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Relationships as source of innovations in advertising industry:  comparative study of Polish and Japanese approaches
 

Relationships as source of innovations in advertising industry: comparative study of Polish and Japanese approaches

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Collaboration among companies is often claimed to become the source of distinctive competitive advantage to companies. Trust belongs to key determinants of collaboration. The literature on innovation ...

Collaboration among companies is often claimed to become the source of distinctive competitive advantage to companies. Trust belongs to key determinants of collaboration. The literature on innovation suggests that innovative companies have well mastered two processes: creation of ideas and transformation of ideas into new solutions. In this presentation these two areas are the focal point. We seek for the information about the customer role as a generator of ideas and its impact on the process of their implementation.
The presentation is based on case studies of Polish companies, which are compared with a case study from Japan. This approach allows comparison of the situation in countries with low and very high innovation economy. In the Polish respondent opinion the Japanese advertising agencies market operates on totally different rules than in Poland. Areas indicated by representatives of both agencies concern mainly the role of trust in the cooperation with external stakeholders.
The advertising market in Poland is still young and highly fragmented. The transactional approach represented by polish agencies results in concentrating on the development of projects and selling capabilities. There is no place, time and knowledge to maintain customers and to develop their loyalty. The fight for customers, often on the borderline of ethics, and price, as the main determinant of project selection, inhibit innovation. The approach to relationships represented by the Polish companies is rooted in the culture. Looking more broadly at the issue of trust in relationships and the role of relationships in the innovation process we refer to the transition economy, which is characterized by a lack of confidence

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    Relationships as source of innovations in advertising industry:  comparative study of Polish and Japanese approaches  Relationships as source of innovations in advertising industry: comparative study of Polish and Japanese approaches Presentation Transcript

