Complex Incremental Product Innovation in Established Service Firms: A Micro Institutional Perspective

33 Pages Posted: 7 Aug 2006  

Patrick A.M. Vermeulen

Tilburg University - Department of Organization Studies

Frans A. J. Van Den Bosch

Erasmus University Rotterdam (EUR) - Department of Strategic Management and Entrepreneurship; Erasmus Research Institute of Management (ERIM)

H. W. Volberda

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Erasmus Research Institute of Management (ERIM)

Date Written: July 24, 2006

Abstract

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

Vermeulen, Patrick A.M. and Van Den Bosch, Frans A. J. and Volberda, H. W., Complex Incremental Product Innovation in Established Service Firms: A Micro Institutional Perspective (July 24, 2006). ERIM Report Series Reference No. ERS-2006-037-STR. Available at SSRN: https://ssrn.com/abstract=920231

Patrick A.M. Vermeulen (Contact Author)

Tilburg University - Department of Organization Studies ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Frans A. J. Van Den Bosch

Erasmus University Rotterdam (EUR) - Department of Strategic Management and Entrepreneurship ( email )

RSM Erasmus University
Rotterdam, 3000 DR
Netherlands
+31 10 408 1955/2005 (Phone)
+31 10 453 0137 (Fax)

HOME PAGE: http://www.rsm.nl/fvandenbosch

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Henk W. Volberda

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands
+31 10 408 2761 (Phone)
+31 10 408 9013 (Fax)

HOME PAGE: http://www.eur.nl/fbk/dep/dep4/faculty_members/Henk_Volberda

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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