IN DEGREE PROJECT DESIGN AND PRODUCT REALISATION,SECOND CYCLE, 30 CREDITS
, STOCKHOLM SWEDEN 2019
Intra-organizational collaboration for innovationUnderstanding the dynamics of formal and informal structures
DILAN KAYA
KTH ROYAL INSTITUTE OF TECHNOLOGYSCHOOL OF INDUSTRIAL ENGINEERING AND MANAGEMENT
Intra-organizational collaboration for innovation
Understanding the dynamics of formal and informal structures
Dilan Kaya
Master of Science Thesis TRITA-ITM-EX 2019:474 KTH Industrial Engineering and Management
Machine Design SE-100 44 STOCKHOLM
Examensarbete TRITA-ITM-EX 2019:474
Intern kollaboration för innovation Förståelse av dynamiken mellan formella och informella
strukturer inom organisationer
Dilan Kaya
Godkänt
2019-06-17
Examinator
Sofia Ritzén
Handledare
Jennie Björk Uppdragsgivare
EVRY AB Kontaktperson
Tone Marie Wahlstrom
Sammanfattning Digitaliseringen har både lett till ökad produktutvecklingshastighet och ökad konkurrens. För att kunna anpassa sig till förändringar på marknaden och fortsätta vara konkurrenskraftiga, måste bolag besitta vissa färdigheter och förutsättningar för att innovera. Då interna innovationsaktiviteter kräver kostsamma resurser, finns det ett antal strategier för att istället bygga på sig kompetenser genom externa samarbeten, såsom öppen innovation och strategiska partnerskap. Däremot kommer dessa med egna utmaningar och kostnader, vilket på senare tid har lett till ett nytt fokus på den interna miljön, och ett nytt ljus riktats mot forskning inom internt samarbete för innovation. Denna studie ämnar därför att utforska de underliggande strukturerna och mekanismerna bakom intern kollaboration för innovation. Tidigare forskning inom ämnet har tittat på de formella och informella strukturerna för intern kunskapsdelning och gemensam problemlösning för innovation. Här har tidigare forskning varit entydig i att sociala interaktioner och tillit är viktigt för informell kollaboration, däremot har påverkan av centralisering visat motsägelsefulla resultat. Därför ämnar denna studie i att svara på forskningsfrågan: Vilka faktorer möjliggör formell och informell kollaboration? I syfte att svara på frågan har en kvalitativ studie bestående av 13 intervjuer med innovatörer och bolagschefer på en IT-tjänstfirma utförts. Intervjuerna ämnade ge insikt på hur kollaboration för innovation över avdelning-, och individnivå skedde, varvid de spelades in, transkriberades och analyserades enligt ett antal metoder. Resultaten delvis bekräftade tidigare forskning, och delvis bidrog med ett antal nya insikter, genom att peka på att centraliserad beslutsfattande, ledares egenintresse och tydliga mandat möjliggör för formell kollaboration; och decentraliserat beslutsfattande, sociala kontakter, medarbetares tankesätt och geografisk närhet möjliggör informell kollaboration. Viktigt specifikt för informell kollaboration var möjligheten för sociala interaktioner och ömsesidig tillit mellan medarbetare, samt nivån på deras kunskap om organisationen. Ytterligare upptäcktes en växelverkan mellan olika möjliggörande faktorer för formell och informell kollaboration, samt en ny insikt om när, hur, och var nivån av centralisering gör nytta för kollaboration. De empiriska resultaten pekade på att centraliserade beslut möjliggör på en strategisk, “makro”-nivå, medan decentraliserade beslut möjliggör på en lägre, “mikro”-nivå.
Nyckelord: Internt samarbete, samarbete, formella strukturer, informella strukturer, centralisering.
Master of Science Thesis TRITA-ITM-EX 2019:474
Intra-organizational collaboration for innovation Understanding the dynamics of formal and informal structures
Dilan Kaya
Approved
2019-06-17 Examiner
Sofia Ritzén Supervisor
Jennie Björk Commissioner
EVRY AB Contact person
Tone Marie Wahlstrom
Abstract Digitalization has led to a higher speed of product development and increased competition on the market. This has impacted how firms organize and manage innovation activities, where firms need to have certain abilities to quickly respond to the external environment in order to stay competitive in dynamic markets. As obtaining innovation capabilities internally require large amount of R&D expenditures, there are several strategies a firm can pursue in order to innovate more efficiently; such as pursuing an Open Innovation landscape, and investing in strategic alliances. However, as these strategies come with additional challenges and costs, focus has instead been turned to the internal environment, and collaborating more effectively internally for innovation purposes has received new light in recent research. Therefore, this study aimed at exploring the underlying structures and mechanisms of intra-organizational collaboration for innovation. Previous research on internal collaboration for innovation have investigated the formal and informal structures for knowledge sharing and joint problem solving. In this stream of research, there has been both consistent and mixed results on the enablers of collaboration. Firstly, previous research is consistent with the importance of trust and social interactions for informal collaboration. However, there exists mixed results on the impact of centralization on collaboration. Therefore, this thesis aimed to shed a new light on this topic, and answer the research question: What are the enabling factors for formal and informal collaboration? In an attempt to answer the research question, a qualitative study consisting of 13 interviews with innovation practitioners and corporate executives in the organizational setting of an IT-service company was conducted. The interviews aimed at providing insights on how collaboration for innovation across units and individuals was carried out, and were carefully recorded, transcribed and analyzed. The findings revealed both support for previous theory as well as provided with new insights, stating that centralized decision making, managers’ self-interest and a clear mandate enables formal collaboration; while decentralized decision making, social connections, employees’ mindset and geographical proximity enables informal collaboration. Particularly important for enabling informal collaboration is the possibility for social interactions between employees, their level of organizational awareness and their mutual trust. Furthermore, the results highlighted the presence of interdependencies between the enabling factors, and provided with a new insight on the impact of centralization by clarifying when and how centralization is an enabler of collaboration, and where firms benefit from decentralized decision making instead. The results indicate that centralized decision making enables collaboration on a strategic “macro” level, and decentralized decision making enables collaboration on a “micro” level.
Keywords: Internal collaboration, collaboration, formal and informal structures, centralization.
FOREWORD
Firstly, I want to thank EVRY for allowing me to conduct my first research project together with them, and especially my industrial supervisor Tone Marie Wahlstrom, for giving me this unique opportunity. I further want to extend my gratitude towards everyone who devoted their time into participating in meetings and interviews with me for the purpose of this research, and encountering me with an openness rarely found elsewhere.
Secondly, I want to thank my friends and family who has stood by my side during this time, always supporting me whenever I would be in need of it.
Lastly, I want to send my deepest thanks to Jennie Björk, associate professor in Product Innovation at KTH, for being my supervisor in this thesis. You not only taught me what research is, but inspired me to wanting to spend hours into learning everything about it. For someone who is not accustomed to the methodologies of research, I was forced to becoming comfortable in the uncertainties that research sometimes consist of. In the end, I found myself inspired to a level where I was not able to stop writing.
Dilan Kaya
Stockholm, June 2019
TABLE OF CONTENTS
SAMMANFATTNING (SWEDISH)
ABSTRACT
FOREWORD
TABLE OF CONTENTS
1 INTRODUCTION 1
1.1 Background 1
1.2 Purpose 2
1.3 Delimitations 2
2 THEORETICAL FRAMEWORK 3
2.1 Inter-organizational collaboration for innovation 4
2.2 Intra-organizational collaboration for innovation 5
2.3 Interplay between intra- and inter-organizational collaboration 7
2.4 Formal and informal structures for collaborating 8
2.5 Summary 12
3 METHOD 15
3.1 Research approach 15
3.2 Data collection 15
3.3 Data analysis 18
3.4 Method assessment 20
4 EMPIRICAL FINDINGS 23
4.1 Organization context 23
4.2 Meeting external drivers of innovation 23
4.3 Formal structures for collaboration 24
4.4 Informal structures for collaboration 27
4.5 Social networks 34
5 ANALYSIS 39
5.1 Enabling factors for formal collaboration 39
5.2 Enabling factors for informal collaboration 40
5.3 Interdependencies between enabling factors 43
6 DISCUSSION AND CONCLUSION 47
6.1 Discussion 47
6.2 Practical implications 49
6.3 Theoretic contribution 51
6.4 Conclusion 51
7 LIMITATIONS AND FUTURE RESEARCH 53
8 REFERENCES 55
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1 INTRODUCTION This chapter describes the background of this study which will guide the reader through the motivation of the purpose. Lastly, it will acknowledge the limitations of the research which will define the scope in the following chapter.
1.1 Background Digitalization has transformed how firms operate strategically for innovation, where firms that are too hesitant to invest in innovation suffer financially over time (Christensen, 2008). In an attempt to put it simply, Boer (2001) defined innovation as “the creation of a new product-market-technology-organization-combination” which exists in three different settings; namely product-, process- and organizational innovation. Further, Pisano (2015) coined four different levels of innovation by combining business model innovation with technological innovation; namely routine-, disruptive-, architectural- and radical innovation.The need for continuous innovation within firms, both incremental and radical, is now widely recognized as a strategy for survival in a rapidly changing competitive environment. New business models and advancements in technology have enabled shorter product-to-market time, increased the speed of product development and contributed with innovations that have resulted in the disruption of multiple industries. Known cases include for example the semiconductor industry in the mid 90’s. The transition from vacuum tubes to transistors, and from transistors to semiconductors, led to the fall of incumbents such as R.C.A, and the rise of new actors such as Texas Instruments and Motorola (Tushman and O’Reilly, 1996). Similarly, the rise of Apple and the fall of Nokia in the mobile phone industry is an additional excellent empirical evidence of how technology innovation disrupted the mobile phone industry and how incumbents that are not seizing the urgency to innovate, end up failing (Vuori and Huy, 2016).
One stream of research that addresses a firm’s prerequisites for adapting to market changes is the one of a firm’s dynamic capabilities. Initially originating from the resource based view (Barney, 1991), dynamic capabilities refers to the firm’s ability to integrate and reconfigure internal and external resources in a rapidly changing environment (Teece and Pisano, 1997) where resources refer to the tangible and intangible assets that are internal and external to a firm, such as knowledge, IP, partners, employees, processes, culture and organizational reputation (Barney, 1991). Possessing dynamic capabilities is argued to consequently lead to a long-term competitive advantage. Teece’s (2007) definition of dynamic capabilities goes well in hand with Tushman and O’Reilly’s (1996), who argued that by exploiting existing knowledge and exploring new knowledge, firms can adapt to changing markets. However, this requires the firm to have certain capabilities for innovating (Christensen, 2000; Tushman and O’Reilly, 2008) and an innovation strategy to go along with it (Pisano, 2015). Thus, a firm’s innovation capabilities reside in their resources, processes and values, and are directly consequential to what innovations they can produce (Christensen and Overdorf, 2000; Pisano, 2019).
Another research stream that addresses the firm’s ability to build and manage their capabilities in order to adapt to a changing market is Open Innovation. First coined by Henry Chesbrough in 2004, the terminology Open Innovation refers to a new paradigm of organizing for innovation,
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where firms open up their closed innovation approaches and allow for both inflow and outflow of resources during different steps of the innovation process (Chesbrough, 2012). Except for the main goal of reducing the amount of “false negatives” as initially presented by Chesbrough (2004), Open Innovation aims to allow firms to increase their R&D capabilities at the same time as reducing costs for new product development through collaboration with competitors, customers and users, and sharing unutilized patents with actors outside of the own business.
However, firms that are aiming to gain competitive advantage through innovation by exploiting existing capabilities and obtaining new ones face numerous challenges. For example, when exploring and exploiting knowledge simultaneously, managerial challenges arise when employees have to meet dual structures and demands. Furthermore, the management of collaborations, the coordination of resources and the establishment of an organizational culture of openness in an Open Innovation landscape can lead to a high cognitive overload for managers (Frishammar, 2018). Thus, developing multiple, broad competencies or maintaining them in the face of rapid technological changes is difficult for firms (Mitchell and Singh, 1996). Transactional considerations may make the purchase of technologies infeasible or prohibitive, leaving internal development and collaboration as the only viable alternatives. By tapping into the developed competencies of other firms, the focal firm can enhance its own knowledge base and thereby improve their innovation performance. Furthermore, digitalization and an increased connectedness has enabled lower transaction costs for knowledge and information acquisition which can contribute to a wider set of resources being accessed (Colombo et. al. 2011). Easier access to internal and external knowledge and resources between people and entities can in turn positively contribute to the firm’s innovation output and effectivize internal processes (Laursen and Salter, 2006), which has led to best practices for internal- and external collaboration to become a growing area of interest for both researchers and practitioners.