    • RELATIONSHIPS AS SOURCE OF INNOVATIONS IN ADVERTISING INDUSTRY COMPARATIVE STUDY OF POLISH AND JAPANESE APPROACHES Y. Hara, K. Hosoi, G. Leszczyński, M. Zieliński Combining the Social and Technological Aspects of Innovation: Relationships and Networks The 28th IMP ConferenceThursday, September 13, 2012
    • Polish approach? Japanese approach? RELATIONSHIPS AS A SOURCE OF INNOVATIONS IN ADVERTISING INDUSTRYThursday, September 13, 2012
    • STARTING POINT • Traditional approach to innovation process places the source of ideas inside the company while open innovation approach treats customer as an external source of new ideas for the company (Von Hippel, 1978, Hyland et al., 2006, Chesborough 2003, Bjork and Magnusson 2009). • Process of innovation requires collaboration of actors, activities and resources at intra- and inter-firm levels (Rothwell 1994). • That concept is based on well established relationships, which, in turn, require trust between the company and the partners with whom it cooperates for innovation. Mutual trust between partners is on the top of the list of factors that affect performance of collaboration (Gulati, 1995, Dyer and Hatch, 2004) • However sometimes distrust is usual.Thursday, September 13, 2012
    • SCOPE OF THE STUDY Purpose The main reason for taking this subject have been concerns raised by managers in relation to the possible use of customer relationships in the exploration and development of innovation in service companies. Therefore the paper deals with the issue of low innovativeness of Polish service companies. Literature addressed The impact of external actors on innovation of the company was discussed in the literature related to new product development (Wuyts et al., 2004), innovation (Laursen & Salter, 2006), business-to- business relationships (Håkansson et al., 2009; Chen et al. in 2011; Salunke et al. 2011). The recognized contribution of services to economic growth contributed to the studies of innovation within services (de Jong et al., 2003; Hauknes, 1998; Howells & Tether, 2004; Miles, 2005). However the impact of distrust relationships on collaboration with customer still needs clarification. Advertising companies Advertising companies were chosen for that study because this industry is defined as a “co-creation service” one, where a high level of participation of the customer is required to create the service and the service itself is advisory and problem-solving (Bolton and Saxena-Iyer, 2009).Thursday, September 13, 2012
    • SERVICE INNOVATION Aa and Elfring (2002) define service innovation as: new combination of services or service elements, reproduction of service, involvement of customer, adoption of technology. Mager and Sangiorgi (2005) suggest 3 dimensions of service innovation: • market - pricing and offering strategies are developed • organizational and production - processes and organizational models are invented • relational - the social and cultural aspects of service experience include the users’ perspective The presumed advantage of collaborating with customers for service innovation relates to: generation of service ideas and information about user requirements • comments on new concepts • assistance on development and testing of prototypes • assistance in diffusion (Chen et al. 2011) We are focused on cases of involvement of customer, inclusion of his perspective and integration of new knowledge in innovation process in advertising companies.Thursday, September 13, 2012
    • RESEARCH FRAMEWORK An open innovation model directs our attention to: • Social capital of advertising companies that is created by the sum of the actual and potential resources embedded within, available through and derived from the network of relationships possessed by an individual or social unit (Nahapiet and Ghoshal 1998). Parties that have high social capital should exchange information more easily and with bigger number of parties (Wu et al 2008) • Learning orientation, which allows incorporation of the innovative potential inherent in the relationships. Innovative companies are characterized by openness to comments and recommendations from the environment, particularly communicated by customers (Kanter 1988). Both inter- and intra-organizational cooperation needs relationships based on trust because it enables sharing of information. The impact of trust/distrust on social capital and learning orientation is discussed.Thursday, September 13, 2012
    • METHODLOGY CASE STUDY IN TWO COUNTRIESThursday, September 13, 2012
    • METHODLOGY CASE STUDY IN TWO COUNTRIES Ad industry Focal point is: •Trust •Learning orientation •Social capital •Innovation processThursday, September 13, 2012
    • METHODLOGY CASE STUDY IN TWO COUNTRIES Ad industry Focal point is: •Trust •Learning orientation •Social capital •Innovation process 1.Interviews in Poland (Case 1&2) 1.Interviews in Japan (Case 3)Thursday, September 13, 2012
    • METHODLOGY CASE STUDY IN TWO COUNTRIES Ad industry Focal point is: •Trust •Learning orientation •Social capital •Innovation process 1.Interviews in Poland (Case 1&2) 1.Interviews in Japan (Case 3)Thursday, September 13, 2012
    • METHODLOGY CASE STUDY IN TWO COUNTRIES Ad industry Focal point is: •Trust •Learning orientation •Social capital •Innovation process 1.Interviews in Poland (Case 1&2) 1.Interviews in Japan (Case 3) 2.Discussing on Japanese case 2.Discussing on polish caseThursday, September 13, 2012
    • CONTEXT Poland Japan • transition → market economy • market economy • services: 54,5% of GDP • services: 75,7% • one of lowest level of innovation • one of the most innovative economies among OECD countries, below EU • focused on giving and receiving results average in a long time • lowest trust and collaboration among EU countries • Polish managers expect quick results of their actions because of the short-term orientationThursday, September 13, 2012
    • CASE 1 Opportunities lack of trust exploitative learning orientation short time relationships Customer is not perceived as a source of innovationThursday, September 13, 2012
    • CASE 1 Opportunities lack of trust exploitative learning orientation short time relationships Customer is not perceived as a source of innovationThursday, September 13, 2012
    • CASE 2 lack of trust lack of faith in the customer’s knowledge short time relationships Customer is kept out of the process of innovationThursday, September 13, 2012
    • CASE 2 lack of trust lack of faith in the customer’s knowledge short time relationships Customer is kept out of the process of innovationThursday, September 13, 2012
    • CASE 3Thursday, September 13, 2012
    • CASE 3 ClanThursday, September 13, 2012
    • CASE 3 Clan Always working with same Clan membersThursday, September 13, 2012
    • CASE 3 Clan Always working with same Clan membersThursday, September 13, 2012
    • CASE 3 Clan Always working with same Clan members Foster trustThursday, September 13, 2012
    • CASE 3 Clan Always working with same Clan members Foster trustThursday, September 13, 2012
    • CASE 3 Clan Always working with same Clan members Foster trust Incremental innovationThursday, September 13, 2012
    • CASE 3 Changing network New knowledge Radical innovationThursday, September 13, 2012
    • CASE 3 Outside Agent Changing network New knowledge Radical innovationThursday, September 13, 2012
    • JAPANESE PERCEPTION OF POLISH APPROACH Japanese respondents were surprised on distrustful relationship in Polish advertising industry. They said that they couldn’t create good works without the trust. Trust and cooperation with others is a basic and minimum request to do creative works in Japanese advertising industry. lack of trust and loyalty a lot of time is spent to define contract linear and intra innovation processThursday, September 13, 2012
    • POLISH PERCEPTION OF JAPANESE APPROACH The Polish managers from both researched agencies were surprised by the importance of customer relationships that are the deciding factor  in selection of the agency. Cooperation with thirds parties agencies is impossible in Polish circumstances. The Japanese concept of clans seems to be very interesting, however this solution may be difficult to transfer to Polish market Personnel exchange (clans) Foster the trust, contracts are not needed Network model of innovationThursday, September 13, 2012
    • CONCLUSIONS • Customer is not regarded as a source of innovation in both countries, but his role is different due to trust/distrust • Customer role: • in Poland at the beginning and at the end of process, • in Japan - customer’s perspective included, customer involved in the process • In polish ad agencies lack of trust limits the possibilities of collaboration with customer and other actors • Reinforcement of trust needs time, so companies might focus on development of social capital or modification / development of their learning orientation • Contracts should include elements of collaborations based on clans • Further research on development of relationships without confidence is needed • The presented observations are exploratory in nature, but they formed the basis to apply for a grant to Polish Ministry of ScienceThursday, September 13, 2012
    • THANK YOUThursday, September 13, 2012