Marketing Dissertation Literature Sample 1

Service innovation involves a unique service experience that consists of different dimensions such as a new customer interaction, a new service concept, a new business partner, an innovative business system, new technological or organisational service delivery system or a new revenue model (Skålén et al., 2015). Service innovation is best described as a process of collective problem-solving in which learning within organisations and connection between organisation play a key role. Love and Mansury (2007) suggested that firms’ external linkages, particularly with customers, can significantly enhance service innovation performance. This research adopted the definition of service innovation from Leiponen (2005) and defines service innovation as the completely new services most often introduced by firms that engage in external knowledge sourcing, particularly from customers and competitors.

Various studies have analysed the management practices of service innovation within the telecom sector. For example, Rahman et al (2015) proposed a framework and empirically validated the successful service innovation practices in telecom sector of developing regions. The proposed framework highlighted the significance of relationships between cross-functional communication, technological tools’ implementation, overall innovation process, organisational culture, competitive pricing and performance. The empirical research results proposed that organisational culture and implementation of technological tools have a significant influence on the innovation process, cross-functional organisation and competition informed pricing. The researchers stressed the need to conduct further research for assessing the innovation management practices within the telecom sector of developing countries (Rahman et al, 2015).

This study has chosen the Jordanian telecom sector to analyse how embedded innovation enhances the overall service innovation in selected telecom industry. Firstly, the research will critically analyse the embedded innovation literature to identify and discuss a comprehensive framework. Later, empirical research will be executed based on this framework in thecontext of Jordanian telecom industry.

The escalating economic pressure and increasing environmental complexities have intensified the quest for frugal grassroots innovations in an interconnected world. The innovation researchers are introducing various models and concepts, such as open innovation, reverse innovation model, inclusive innovation, low-cost frugal innovation, embedded innovation etc. to quench the innovation thirst of proactive firms operating in highly turbulent markets (George, McGahan & Prabhu, 2012). The open-inclusive innovation model involves the different dynamics of relationships between knowledge seekers and knowledge providers that make the whole system responsive, responsible and reciprocal (Gupta, 2016). The model further suggests that in open systems, the inclusive innovation costs go down, resulting into a more inclusive and symmetrical knowledge system. The innovative solutions help in addressing social, skill, sectoral, seasonal and spatial factors (Gupta, 2014). The open inclusive innovation system makes the resources affordable, accessible, adaptable and available to differentiated and varying user needs and endowments besides having a circular nature. However, the successful integration of the open-inclusive innovation requires a comprehensive understanding of the multifaceted interaction between intellectual, ethical, social and natural capital that lies in the innovation’s institutional context (Gupta, 2016).

Before understanding the need to shift the focus from open innovation to embedded innovation paradigm, it is necessary to understand how previous innovation models facilitate the communication flow within the organizations, and whether these models offer adequate guidance to develop effective communication channels that can facilitate the knowledge flow from within and outside the organization, and how acquired knowledge can be used to set the basis for sustainable competitive advantage.

Open innovation allows the open sharing of knowledge, whereas, inclusive innovation ensures the inclusion factor by collaborating with the poor communities. This innovation exchange among communities and corporations is guided by different efficiency and ethical considerations (George, McGahan & Prabhu, 2012). The available literature regards the openness of corporation to seek ideas from the outside with open-innovation policy, irrespective of that fact whether the organizations disclose how the collected information was used to strengthen the innovation foundation (Gupta, et al., 2016).

Von Hippel has disagreed in this regard as the researcher regards the willingness to use the obtained knowledge and openly share the innovation derivations as open innovation (Bogers and Bastian, 2010; von Hippel, 2005). Gupta et al (2016) have characterized the information exchanges into four different strands, low inside out and low outside in, high inside out and low inside in, low inside out and high outside in, and finally the high inside out and high outside in. The open inclusive innovation supports the high inside out and high inside in strand, but the theory doesn’t provide adequate guidance to organizations about how such innovative culture could be crafted within the industry (Fleming & Waguespack, 2007). The emerging concept of embedded innovation best serves the purpose in this regard. However, before discussing how a shift from the dis-embeddedness to embeddedness can improve the innovation practices of Jordanian telecom organizations, this section will briefly describe four above mentioned innovation exchange strands:

