Starting from early 21st century, companies increasingly use open innovation challenges to generate creative solutions to business problems. This revolution in business models and management strategy reflects the evolution supported by new technology. Employing this new strategic model, companies seek to innovate in a wide variety of areas, such as clothes designs, photography solutions, business plans, and film production. Contrary to closed innovation through which companies develop creative ideas internally, innovation challenges are catalyzed by socioeconomic changes such as the rapid advancement of information technologies, increased labor division, as well as ever-expanding globalization. Going hand in hand are trends such as outsourcing, occurring in parallel in the management area, which makes companies more agile and flexible. Multifaceted and multidimensional, open innovation challenges consist of various activities such as inbound innovation (acquiring and sourcing), outbound innovation (selling and revealing), or a compound mix of these two forms. It also pertains to complementary assets, absorptive capacity, organizational exploration, and exploitation. In an attempt to determine how to best support such an important component of society, scholars and practitioners continue to pursue effective innovation challenge architecture (the art or practice that guides participants’ interactions and exchange) that allows open collaboration among the crowd, as well as an approach for incorporating such architecture into technological platforms in order to improve the crowd’s creativity. This issue is addressed by focusing on existing research that delineates various types of effective architecture of innovation challenges. A theory-based framework guides this examination, and work from various scholarly perspectives of innovation challenges, knowledge management, motivated knowledge sharing, and crowdsourcing are integrated into this framework.
Article
Markus Beckmann and Stefan Schaltegger
Sustainable development is about meeting the needs of current and future generations while operating in the safe ecological space of planetary boundaries. Against this background, companies can contribute to sustainability in both positive and negative ways. In a world of scarce resources, the positive contribution of businesses is to create value for diverse stakeholders (i.e., goods in the actual sense of good services and things with value) without social shortfalls or ecological overshooting with regard to planetary boundaries. Yet, when value-creation processes cause negative social or ecological externalities, companies create disvalue for current or future stakeholders, thus undermining sustainable development. Sustainability in business therefore aims at the integrative management of value creation and disvalue mitigation. Various institutions, such as sustainability laws as well as quasi-regulatory and voluntary sustainability standards, aim at providing an enabling environment in this regard yet are often insufficient. Corporate sustainability therefore calls for proactive management. Neither value nor disvalue fall from heaven but are rather co-created or caused through the interaction with stakeholders. Transforming from unsustainability to sustainability thus requires transforming the underlying relational arrangements. Here, market and non-market stakeholder relations need to be distinguished. In markets, companies transact with customers, employees, suppliers, and financiers who typically have voluntary exchange relationships with the firm. As a result, stakeholders can use the exit option when the relationship causes them harm. Companies therefore need to know and respect their value-creation partners, their potential contributions, and above all their needs. Sustainability can influence these market relationships in two ways. First, as sustainability addresses environmental, social, and ethical issues that are otherwise often overlooked, sustainability can relate to specific goals and motivations that stakeholders pursue when they care about these matters. Second, sustainability can be linked to transaction-specific particularities. This can be the case when sustainability features lead to information asymmetries, higher transaction costs, or resource dependencies. Non-market relationships, however, can differ in that stakeholders are involuntarily affected by the firm. In many cases, such as environmental pollution, stakeholders like local communities experience disvalue but cannot simply walk away. From a sustainability perspective, giving voice to non-market stakeholders through dialogue and participation is therefore crucial to identify early-on potential issues where companies cause disvalue. Such a proactive dialogue does not necessarily present a constraint that limits value creation in the market. Giving a voice to non-market stakeholders can also help create innovations and mobilize valuable resources such as knowledge, legitimacy, and partnership. The key idea is to find solutions that create value not only for market stakeholders but also for a larger circle, including non-market stakeholders as well. Such stakeholder business cases for sustainability aim at the synergistic integration of value creation and disvalue mitigation.
Article
G. James Lemoine
Because leadership and creativity represent two of the most popular topics in the fields of management and organizational behavior, it should not be surprising that a large body of literature has emerged in which the two are jointly examined. Leadership is a commonly studied independent variable, whereas creativity is an outcome of paramount importance for organizations, and the two are also theoretically connected in several ways, suggesting that leadership could precipitate followers’ creative outcomes. This relationship pattern, called “creative leadership,” is the most common way leadership and creativity interact in the extant scholarship. Most of the existing work has focused on “facilitating” creative leadership, in which followers (but not leaders) generate creative outputs, often as a result of leadership behaviors and styles, relationships, or the characteristics of their leader. This work generally finds that positive leadership precipitates positive creative outcomes, although some findings have emerged suggesting that considerable nuance may exist in these relationships, a promising area for future research. Much less scholarship has examined how leaders might direct others to implement their own creative visions, or how leaders might integrate their own creative efforts with those of their followers to enhance overall creativity. Research on these forms of creative leadership is often limited to specific creativity-relevant industries, such the culinary field and the arts, but there is opportunity to examine how they might operate in more general organizational fields.
