Management of future innovative firms and networks

Katri Valkokari, Tapio Koivisto, Raimo Hyötyläinen, Maarit Heikkinen, Magnus Simons, Maaria Nuutinen, Tiina Apilo, Juha Oksanen

    Research output: Book/ReportReport


    The main focus of this publication is the different aspects of managing innovative firms and their networks in the future. The premise of our approach is that many new changes in innovation and management area are happening at the same time, which will profoundly influence how firms and networks will compete and prosper in the future. The firms and networks have to be able to renew their management and organization as well as their products, services and marketing practices. The publication will provide new knowledge on the questions of renewal of the management of future innovative organizations. Innovation is typically linked to business renewal, growth, and competitiveness. The assertion is that innovation is always a complex and uncertain activity. Innovation is more than just one idea or invention. Innovation can be product, process, organizational or paradigmatic innovation as well as network and customer management innovation. Innovation is composed of the new arrangement of existing or new elements of business systems. The innovation process and management approach offer a means to consider organizational learning processes and the formation of organizational routines by which the firm can manage the uncertain facets of innovation processes. However, innovation processes are not linear processes. They are composed of many phases and feedback loops. There are many factors promoting or inhibiting innovations in organizations. At an organization level, strategy, organizational structure, organizational culture and management practices are the most important conditions for progressing innovativeness in the organization. However, bureaucracy and tight control is argued to inhibit innovativeness. Instead, some freedom and risk-taking might support innovative activities. Open communication at the team level will enhance innovation efforts in the organization, which will also inspire different persons to take responsibility for innovative activities. The participation of different shareholders is a more important source and condition for innovation. This will promote the co-creation practices between a producer, users and customers. It will also help the implementation and diffusion of innovations in different customer groups. At best, business companies can create new strategic innovations in a market where customers and users do not have any previous experience. This will provide a new basis for competition in the market. Alliances and networks are even more essential forms for innovative activities as well as the exploitation of network resources and competencies in future firms. Many business networks are established and developed as intentional network forms. Networks can be considered dynamic multilevel systems, because actors are networked at many levels. At the network level, dynamic features depict non-linear characteristics, because the network system is composed of many interconnected elements. On the other hand, the network has some self-organising features, which support the creation of new targets and renewal in the interaction processes between the parties in the network. Different network forms can be identified ranging from closed forms towards more open or loosely-coupled networks. These forms can be described as four network models. The hub-spoke model aims to use the present operations as effectively as possible. It is based on the subcontracting model. The strategic network model is targeted on some renewal and co-configuration of solutions. However, it is mainly based on knowledge exploitation dimensions. The strategic alliance model is to integrate competencies for new solutions reaching new markets. The model is then oriented to an exploration dimension. The open innovation model is composed of several parallel networks aimed at the future competitiveness of firms. Furthermore, the open innovation model offers a basis for considering how to strategize and find new approaches within future innovative firm. Business model is one of the essential forms that depict the development of a firm. Strategic renewal and networking is considered through the analysis of medium-sized firms. The framework consists of four forms: growth pilots, strategy making, ramp up, and consolidation. These forms are analysed via main cognitive models, cognitive processes, and networking. This opens up a new way to consider the development phases of firms, from exploration mode to exploitation phases. In the changing and complex environment it is important to any firm to identify itself. Firms will determine their own position in the competitive field and environment. How the firm understands its own identity will largely determine its organizing and strategizing efforts. Organization identity will form through manifold discursive and communicative processes going on in the organization. Decision-making is, anyway, a basic operation in the organization through which it is possible to reflect itself as well as the environment opportunities. By this way, the firm can crystallize its business idea as a basis for its resources and competitive success factors. The main function of organization is to reduce uncertainty and ensure coordination between different function and processes. New flexible organization forms are emerging. New forms are emerging though electronic working models as well as virtual teams who are geographically, organizationally and/or time-dispersed individuals brought together for common goals. Strategies of uncertainty reduction and absorption correspond to the two distinct strategies of learning: exploration and exploitation. To summarize, we present twelve case-examples from seven case companies, how firms could and should have different solutions to cope with uncertainty. Based on the contribution of previous chapters and lessons learned, the grounds for practice-oriented management research paradigm is presented and analysed. It is practice turn in strategy research. The nature of practice research is process and future oriented research. The premise of practice-oriented research is to look at organizations from the perspective of processual views and organizational change patterns.
    Original languageEnglish
    Place of PublicationEspoo
    PublisherVTT Technical Research Centre of Finland
    Number of pages185
    ISBN (Electronic)978-951-38-7778-1
    ISBN (Print)978-951-38-7777-4
    Publication statusPublished - 2011
    MoE publication typeNot Eligible

    Publication series

    SeriesVTT Tiedotteita - Research Notes


    • management
    • innovation firm
    • network
    • strategizing
    • practice-oriented research


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