panorama forces excavators to rethink the future of archaeology. This shift calls for reinventing the firm […] You can't come up with a good management program through intuition. We need to place greater emphasis on management processes to adapt the firm to the ups and downs of the business world, and we need an aggressive effort toward novel forms of organization.” OI is classified according to four dimensions described in the literature: new business practices, new ways of organizing work, new human capital capabilities, and new organizational culture (Armbruster et al., 2008; Birkinshaw et al., 2008). The survey identified differences in implementation of these innovations (multiple responses allowed, see Table 5). Whereas a remarkably high proportion of firms (28%) developed collaborative ties with other firms or customers, giving way to innovative work methods, only a small proportion of firms promoted changes in their organizational culture. Further quantitative analysis provided evidence that the companies that implemented OI were the most successful. After controlling for size and geographic scope, ANOVA and t-test showed significant differences in economic performance (captured using the differences in annual sales between 2006 and 2010) between firms classified as innovative and those classified as non-innovative (using a composite of all OI activities listed in Table 5) at a 0.001 level. The ANOVA results showed a mean for innovative firms of 8.216 (s = 6.303) and for unsuccessful

firms of 5.101 (s = 5.1302), an F-ratio of 12.642. Furthermore, results indicated that moderately innovative (adopting technological innovations) and high innovative firms (technological and OI) performed significantly better than non-innovative firms at a 0.001 level. 4.3. Reinvent or perish: reconception and adaptation A seven-year period of relentless recession left the archeological industry mired in a prolonged downturn. At the time of this study, firms are nowhere near the end of the crisis. It is still early in the process to model the impact of innovations on long-term survival. New service offering is related to changes in the institutional context, which is characterized by the drop in public supportiveness of heritage management and the greater role of the general public. Mass consumption of archeological-derived products becomes an important source of revenue for firms targeting this market. Data from the 2010 Survey of Cultural Habits and Practices in Spain indicates that visits to museums, exhibitions, and archeological sites increased almost five percent in the 2010–2011 period. In late 2010, the economic crisis worsened the already fragile archeological industry situation. Yet, our interview data suggested that certain firms successfully responded to environmental scarcity by means of discontinuous transformations of their service offering paired with extensive OI. To better assess the role of innovation in strategic renewal, we selected three successful and one unsuccessful company to carry out an in-depth case analysis of the relationship between adaptation and innovation (see Table 6). Successful cases illustrate how innovations, particularly OI, facilitated resource allocation and orchestration and, in doing so, were crucial in facilitating renewal. An unsuccessful case illustrates decline in a context of organization misalignment with its market niche when the firm's resources constrict, resulting in the deterioration of performance. Case A. completely revamped its service offering during the first few years of the crisis. The firm introduced new business practices and ways of organizing its work. The key innovations were the reorganization of the firm into an organic structure, the establishment of multidisciplinary teams for the development of new projects, the introduction of a new business culture, and the development of communication and marketing plans. As the CEO explained, “There has been a before and an after for us in terms of managing our organization. We started by investing in our employees' skills, addressing work routines, and our system infrastructure (from recruitment to a new knowledge

Table 6 Summary of case studies. Case studies

Business activity

Innovation strategy

Portfolio of innovation initiatives

Outcome

Case A: successful firm

— Founded in 1994, 15 employees (2012) — Activity: cultural promotion, recreations and exhibits; training and consultancy — +40,000 users/year

Diversification: acquiring new technology and entrance in new markets (new technology + general public)

Renewal

Case B: successful firm

— Founded in 1996, 123 employees (2012) — Activity: management services for sociocultural activities — +150,000 visits/year — Founded in 2000, 33 employees (2012) — Activity: Control and monitoring of construction works — 2 M€ turnover (2012)

Diversification: entrance in new markets oriented to general public

— Organic organizational structure — Multidisciplinary teams for new project development — New business culture — On the job training to foster creativity — Set up multi-disciplinary teams — New organizational culture — Collaborative structures with external agents to create a working network — Joint activities to strengthen relations with external agents (firms and universities) — Collaborative structure — Training highly qualified personnel — Operating actions: cost reduction, asset and personnel reduction

Case C:successful firm

Case D: non-successful firm

— Founded in 2002, 10 employees (2011) — Activity: Field activities and enhancement — Income decline, lack of public funding, forced to close in 2012