The close innovation theories cultivated the low inside out and low outside in innovation culture. Within this culture, the organizations acted like an ostrich and management strongly resisted to share the information as knowledge was regarded as a source to get a sustainable competitive advantage (Baden‐Fuller, 1995). This innovation culture lacked the resilience and consequently the enterprises were highly vulnerable to market, institutional and climatic risks. However, the increasing environmental complexities made the survival of these organizations almost impossible and they either disappeared, or acquired by proactive market players (Simanis and Hart, 2009). The low inside out and low outside in was eventually replaced by a new strand, low inside out, and high outside in. As the name indicates, the organizations realized the importance of two-way innovation exchange. However, the enterprises were still unwilling to openly share their innovation derivations. Now, the organizations adopted a sponge like behaviour (Poetz and Schreier 2012), and showed higher willingness to learn from outside and low willingness to share the way they convert knowledge into innovative organization capabilities (Laursen & Salter, 2004).

These crowdsourcing strategies are used by many large enterprises. However, these enterprises don’t fully follow the open innovation principles due to their unwillingness to share information with external community. The innovation providers seldom know how their provided information was used by the company (Gupta et al 2016). Such kinds of institutional arrangements don’t last very long as innovation providers lack the motivation to share when they don’t know how provided knowledge will be used and to what extent the provided knowledge is useful. Eventually, this lack of motivation drives the innovation providers somewhere else (Gupta et al 2016).

The third innovation exchange strand “high inside out and low outside in” works in an opposite direction. Here, the enterprises adopt a pollinator behaviour. This innovation exchange model shares some resemblance with the open innovation theory. Tesla is an example of this innovation exchange strand (Quinn and Brachmann 2014; Dahlander & Gann, 2010). Within this innovation environment, the knowledge public goods are created without reciprocity expectations. The research and development institutions share the produced innovative knowledge with outside world to let the whole community benefit from it. However, the abundance of knowledge cause some organizations to avoid learning from outside that could be fatal for long-term business survival (Dahlander & Gann, 2010). Lastly, the high outside in and high inside out is the most favourable and ideal innovation exchange strand that results into development of highly innovative culture. It lets the innovation embed into each business process and drives the organizations to develop meaningful relationships with innovation providers and overall community (Gupta et al 2016).

However, the cultivation of such innovative culture within any sector requires an open mind and heart. The enterprises adopting this innovation exchange strand survive in the long-run and their development and growth relies on the continuous iterative cycle of sharing and learning (Abrol & Gupta, 2014). One example of this innovation strand is the Honey Bee network, where like-minded individuals such as non-governmental organizations, entrepreneurs, policy makers, academicians, farmers, scholars and innovators connect and share the innovation derivations for collective betterment. It connects the people and facilitates the information flow by hybridising the open source model with closed stratified, IP-based innovation model (Abrol & Gupta, 2014).

The above discussion suggests that corporate leaders must consider the value of sharing ideas from outside and adopting a holistic view emerging from the grass-root level. However, it requires mutual responsibility and respect that can monitor the innovative ideas exchange between informal and formal sectors. The researchers have introduced the notion of embeddedness to mark this transformation of integrating firms into communities to ensure high outside in and high inside out knowledge flow. Such community integration can assure the absorption of exploitable knowledge. It is important to note that notion of embeddedness is not a new term. It was introduced by Granovetter (1985) when the researcher emphasized the need to go beyond the open innovation to tackle the changing environmental needs. This notion conceptually embraces the particular ambidextrous capabilities of leveraging the institutional arrangements for accomplishing embedding process (O’Reilly and Tushman, 2008). Such institutional arrangements maybe mechanic, organic, exploitative, explorative or explicit in nature (Hafkesbrink and Evers, 2010; Tushman et al., 2002), considering the phase and nature of innovation process and relationship characteristics. After discussing the limitations of the open innovation theories, now the researcher will discuss how inclusive innovation theories provide the guidance for crafting a high outside in and high inside out innovation exchange environment.

