Innovation in Conservative and Entrepreneurial Firms: Two Models of Strategic Momentum

Posted: 17 Nov 2009

See all articles by Danny Miller

Danny Miller

HEC Montreal

Peter H. Friesen

affiliation not provided to SSRN

Date Written: 1982

Abstract

Innovation is conceptualized in different ways from firm to firm. While some firms tend to accept a more conservative approach towards innovation, other firms approach innovation from a more entrepreneurial perspective. A conservative model of innovation and an entrepreneurial model of innovation are presented, considering such firm characteristics as environmental variables, information processing variables, structural variables, and decision making variables. The methodology for the study includes data collected via questionnaire from 52 diverse firms in the Montreal region; these firms represent a variety of industries, including broadcasting, food, electronics, chemicals, and publishing, to name a few. The data were analyzed using both a correlational analysis and curvilinear regression analysis to better understand the influence of the respective variables for each model. The findings indicate that innovation within conservative firms correlates positively to the aforementioned variables. Within conservative firms, innovation occurs when 1) environmental challenges and instabilities are present; 2) these instabilities are made explicit to and analyzed by the management team; and 3) financial and structural resources are available for innovation to occur. Entrepreneurial firms also exhibit positive correlations with environmental and structural variables; however, negative correlations are also observed regarding information processing, decision making, and structural integration. Innovation occurs on an extreme level within entrepreneurial firms except in cases when information processing systems, as well as analytical and strategic planning processes and structural integration devices, warn the management team of the risks associated with extreme innovation. The results indicate that a balance between the extremes of conservativism and entrepreneurship must be considered. (AKP)

Keywords: Private sector, Environment, Information processing, Firm management, Management decisions, Startups, Innovation process, Firm centralization, Product development, Business assistance, Firm strategies, Entrepreneurial orientation, Organizational strategies, Motivation

Suggested Citation

Miller, Danny and Friesen, Peter H., Innovation in Conservative and Entrepreneurial Firms: Two Models of Strategic Momentum (1982). Strategic Management Journal, Vol. 3, Issue 1, p. 1-25 1982. Available at SSRN: https://ssrn.com/abstract=1505196

Danny Miller (Contact Author)

HEC Montreal ( email )

3000, Chemin de la Côte-Sainte-Catherine
Montreal, Quebec H2X 2L3 H3T 2A7
Canada

Peter H. Friesen

affiliation not provided to SSRN

No Address Available

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