Archives
Innovation and the dynamics of capability accumulation in project-based firms
Steffen Bayer
Innovation Studies Centre, Tanaka Business School
Imperial College London, South Kensington Campus, London, United Kingdom
David Gann
Innovation Studies Centre, Tanaka Business School
Imperial College London, United Kingdom
Abstract
Project-based firms face particular difficulties in managing innovation. This paper builds on the literature on concepts of project-based firms to develop an approach to innovation management linking work acquisition, execution and learning.
The conceptual framework is expressed in diagrammatic form, providing a succinct representation of the complex relationships and a starting point for analysis of the opportunities and challenges facing the management of project-based firms, including those impeding success, in particular the role of time pressures.
The analysis helps to elucidate findings from prior in-depth studies of a large number of engineering and design firms. The paper also provides pointers for future research.
Keywords
capabilities, innovation, project-based firms, modelling, system dynamics, learning
Article Text
This paper examines the relationship between project acquisition practices and innovation in project-based service organisations. Analysing project acquisition and innovation alongside project execution exposes key issues for commercial success in project-based firms (PBFs).
While the acquisition of work is an essential condition for survival in the short term, innovation and the development of new capabilities are preconditions for the exploitation of new markets and the adaptation to a shifting environment. Work acquisition and innovation are closely linked within project organisations. Not only does innovation enable the acquisition of new, complex and demanding work; the acquisition of work in turn, influences the potential path of learning and innovation as learning occurs predominantly in the context of project execution.
The paper highlights the way in which current practices and strategies for acquiring work relate to the development of innovative capabilities in PBFs. In this, particular attention is paid to the influence of time availability in the execution process on capability accumulation and innovation.
References
Barney JB (1986) Strategic factor markets: expectations, luck and business strategy. Management Science 32: 1231-41.
Bayer S and Gann D (2006) Balancing work: bidding strategies and workload dynamics in a project-based professional service organisation, System Dynamics Review 22: 185-211.
Brady T and Davies A (2004) Building project capabilities: From exploratory to exploitative learning, Organization Studies 25: 1601-1621.
Brady T, Marshall N, Prencipe A and Tell F (2002) Making sense of learning landscapes in project-based organizations. 3rd European Conference on Organizing, Knowledge and Capabilities, Athens, Greece.
Clegg S (1975) Power, rule and domination. A critical and empirical understanding of power in sociological theory and organizational life. London: Routledge and Kegan Paul.
Clegg S and Courpasson D (2004) Political hybrids: Tocquevillean views on project organizations. Journal of Management Studies 41: 525-547.
Cooper KG (1980) Naval ship production: A claim settled and framework built. The Institute of Management Sciences Interfaces 10(6): 20-26.
Courpasson D (2000) Managerial Strategies of domination. Power in soft bureaucracies. Organization Studies 21: 141-161.
Davies A and Brady T (2000) Organisational capabilities and learning in complex product systems: towards repeatable solutions. Research Policy 29(7-8): 931-953.
Davies A and Hobday M (2005) The Business of Projects. Cambridge University Press, Cambridge.
DeFillippi R (2001) Introduction: Project-based learning, reflective practices and learning outcomes. Management Learning 32(1): 5-10.
Diericks I and Cool K (1989) Asset stock accumulation and the sustainability of competitive advantage. Management Science 35: 1504-11.
Engwall M (2003) No project is an island: linking projects to history and context, Research Policy 32: 789-808.
Foss NJ (1996) Whither the competence perspective? In NJ Foss and C Knudsen (eds) Towards a competence theory of the firm. London and New York: Routledge, pp.175-200.
Gann DM and Salter AJ (2000) Innovation in project-based, service-enhanced firms: the construction of complex products and systems. Research Policy 29: 955-972.
Gann DM and Salter AJ (2003) Project baronies: Growth and governance in the project-based firm. DRUID Summer Conference, Copenhagen June 12-14.
Grant RM (2005) Contemporary Strategy Analysis 5th edn, Blackwell, Malden/MA, Oxford.
Groak S and Krimgold F (1989) The practitioner-research in the building industry. Building Research and Practice 17: 52-59.