Specialization: in heritage using the latest technologies, acquiring new resources

None

Renewal

Renewal

Failure



management system)”. Taken together, these initiatives allowed the firm to focus on process rather than output, enabling proactive adaptation. In 2012, the company had emerged as a model for competitors to emulate. In fact, it was expanding despite the backdrop of the crisis, with some 40,000 users per year, and continued to innovate its service offering. The next innovation objective was to combine OI with advanced technological innovations as a way to enter new markets and offer new services. A senior manager reported, “We're on the verge of taking another step forward by introducing open innovation to meet demand through the web, developing a process to digitalize our know-how, and setting up an R&D lab, through which we can detect new demands.” Case B. is another exemplary case of a highly adaptive firm. In 2012, the company employed 128 people on a permanent basis, and it was one of the most important archeology firms, with its displays and exhibits receiving more than 150,000 visitors per year. The firm began to grow exponentially from 2002 onwards on the back of a line of services aimed at heritage-based activities in schools. This line of business was a keystone of the firm's strategy since the start of the economic downturn. According to the CEO, “We began this adventure more than 15 years ago, and since then we haven't stopped rolling out new projects. Our value lies in the way we have to work and adapt, through investment in training, cross-functional teamwork, and networking.” The introduction of OI contributed to firm survival. OI helped reorganize the firm's structure into multi-disciplinary teams to offer specialized services by means of promoting a collaborative business culture and introducing collaborative work practices. The goal was to foster activities that promoted knowledge sharing and creativity and to detect problems and deficiencies in service processes. As a result, the company successfully developed a network of internal and external agents, such as a cooperation agreement with one university, to facilitate knowledge exchanges. Case C. illustrates a trend that has been recurrent in the activity: the company opened its doors in 2000 during the construction boom and was successful until its market share plummeted in 2008. In 2009, it attempted to find a market niche and had to spend large sums of money to adapt its service offering to market conditions. Owners and managing directors invested in new technology and in an R&D strategy focused on cataloging, inventory, and 3D reconstruction. This shift allowed it to establish successful relationships with universities and other companies, to present joint projects together, and to structure initiatives to share and develop their knowledge through OI. In late 2010, the firm's market share and profits began to increase. The head of the R&D department stated, “We keep trying what we know best: being fast and efficient by providing excellence in service with the latest technologies available”. Case D. is an example of a firm specialized in providing services related to the dissemination of archeological heritage to the general public that struggled because its income depended exclusively on public sources. By 2008, their revenues tumbled 40% due to government budget cuts; nevertheless, working under the assuming that the reduction was only temporary, they decided to maintain their activity yet reduce their workforce, cutting both wages and the quality of services. However, by 2011, this situation became untenable. Thus, because Case D did not adapt to the public budgets cuts, and instead waited for changes in the external environment, the firm experienced organizational decline which it could not overcome and eventually filed for bankruptcy. The former CEO objected, “We were expected to deliver the same results; but with fewer resources, fewer employees, and within a shorter deadline. It became more and more difficult to offer our services and we eventually had to file for bankruptcy.”

5. Discussion The conceptual framework and findings reported above serve as building blocks for the construction of a grounded process theory of

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the dynamic aspects of innovation actions for organizational renewal attempted by commercial archeology in Spain to a seven-year economic slump (Glaser & Strauss, 1967). This research highlights four core links between innovation and strategic renewal whereby innovation investments made by firms facing economic crisis can result in strategic renewal. They yield several testable theoretical propositions that contribute to the development of a dynamic theory of the role of OI in service renewal (Agarwal & Helfat, 2009; Mone et al., 1998).