The last two decades have witnessed the uncoupling, escalating social and economic development at global stage. However, despite the tremendous development, a large number of people are living below the poverty line (Chataway, Hanlin & Kaplinsky, 2014). The proactive organizations have taken the poverty alleviation as a challenge as well as a viable opportunity that could be beneficial for organization as well as overall society (Foster and Heeks, 2013). The emergence of “inclusive innovation” notion reflects this major shift from dis-embeddedness and exclusion to inclusiveness, a benign and partial form of embedded innovation. The main reason behind this shift is that enterprises are increasingly realizing that capital intensive nature of innovation trajectory that is destructive to environment, and only creates values for the organization is one of major reasons behind escalating poverty and exclusion (Chataway, Hanlin & Kaplinsky, 2014).

Although, a re-orientation towards the inclusive innovation path can play highly important role in overcoming the escalating poverty and exclusion, the current inclusive innovation theories offer a partial and weak understanding of underlying phenomenon (Foster and Heeks, 2013). The inclusive innovation researchers have offered limited explanation of dynamics and nature of inclusive innovation and this conceptual gap has motivated the researchers to combine the open and inclusive theories for broadening the understanding. The current inclusive innovation theories must be developed and understood in context of innovation cycle (Foster and Heeks, 2013). The roles played by poor people as consumers and innovation providers, and distinction between product and process innovation must also be clarified to maximize the effectiveness of inclusive innovation (Chataway, Hanlin & Kaplinsky, 2014). The innovation researchers must recognize the changing innovation needs of organizations and their increased interest towards exploring the bottom of the pyramid. Moreover, the consideration must also be given to understand the role played by growth trajectories in determining the innovation direction, and in facilitating the associations between poorest world community and rest of the world (Foster and Heeks, 2013). Chataway, Hanlin & Kaplinsky (2014) emphasized the need for an effectively balanced and holistic approach to the inclusive innovation that could facilitate the active innovation exchange among all stakeholders, resulting into effective deployment of resources to assist the recoupling of development and growth.

Based on the in-depth theoretical research, Altenburg & Lundvall (2009) proposed that positive developments in the innovation exchange environment requires the organizations to think beyond the inclusive innovation. Although, the inclusive innovation trajectory is positive, the scope is limited and there is considerable opportunity to broaden the scope and enhance direction and pace of inclusive innovation (Fressoli et al 2014).  The researchers further proposed that current inclusive innovation theories have not clarified the set of objectives for each innovation actor and there is a non-existent or weak grasp of different inclusive innovation elements, resulting into inability in introducing the collaborative synergistic innovation policies and accessing the low hanging fruit (Chataway, Hanlin & Kaplinsky, 2014). There is a need to develop a supportive and appropriate national innovation system that can direct the scare innovation resources in cost-effective manner. To overcome the limitations of open and inclusive innovation, the theory of open-inclusive innovation has been introduced (Fressoli et al 2014). 

However, it is not a new theory or paradigm, but only a combination of previous innovation theories with an aim to minimise the weaknesses and leverage the strengths of both theories. The open-inclusive innovation paradigm suggests the organizations to ensure a high outside in and high inside out flow, however, this concept requires further refinement to overcome the conceptual limitations. This section has highlighted the major reasons for shifting the focus beyond open innovation. The researcher has analysed different arguments made by past researchers that stress the need to re-visit open and inclusive innovation theories due to their associated limitations. Next section will discuss the emerging embedded innovation paradigm and how this emerging concept helps the innovation researchers in overcoming the conceptual and practical limitations of open and inclusive innovation theories.

