The Effect of Strategic Orientation on the Structure of an Organization and the Resulting Innovation Strategy

1. The Effect of Strategic Orientation on the Structure of an Organization and the Resulting Innovation Strategy Dissertation Phase: ready for pilot Committee: Dr. Jeen S. Lim (E-Business) Dr. Janet Hartley (BGSU, chair, Mgmt.) Dr. James Pope OM Dr. Thomas Sharkey (Intl. Business) David Marion University of Toledo

2. Innovation • Innovation Management Strategy has not been clearly defined in the literature • Innovation has been stated as a way an organization can grow its market share, revitalize an existing product and even create a competitive advantage • Innovation is typically studied in isolation to itself or in combination with one other construct David Marion University of Toledo

3. Purpose for Study • Define innovation more clearly • Portfolio method for measurement • Further development of three measures • Add more to organizational structure in innovation research • Attempt to display the advantages of different configurations David Marion University of Toledo

4. Structure of Study • This study will introduce the different functions of the organization that affect the outcomes of an innovation • The premise is that once the strategic orientation of the organization is decided, the functional orientations will align to create innovations that support the strategic mission David Marion University of Toledo

5. Overview of presentation • Present the conceptual model • Present the different aspects of the organization that contribute to product innovativeness • Present the theoretical basis for the study • Present the measures and hypotheses examples • Close with research methods and expected contributions David Marion University of Toledo

6. Control Variables Market Orientation Supply Management Orientation Manufacturing Orientation Innovation Management Innovation Management Strategy Product Portfolio Firm Performance Strategic Orientation Strategic Alignment Conceptual Model David Marion University of Toledo

7. Strategic Orientation andMarket Orientation • Miles and Snow (1978) Defender, Prospector, Analyzer, and Reactor; Venkatraman (1989) Aggressiveness, Analysis, Defensiveness, Futurity, Proactiveness, and Riskiness • Narver and Slater (1990) competitor orientation, customer orientation and interfunctional coordination; Kohli and Jaworski (1990) David Marion University of Toledo

8. Supply Management Orientationand Manufacturing Orientation • Shin (et. al., 2000) introduced the orientation as a focus on long-term supplier development, has not been included in organizational structure. • Mavondo (1999) used the Defender orientation as a representation of manufacturing orientation • Hausman (et. al., 2000) stated that it should be used as leverage for competitive strategy • Boyer (1998) introduced competitive priority constructs as representative of manufacturing strategy, they are cost, quality, delivery, and flexibility David Marion University of Toledo

9. Innovation Management Strategy • Griffin and Page (1996) present a study of six different innovation strategies in unison with Miles and Snow’s (1978) strategic orientations • Ettlie and Subramaniam (2004) use eight case studies with four types of innovation strategies driven by market pull, technology push, competition, or any combination David Marion University of Toledo

10. Product Portfolio • Portfolio management for product innovation has surfaced as one of the most important senior management functions (Cooper and Kleinschmidt, 1996; Cooper et al, 2001) • The studies concerning product portfolios have been mixed at best David Marion University of Toledo

11. Theoretical Foundation • The antecedents and consequences of innovation such as strategy, structure, alignment and financial outcomes • The foundation for this study will be based on three accepted theories, Contingency Theory, Core Competencies and Resource-Based View David Marion University of Toledo

12. Contingency Theory • This theory is based on the match or coalignment of an organization that occurs with its environment on at least two levels. The first level, consisting of the structural features such as each subunit, should be suited to the specific environment in which it exists. • The second level, is the differentiation and mode of integration • Each business unit will perform a distinct function, yet be integrated into the greater whole of the organization David Marion University of Toledo

13. Core Competencies • Through developing routines and dealing with the changing contingencies, the organization will develop effective skill sets and become more proficient with different technologies. • Core competencies are defined as the collective learning in the organization, especially how to coordinate diverse production skills and integrate multiple streams of technologies David Marion University of Toledo

14. Resource-Based View Theory • The RBV theory develops from two main assumptions, that there is heterogeneity of organizations, and that resources are immobile • The individualism of an organization is determined by the choices made • The resources immobility is represented by the organizations choices and access to resources David Marion University of Toledo

15. Research Questions • Research Question 1: Will the choice of a specific strategic orientation define a certain level of (a) market orientation, (b) supply management orientation, and (c) manufacturing orientation? • Research Question 2: Will the drivers of the innovation management strategy clearly define the organization’s degree of product innovativeness? • Research Question 3: What organizational structure combinations will perform the best? David Marion University of Toledo

16. Strategic Orientation andMarket Orientation Measures • Strategic orientation will use the measures from Sabherwal and Chan’s (2001) study concerning strategies in information systems • Narver (et. al., 2004) introduces proactive and responsive market orientation in conjunction with new product development • Hypothesis 1a: Strategic orientation will have a positive effect on the level of market orientation. David Marion University of Toledo

17. Supply Management Orientationand Manufacturing Orientation • Shin (et. al., 2000) measures the management, buyer and supplier relationships • Hypothesis 1b: Strategic orientation will have a positive effect on the level of supply management orientation. • manufacturing orientation will use Boyer’s (1998, 1999, 2000) measures from competitive priorities • Hypothesis 1c: Strategic orientation will have a positive effect on the level of manufacturing orientation. David Marion University of Toledo

18. Innovation Management Strategy and the Product Portfolio • The innovation management strategy is expected to be directed by the drivers and past experience of the organization • The measurement of the innovation management strategy will consist of the drivers that determine the innovation strategy and the management of other pertinent knowledge concerning innovations • The product portfolio will be measured according to the amount of each of the five types of product innovation developed • A respondent will be given 100 points to allocate between each type of product innovation David Marion University of Toledo

19. Strategic Alignment • Strategic alignment will be the indirect result of the different orientation’s alignment with the strategy of the organization • Hypothesis 7a: Strategic alignment will have a positive affect on the innovation management. • Hypothesis 7b: Strategic alignment will have a positive affect on the firm performance. David Marion University of Toledo

20. Control Variables • Organizational size, gross sales, employees, age and industry • Technology turbulence and market turbulence will be used from Narver (et. al. 2004) • Hypothesis 10: An organization that is affected by higher technological turbulence will be higher in market orientation and lower in manufacturing and supply management orientation. David Marion University of Toledo

21. Research Method • Manufacturing Orientation, Innovation Management Strategy and Strategic Alignment • Respondents will be project/program managers responsible for all facets of NPD in various industries • Pilot study will be conducted using local organizations • After clarification from the small sample, move to large sample survey; employ both mail and email • Final analysis will be conducted using both SPSS and LISREL David Marion University of Toledo

22. Expected Contributions • Insight into the strategy, structure and resulting innovations created within organizations. • Development of an Innovation Management Strategy measure • Adoption of a Manufacturing Orientation measure • Development of a stronger Supply Management Orientation measure • Better understanding of economic implications for an organization David Marion University of Toledo

23. Thank You! Dissertation Proposal Defense David Marion University of Toledo