5.1. Systemic and discontinuous service innovation Earlier research has found several approaches to service innovation. This study suggests that when advanced-knowledge services face external economic constraints, systemic innovation — innovations that are complex, systemic in nature and new to the industry (Teece, 1986), emerges as one source of strategic renewal. Furthermore, for services experiencing decline and attempting renewal, organizational failure is also associated with a lack of innovation initiatives. Companies implementing innovation actions specifically designed to overcome major decline in service activity and performance over several years show better results in dealing with pressure from their institutional and economic environments. Innovators consciously employed relevant innovation strategies to cope with deteriorating economic conditions. Companies provided explanations regarding the external pressures (competition, resource scarcity, and customer demands) and internal organizational decisions (gaining specific competencies, reorganizing workflows, increasing the range and quality of services). Studying strategic renewal reveals that it is important to consider systemic innovation that help service firms to continue to match their business skills with environment instability and the shifting competitive landscape (Burns & Stalker, 1961). More formally, Proposition 1a. Persistent economic decline will substantially increase the likelihood of systemic innovation actions involving most or all domains of service activity. Proposition 1a is consistent with previous findings showing that, in the case of service firms, organizational adaptation is often the result of a reactive process prompted by environmental uncertainty or downturn in the economy (Ettlie & Rosenthal, 2011). This study also confirms that firms' adaptability to changing market conditions improves when systemic innovation actions are purposely associated with generating organizational renewal. Although often deemed as incremental, we observed that service innovation might also be discontinuous, particularly when it takes place in rather unpredictable and a continuouslychanging economic environment. This study suggests that services' actions in a renewal situation may trigger a distinctive portfolio of innovations that radically alters the focus of the firm's service-market strategy. This process-view of innovation is especially important in advancedknowledge providers, whose activity typically involves applying a bundle of capacities and competences (human, technological, organizational) to organizing a solution to a problem (Gallouj & Weinstein, 1997). These services rely on very high levels of qualified staff to develop and sustain long-standing relationships with their clients. Therefore, knowledge intensity and a professionalized workforce have important implications for the design and implementation of new-to-the-industry innovation in advanced-knowledge services (Martin-Rios, 2016; Martin-Rios, 2014. Our study offers preliminary evidence that when archeological firms facing competition for scarce environmental resources implemented innovation actions specifically designed for economic slumps, they tended to be a departure from the established innovation strategy and, as a result, might trigger major changes in the service offering and the work methods, enabling firms to cope with changes in the external environment. We can therefore hypothesize that:


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Proposition 1b. Organizational adaptation to sustained decline in the firm's service activity will most frequently occur in disruptive bursts of innovation with the purpose of favoring major changes in the service offering and the work methods. For Proposition 1b not to be a tautology, disruptive innovation must, of course, be established independent of former innovation strategy. This is consistent with earlier research on discontinuous innovation that suggested that occasionally ‘the rules of the game’ change and firms must change what they are doing. Kim and Pennings (2009) document that in mature industries incumbents who introduce technological innovations to strategically renew themselves have a greater chance to successfully replace critical organizational attributes. However, most of the research in this area has examined factors that facilitate or suppress strategic change at manufacturing firms without examining its pertinence for services (Ndofor et al., 2013). In the case of archeological firms, innovation for discontinuous transformation includes a fusion of related technological and OI. 5.2. OI, resource orchestration and renewal While researchers have noted that services benefit from innovation (Hervas-Oliver & Sempere-Ripoll, 2015), the underlying processes that contribute to strategic renewal are not well understood. In archeological firms attempting discontinuous strategic transformations (Agarwal & Helfat, 2009), innovation portfolios tended to undertake an integration of technological and OI capabilities. Resource orchestration led to adaptive efforts based on the need to promote renewal where more traditional, standard innovative actions might not be enough to guarantee firm survival. The findings suggest that those firms that engaged in several forms of innovation activities (technological and organizational) were more likely to overcome economic downturn. We argue that firm adaptability to changing market conditions improves when different innovation initiatives are aimed at organizational renewal. This is particularly important in turbulent times. Indeed, during financial and economic crises advanced-knowledge services are forced to continually readapt their strategic focus and pursue alternative markets, customer, and service opportunities. More formally, Proposition 2a. Major declines in the economic conditions over several years will substantially increase the likelihood of combining technological and OI. Proposition 2a is consistent with previous findings showing that innovation reduces the risk of organizational failure; but it also confirms that — besides technological innovation — OI plays an essential role in strategic renewal. For knowledge-based services, advanced management systems are essential to ensure service success (Castellacci, 2008) and, as we find out, OI plays a central role in the development of these activities. Many self-declared ‘highly innovative’ companies in the activity put more emphasis on OI. For those firms with a clear innovation pathway or portfolio, OI was intimately linked with renewal. This form of non-technological innovation helped companies to withstand the economic downturn, financial crisis, and the exhaustion of their service business model. At the same time, it enabled and facilitated a change in business practices and encouraged service model innovations. This type of innovation aimed to improve the effectiveness and performance of the firm while restructuring its strategic and organizational foundations. In particular, OI actions contributed to resource orchestration activities in terms of efficient innovation decisions and implementation. More formally, Proposition 2b. In the context of persistent economic decline, OI has the potential to successfully leverage strategic renewal actions. Proposition 2b broadens the importance of OI beyond its current role as a prerequisite or facilitator of other innovation dynamics (e.g., the introduction of technological innovations) (Damanpour, 1991). It