Hobday M (1998) Product complexity, innovation and industrial organisation. Research-Policy 29: 871-893.
Hobday M (2000) The project-based organisation: an ideal form for managing complex products and systems. Research-Policy 29(7-8): 871-893.
King A and Tucci CL (2002) Incumbent Entry into new market niches: The role of experience and managerial choice in the creation of dynamic capabilities. Management Science 48: 171-186.
Lyneis JM, Cooper KG and Els SA (2001) Strategic management of complex projects: A case study using system dynamics. System Dynamics Review 17(3): 237-260.
Nam CH and Tatum CB (1997) Leaders and champions for construction innovation, Construction Management and Economics 15: 259-270.
Nelson RR and Winter SG (1982) An Evolutionary Theory of Economic Change, Cambridge, Mass: Harvard University Press.
Nohria N and Gulati R (1996) Is slack good or bad for innovation? The Academy of Management Journal 39(5): 1245-1264.
Mahoney JT and JR Pandian (1992) The resource-based view within the conversation of trategic management. Strategic Management Journal 13: 363-80.
Middleton CJ (1967) How to set up a project organization. Harvard Business Review March-April: 73-82.
Milling PM (2002) Understanding and managing innovation processes. System Dynamics Review 18: 73-86.
Montgomery CA and Wernerfelt B (1988) Diversification, Ricardian rents, and Tobin's q. RAND Journal of Economics 19: 623-32.
Patel P and Pavitt K (1997) The technological competencies of the world' s largest firms complex and path-dependent, but not much variety. Research Policy 26: 141-156.
Penrose ET (1959) The Theory of Growth of the Firm. Oxford University Press, Oxford.
Peteraf MA (1993) The Cornerstones of competitive advantage: A resource-based view. Strategic Management Journal 14: 363-80.
Perlow LA (1999) The time famine: Towards a sociology of work time. Administrative Sciences Quarterly 44: 57-81.
Prahalad CK and Hamel G (1990) The core competence of the corporation. Harvard Business Review 66.
Prencipe A and Tell F (2001) Inter-project learning: processes and outcomes of knowledge codification in PBFs. Research Policy 30: 1373-1394.
Repenning NP (2002) A simulation-based approach to understanding the dynamics of innovation implementation. Organization Science 13(3): 109-127.
Rindova VP and Kotha S (2001) Continuous ‘morphing': Competing through dynamic capabilities, form and function, Academy of Management Journal 44: 1263-1280.
Rockart S (2003) Calling spirits from the deep: the effect of social learning on industry structure and competitive dynamics. Fuqua School of Business, Duke University, working paper.
Rothwell R (1992) Successful industrial innovation: critical factors for the 1990s. R&D Management 22(3): 221-239.
Rudolph, JW and Repenning NP (2002) Disaster dynamics : understanding the role of quantity in organizational collapse. Administrative Science Quarterly 47(1): 1-30.
Rumelt RP (1984) Towards a strategic Theory of the firm. In RB Lamb (ed) Competitive Strategic Management. Upper Saddle River, NJ: Prentice Hall.
Sapsed JD (2005) How should ‘knowledge bases' be organised in multi-technology corporations. International Journal of Innovation Management 9: 75-102.
Saeed K (1998) Maintaining professional competence in innovation organizations. Human Systems Management 17(1): 69-87.
Sastry MA (1997) Problems and paradoxes in a model of punctuated organizational change, Administrative Science Quarterly 42(2): 237-275.
Schön DA (1983) The reflective practitioner. New York: Basic Books.
Sterman JD (2000) Business Dynamics: Systems Thinking and Modeling for a Complex World. Boston, Irwin/McGraw-Hill.
Teece DJ, Pisano G and Shuen A (1997) Dynamic capabilities and strategic management. Strategic Management Journal 18: 509-33.
Warren K (2002) Competitive Strategy Dynamics. Wiley, Chichester.
Verona G and Ravasi D (2003) Unbundling dynamic capabilities: an exploratory study of continuous product innovation 3: 577-606.
Wernerfelt B (1984) A resource-based view of the firm. Strategic Management Journal 5: 171-80.
Winter SG (2003) Understanding dynamic capabilities, Strategic Management Journal 24: 991-995.
eContent Home