1.2 Purpose The new competitive environment poses several challenges for firms, and it is known that firms have to innovate quicker and use their tangible and intangible assets more efficiently in order to maintain competitive advantage. For firms, this means to be able to coordinate internal processes in a way that stimulates innovation activities and strengthens external alliances (Chen et. al. 2013). Therefore, this thesis aims to explore intra-organizational collaboration for innovation and its underlying structures and processes. Additionally, as previous research has acknowledged the possible interplay between intra- and inter-organizational collaboration, it is of interest to look into external collaboration for innovation as well.
1.3 Delimitations The number of informants that were interviewed in the qualitative study were limited due to the limited time frame and in relation to both the size of the company and the research focus. Furthermore, as the field is very broad, it will not go into detail in the antecedents and challenges of each component of collaboration, as these are tangential to other fields outside of innovation management. Instead, it will provide a holistic overview of intra-organizational collaboration in relations to previous research on collaboration within innovation management specifically.
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2 THEORETICAL FRAMEWORK Given the aim to explore intra-organizational collaboration for innovation, as well as looking into external collaboration, this section will at first tackle the definition of collaboration in the context of internal and external collaboration for innovation. Secondly, it will disclose how inter- and intra-organizational collaboration can impact the innovation output of a firm, the challenges that they are subjected to and whether there exists an interrelationship between them. As the theory unfolds, it will further disclose the formal and informal structures of collaboration and their contingencies. Lastly, the covered literature is synthesized in a summary with the aim to arrive to a research question that will set the basis of the research.
2.1 Inter-organizational collaboration for innovation Inter-organizational collaboration is the relationships that a firm has to external actors in a network, such as customers, suppliers, research institutes and partners. It is mainly motivated by a firm’s incentives for enhancing new product development and innovation by reducing internal development costs and gaining access to resources, knowledge and alternative delivery channels, see Table 1. There have been several research streams focusing on inter-organizational collaboration; such as external sourcing of innovation (Rothwell et al., 1974; von Hippel, 1976; Rosenberg, 1982), strategic alliances (Doz, 1996), social capital (Ahuja, 2000) and open innovation (Chesbrough, 2004).
Table 1. Inter-organizational collaboration for innovation.
Innovation activities Impact on innovation Main challenges
External sourcing of ideas (see eg. Von Hippel, 1976) External sourcing of technology (Mention, 2011) External sourcing of development (Chesbrough, 2004) External sourcing of marketing channels (Chesbrough, 2012)
Product innovation and novelty (see eg. Lin and Chen, 2006; Nieto and Santamaria, 2007, 2010) Cuts cost that can be spent on innovation instead (Chesbrough, 2004) Quicker deliveries to market (see eg. Tessarolo, 2007)
Managing multiple partnerships simultaneously (Ahuja, 2000; Frishammar, 2018) Absorbing, translating and exploiting knowledge (see eg. Mention, 2011) “Not invented here”-syndrome (see eg. de Burcharth et al., 2014; Antons and Piller, 2015)
Both internal and external collaboration can have a significant impact on a firm’s innovation output, see Table 1. External collaborations for resources such as technology, development and IP can significantly reduce the costs of R&D, increase the speed of development, expand the
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capabilities within a firm and increase the quality and innovation novelty of products. The latter however, is moderated by the number of cooperating firms, as the focal firm’s absorptive capacity is challenged by too many collaborations with other entities.
Determining the benefits of inter-organizational collaboration on innovation is both complex and consists of paradoxical results, where research has shown mixed impacts. While the body of literature is mostly consistent with that inter-organizational collaboration positively affects the speed of the product development process and the quality of the products delivered (Hoegl and Wagner, 2005; Faems et. al., 2005; Tessarolo, 2007), there exists mixed results on the impacts of inter-organizational collaboration on product innovativeness. Knowledge integration between collaborating organizations in the manufacturing industry have shown positive impacts on innovation (Lin and Chen, 2006), where the product novelty has been moderated by the type of partner and firm size (Nieto and Santamaria, 2007; Nieto and Santamaria, 2010). Whereas some suggest that partnerships with universities and research institutes contribute to the degree of novelty of products (Knudsen, 2007; Su et al., 2009), others contradict this by revealing that knowledge sourcing from the science base do not lead to innovation novelty due to difficulties in absorbing and exploiting the accessed knowledge (Mention, 2011).
Challenges with absorptive capabilities have been identified during several occasions. Previous studies have identified the negative correlation between the number of cooperating firms and the degree of novelty of products (Kotabe and Swan, 1995; Ahuja; 2000; Su et al., 2009), where Ahuja’s (2000) study on direct and indirect ties between the focal firm and its external partners suggest that engaging in too many partnerships could lead to poor absorptive capability and acting on opportunities for innovation. This goes hand in hand with the challenges that organizations experience pursuing an Open Innovation landscape. In an Open Innovation landscape, managers struggle dealing with the cognitive challenge of managing several partnerships with different entities simultaneously (Frishammar, 2018). Furthermore, organizational culture has a significant impact on the implementation of Open Innovation in firms, where firms struggle with the “not invented here”-syndrome amongst their employees (Chesbrough, 2012). The syndrome itself has been widely used in innovation research (for example, de Burcharth et al., 2014) and is the “negatively shaped attitude of an individual toward knowledge” (Antons and Piller, 2015) which results in either “suboptimal utilization” or “rejection”. In practice, this means that employees have a negative attitude towards knowledge coming externally into the organization, which results in bias during decision making processes or the unwillingness to fully absorb the knowledge.
The challenges with knowledge absorption, along with the unwillingness to absorb knowledge and to exploit resources that enters the organization, will in turn have an impact on the innovation output of the focal firm as it will reduce its ability to take advantage of the innovation enablers being provided.
2.2 Intra-organizational collaboration for innovation Intra-organizational collaboration refers to the interrelationships between departments, units and individuals within a firm, for example through cross-functional teams in projects or knowledge exchange between individuals. There exist several perspectives on how intra-organizational collaboration contributes to the innovation output in a firm, see Table 2, where the most researched
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on involves resource and knowledge exchange between people and units. This chapter will therefore disclose how collaboration can unfold itself inside of organizations, its consequences on innovation and what challenges it is subjected to.
Table 2. Intra-organizational collaboration for innovation.
In both De Clercq et al. (2011) study on 232 firms in different industries, as well as Carnabuci and Operti’s (2013) study on the semiconductor industry, collaboration was defined as the interconnected network that allowed for joint problem solving and the exchange of different types of “sticky” knowledge for product innovation. Furthermore, the effective combination of knowledge across departments through collaboration could lead to the reinventing of existing competencies within employees (Sherman, Berkowitz and Souder, 2005), as innovation is generated by highly knowledgeable employees and the combination of different types of knowledge residing within them (Ayers, 1997; De Luca and Atuahene-Gima, 2007; Colombo et al, 2011).
Innovation activities Impact on Innovation Main challenges
Joint problem solving (De Clercq et al. 2011; Carnabuci and Operti, 2013) Recombination of existing technologies (Carnabuci and Operti, 2013) Knowledge exchange and combination (see eg. Tsai, 2002; Colombo et al, 2011) Receiving and exploiting market related information (Atahuene-Gima, 2005) Internal coordinating of task procedures in NPD process (Chen, Y., et al., 2013) Gatekeepers (Allen, 1977; Arora, 1987) Cultural brokers (Casciaro et. al., 2019)
Product innovation (De Clercq et al. 2011; Carnabuci and Operti, 2013) Conduct more innovation experiments (Chen, Y., et al., 2013) Responding to the market quicker (Atahuene-Gima, 2005) Responding to external partners quicker (Chen, Y., et al., 2013) External insourcing of knowledge (Allen, 1977; Arora, 1987) Cross-silo leadership (Casciaro et. al., 2019)
Absorbing, translating and exploiting knowledge (see eg. Szulanski, 1996) “This is how we do it here”-mentality (Ahuja and Lampert, 2001) “Not invented here”-syndrome (see eg. de Burcharth et al., 2014; Antons and Piller, 2015) Coopetition - competing for same internal resources (Tsai, 2001) Smooth and efficient communication (Cross et. al., 2011; De Luca et al., 2010; Tessarolo, 2007)
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From an organizational view, a beneficial attribute of business units is that they have recombinant capabilities that allow them to be modular and thus remove, add and recombine firm resources effectively (Eisenhardt and Martin, 2011). A firm’s recombining capabilities from a product innovation view, is the ability to combine and reuse existing technology within the firm (Carnabuci and Operti, 2013). Furthermore, the recombinant capability for product innovation is dependent on the level of integration of the firm’s intra-organizational network and the diversity of its knowledge base, meaning that collaboration combined with a diverse knowledge base among individuals within a firm may lead to product innovativeness. However, collaboration amongst individuals without a diverse knowledge base may reduce the degree of novelty of innovations, as inventors tend to stay in areas familiar to them and reuse existing technologies within the firm to reduce unnecessary risk (Ahuja and Lampert, 2001). A successful practical example of how collaboration between business units have create economic value, is through Apple’s integration of their products into one common platform.
Knowledge transfer between employees in units require organizational capabilities for absorbing, translating and reusing the knowledge that is being provided. Furthermore, capabilities for assembling and combining knowledge is crucial for innovation output, i.e technological recombination. In the previously mentioned study by Carnabuci and Operti (2013) on collaborative networks between inventors in a firm, it was suggested that high knowledge diversity between inventors inhibited innovation and increased the risk of failure (through the act of recombination of the firm’s existing technologies) as the inventors had to invest time into translating each other’s knowledge at the expense of effective knowledge flow. In cross-functional collaboration, different functions are good at absorbing different type of knowledge. Furthermore, culture within a firm also impacts the extent to how much individuals exit their own comfort zones and explore new fields, as a “this is how we do it here” mentality can affect the reasoning of employees.
Hence, integration of knowledge bases is an aspect that has not been taken into consideration in the majority of the literature on collaboration, though considered to be vital for product innovativeness. Tsai and Ghoshal (1998) along with Szulanski (1996) have pointed out the importance of managers to understand each other’s departments for successful integration of the respective knowledge bases. Szulanski’s research in particular, on internal stickiness of knowledge transfer in eight companies, revealed that the three most important origins of knowledge stickiness which also acts as knowledge barriers are: the lack of absorptive capacity of the recipient, causal ambiguity and the relationship between the recipient and the source of the knowledge.
The amount of slack resources available to the firm also has an impact on product development performance and thereby innovation, as available resources can allow for diverse innovation experiments and activities to be conducted (Chen et al., 2013). The amount of slack available in the firm is consequently a result of how well coordinated the firm’s intra-organizational collaboration is, for example through efficient knowledge exchange that reduces costs for information processing (Tsai, 2002; Badrinarayanan and Arnett, 2008) good internal communications, and smooth workflows without overlapping phases in cooperative projects (De Luca et al., 2010; Tessarolo, 2007).
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2.3 Interplay between intra- and inter-organizational collaboration for innovation The literature is consistent in that both internal and external collaboration contributes to a firm’s innovation output and its ability to provide innovative services towards its customers. Extending that rational view, there has been some research pointing out the interlinkages between intra- and inter-organizational collaboration. It has been suggested that firms who are good at coordinating their internal task procedures are able to release slack resources that in turn can be used to focus on the needs and requirements of external partners, or to conduct innovation experiments that contribute to the firm’s new product development (Chen et al., 2013). Furthermore, well executed intra-organizational coordination helps firms to manage information more effectively in terms of getting access to, exploiting and distributing information further. This could in turn affect the quality of inter-organizational collaborations. For example, a mechanism could be a collective action by units for the gathering and exploitation of market-related information in order to respond to the external environment quicker (Atahuene-Gima, 2005). Additionally, the ability to efficiently respond to external partners will release even more resources internally to spend on innovation activities. Similar to external collaborations, this also affects the speed of processes such as product development projects, where good coordination internally has a positive effect on the speed of delivery (De Luca and Atuahene-Gima, 2007; Atuahene-Gima, 2005).
