Complex Incremental Product Innovation in Established Service Firms: A Micro Institutional Perspective
33 Pages Posted: 7 Aug 2006
Date Written: July 24, 2006
Many product innovation studies have described key determinants that should lead to successful incremental product innovation. Despite numerous studies suggesting how incremental product innovation should be successfully undertaken, many firms still struggle with this type of innovation. In this paper, we use an institutional perspective to investigate why established firms in the financial services industry struggle with their complex incremental product innovation efforts. We argue that although the impact of micro institutional forces is often overlooked in innovation studies, these forces matter for innovation success. Our study complements the existing innovation literature and provides an additional explanation why incremental product innovation is highly complex and suffers from several liabilities in established firms. Using qualitative data from the Dutch financial services sector collected over the period 1997-2002, the paper illustrates how micro institutional forces at the business unit level affect complex incremental product innovation and how the interaction of these forces delivers their impact.
Keywords: Financial Services Sector, Micro Institutional Forces, Neo-Institutional Theory, Complex Incremental Product Innovation
JEL Classification: M, D21, L20, O31, M11
Suggested Citation: Suggested Citation