Other phenomena linking leadership and creativity are plausible but less understood. For instance, leaders may assemble creative contexts, engage in unconventional behavior, or emerge as leaders regardless of their hierarchical positions. Least explored of all is the idea of an opposite causal order—that of creativity affecting leadership, such that creative acts or experiences by an organizational member might drive or alter leadership emerging from themselves, their managers, or their followers. After review of the extant literature in these areas, potential topics for future scholarship are identified within and among the different research streams.
Article
Christina Maria Muehr and Thomas Lindner
An initial public offering (IPO) is the process within which private firms offer their shares to the public by form of a new stock issuance for the first time. IPOs have strong economic significance and performance fluctuations, which affect both firms and public markets. What is more, acquiring capital on a stock exchange outside of the firm’s home country comes with substantial benefits, including access to a greater and more diversified pool of resources and investors, more liquid markets, the opportunity to raise capital at a lower cost of capital, and increased capital retention for future investments. On the contrary, it also introduces multiple challenges, including higher underwriting, professional, and initial listing fees or lower analyst coverage, trading volume, and trading liquidity.
Integrating and building on literature emerging from multiple domains, including international business (IB), accounting, finance, entrepreneurship, management, and economics, international IPO research clusters around seven central themes: corporate governance, upper echelon, social partners, internationalization activities, institutions, technology, and market activities. Each of these themes employs unique theoretical perspectives and findings, which are at the forefront of advancements in international IPO research from its early beginnings and altogether provide a deep understanding with some potential avenues of future enquiries within the field.
Article
Mikko Ketokivi and Joseph T. Mahoney
Which components should a manufacturing firm make in-house, which should it co-produce, and which should it outsource? Who should sit on the firm’s board of directors? What is the right balance between debt and equity financing?
These questions may appear different on the surface, but they are all variations on the same theme: how should a complex contractual relationship be governed to avoid waste and to create transaction value? Transaction Cost Economics (TCE) is one of the most established theories to address this fundamental question.
Ronald H. Coase, in 1937, was the first to highlight the importance of understanding the costs of transacting, but TCE as a formal theory started in earnest in the late 1960s and early 1970s as an attempt to understand and to make empirical predictions about vertical integration (“the make-or-buy decision”). In its history spanning now over five decades, TCE has expanded to become one of the most influential management theories, addressing not only the scale and scope of the firm but also many aspects of its internal workings, most notably corporate governance and organization design. TCE is therefore not only a theory of the firm, but also a theory of management and of governance.
At its foundation, TCE is a theory of organizational efficiency: how should a complex transaction be structured and governed so as to minimize waste? The efficiency objective calls for identifying the comparatively better organizational arrangement, the alternative that best matches the key features of the transaction. For example, a complex, risky, and recurring transaction may be very expensive to manage through a buyer-supplier contract; internalizing the transaction through vertical integration offers an economically more efficient approach than market exchange.
TCE seeks to describe and to understand two kinds of heterogeneity. The first kind is the diversity of transactions: what are the relevant dimensions with respect to which transactions differ from one another? The second kind is the diversity of organizations: what are the relevant alternatives in which organizational responses to transaction governance differ from one another? The ultimate objective in TCE is to understand discriminating alignment: which organizational response offers the feasible least-cost solution to govern a given transaction? Understanding discriminating alignment is also the main source of prescription derived from TCE.
The key points to be made when examining the logic and applicability of TCE are:
(1) The first phenomenon TCE sought to address was vertical integration, sometimes dubbed “the canonical TCE case.” But TCE has broader applicability to the examination of complex transactions and contracts more generally.
(2) TCE could be described as a constructive stakeholder theory where the primary objective is to ensure efficient transactions and avoidance of waste. TCE shares many features with contemporary stakeholder management principles.
(3) TCE offers a useful contrast and counterpoint to other organization theories, such as competence- and power-based theories of the firm. These other theories, of course, symmetrically inform TCE.