Another action that firms can undertake internally in order to quicker respond to the external environment, is to facilitate technological gatekeepers and cultural brokers in the organization. Technological gatekeepers are individuals in a company who gather information from non-traditional external sources such as events, seminars and discussions, and brings this sourced knowledge back into the organization to share with colleagues (Allen, 1977; Arora, 1987). Additionally, the gatekeeper has a personal interest of gathering knowledge and has the capabilities of evaluating if the information is relevant to be applied onto specific problems in the own firm, or if the information would be beneficial for other colleagues in the own firm. Lastly, the gatekeeper also has a well-developed network both inside and outside of the organization. This greater exposure of knowledge leads to fellow colleagues reaching out to these individuals in particular, even though the same knowledge could be retrieved through other intermediates (Yates, 1970).
Recent emphasis has also been made on the beneficial outcomes that employees with boundary spanning attributes have on a firms’ external activities. Horizontal collaborations between functions, offices and organizations have been identified as the main antecedent to innovation and business development-opportunities today, where employees who reach out to colleagues in complementing areas of expertise learn and gain skills faster than employees that stay within their own silos (Casciaro et. al., 2019). These employees go under the name of “cultural brokers”, and have experiences from different industries, areas of expertise and functions, subsequently being able to act as an adhesive, or bridge, between them. Consequently, firms that are able to develop and train these interdisciplinary boundary spanners, achieve better customer relationships and consequently higher margins. In a study on more than 2000 global teams found that teams where there existed a cultural broker, outperformed teams without any cultural brokers (Jang, 2018).
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What additionally can be observed is the common barriers for innovation that organizations experience with internal and external collaborations, where knowledge absorption and organizational culture are two challenges that inhibit effective knowledge flows and the willingness to collaborate. Thus, a firm’s internal capabilities for coordinating intra-organizational collaboration seem to be a critical factor for obtaining and managing external collaborations as well. Therefore, it is of interest to further investigate in the internal structures and processes that can facilitate effective internal collaboration.
2.4 Formal and informal structures for collaborating Research on intra-organizational collaboration has mainly investigated two perspectives on collaboration: structures for initiating collaborations between managers, units and teams; and the motivating factors that underlies them. These two perspectives of course operate co-dependently as one cannot exist without the other, where their underlying mechanisms rely on a firm’s formal and informal structures, see Table 3.
Gupta and Govindarajan (1991) argued that it is a firm’s formal organizational design that is critical for shaping its knowledge exchange patterns cross-business units and thereby impacts its innovation capabilities. On a similar note, Jassawalla and Sashittal (1998) stressed that formal structures are important for successful cross-functional collaboration in the innovation process. However, research on social network analysis has shown that informal structures emerges within firms, which can have an equal, or even more crucial, role in motivating collaboration for innovation between employees and departments (see eg. Tsai and Ghoshal, 1998; Nahapiet and Ghoshal, 1998; Cross et. al., 2002). Nonetheless, both have an important role in whether knowledge and information between individuals, teams and units get unlocked, absorbed and exchanged for innovation (De Clercq et. al., 2011). Therefore, this chapter aims to unfold the formal and informal structures for collaboration in a firm, and the underlying factors that influence them.
Table 3. Formal and informal structures for collaboration and their enabling factors.
Formal structures Informal structures
Collaborations
Organization design (matrix, functional, geography, product) (see eg. Gupta and Govindarajan, 1991) Strategic relatedness (Tsai, 2001) Firm-wide incentives (Gupta and Govindarajan, 1986) Cross-BU team creation (Tsai, 2001) Competing business units (Tsai, 2001) BU task force (Gupta and Govindarajan, 2000)
Social events (Eisenhardt and Martin, 2010) Social relationships (see eg. Tsai, 2000; Cross et. al. 2002) Shared goals (Tsai, 2002) Financial incentives (Hill et. al. 1992) Cultural brokers (Casciaro et. al., 2019) Gatekeepers (Allen, 1977; Arora, 1987)
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Enabling factors
Centralization (Hill et. al. 1992; De Clercq et. al. 2011) Top management prioritization (Jassawalla and Sashittal, 1998) Induced shared responsibility (Tsai, 2000) Autonomy provided (see eg. Jassawalla and Sashittal, 1998) Deliberate learning activities (Eisenhardt and Martin, 2010) Trust (see eg. Jassawalla and Sashittal, 1998; Tsai, 2000; Hansen 1999)
Social interaction (Tsai, 2002; Eisenhardt and Martin, 2010; Tsai and Ghoshal, 1998) Trust (see eg. Jassawalla and Sashittal, 1998; Tsai, 2000; Hansen 1999) BU-managers self-interest (Eisenhardt and Martin, 2010) BU-members self-interest (Eisenhardt and Martin, 2010) Common goals and expectations (Jassawalla and Sashittal, 1998)
Formal structures The formal structures of collaboration within an organization are the mechanisms established and pursued by the firm in order to enable resource sharing and knowledge exchange between individuals and departments; such as the organization design, firm-wide incentives and strategic relatedness, see references in Table 3.
In Gupta and Govindarajan’s (1986) study on resource sharing in eight Fortune 500 companies, it was revealed that firm-wide incentives for business unit managers led to more cross-BU collaborations and higher business unit performance. These findings were confirmed and extended by Hill et. al. (1992) in a survey of CEOs in 184 Fortune 1000 companies where, except for firm-wide incentives, centralized decision making, was also revealed to be correlated with more cross-BU collaboration and higher economic returns. Thus, the previous research supporting the corporate centric process with firm-wide incentives and centralization at its forefront, suggest that corporate executives has the most superior information in order to locate the best cross-BU collaborations. However, there has been some conflicting research on how centralization impacts collaboration and thus knowledge flow for innovation. Gerwin and Moffat (1997) claimed that too much centralization leads to functional managers conducting their own specific tasks with no exploration for innovative opportunities through collaboration with other functions or units. On the other hand, De Clercq et. al. (2011) argued that the level of centralization of departments along with the interconnectedness of their performance measures has a positive impact on interdepartmental collaboration.
Jassawalla and Sashittal (1998) also highlighted a couple of organizational factors that are dominant in their contribution to collaboration for innovation; the priority that senior management gives to the development of new products, and autonomy provided during the new product development process. The notion of providing autonomy was also shared by Eisenhardt and Martin (2010). In their study on six firms in the software industry, they revealed that decentralized decision making on collaboration that originated from the business units rather than from corporate executives, motivated for more cross-BU collaborations. This contrasts with previous theory. The reasons behind this were that a business unit team decision for collaboration often involved more
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information at hand that supported and motivated the collaboration, as well as providing an ownership to the BU members. Additionally, deliberate learning activities prior to deciding upon collaborations increased the performance of the collaboration.
Furthermore, they argued that creating multibusiness teams consisting of general managers from different units, instead of highly centralized processes consisting of executive managers, yielded economically high-performing collaborations as general managers have the most relevant information on both a macro- and micro level of the firm. General managers operate in the proximity of strategy and tactics on a cross-BU level, as well as have the detailed insights on how collaboration is executed in the firm. This aligns with the findings of Tsai’s (2002) research on collaboration between business units in a multiunit organization, which investigated the formal and informal organizational coordination mechanisms and how they affect the internal knowledge sharing between competing business units within a firm. His findings revealed that formal hierarchical structures, in the form of centralization, inhibited knowledge sharing while informal structures, in the form of social interaction, had a positive effect on knowledge sharing. However, there of course exists formal incentives that deliberately either hinder the initiation of collaborations or promote it, such as having competing business units, or the creation of cross-BU teams.
Induced shared responsibility from top management also influences collaboration, and refers to the incentives for department managers to engage in collaboration with each other and aspire for firm level goals rather than only focusing on individual goals. Furthermore, strategic relatedness between business units is argued to incentivize the creation of interunit linkages between managers of business units (Tsai, 2001). Similarly, Gupta and Govindarajan’s (2000) study on 75 multinational firms revealed that formal activities among business units generated more cross-BU collaborations through knowledge flows, and include activities such as cross-BU task forces and liaisons.
Informal structures Social network analysis has enabled the identification of informal structures for knowledge and information sharing that has a significant impact on collaboration. Informal structures have gained huge importance in the literature on collaboration the last decade, where social interactions, trust and shared goals are regarded as antecedents to initiating collaboration through informal means (Tsai, 2002). Social relationships between employees and business units have been considered critical for creating interunit network links that allow for horizontal knowledge sharing (Tsai, 2000; Tsai, 2002) and thus contribute to innovation. It has been argued that social interaction between managers both enhances the willingness to initiate collaborations between units and departments (Eisenhardt and Martin, 2010), as well as stimulates the close cooperation between actors to enhance high quality knowledge exchange for innovation-related goals (Tsai and Ghoshal, 1998).
Previous research has highlighted how effective communications internally improve the firm’s adaptability during problem solving, which subsequently reduces the speed of the development process (Brown and Eisenhardt, 1995) and reduces costs. Therefore, social relationships amongst managers have been suggested to help the initiation of collaborations in terms of finding and smoothly working together to achieve them effectively. However, there exists mixed results on
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the influence of social interactions on collaboration. Gupta and Govindarajan’s (1986) study of eight manufacturing firms suggested that familiarity between general managers did not lead to more resource sharing through cross-BU collaboration. On a similar note, Eisenhardt and Martin (2010) revealed that social ties are not sufficient conditions for generating high-performing collaborations as managers with great social networks engaged in both high and low-performing collaborations.
Cross et. al. (2002) social network analysis on a large petroleum organization revealed certain critical factors for the knowledge-based dimensions of social relationships and collaboration; knowing what someone knows; gaining timely access to that person; creating viable knowledge through cognitive engagement; and learning from a safe relationship. Thus, in short: “know-what”, “know-who”, and “know-how”. Especially interesting for collaboration, is firstly, the access gained to knowledgeable people relevant to one’s problems. This meaning, the geographical proximity and technical environment has an influence on whether people will consult each other and engage in collaboration or not. For example, when managers in the petroleum company moved one product division to another floor, the physical separation inhibited the informal meetings and interactions that were carried out with other divisions on the previous floor, and thus impacted the firm on a much higher level. Therefore, executives initiated formal meetings and adopted an instant messaging system in order to facilitate the communication between the product divisions that previously relied on informal structures. Secondly, Cross et al. (2002) emphasize on the positive effect of relationships with mutual trust on knowledge sharing and learning, as well as how the lack of trust can block learning on both individual and group level, detrimental for collaboration.
The development of trust in social relationships has proven to be of importance when unlocking and sharing knowledge (Jassawalla and Sashittal, 1998; Tsai, 2000; Tsai, 2002). For example, BU managers are more prone to finding collaborations with other BU managers that they have already had a previous connection to, and those collaborations are more prone to be smoothly executed as there already exists trust and familiarity (Hansen, 1999; Tsai, 2000; 2001). Furthermore, trust allows for managers to ask each other for help and take risks in collaborative endeavors towards innovation related projects. Additionally, another critical component underlying the informal structures are to which extent there exists common goals and expectations between units that can support the motivation for engaging in effective collaborations.
Moving further, BU members usually have their own unit in mind on the first hand, and therefore work spontaneously to create internal and external collaborations that would address issues in their own units (Eisenhardt and Martin, 2010). It is therefore suggested that the initiation of collaborations by members in business units increases the quality of the collaboration idea, the motivation for collaboration and improves the collaboration decision. Additionally, small events such as conferences occurring at low levels, could lead to very high-performing cross-BU collaborations when employees meet and interact with each other. However, positive effects of informal social interactions were not revealed to be true for units competing for internal resources according to Tsai (2002).
Extent theory has also shown mixed results on whether financial incentives motivate business unit managers into embarking on cross-BU collaborations. While Gupta (1987) and Hill et al., (1992) suggested that financial incentives motivate for cross-BU collaboration, Eisenhardt and Martin (2010) revealed that general managers of business units were motivated by self-interest, meaning
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how collaborations would generate economic value for their own unit, rather than by firm-wide financial incentives when initiating collaborations with each other.
2.5 Summary This section aims to summarize and discuss the theoretical framework in order to find and identify the research gaps that exist within the field. At the end of this chapter, the two research questions which will further guide this thesis will be revealed.
