This slideshow was used at "Organizational Innovation" workshop held in Valencia (February 2013) to present an academic article about my research work in progress on organizational innovation. Abstract: Organizational innovation is currently studied an important source of competitive advantage both for firms and for territories. This relevance is related to the widening of the innovation concept, which is no longer limited to technology. However, organizational innovation concept is still considered ambiguous and even Oslo Manual recognizes that its referential definition is still exploratory. Besides, innovation processes are no longer understood as lineal and predictive but complex and variable, so the analysis of organizational innovation becomes methodologically challenging. Consequently, new studies and adapted methods are required to acquire deeper knowledge about organizational innovation practice and its consequences for competitiveness. This research is precisely intended to reach thorough understanding about how an organizational innovation process is developed and interpreted in practice; and to generate new theoretical insights about it for further future research. Grounded theory is proposed as a suitable methodology for this inductive, longitudinal, field-based case study research. Preliminary results have helped reaching new theoretical insights about the suitability of Oslo Manual’s definition with practice and about the application of innovation generation and adoption process perspective to the study of organizational innovation. Work is still in-progress to consolidate first results, to guarantee their confirmability and to facilitate their transfer.

1. Understanding organizational innovation
from its practice
Maria Larraza Malkorra
Faculty of Social and Human Sciences – University of Deusto
Valencia, 21st February 2013

2. Introduction - widening innovation
From To
• Technology • Oslo Manual – 3rd edition
Concept • R&D • Organizational Innovation as a
commonly acknowledged source of
competitive advantage
Innovation
• Linear • Complex, self-referential, feedback
Process • Sequential loops
• Predictable • Requiring social and organizational
changes
Applied to  Still ambiguous (Lam, 2005)
ORGANIZATIONAL  Still methodologically challenging (Kirner et al. 2008)
INNOVATION (OI)  Understanding and diffusion still restricted
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3. Why is OI still ambiguous?
Two literature streams: Organizations // Innovation (Lam, 2005)
1. Structural forms and innovativeness All related but separated
2. Innovation as organizational learning and Lack of consensus about
knowledge creation in organizations a common conceptual
3. Organizations capacity to change & adapt framework
Differentiating from Organizational Change
• Oslo Manual 2005
– Implementing on business practices, Elements also
work organization or external relations appearing at
– New to the firm organizational change
– Strategic reason literature
• Som et al., 2012: Strategic reason oriented
to considerable improvement of competitive (Van de Ven, 1992;
advantage or economic performance Poole, 2004)
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4. Why is OI still methodologically challenging?
• Empirical basis for its measurement is weak and scattered
– Lack of reliable scales
– Intangibility of OI’s goals
Armbruster et al., 2006
• Complexity for measuring OI’s effects
– Different aggregation levels
– Long life cycles
– Internal differences on the extent of implementation
– Multidimensional relationship between OI and its outcomes
Kirner et al., 2008
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5. Purpose of this research
Deeply understand organizational innovation:
– How is the process developed and interpreted in practice?
Generate new theoretical insights about organizational innovation for
further research and diffusion
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6. Looking for references
• Management theory – process perspective vs. variance
– Applied to Organizational Change - resulting in 4 models, not
directly applicable to OI Van de Ven, 1992; Poole, 2004
• Innovation theory – different modes of innovation processes
– Generation: creating a new opportunity or making use of an
existing one in novel ways
• Creative process covering all efforts and activities combining
new and known ideas
– Adoption: assimilation of a product, service or technology
created elsewhere and new to the adopting organization
• Two sub-processes: initiation (from awareness to planning)
and implementation (practicing until it is part of routine)
Damanpour and Wischnevsy, 2006
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7. Methodology
• Research design proposal, applying process perspective to study OI
Inductive, longitudinal, field-based case study, well suited for
developing Grounded Theory
Eisenhardt, 1989; Glaser and Strauss, 1967
– It pays attention to the reality and evolution of the field study
– Without previous hypothesis
– Looking for results along the collection and systematic analysis
of field data
– Useful for feedback processes driving change dynamics over
time Tripsas, 2009
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8. Introduction to Grounded Theory (GT)
• Develop theories about barely known phemomenon
Purpose • Based on data directly collected on the field
Difference From mere description to theory
Focus on Behaviours - the engine of the meanings
Use on business
Elusive and misunderstood
research
• NO deep initial literature review
• NO hypotheses
Features • NO linearity: constant comparative cycle
• Fieldwork and data analysis: in paralell
• Ends with saturation, confirmability & final theory
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9. Developing GT on organizational innovation research
Field settings:
- Basque Industrial SME
- Theoretical sampling
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10. Data sources applied
2nd round
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11. Analytical process developed
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12. Organization of incidents - screenshot
Partially covered
for confidentiality
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13. Tag cloud example – “internal dynamics” cathegory
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14. Timeline example
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15. Analytical process developed
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16. Initial theory from Ennera case (1/2)
• Evolution from a project based workplace organization (until 2010)
to a functionally departamentalized model (2011)
– Further vertical decision-making process
– Partially developed due to deeply rooted horizontal
communication processes and business practices
– New to the organization innovation
• Main challenge arising in 2012:
– Formalizing business practices
– While keeping informal and family-like organizational culture
– Self-generated methods combined with commonly known ones
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17. Initial theory from Ennera case (2/2)
• Main driver for OI process - their strategic goal:
– Gain a competitive advantage in the renewable energy market
– offering a technology-based value-added servie
– mainly differentiated by their particular approach to market:
honest, transparent and coherent
• It is the reference to build their own organizational method
– No defined idea of a model to deploy
– No plans, no implementation steps
– OI process based on a sequence of actions and decisions
evolving on a trial and error dynamic
Process in progress
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18. Final theory – initial results
It emerges when theoretical explanation is found to the first theory
• Ennera’s OI is interpreted afterwards as the implementation of new
methods in
– Its business practices and workplace organization (interrelated)
– Currently with some hints about innovation on external relations
– New to the firm, with potential to be new to the market
– Driven by a broad strategic goal
• Ennera is developing a OI generation process combining self-
generated ideas with generally known ones, as part of a creative
process towards a previously unknown organizational model
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19. Limitations
• Work in progress
• Researcher as the main reseach tool – risk of bias:
– Immersion is a must to understand meanings in the field
– Requires data triangulation, rigour on field notes and own
consciousness
– To reach confirmability
Kawulich, 2005; Peñaloza&Cayla, 2006
• Applicability will be based on
– facilitating transference to other contexts
– opening future research tracks
Williams et al., 2005
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20. Conclusions
• Oslo Manual’s definition is relevant to clarify OI, but:
– Not enough differentiation from Organizational Change
– “New to the firm” degree fits
– But diffusion potential might be limited
– Strategic goal might be broad and not organizationally defining
• Generation / adoption innovation process distinction
– Is also applied to non-technological innovation
– Can help understanding better OI phenomenon
• Grounded Theory is a suitable methodology for studying OI
– Can be applicable to future research on management or
innovation processes
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21. Thank you!
Maria Larraza Malkorra
Blog: www.marialarraza.com
E-mail: maria.larraza@deusto.es
Faculty of Social and Human Sciences – University of Deusto