emphasizes OI as a critical process for service firms attempting renewal. To some extent, the disadvantages of a severe economic downturn can turn into innovation advantages and opportunities for pioneering firms (Martin-Rios & Parga, 2015). We illustrate how confronting a persistent economic slump, one that has seen nearly half of all companies in the sector go under, may actually lead surviving firms to develop other core capabilities in areas like management systems, creative problem solving, and rule-bending. 6. Limitations and conclusion The main limitation of this study is the lack of longitudinal financial data to capture performance and offer ratios, such as return on investment or return on equity of the firms that are successful or unsuccessful in reversing economic crisis. From this perspective, it is necessary to continue gathering quantitative data in order to analyze the renewal or failure (including liquidation) dichotomy through OI. While general conclusions drawn from a single case study require caution, the process theory presented in this paper offers preliminary evidence that strategic renewal actions and, specifically, OI, are an important tool for service firms facing hostile, declining economic conditions as it has the potential to help them to obtain superior capabilities in terms of organizational and technical efficiency. Despite the recent surge in academic interest, service response to environmental decline remains a poorly understood, under-researched topic, particularly in aspects pertaining to the way resource orchestration via innovation actions contributes to organizational adaptation and renewal. This study suggests a complex and dynamic process of adaptation and recovery for services and supports the view that advancedknowledge service providers must look beyond short-sight initiatives and implement innovations to overcome crises. After enjoying growth that was unparalleled in any other country, Spanish archeological firms were rocked by the impact of the crisis and squeezed to the verge of extinction. Firms had to implement innovative actions to survive. Results indicated that renewal was facilitated by integrating OI capabilities into service's renewal portfolio. References Agarwal, R., & Helfat, C.E. (2009). Strategic renewal of organizations. Organization Science, 20, 281–293. Aitchison, K. (2009). Archaeology and the global financial crisis. Antiquity, 83, 319–332. Armbruster, H., Bikfalvi, A., Kinkel, S., & Lay, G. (2008). Organizational innovation: The challenge of measuring non-technical innovation in large-scale surveys. Technovation, 28, 644–657. Birkinshaw, J., Hamel, G., & Mol, M. (2008). Management innovation. Academy of Management Review, 33, 825–845. Bohman, H., & Johansson, M. -B. (1998). Management for change: On strategic change during recession. Journal of Business Research, 41, 57–70. Burgelman, R.A. (1994). Fading memories: A process theory of strategic business exit in dynamic environments. Administrative Science Quarterly, 39, 24–56. Burns, T., & Stalker, G.M. (1961). The management of innovation. London: Tavistock. Camison, C., & Villar-Lopez, A. (2014). Organizational innovation as an enabler of technological innovation capabilities and firm performance. Journal of Business Research, 67, 2891–2902. Castañer, X. (2013). Management challenges of cultural heritage organizations. In I. Rizzo, & Mignosa (Eds.), Handbook of the economics of cultural heritage (pp. 209–231). Cheltenham: Elgar. Castellacci, F. (2008). Technological paradigms, regimes and trajectories: Manufacturing and service industries in a new taxonomy of sectorial patterns of innovation. Research Policy, 37, 978–994. Chowdhury, S. (1996). Turnaround in small firms: An assessment of efficiency strategies. Journal of Business Research, 36, 169–178. Damanpour, F. (1991). Organizational innovation: A meta-analysis of effects of determinants and moderators. Academy of Management Journal, 34, 555–590. Denzin, N.K. (1978). The research act. New York: McGraw-Hill. Eisenhardt, K.M. (1989). Building theories from case study research. The Academy of Management Review, 14, 532–550. Ettlie, J.E., & Rosenthal, S.R. (2011). Service versus manufacturing innovation. Journal of Product Innovation Management, 28, 285–299. Foss, N., Laursen, K., & Pedersen, T. (2011). Linking customer interaction and innovation: The mediating role of new organizational practices. Organization Science, 22, 980–999.


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