As the existence of an interlinkage between intra- and inter-organizational collaboration for innovation might be true, there exists motivation for looking deeper into the processes and underlying structures within intra-organizational collaboration in particular. To summarize, intra-organizational collaboration in extent literature has mainly been used to describe the complex interaction and exchange of knowledge, information and resources between individuals, teams and departments within an organization. Extent theory mainly discusses three activities: joint problem solving and knowledge exchange between individuals for the recombination of existing technologies and the creation of new technologies; acting upon opportunities by receiving and exploiting market-related insights and information from other parts of the organization that can lead to responding to external partners and the market quicker, and lastly; collaboration through effective internal coordination of task procedures and information that contributes to the emergence of slack-resources which in turn can focus on conducting innovation experiments and being attentive to the needs and requirements of alliance partners.
The formal and informal structures operate in an interplay rather than existing separately (Jassawalla and Sashittal, 1998; Tsai, 2002; Cross et. al., 2002). This means that on top of the formal mechanisms, the level of collaboration is highly affected by organizational characteristics that are informal in its nature, see Table 3. Formal structures include the organization design, firm-wide incentives and hierarchy and is influenced by, amongst others, the level of centralization and the level of autonomy provided to managers. The informal structures include informal interactions in social networks and social events and are highly influenced by trust and social interactions. But interunit linkages are complex in its nature as they operate on both formal and informal grounds, leaving managers with a hard task to identify and strategize around. For example, collaborating participants in units need to see value in cooperating as well as having enough trust and an openness to change. From a managerial approach, the level of autonomy provided by senior management and the prioritization of new product development communicated by senior management has a great impact on the emergence and quality of internal collaboration.
Even though extent theory is consistent with that both formal and informal structures are important for collaboration, there exists mixed results on whether factors such as centralization and social interaction inhibit or promote cross-unit collaboration in organizations. Furthermore, the unit of analysis in previous research has not been on collaboration for innovation in particular, but rather on economic performance (Eisenhardt and Martin, 2010), or only for knowledge sharing (Tsai, 2002). Additionally, theory on collaboration for innovation has revealed the impacts and challenges that certain activities, such as joint problem solving and knowledge sharing, has on the innovation output of a firm. Looking into the factors that influence formal and informal structures, some that have been revealed in the empirical research, such as culture and mindset, are lacking
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from the literature on the influencing factors of formal and informal collaboration. Therefore, it is of interest to understand the underlying structures, processes and enablers of intra-organizational collaboration. In order to entangle the mentioned issues with collaboration particularly for innovation, this thesis aims to address the research gaps by answering the following research question:
• What are the enablers of formal and informal collaboration for innovation?
In this thesis, the definition of innovation is a process or a product with new to the company features - either technological, process or business model. Furthermore, the definition of collaboration is the mutual knowledge sharing, joint problem solving or achievement of mutual goals between individuals or units in an organization. Moving further, these definitions will be used to guide the collection of data and the analysis of the empirical results.
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3 METHOD This chapter will cover the methodology used during the research process and therefore includes a description of the research approach, the context of the study, the data collection for how the data was retrieved and a description of how the data was analyzed. Lastly, it will present a visual representation of the data structure that will be further disclosed in the findings.
3.1 Research approach The research followed a highly iterative process between data collection and data analysis, as described in Eisenhardt’s (1989) process for case study research. A single case study of a firm was chosen for understanding the dynamics of this particular theoretical setting, and the data collection mainly consisted of qualitative interviews. As the research question aims to answer what the enablers of collaboration are, and thus consisting of social constructs occurring at an organizational level, descriptive formulations of employees’ experiences would generate deep knowledge about the current processes and organizational dynamics that exists (Dubois and Gadde, 2002; Eisenhardt 1989). Furthermore, the research was characterized by an abductive approach according to Dubois and Gadde (2002). The abductive approach allowed for “systematic combining”, a cycling between theories emerging from initial theory with new assumptions emerging throughout the interview process and the case analysis in a synergetic evolvement. This consequently led to the interview template and theoretic directions to be slightly modified during the interviewing process.
The process started with a broad research focus – namely – how firms can collaborate more effectively for innovation, which allowed for a literature review in the topic of collaboration for innovation that resulted in a tight theoretical framework. The role of the framework was to ensure that the data collection would not generate a data overload, as commonly for inductive research approaches (Dubois and Gadde, 2002). Eisenhardt (1989) described a similar process for theory-building approach using case studies, where an initial research problem would lead to a few important variables that could guide the researcher in further steps but still allow for new variables to emerge. In contrary, much effort put into an initial structuring of a study could result in a bias data collection and misinterpretation of the informants’ responses (Dubois and Gadde, 2002). Furthermore, as common for case study research, the qualitative data was triangulated with other data sources such as digital presentations and meetings with company employees in order to provide stronger evidence for the research questions and interviewees of choice. This resulted in a data collection guided by both initial theory conducted in the field of collaboration, as well as by what the informants themselves brought up which allowed for new, or unexpected, theories to be discovered.
3.2 Data collection The setting is the highly dynamic knowledge-based IT industry where opportunities for cross-BU collaborations are many (Grant, 1996), where the case company is one of the largest IT service provider in the Nordics. Two initial meetings together with the Head of Innovation and Strategy were carried out to understand the encompassing innovation landscape and the innovation related
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goals the firm has. Additionally, prior research was conducted by employing multiple data sources (presentations, media, annual reports, organization chart) in order to grasp the organizational context that encompassed the firm and becoming knowledgeable about the organizational design, charts, products, services and where the different firm activities took place. This subsequently simplified the process of understanding who the relevant people to reach out for and interview were. See Table 4 for full disclosure of the data collection and its use in the analysis.
Table 4. Data collection and use in analysis.
Datasourcesandcollection Focusanduseinanalysis
Digitalmaterial(RetrievedbetweenJanuary–April
2019)
Presentationsonproductsandservices
andtheorganizationstructure,public
onlinematerialsuchasannualreports,
mediaposts.
ComplementarydataProvidedabroadunderstandingofthecurrentandprevious
waysofworking,theorganizationhistory,theorganization
structure,theinnovationactivitiesandprojectscarriedout
inthefirminatimelineofevents,andthefirms’goalsand
futurevision.
Meetingswithinnovationstrategists(January2019)Twoseparatemeetingswithtwo
innovationstrategistsonlevel2and3
thatlastedonaverage45minutes.Data
consistedofdetailednotes.
MaindataProvidedanunderstandingofthefirm’sinnovation
landscape,theirstrategyandtheirgoalsforinnovation.
InterviewswithBUexecutives(March-April2019)
ThreeinterviewswithBUexecutives,
onlevel2,carefullyrecordedand
transcribed.Oneinterviewlastedon
average45minutes.
MaindataProvidedinsightsonhowthebusinessunitscollaboratewith
otherunits,theirincentivesforcollaborationandthe
enablingfactorsforcollaboration.Mainlyonafirm-wide
level.
Interviewswithseniorandmiddlemanagers(March-April2019)Seveninterviewswithmanagersof
innovationdepartments/incentives
rangingfromlevel2-4,carefully
recordedandtranscribed.One
interviewlastedonaverage45minutes.
MaindataProvidedinsightsonhowmanagersengageincollaboration
withothermanagers.whatneedforcollaborationthey
themselvesandtheirunithave,andtheenablingfactorsfor
collaborationbasedonpreviousexperiences.
Interviewswithconsultants(March-April2019)
Threeinterviewswithconsultantsfrom
innovationdepartments/incentiveson
level4,carefullyrecordedand
transcribed.Aninterviewlastedon
average45minutes.
MaindataProvidedinsightsinhowemployeesofinnovation
departmentsengageincollaborationwithothersinthefirm,
whattheunderlyingfactorsareandtheirdailytasks.
Socialmediaplatformnavigation(January-April2019)
Observationthroughnavigationof
internalsocialmediaplatform.Data
consistedofdetailednotes.
ComplementarydataEnabledtheunderstandingoftheorganizationdesignaswell
asprovidedwithanunderstandingofhowemployees
communicateaboutinnovationandshareknowledgeacross
theorganization.
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The interviews were carried out throughout March-April in 2019 and there was a total of 13 interviews conducted. The interviewees were of three different hierarchical levels: corporate executives, managers of innovation initiatives, and employees who are members of the innovation units and thus working directly with innovation projects. An average interview lasted for about 45 minutes and was recorded with consent, promising anonymity to the informant. The interviews were of semi-structured descent consisting of open-ended questions, where the informants were given somewhat of a space to guide the conversation depending on the information that emerged. Furthermore, the interview template had some variations amongst the respondents depending on their specific role and level at the company. The goal of the interviews was to get both retrospective and real-time accounts of the informants’ experiences of collaborations within the company, along with the working methods and structures they pursue for themselves and their respective teams on a daily basis.
The informants were of different hierarchical levels and positions in the company, ranging from Senior Vice Presidents to middle- and low managers and internal consultants. In the findings chapter, they are labelled according to their level in the company, ranging from 1-4 where 1 is the highest and 4 the lowest, see Table 5. Additionally, as they were promised anonymity, the informants were given a letter ranging between A-M in the presentation of the findings. For example, A-3 in the findings refer to informant A on level 3.
Table 5. Informants.
Level Role Type1 SeniorVicePresident Interview45min1 SeniorVicePresident Interview65min1 SeniorVicePresident Interview45min2 VicePresident Interview60min3 SeniorManager Interview45min3 HeadofDepartment Interview50min
3 HeadofDepartment Interview45min
3 HeadofDepartment Interview45min4 HeadofSection Interview45min
4 HeadofSection Interview45min4 Consultant Interview40min4 Consultant Interview40min4 Consultant Interview50min 2 HeadofInnovationandStrategy 2meetingsá50min3 HeadofInnovationDepartment 1meeting40min
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3.3 Data Analysis The analysis method described by Gioia and Corley (2012) was used on the collected data in order to find themes and concepts that could describe the problem under investigation, and subsequently, arrive to a conclusion about their synergies. Although Gioia and Corley apply the method onto inductive reasoning for grounded theory, convenient practices are introduced for identifying emerging themes and larger concepts from coded data.
The interviews were transcribed and coded continuously throughout the interview process in accordance to Strauss and Corbin’s (1998) method of open coding. Therefore, the data collection and analysis was carried out somewhat in par. Initially, the coding was carried out very freely, where the informants’ statements were labeled with codes that described internal processes, their experiences of collaboration and the social structures that surrounded them. In order to get an understanding of the organizational structures that the firm operated within, many of the initial codes that were used had more or less a direct connection to key elements from the literature, identifying structures such as formal and informal mechanisms for collaboration. During this process, several memos were also written. Additionally, organizational knowledge was also retrieved from the interviews in order to familiarize with how the firm is operating in practice and the factors that are motivating the firm’s strategy, which could not be identified from the external sources of data. As the interviews proceeded, the informant’s statements allowed for the emergence of themes which further guided the interview template and the labels used during the coding, including new themes and abbreviations used by the informants which had not been mentioned in the previous literature. After the interviews were conducted, transcribed and coded, they were revised again to ensure that important statements by the informants were not accidentally neglected.
At this moment, there existed too many different codes to make sense out of. In an attempt to reduce the amount, Strauss and Corbin’s (1998) notion of axial coding was used to map links between statements from different informants’ experiences, indicating their relationships and thus arriving to an overarching conclusion. This resulted in a reduced amount of 1st order codes using the informants own language. Further, similarities and differences were investigated between the codes of the different data segments. For example, when several informants verbally pointed out the importance of trust for initiating collaborations, a theme of shared need for trust emerged. When there existed differences between their experiences, their antecedents were analyzed and placed into context. Furthermore, antecedents and consequences of new themes unfamiliar to the theoretical framework were analyzed and placed into context. This generated a set of 2nd order themes based on both new concepts and existing concepts from the literature, using research terms. Continuing from this point, an attempt to use a magnifying glass to see the overarching picture was carried out in order to find aggregated dimensions that would explain the entire constellation. This resulted in the data structure presented in Table 6.