With the passage of time, the shift from dis-embeddedness to embeddedness has become visible (Hafkesbrink, Krause and Westermaier, 2010). The organizations are increasingly seeking to embed the innovation exchange into organizational processes so that meaningful collaborations with the stakeholders and innovation actors could be made (Rutten & Boekema, 2007). Schweisfurth (2012) proposes that embedded innovation paradigm assists the organizations in leveraging its relationships with community to its maximum potential (Schweisfurth, 2012). However, review of literature has revealed that innovation researchers have underexplored the potential of embedded innovation, and there is need to conduct in-depth exploration for refining and broadening the understanding about underlying phenomenon (Rutten & Boekema, 2007). The embedded innovation stresses the importance of developing close ties with the local community and builds the customer loyalty based on mutual trust (Ferrary, 2011). Embedded innovation model guides the modern business enterprises to develop and sustain the meaningful relationships with all stakeholders and innovation providers, and presents a strategically wise give and takes relationship with the customers and local community (Baldwin & Von Hippel, 2011). This model views the engagement with stakeholders as transformational rather than transactional, and guides the organizations to develop a sense of mutual responsibility by focusing on the latent customers’ needs through effective communication (Baldwin & Von Hippel, 2011). However, the lack of adequate exploration has limited the organizations’ ability to adopt embedded innovation model in real world settings (Hafkesbrink, Krause and Westermaier, 2010). 

The underlying research intends to explore the potential of emerging embedded innovation paradigm in improving the organizations functioning in highly competitive markets. Hafkesbrink & Schroll (2011) explored the embedded innovation concept and proposed that this emerging notion is particularly meaningful for small and medium business enterprises, or industries facing the resource constraint issues. Today, the digital economy along with a huge influx of small and medium organizations require innovation researchers to take a step ahead open innovation theories (Hafkesbrink & Schroll, 2011). Mostly, the open innovation has been discussed in context of large organizations that have enough resources and capacity to absorb the knowledge from outside and ensure the inside-out knowledge exploitation and technology transfer. Various successful examples of knowledge absorption strategies from external sources have been discussed by the past innovation researchers (Chesbrough, 2004). Contrarily, the embedded innovation focuses on the knowledge transfer abilities of small and medium enterprises (Hafkesbrink, Krause and Westermaier, 2010).

This innovation model leverages the collaborating nature of organizations during the innovation process when knowledge cycles are highly dynamic and knowledge is widely distributed among innovation actors. Diener and Piller (2010) contend that embedded innovation offers more holistic view as it suits both large and small organizations. On the other hand, open innovation only suits large business enterprises, where management can sophisticatedly manage the whole open innovation process by using open innovation toolkits and lead-user approaches. Big enterprises use the innovation contests to create the adequate gravitational force for attracting innovation providers, whereas, small and medium enterprises lack sufficient resources to leverage the benefits offered by open innovation (Hafkesbrink, Krause and Westermaier, 2010).

The knowledge sharing within the open innovation context relies on the multiple interactions between the innovation actors (Diener and Piller, 2010). On other hand, decentralized and individual small and medium enterprises that share the knowledge must develop multiple interactions with the local community to foster innovation. The organizations seek for a win-win situation by collaborating with the community (Hafkesbrink, Krause and Westermaier, 2010). The knowledge is collectively exploited within communities and networks etc. Diener and Piller (2010) regard the open innovation as a transition from the dis-embeddedness to embeddedness, that is, from close innovation to the embedded innovation. The emerging innovation paradigm develops a collaborative network or cluster of organizations with the local community that is adequately stable and flexible to embed the innovative knowledge and ensure the effective exploitation of collaborative learning within multi-agent system (Diener and Piller, 2010).

            Considering the importance of embedded innovation for tackling the innovation needs of modern enterprises, this study intends to assess the embedded innovation practices of Jordanian telecom organization. The researcher will assess the willingness of telecom management to collaborate with a community and build a network that can facilitate the innovation exchange among different actors. For this purpose, the underlying research has adopted the theoretical framework proposed by Hassink (2001). This framework will be based to conduct the Jordanian telecom sector specific empirical research. The section will also analyse different components of theoretical framework considering existing literature. Here is the graphical representation of theoretical framework adopted by the underlying research:

Proposed theoretical framework of embedded innovation in telecom sector

The theoretical framework has been adapted by the study conducted by Hassink (2001), upon the understanding and nature of the topic which is focused towards evaluation of trends and challenges of the telecommunication sector of Jordanian Telecommunication sector. The main variables of the study were research and development, skill qualification and core competency, business environment and innovation support system. Therefore, upon the understanding of the variables, the following theoretical framework has been designed, where the variables has been discussed in an in-depth manner in literature review section.

Source: ( Adapted Hassink, 2001)