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Table 6. Code aggregation diagram
s
Activity based seating plan allow for free seating anywhere Employees engage in office chats by the coffee machine Office chats allow for knowledge sharing and building trust Office chats allow for opportunities for collaboration
Office chats
Responsibilities by activities of different functions force their inclusion in projects Firm-wide incentives establish innovation departments in the organization design Innovation departments initiated by top management receive prioritization
Organization Design
Financial Incentives
Business units are meant to share solutions for cost-efficiency Market- and business units collaborate to share industry knowledge Strategic
Relatedness
Managers engage in collaboration for own learning on innovation Managers engage in collaboration in order to increase their own units value offerings Managers are too worried about own unit’s profit to invest in innovation related projects Managers are not incentivized enough to hand away resources
Managers self-interest
Collaboration work well between locations where relationships have existed for a long time Tight communication is important when project members are dispersed Little collaboration between geographically dispersed units when there are no relationships between managers and employees Sitting close to business area colleagues leads to conversations around customers Geographically dispersed innovation activities don’t receive top management attention
Geographical location
History of being a consolidated company Silos-oriented company inhibits collaboration Seniors working in the firm for many years do not see the urgency or importance of innovation Senior might feel threatened by innovation methods and tools Seniors change mindset about innovation through learning in projects
Culture
Financial incentives are not motivating enough for initiating collaboration Financial rewards measured on the whole organization provides new focus onto collaboration
Formal structures for collaboratio
2nd Order Themes
Informal structures for collaboration
Aggregated Dimensions
1st Order Codes
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Table 6. Code aggregation diagram (continued).
3.4 Method assessment Differentiating from quantitative research, qualitative data is more difficult to measure as the researcher looks for depth rather than breadth (Kirk and Miller, 1986). This meaning, that the researcher looks for the underlying constructs and social dynamics in the informants’ experiences, thus denoting “quality”, rather than “quantity” - the occurrence of certain events or phenomenon. However, quantitative research has also been criticized for lacking validity, often leading to both research methods being used in one and the same study in order to complement each other and thus give stronger proof of evidence. Nevertheless, given the challenge of determining the reliability, validity and transferability of the ethnographic nature of qualitative research, certain measures are still able to be taken by researchers in order to arrive to objective conclusions that can be contributed to scientific literature and practice. The following section will therefore disclose the method assessment of this study according to Kirk and Miller (1986), and the measures that were taken.
Reliability The reliability of this study can be assessed in different ways. Firstly, preparatory work was carried out in order to find the relevant people to interview for the specific research questions of interest. Meaning, interviewing employees with insights in the phenomenon under investigation. It was additionally ensured that all informants were aware of, for example, who the decision makers were
Knowing a lot of people in the firm lead to collaborations Previous projects incentivize for engaging in additional projects too Previous projects lead to trust and social connections Managers with wide social networks have good understanding of organization structure and where competences exist Managers with wide social networks better know who to contact
Employees go to social events due to personal interest in innovation Employees gather knowledge and bring it back to the firm to share it Employees share knowledge from events to leaders to gain trust Employees go to social events to network with others Managers talk on internal events to spread awareness of own department
Establishing connections
Social platforms
Social events
Organization Awareness
Internal social media platform is used for sharing knowledge Managers use the social media platform to increase transparency Managers use the platform to stay updated about the firms’ activities Managers engage in collaboration when they have a need for help Employees use the social platform to navigate them around the organization
Long process for finding relevant people Employees email around in order to find information needed Managers struggle with finding expertise they need Managers struggle with “knowing where to go” “Many parts of the company don’t even know that we exist”
Social networks
2nd Order Themes Aggregated Dimensions
1st Order Codes
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and the innovative units in the organization were, in order to avoid obtaining false data based on assumptions of who does what. The interviews were carried out during a short period of time, allowing consistency in the experiences of the political climate and culture internally in the firm, as well as no significant changes in the external environment of the firm. In order to avoid misinterpretations and false answers when asking the interview questions, the definitions of key terminology, for example what collaboration is, was provided the informant. The interview questions addressed different forms of collaboration as well as the whole of the collaborative process, thus not one specific element of it - such as the initiation of collaboration - which could be problematic in an effort of replicating the study. However, certain elements were strictly sought after during the interviews, such as the different formal and informal structures that had been identified during the previously conducted literature study.
Furthermore, all interviews were carefully recorded and transcribed, and all data was collected and saved throughout the entire research process, allowing for easily going back and validating what the informants had expressed during the interviews. As the interviews were supposed to be with informants of different levels and different roles in the firm, identical observations between all informants were not possible to obtain nor was the goal of the data collection. However, consistency between observations in the same levels and roles existed, thus achieving synchronic reliability. In order to obtain quixotic reliability, meaning avoiding false responses from interviewees mechanically answering questions as they “should” rather than they feel and mean, open ended questions that required explanations and descriptions rather than short answers were asked. Additionally, follow-up questions were asked in order to grasp the detailed picture that the informant was describing. Through these mechanisms, accurate answers could be obtained as they required the informants to vividly describe situations without exactly knowing what the underpinning factors in the answers that were looked after.
Lastly, the replicability of the study is somewhat difficult from a diachronic perspective as the organizational setting and the industry itself is constantly evolving and changing with time. Therefore, assuming that the data is isomorphic over time is not possible. However, social and organizational elements under investigation in this research, such as centralization and trust, are likely to be replicable onto future scenarios as they are somewhat persistent over time and existent in multiple settings.
Validity Pursuing validity in qualitative research can be obtained through certain measures, such as construct validity. With this meaning, assuring that the results from the data collection is properly assessed in order to ensure its validity in theory as well. To ensure this, certain measures were taken during the data analysis process. Firstly, terminologies used by the informants for describing their feelings and experiences were directly correlated to the terminologies that appeared in previous research in the field, in order to not draw any bold assumptions from the informants’ statements. For example, when the informants expressed that they felt a lack of trust - it was categorized as a mean of trust, and when the informants expressed that they were interacting or talking to someone – this was categorized as a mean of social interaction. When the informants were expressing feelings, or describing situations with terminology that were not as apparent, they were asked to elaborate further what they were meaning.
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Secondly, the emerging concepts and categories were put in direct correlation to previous theories in the field of collaboration. For example, when explaining how decisions were made in the firm and the informants expressed that decisions were made by corporate executives during corporate meetings, this was considered centralized decision making according to previous literature on centralization. Similarly, if the lower level managers or employees expressed that they made decisions on collaborations autonomously, this was categorized as decentralized decision making. In the same way, categorization of formal and informal structures was matched with informants describing situations typical for these structures in order to prove validity.
Transferability As the study of choice was on a few number of individuals in different positions, in one specific firm, and in one specific industry, the transferability of the results on an empirical ground can be difficult. However, the empirical findings can be applied onto similar firms in similar industries characterized by the organizational settings that exists within this specific firm. These include centralization, geographical proximity between units, social interactions between employees, strategic relatedness between units and social platorms for connecting between employees. Furthermore, theories such as the effect of gatekeeping on innovation can additionally be transferred onto several knowledge-based industries.
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4 EMPIRICAL FINDINGS This chapter aims to provide the findings from the data analysis.
4.1 Organization context The study was conducted on one of the largest IT-firms in the Nordics that provides digital products, digital services and consultancy to businesses in multiple industries. Their main offices are located in Norway and Sweden, with a few offices in eastern Europe and India for offshoring of IT and development. The organization is divided into two main blocks where decisions are mainly made from offices in Sweden and Norway. The first block consists of pure consultancy services provided to customers in different industry sectors; such as retail, transport and municipality. The second block consists of products and services delivered to customers within the financial industry. The firm has a history of being a consolidated company, primarily existing of over 50 different companies that were merged together in 2012. The aftermath of this merge lead to the creation of verticals consisting of functional departments, accompanied by a silos-oriented culture with different mindsets and working methods dispersed around in the organization. In this age of rapidly changing markets with tough competitors on the same playground as the firm itself, a need for internal collaboration and innovation has been identified by the firm, leading to active measures in the form of the establishment of new innovation and technology departments with the aim to explore technology and catalyze innovation in the firm.
4.2 Meeting external drivers of innovation External forces in the shape of various customer needs for innovation forces the firm to coordinate internally in order take action for responding to those needs. Top management, consisting of the senior vice presidents of the business units, undertakes certain activities on a regular basis to capture needs from existing customers, assess those needs and create an internal strategy for responding to them. For capturing both explicit and implicit needs, meetings together with customers are carried out regularly. The needs are then communicated to the rest of the top management during top management meetings where strategies for moving forward are discussed. Furthermore, meetings together with managers of the different business units are carried out in order to communicate and align the firm’s strategy and prioritized goals with business unit managers. Additionally, allowing managers of innovation initiatives to join key account managers and SVP to client meetings, generate opportunities for innovation projects which involves the development of new innovative services internally that is to be delivered to the client, and thus requiring internal collaboration. The firm’s two special initiatives for innovation are the “AI program” and the “Innovation Hub”, whose aims are to catalyze innovation in the different business units through collaboration with the units for advancing their technology and innovation offerings, as well as working together with customers directly on innovation projects. Furthermore, the firm also has a consultancy department that work on innovative projects together with external clients, and one department that specializes in delivering innovative solutions through robotic process automation services.
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“I think they saw changes in the market, a need for them to better adopter market offerings because the competition is harder. There are new players in the market who move faster than before so then they need to be more adoptive and keep up with the latest trends and technologies when they present stuff for their customers. And there has not been to say need before because then it was more slowly, slowly moves in the market and maybe not that much competition in some areas. It might be outside their expertise areas.” L-4
“They are also questioning different areas within technology and innovation more. And then we need to have the competence to actually answer back” F-3
4.3 Formal structures for collaboration There are several ways in which collaboration for innovation in the firm is affected by formal structures and incentives. Therefore, this section discloses what formal structures that exist within the firm, how they contribute to collaborating for innovation, and the underlying factors that influence them.
Organization Design Like most firms, this firm is also structured in a way that facilitates collaboration between business units and managers, for example, that development units naturally collaborate with delivery units when launching a new service, followed by a continuous collaboration with the maintenance units. In the context of the specific innovation initiatives in the firm, they are positioned as “central programs” where they bring value through collaboration with either business units or external customers by delivering their services through the business units delivery channels or innovating on their existing products. It is therefore through the products and services they develop internally that determines which business unit to collaborate with, and vice versa. These collaboration projects however, are brought to attention during management- or steering group meetings, and need to be approved by top management before being able to be initiated.
“We have established a steering group, which consists of the leaders of those business units to make sure we have enough vials when going in there and trying to look at their business cases. The mandate is coming from the management team and the steering group”. E-3
Furthermore, the responsibilities of different functions allow for additional collaborations. For example, during a collaboration between the business unit Cards and the Innovation Hub, where content of the firm’s website was to be developed, the marketing and communications team were naturally contacted and invited to the collaboration due to their ownership of the content that is presented externally. This was an action by Cards and Innovation Hub that required organizational awareness of the guidelines and rules of compliance of the firm.
“I work on this projects with cards right now, writing these articles for their website. And it’s kind of interesting because it is me, cards and now also the marketing and communications people. So it's like, multiple collaboration, many different people that need to come together.” M-4
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The mandate given to the special innovation initiatives, and which is communicated to the business unit heads from the top management during management meetings, require business unit managers to actively participate in collaborative projects carried out by the innovation initiatives, such as the “Sprint Program” of the Innovation Hub and the “Steering group” in the AI program. As the strategy for the programs include projects that only can deliver value when collaborating with other units, it is a formal structure “forcing” other business units to participate. As the manager of one iniatiative indicates, prioritization by top management is key to generating collaborations.
“It is prioritized. So, we see that seniors have to be a part of the projects that we run, they have to prioritize it because it’s important. […] That is also why we are organized the way we are reporting to the CEO with one of the biggest mandate in the company. So it’s easier for him also to tell when someone has to prioritize us.” F-3
An informant that previously was a part of this type of collaboration express that how the Sprint Program is structured is a positive method that incentivizes for future collaborations as well.
“It is through this program that you are able to bridge this collaboration gap and so you can create new collaborations” M-4
However, the informant also emphasizes that the way that the innovation department is positioned in the organization design also limits the amount of collaboration for innovation overall, as departments and sectors outside of the business area are excluded from innovation.
“I think honestly, the way that we would really facilitate innovation with the other departments would be if we weren’t just to be limited to financial services. Because I think by limiting what we are, we fail to see the actual connections that the financial industry can have with a lot of the other industries in this company. And so if we do, I could see how we could take something as diverse as, I don’t know, forestry, and then combine it with cards or something and then something maybe exciting will happen. I see that as quite a big barrier”. M-4
Continuing on the importance of delegating mandate, one manager express that a clear mandate and responsibility are important during collaborations, as too many stakeholders can lead to slow processes and competition.
“It is important that we have a clear mandate and responsibilities and that mandate is being distributed so that we who have mandate can take quick decisions without needing to anchor with multiple stakeholders which only leads to slow processes. If you do not have clear responsibilities you will end up with ten separately developed platforms and then we don’t have a strategy anymore. It’s a challenge when you deliver the same things, you could easily become competitors instead. Also for us, having our own resources enables us to deliver quickly as we do not need to wait for anyone else.” J-3
The same manager added:
“But it’s a lot about our knowledge and expertise. If you have a lot of knowledge and expertise within a niche area, it’s hard for people to argument against you. And within our area, differently from banking, it’s quite easy to become an expert. It doesn’t take as many
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years, so even at a pretty young age you are able to gain a lot of trust amongst the ones you are talking to.” J-3
Lastly, the lack of ownership and top management prioritization over innovation activities could lead to them not being utilized at all. For example, one informant described how several employees from the informant’s department came together and devoted time in order to create an innovation process for the firm, which when finalized has not been utilized at all as no one had any ownership or mandate around it.
“I don't think that there's really an ownership or mandate over a unified approach to innovation within the company because ultimately that's what that the ‘Playbook’ or service development process is. You know, it's helping [company] to innovate and how it develops their products and services that we bring to market. So, I think it would make sense if my team we're to be able to own that a bit and work internally to, you know, to help make that happen.” G-2
Strategic Relatedness One of the firm’s goals and prioritization is to be able to deliver value quickly and cost efficiently without “reinventing-the-wheel” every time a need is identified. Therefore, top management meetings allow for communication between the senior vice presidents and allow for opportunities for sharing different business units’ solutions to emerge and be addressed. For example, solutions between business units in Sweden and Norway have been shared and modified to suit the respective market.
“We collaborate a bit in the credit area where we have taken some parts of a solution from the Norwegian’s and the other way around, where they have taken a solution from us and implemented towards their own customers.” D-1
Additionally, several managers express that duplication of technology is something that the firm wants to avoid but something that occurs due to the history of the organization as a consolidated company, and which has led to a silos-oriented culture with little communication between the different business units. However, reasonable measures to avoid this have been taken into action as top management’s prioritization of this issue has allowed managers of innovation initiatives to devote time onto screening the different business areas and thus making sure that technology is not duplicated by their own or other business units. Therefore, this screening is also incentivized by the managers’ own self-interest of the efficiency of their own units.
“We have a lot of contact with the market units. It’s important to stay updated and follow what others are doing within the firm and make sure to copy each other”. J-3
Financial incentives Another mechanism for incentivizing collaboration is the notion of having a reward system in the firm that give managers an economic bonus if the entire business area has performed well. As this manager bonus is measured holistically on the economic performance and customer satisfaction of the whole business area, informants interpret the bonus as an indirect incentive for collaborating internally. However, there are mixed opinions on whether the bonus actually incentivizes for
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collaboration or not. One of the informants express that the reward is too insignificant for incentivizing collaboration, while one express that the bonus does incentivize for collaborating with others.
“There is a problem regarding financial incentives for collaboration in this organization. We are measured on a whole for that particular manager bonus that indirectly incentivizes collaboration, but how we are actually measured is on the monthly business review where I need to sit down and explain to my leader why my unit has performed as it has done. And that’s an issue that inhibits collaboration a lot. Being measured on a unit level makes it hard for me to collaborate internally instead as it is much cheaper for me to hire a resource from the street as the bonus is measured over the entire FS and only on financial and customer satisfaction KPI:s.” D-1
“But there exists a leadership bonus that is being measured on the performance of the whole of Sweden, and that is good because then you can put focus on collaboration over the entire [Company].” H-3
4.4 Informal structures for collaboration On the same notion as formal structures, there are several ways that collaboration for innovation in the firm is affected by informal structures and incentives. Therefore, this section discloses what informal structures that exist within in the firm, how they contribute to collaborating for innovation, and the underlying factors that influence them.
Managers self interest Informants that worked hands-on with innovation projects expressed how managers in the organization engaged in collaboration with them in order to gain knowledge in innovation related topics such as new technology, or keeping up with changes in the market. Furthermore, informants expressed that managers engaged in these collaboration in order for themselves to be able to respond to the external environment quicker. Expression such as “they lack resources”, “we could help them”, “we need to support them” and “educate them in the technology” were used by the informants.
“I would say most of the management level people have a pretty good understanding of this industry and the technology as well, but they lack resources maybe to look into those areas and so on. So therefore, I think as well as they were pretty happy too when we could help them with that kind of stuff, that they understand that it's happening, but they don't have time or resources by themselves in the department to look at it or fix it.” L-4
“Another area is that we have a sales organization and we try to educate also them which questions to ask, what types of areas to identify. And then it's the customers themselves. I mean, they are coming to us with requests. We are a long-time partner for them and they expect us to be, let's say having an answer if they have a challenge. They challenge us to be a discussion partner, but also on new technologies. That's why we also need to step up and support sales support management in an interested customer, dialogues in the areas that are relevant.” E-3
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“So when we want to start a use case, let's say exploration project, and when we go through different departments, we will then do educational parts as part of this process. So being able to devote to degenerating use cases that are relevant for the domain and use those use cases for educate them on the technology. We’re talking to the sales department, we’re talking to, I was talking to business development forums, I'm talking on the, uh, kickoff meetings with departments. So it's, it's kind of, it's an ongoing process.” E-3
However, several informants also highlighted the critical factor of prioritization that hindered managers from taking their time to understand and learn about innovation practices.
“I think a lot of the leaders, they never quite mature. I think they understand that the role is changing. There's so many Fintechs are coming. We have to be, we have to think in another way, but at the same time they are pressured. Like there's a big pressure on time and time to market and they just want to push their projects out. So even though they think that it's important that designers are onboard, they don't always do it because they have to.” A-4
“I usually find an openness and a willingness to learn. But also, you know, the time spend that people have is pretty limited.” G-2
“If you come with innovative ideas and you might have also some leadership support for them, that's good. And that's important. Without that you don't leave any stone but it is still hard to free time from those domain resources because they are put on even higher prioritized tasks. Then we’re talking about mission critical deliverables and innovation is seen important and it's much like the climate change. You know, everybody says it's the biggest thing happening around but nobody does take action and that's a similar issue. I think everybody agrees that it is important and I give them a try to educate them on what will happen if they just continue what they're doing. But the short-term priorities don't get moved. They have supposed to come up with the innovation.” E-3
The informant of the last quote expressed:
“So we just need to push them, inspire them.” E-3
Moving further. The firm’s managers are given the autonomy and responsibility of their own unit’s performance, and are measured on their financial performance and customer satisfaction level in a monthly business unit review. During this review, they explain to their manager about the recent work conducted by their units and whether they have reached their goals or not. Therefore, it is described as “natural” that managers want to ensure the economic profitability of their own unit.
“Through a firm-wide perspective, we can be unbeatable, and that is what we should try to sell. But a lot of leaders think about their own unit as you are being charged on your own unit in order for the whole organization to stay intact.” H-3
In order to do so, they need to ensure that projects with customers are obtained, and that they are carried out smoothly and with satisfactory results. When ensuring capabilities and capacity to the innovation projects that they have obtained, or been assigned to, a need for niche competencies or
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a lack of expertise is sometimes identified. To solve this requirement, managers need to obtain competencies and capacity from other areas of the organization.
“There is an immense pressure on some competences, but it varies. Sometimes everyone is busy, sometimes people are available and there are no projects. So it’s a lot about optimizing the staffing level, having enough to do as the same time as we are in an industry with consistent shortage of resources.” H-3
“I feel like it has been put on the agenda to be “unstoppable by collaboration” but then it is shown that in practice when it comes to resources that it will be hard to actually do. It would be much easier to map out available competences and what competences that exist in the company.” B-1
However, there exists challenges that decentivize for resource sharing horizontally between units. For example, the lack of policy for job rotation in the organization can demotivate collaboration as managers are not being rewarded for giving up their, most likely attractive, employees with niche competencies.
“And then we need a policy or a goal for internal job rotation. If the business unit manager has a competent person and gives up this resource to another manager in need, the business unit manager does not get a reward for it, he only has an additional problem. So in this area we might miss a real strategy for job rotation and not only consultancy. We need mechanisms to be able to move people horizontally.” B-1
The willingness to give up resources for another manager is, however, also contingent on whether there exists a personal relationship and trust between managers. One of the informants highlight that trust, in combination with the common goals of the organization, increases the willingness to share.
“Every manager has responsibility for their own area so if I need help I ask around the different managers I know, ask if it is okay and if there is a possibility to receive some of their resources.” H-3
Furthermore, several managers express how executives and managers would want to collaborate more with them, but that there exists a “time pressure” and a prioritization of customer deliveries that could get in the way of collaborating on projects “without a price tag”.
“No one in [Company] will say that it’s a bad idea but as we are working in consultancy, we need to ensure that we will receive money for the work that we are doing.” H-3
“When I want to collaborate with them. They can't really just lend me a resource for two or three customer meetings because they are supposed to make money with them each and every time. And so they have little flexibility and if I, if I really request that flexibility, I need to play this based on let's say personal favor thing, call it a presales thing. So they don't have a buffer for that. Yeah, they take it, they get measured on hard numbers and they only get hard numbers if they invoice to a customer and that that's a bit an issue for them.” E-3
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Lastly, corporate executives disclose how large customer projects with greater price tags contribute to firm-wide efforts of collaboration between units in order to ensure customer delivery and satisfaction. In the following quotes, “BA” stands for other business areas.
“Yes, but we [in FS] only collaborate with BA for bigger projects. We can probably do that more structured when it comes to innovation, but then there is a need for a more structured strategy for how we can do that cross-unit. More cross-unit collaboration with other units that have competence and knowledge.” B-1
“It’s when it comes new things...new bigger projects that are in need of help. But I wouldn’t say that there exists a clear strategy but more when you need help with capacity for when you are to establish in a new geography.” D-1
Geographical location The departments of the firm are somewhat geographically dispersed around the world depending on their function. Whereas some departments exist in multiple locations, both cross-border and in several locations in one country, an additional IT service unit is located in Ukraine and an additional capacity unit by the name “Global Delivery”, is located in India. Corporate executives either have an ongoing relationship between the own unit and the cross-border unit, or reach out to these departments when capacity is needed. One executive express how their collaboration work very well as they have “worked with each other for ten years, and now, there even exists capabilities there that we no longer have here anymore”.
“We have a really good collaboration. But then again, I think that is because we have worked during a pretty long time with them. We have worked together for about ten years, and most of our employees here interact with the ones in India on a daily and weekly basis, while I have contact with them monthly.” D-1
“It requires very tight communication if we have projects with people from different departments who also work in different geographies. Especially if there is a distance between the project team members, communication is important to making it work.” H-3
One informant explicitly raised the issue with geographical distant offices’ and its effect on collaboration, saying that not “having a face” or interacting with colleagues on other locations had a negative effect on collaboration.
“Bergen for example, we don't have so much collaboration with them because we don't know them. So I think being geographically on different offices that I understand that it has to happen, but we should take a look at how we could do even better than I think that just knowing people, it's positive, get to talk to people, get a face and then not just a name on a mail thread.” A-4
One executive also mentioned how “sitting close” to managers in the office contributed to the level of familiarity as the daily work contained casual conversation based discussions, and how not knowing or interacting with other units decreases the willingness to collaborate as there is a “lack of transparency”.
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“We have steering group and leadership group meetings where both parties are present and then we have tactical and strategic meetings with customers, but then it’s usually more conversation based. It’s not that structured as FS is quite small in Sweden so we sit quite close to each other and with our clients.” D-1
“We need to have more meetings with each other. I wouldn’t want to collaborate with someone who I have never met, don’t know what that person does, do not talk to or have contact with. There is a need for transparency, something which could be solved with meetings together.” D-1
“There was a manager in Bergen that I've been thinking, oh, he's so strict. Ooh, I don't want to be in meetings with him because I think that is kind of to crack. And then he called me for something else because they wanted to discuss something and it was, he was such a nice guy and I'm like walking around being so afraid of this name because I thought that he was strict in his emails and when I spoke to him on the phone, it was just the cutest, nicest guy ever. So I think we have to make that happen in some way. Make sure that easy for people to get to know each other. Because then you have trust and then you want to help each other.” A-4
On a similar note, one executive working hands-on with innovation described it as “natural” that their counterparts in Sweden sourced in capabilities from the company-owned firm “NetRelations”, as they “are located in Sweden”, even though both the Swedish and the Norwegian offices should have the same connection with that particular department.
“They're physically based in Stockholm, so they naturally, you know, there's been a bit more collaboration I would imagine with Sweden. But the intention is that we work more together and work more across when it makes sense for the kind of multidisciplinary requirement of the projects.” G-2
Furthermore, the departments working specifically on innovation projects, are located in either the headquarter or the largest offices, in close proximity to corporate executives and where important decisions on innovation projects are carried out. One informant shared his experience on communicating with offices in India and Ukraine about what the firm had developed within IoT which he wanted to find out more about for his own project, and how he discovered that these employees had generated several interesting concepts in these locations that did not receive any attention on a higher level.
“I have recently talked to some people in India that have done things within IoT and they say that, okay, we have problem, we don't have any maintenance part in [Company], that when they have done a project they don't really know… or when they have done a pitch, introduced a collaboration with or started done a contract with the customer and did an MVP and, and uh, a proof of concept and the customer likes that and so on. There is no maintenance department on place for such a new technology as IoT.” K-4
The informant continued by describing it as shocking that on one hand, no one knew what the firm was doing in that field, as the informant himself was struggling with finding information, and in other hand, there actually existed developed concepts and prototypes somewhere else.
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Culture One manager of an innovation initiative explained how seniors with defensive mindsets towards innovation activities get the opportunity to learn and understand innovation better during collaborations, which subsequently lead to successful projects.
“So we teach them about innovation and technology and how to work digital or move into a digital sphere while the seniors exchange with us. Field expertise. Just different architecture knowledge or a knowledge about the client. Because many of the seniors has worked here for more than 20 years because they have an experience and the knowledge cannot even compete with, but we have a different type of expertise that maybe they don't have. So we see that the seniors get a digital lift. So what we did that was that we have the AI expertise. We have the agile way of thinking, we move faster. So while the AML (anti money laundry) team internally, they have been here for many years and they don’t work agile the same way. They don't work in workshops with the clients for example. Then we formed the team that together works. So the AML team internally to learn how to work agile and have to run a workshop with the client. And then we have like moved forward and are in the process also of like delivering on that project.” F-3
Moving further, several informants expressed how the firm’s history as a consolidated company, and how its proven track record of working silos-oriented has had a significant impact on the level of cross-unit collaboration for innovation.
“I have heard about NetRelations, but we don't collaborate. As you know, there are so many silos in [Company], so one silo is like via Norway and FS. But I think it's even worse with Sweden because there's just further away geographically.” A-4
“And I think it's a lot of that is the main challenge, that some people I feel thinking about 20 years ago and they have a different mindset than us, they don't see the urgency or they don't see, they don't understand how technology can be used or why it's important to innovate. I think it's important to also give the people that had worked here on the same project for 20 years, to have a chance to be a part of something completely new and different. And that's the way they learn, I think. There's not a point that I go out and preach for them or what innovation or technology or tried to put it down their throats. It's more involving them in projects. And then I think that way will make the culture also moving forward. And that's something we see is working as well.” F-3
“But sometimes it's hard to, I don't know, it’s a really old firm and there's been people here that's been working for years. So a lot of them think that they know best, they know what the customers need. I know what the user need. They think they know best and, and then they kind of nothing [inaudible] the role changing and new people are coming in and yeah, there's different needs that there were before.” A-4
“Many people have not worked in this way before, so it can be only a bit threatening.” F-3
One corporate executive describes how the same departments but in two different locations, experience different level of challenges with sourcing in knowledge and resources when needed
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to projects, also emphasizing how a long time of collaboration has led to significantly better routines. The same executive continues by explaining how different working cultures cross-border could actually be a barrier for collaboration. For example, the informant expresses that if there exists a shortage of capacity in a project in the neighboring country, and the informant himself is able to offer capacity from his own department located in another country, barriers such as how different countries prefer to work influence the level of collaboration.
“We have offered our resources to a huge innovation project [in Norway] as we do not really have that much to do right now but it’s not that easy as there exists a bunch of other structures and we are used to working in different ways and they are used to working in different ways. We actually work differently in the entire firm which makes it a little difficult to collaborate internally. For example, we have about 60 in India and 100 employees here. We have a structure where the employee here manages a couple of Indians, so when a huge project like […] comes along and wants our Swedish resource but without the Indians, that would break the structure of my department. Then we would rather prefer to receive tasks to do here, but then they prefer their project team members to sit next to them by their desks. Which in practice makes it very difficult to move each other kanban when there exist structures, economic incentives, working methods and culture that makes it hard.” D-1
Office chats The firm’s office space follows an activity based seating plan, meaning that there are no fixed seats for the different departments and that employees can sit wherever they please. Several informants from innovation initiatives expressed that unplanned office chats with people they were familiar with by the coffee machine, or stopping up to chat a few minutes when walking past each other’s seats in the office, lead to opportunities for collaborating. The informants explained it to occur in multiple ways. Firstly, one informant explained it as when others described the projects they currently were working on and the potential struggle they were experiencing, the informant offered to give input or help the person out by joining the project or collaborating on a project.
“So I don't call them, but if you meet them here in the office, then you, oh, ‘how is it going with that product and product x? And now I'm working with this, do you have any input on that?’ Yeah, stuff like that.” L-4
Usually, this occurred with managers that the informant had worked with in previous innovation-related projects and had “gained trust with”.
“I have kind of built up their trust and now I kind of interact with the people I’m working with, the kind of like outside projects here as well as you can discuss like latest trends and projects and so on. Even if you're not have a current engagement together.” L-4
Another manager mentioned office chats by the coffee machine to be a good way to become aware of what other business units were currently working on, and to gain knowledge about what is going on in that specific industry. Further, if the conversation turned out to be interesting for that managers own daily work, opportunities for collaboration in projects could emerge from the coffee chats.
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4.5 Social networks All informants emphasized on how their social network with colleagues was a key factor when engaging in collaborations through both projects and knowledge sharing. The informants described several occasions and underlying factors for how their social network lead to collaborations.
Establishing connections All informants working hands-on with innovation expressed that the amount of connections they had spread around in the organization significantly impacted their collaborative endeavors with other business units. For example, have been engaged in previous projects directly lead to new connections that later could lead to further collaborations. This could carry itself out in two ways. Firstly, if the manager was satisfied with the informant’s effort in a first project, the informant was sporadically contacted for further projects too. Secondly, if the informant was a part of a successful collaboration with other employees, the informant could be proposed to be a part of another project as employees suggested each other.
“I got to know a lot of the people in the office, so I have a good collaboration with them. But that's kind of just because I was lucky being on the project.” A-4
“So, because I already had contact with them in the internship program, so then they thought that I would be a good person to write the articles with them. Because I had prior experience in writing and they thought that my writing was good. So that's why they decided to get me to help them with that. I think it was enough to show my abilities in writing and also show my thinking skills. So that was what made them want to contact me.” M-4
“I think that when you do something and that they find useful, then they want more. So, it's just a big sort of coincidence from the beginning.” K-4
“Because we have been there for an internship before. So, he kind of knew what we deliver and how we deliver and that was what they wanted to continue with. But in the beginning, I guess it was kind of hard, because one of the things was that we were seen as kind of juniors maybe it was supposed to because we went here directly from school. Many people, like maybe questioned your authority as they should. Uh, so it takes a time to build up the trust and also to be able to showcase what you actual can deliver and what you can't deliver.” L-4
As described, the “forced” collaboration in the Sprint Program initiated a trust and “proof-of-ability” that extended the managers network of capabilities to reach out to for further collaborations.
“Maybe I’m most kind of lucky to know the right people within the organization. In the beginning, I think they trusted me a lot, that also helped us to become established within the organization. We kind of had an anchor in the beginning, which was the internship.
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During the internship, we had a close contact with management. The sales department always helped us to be introduced if we needed to. They put some type of approvement on us. And that helped a lot.” L-4
Further, managers with large social networks explained that the amount of connections they had led to a better organizational awareness, such as what departments that exist and what they work with, along with what competencies that exist in the organization and where to find them. Additionally, having close relationship with other managers strategically related to themselves positively impacted the willingness to collaborate by giving away resources.
“I wish that I could say that I automatically could enter a website and find competences, and we are starting to get there with ‘My Skills’, but as for now I’m still relying on my personal network. Now I have had that role throughout the years where I have been involved in many different projects in different areas within the firm, so I know a lot of people within the Swedish offices and therefore I have a large network, but for those who don’t have a big network it can be tough. Many times, I know the people that are responsible for different parts within the company pretty well, and if I don’t know them I at least know who to call.” H-3
“I think the challenge with bringing two departments together, what makes it more challenging is that we have to have quite a lot of expertise in that specific area, which I'm not sure we do right now because a lot of the things are technical or like we have to do specific uh, set ups of the financial industry for example. And I don't know who to contact. Like I said, I don't know. Just don't know.” M-4
The reason for their large networks was itself contingent on three reasons. Firstly, it was due to the amount of years the manager had worked in the firm, where many years was equivalent to many connections. Secondly, it was due to the previous employments that the manager has had within the company, where many different employments in different departments also built up an organizational awareness of the structure and the key people in each department. Lastly, the wide network was contingent on the amount of time the manager spent on spreading awareness about their own business units and field of expertise.
“I think I have pretty rough, good overview of myself because I know the relevant, let's say departments, I worked also in some of them before but it is challenging that this is based on personal contacts. So this is still based on a lot of personal contacts or advice or asking one another.” E-3
Social events Employees in the innovation initiatives also mentioned that they went to social events both during, and after, working hours where they partially obtained industry information about innovation in which they shared to the rest of the organization, partially gained knowledge in which they shared during collaborative projects for an improved project outcome, and lastly for networking with people that could be of help to the managers of the firm.
“So yeah, definitely that's like the 50% of the whole thing with the events. I think it's networking.” K-4
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The drivers of attending these events were mainly based on the employees’ personal interests and their willingness to learn, along with their wanting to gain trust with seniors and managers during projects which subsequently could lead to obtaining additional projects. By proving themselves to be knowledgeable and wanting to improve the outcome of the projects, trust with managers would be earned.
“One thing is to like establish trust and then when you can showcase that you have a good understanding of the latest things that happen, then you get this trust from other people. So that's one thing. I go there to learn stuff. And create a network of people within the industry. To, uh, learn more about the current trends and technologies. Uh, and what type of, uh, actors are moving into different industries.” L-4
Additionally, in the context of social interactions, managers working hands-on with innovation also expressed how they either spoke at internal events, to important decision makers in the firm, or on the internal social media platforms about their departments work in order to convince and “sell your story” to other parts of the firm.
“You have to sell a story, what you can do and your story needs to be bold so people get an idea or get them the motivation to talk to you next time they have a problem.” E-3
One manager of an innovation initiative shared how the will to spreading awareness and making other managers aware of the value of the manager’s department, originated from personal interest - emphasizing on a “burning desire”.
“So I'm burning for it and I'm burning for design. Both I'd be held to have projects of, our designers are, have cool stuff to work on so the section actually survives.” A-4
Social platforms The firm uses several digital intermediates to find and source capabilities in the organization, share knowledge with each other and spread awareness about the different business units ongoing projects. However, one was specifically emphasized by several informants as a “great tool for sharing what you are doing” and “finding relevant people”. Recently being implemented, a social media platform similar to Facebook is currently being used for connecting with different parts of the organization. Here, managers express that they use the platform in order to be transparent with their unit’s progress, and source help from other business units if needed. One manager express that it should be all the managers own responsibility to stay updated on other departments work and to be transparent themselves with what they do, in order to both foster a culture of trust, but also find opportunities for collaboration that can reduce duplication of products and services.
“I’m very conscious about being updated about what’s going on. Who is sitting in the management team, who is sitting in the marketing and delivery units and know how they are organized. I take own responsibility to be updated as it makes it much easier to know where to turn. Workplace is good for that.” J-3
“It would be good if we could naturally use each other’s competences and fill out where needed instead of delivering the same solutions and almost become competitors instead.” J-3
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“Workplace is nice as it makes everything more visible and communication becomes much easier.” J-3
Further, employees describe using the platform for looking into the organization chart for understanding the structure, as well as finding knowledge about niche topics relevant to the employees’ current innovation projects.
“I don't have so much knowledge on what we do. So I reached out to understand more about what we do there and that's just finding people at Workplace and set up meetings and blindly shoot. They know something and some, if you don't get the right person there, they will tell, uh, go to this person.” K-4
“So we get to a lot of freedom on how to do this and reaching out to, for example digital experience, is mostly down by me asking someone with what should I do? And they said, Oh, maybe you can ask this person. And then they ask that person and then he sends me to another and another. We just have to communicate more. Uh, so it's both good and bad type of freedom. But I think we learn with the more experience we get in and understand the company because it's so huge company. I don't have so much knowledge on what we do. So I reached out to, to understand more about what we do there and that's just finding people at Workplace and set up to set up meetings and blindly shoot. They know something and some, if you don't get the right person there, they will tell, uh, go to this person. And I think that we could make it more efficient is throw out questions there.” K-4
Organizational awareness Lastly, several informants of innovation initiatives highlighted the challenges with not knowing where competence, which they wanted to collaborate with, was located in the organization and how to find these in a smooth and effective way. They describe a conversation-based process through connections for finding the right people to talk to.
“I think I had four meetings this week, but I probably talked to 50 people sending me the next before that.” K-4
“So we reached out to our colleagues in Sweden, and they had a couple people but they were busy. So then I reached out to NetRelations. So it's a really, it's a really good question because this is actually something that I struggle with a bit, just kind of knowing where to go.” G-2
“We have Workplace, not like that's really optimized or indexed appropriately to be really useful. So we typically will start with the, with the managers and see, cause that's the best point of contact because they know the skills that they have on their team. But again, it is all a very kind of like manual, like conversation based way that we do it. You know, it would be really nice if…. I mean I guess like one thing that we could do is I guess just look like in the CV portal to kind of like search for skills. That would probably work.” G-2
“It's a very kind of, you have to sort of like hunt around. I know that there's so much expertise at [Company], and it's just like, still not very easy to find.” G-2
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Another informant added how many employees that do not understand the organization structure neither knows that the innovation department exists.
”It is hard to find the right people. It is hard to understand the structure and it is hard to understand who did what and where and how and how do I communicate with them and so on. So I think that is a struggle. Especially for us as an innovation department because we are so different from other departments. I think that there are many, many, many parts of the company that don't even know that we exist.” K-4
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5 ANALYSIS Given the aim of this thesis to explore intra-organizational collaboration for innovation, this section contains an analysis of the empirical findings, where the previously stated research questions are answered in relation to the theoretical background.
5.1 Enabling factors for formal collaboration The empirical findings revealed certain factors that influences formal collaboration for innovation in different ways.
Centralized decision-making boosts firm-wide incentives for innovation The empirical findings from this research supports extent theory that a corporate-centric process with centralized decision-making influences formal collaboration positively (Hill et al., 1992; Gupta and Govindarajan, 1986). The theory supporting a corporate-centric process claim that executives have the superior information about the firm on a macro level, and can easily identify where collaboration across business units should occur in order to reach the firm’s overall strategy and vision. As revealed by the empirical findings, we see that firm-wide innovation incentives are initiated by corporate executives with the aim to catalyze innovation between and inside business units in order to reach the firm’s vision of becoming a true innovation partner. These central programs and steering groups are being added to the firm’s formal organization structure, with the aim to catalyze innovation cross-BU through the support by top management. These formalized actions lead to BU-managers and employees to prioritize these and therefore engage in collaboration, supporting previous research by Jassawalla and Sashittal (1998) highlighting the importance of top management prioritization of innovation activities, and confirming the positive impact of centralization on formal collaboration. Additionally, Gerwin and Moffat (1997) claimed that too much centralization lead to managers only focusing on their own specific tasks and therefore engage in little exploration of innovation opportunities with other units. However, the empirical findings reveal that formalizing the connections between business units and innovation units through centralized decision-making lead to collaboration.
The findings also revealed that centralized decision making of innovation activities could lead to innovation activities dispersed around in the organization being neglected or not brought into attention as they are not brought up to top management level. In this specific case, decision and maintenance of innovation activities were carried out in proximity to the headquarters, during management meetings and in close relationship to decision makers, and therefore, the generated ideas outside of the core activities were not brought into attention and taken further in the innovation process.
Clear mandate and responsibilities for strategically related projects Informants expressed that a clear mandate provided to business unit heads in collaborative projects was critical for taking quick decisions and moving forward in the innovation process, as too many stakeholders allowed for slow processes when mandate was not clearly distributed. This can be applied onto previous theory in certain ways. For example, the findings show that strategic relatedness between business units lead to collaboration which is consistent with prior literature
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suggesting that interconnectedness between business units performance measures lead to collaborations (Tsai, 2001; De Clerq et al., 2011). However, clear mandate in these collaborations are important for moving the projects further, as previously noted by Jassawalla and Sashittal (1998). The findings from this research confirms previous research proving the importance of having a clear mandate, but also adds the notion of ownership, such as marketing and communications ownership of the website and thus the content that is produced for it, as a factor that allow for smooth and efficient collaboration between units as collaborating entities know who is in charge. Additionally, these responsibilities that marketing have in the process incentivizes for collaboration itself, as units know who needs to be contacted in order to enable the project. This process however, is suggested to require employees to be aware of what organizational processes that exist.
Managers self-interest and knowledge in innovation Consistent with Eisenhardt and Martin (2010), managers are motivated to collaborate due to self-interest rather than for financial incentives, as managers prioritize how their own units are performing. The empirical findings show that this impacts collaboration for innovation in several ways. Firstly, managers are willing to collaborate more with innovation units as the collaboration will lead to an improvement of their own products and services, a type of self-interest. However, the findings add on to previous research by revealing that this requires that managers are aware of the innovation urgency and the potential benefits of innovating in the current competitive landscape. Furthermore, collaboration with innovation initiatives will also lead to BU-managers and BU-members learning more about innovation methods and changing their own mindsets, something that managers see as beneficial for the performance of their own unit. Extent theory have suggested that learning activities prior to collaboration increases the performance for collaboration (Eisenhardt and Martin, 2010), while in this case, the learning is an integrated aspect of the collaboration itself.
Furthermore, senior managers that are expected by external customers to have knowledge within innovation topics, but with little time and resources for gaining that knowledge by themselves, took the opportunity during management meetings to join into collaboration with innovation units in unloading that knowledge burden from themselves. The notion of managers’ lack of time as an antecedent to collaboration goes well in hand with previous research on how good internal coordination of resources can lead to better responding to external partners, as resources are modularly allocated to where they are needed (Chen, Y., et al., 2013). However, informants mention that trust gained from managers during previous projects were important in order for these new collaborations with new actors to emerge, as managers spoke with each other about what competences that exist in the organization. This aligns with previous research, that trust influences formal structures of collaborations as well (Hansen, 1999; Tsai, 2000, 2001).
5.2 Enabling factors for informal collaboration The empirical findings revealed that there exist certain factors that enable informal collaboration for innovation; the level of centralization, social interactions, trust, autonomy provided managers, mindset and organizational awareness.
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Decentralized decision making and autonomy provided to managers The empirical findings revealed that decentralized decision making where the idea for collaboration has a BU-origin rather than a corporate executive origin, lead to more cross-BU collaboration for innovation as managers have the best knowledge about the existing competences in their teams, what problems their specific business unit was experiencing and how to solve that problem. This finding is somewhat identical of what was suggested by Eisenhardt and Martin (2010), stressing that a BU-centric process is preferred for collaboration.
In combination with business unit managers’ self-interest in regard to the performance of their own unit, being provided with the autonomy to solve the own BU’s problems influenced informal collaborations in several ways. For example, managers scouted around in the firm by themselves, observing and potentially engaging in collaboration in order to share technology cross-unit and avoid spending resources on “reinventing the wheel”. Also, managers expressed how they were responsible for identifying the need for niche competences in their teams by themselves, and scouted and obtained those competences from other business units on their own initiative. Thus, being able to make decisions for solving the own unit’s problems means that the level of centralized decision making and the level of autonomy provided managers also has an impact on informal collaboration.
Furthermore, in order to navigate themselves and engage in these informal collaborations, the findings suggest that managers and employees need to have sufficient knowledge of the organization structure, the competencies that exist in the firm and where they are, along with the know-how for how to approach these potential collaborations. This finding goes well in hand with previous research in social network theory that stresses that “know- what”, “know-who”, and “know-how” are important for knowledge sharing (Cross et. al., 2002).
Geographical location of departments influences social interactions and trust Non-surprisingly, strong communication was found to be important for collaborations in different locations to operate smoothly. Furthermore, the lack of social interaction between units in different locations affected informal collaboration due to lack of familiarity and trust. In contrast, being able to sit close to each other in the office increased social interactions and familiarity, which consequently lead to more collaborations and knowledge sharing, aligning with previous research on social network theory suggesting that informal relationship between employees affect who you reach out to for knowledge sharing and collaboration (Cross et. al., 2002). Conversely, the findings revealed that strategically related business units that operated in different geographies did not reach out to each other on the first hand, but rather with familiar faces closer to them geographically, as they were not as socially familiar with each other.
Culture and mindset influence the willingness to collaborate Culture and mindset influence collaboration for innovation in multiple ways, as brought up in several research fields, such as Open Innovation. Firstly, the findings revealed that differences in working cultures influenced cross-unit collaboration negatively. When one manager in a country tried to share resources to a manager in another country in order to support the rollout of an innovation project in the firm, differences in preferred way of working due to culture inhibited the
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collaboration. Secondly, another manager added that the silos-orientated culture in the firm inhibited collaboration as well, and that geographical distance between units only demotivated for reaching out even more.
Lastly, managers expressed how the mindset within seniors that had worked in the firm for many years, but who have little knowledge about innovation processes and innovation urgency, posed a challenge for cross-unit innovation work. One manager expressed that seniors may feel “threatened” by the new ways of working, which could be linked to prior studies about the “not invented here”-syndrome (de Burcharth et al., 2014; Antons and Piller, 2015). However, the same manager highlighted the positive effects on mindset when letting seniors work on projects together with the innovation department, suggesting it “moves the culture forward”. As previously mentioned, the notion of employee learning in order to change their mindset towards innovation practices is a well-researched-upon topic that clearly has an influence on formal and informal collaboration likewise.
Social connections as an enabler of organizational awareness and incentives for collaboration The findings suggest that wide social networks, with many connections in different departments, led to better organizational awareness as managers who had worked in the firm for many years and in different departments expressed that they knew a lot of people which subsequently led to more informal collaborations, confirming previous research on social capital (Cross et al. 2002; Tsai, 2000). For example, managers with wide networks knew better what and how the different departments worked and where competence was located in the firm, which influenced the level of informal collaboration. In contrast, managers and employees with less experience in the company, and therefore had less knowledge of the organization structure and where competence and activities were carried out, struggled with knowing where to turn in order to find what they needed. However, social interaction through emails with colleagues, and digital social media platforms where employees could study the organization chart and write public messages to the entire organization, helped increasing the organizational awareness and connections to relevant people.
Furthermore, managers in innovation initiatives expressed that “touring around” in the organization and spreading awareness about their departments either by talking to each other, writing public posts on the internal digital social media platform, or speaking at events, lead to more opportunities for cross-unit collaboration. When spreading awareness about their own departments, employees and managers from other units and with previously little knowledge about what the innovation department was working with, found new opportunities for collaboration either by offering their own units knowledge and resources to solve a problem, or joining in a collaborative project. It is suggested that this type of “touring around” amongst other areas in the organization, is a boundary spanning type of behavior similar to cultural brokerage (Casciero et. al., 2019), where certain social and intellectual abilities within employees contributes to bridging between the work of different units.
Furthermore, employees mentioned how office chats by the coffee machine or by the colleagues’ desks lead to more opportunities for collaboration as both parties shared information about their current projects and the struggles that they were experiencing, which subsequently led to them offering to give input to one another or join each other’s projects. This aligns with previous
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research on social network analysis, which suggests that social interaction influences informal collaboration (Cross et. al. 2002). Additionally, as revealed from the findings, this dimension of social interaction through office chats were mediated by the connections that existed before from previous projects or interactions, and would therefore not occur with someone unfamiliar.
Social platforms and personal interest as enablers of trust and collaboration
Informants also shared the particular impact that interacting through social media platforms had on informal collaboration. For example, managers posted updates about their organization’s work in order to be transparent to the rest of the organization and seize opportunities for avoiding duplication of technology and products. Further, posts on the platforms were made in case a manager or employee needed help with resources and knowledge, or if employees wanted to share knowledge on topics with others. However, informants revealed that being active on these platforms were solely based on their own personal interest.
Lastly, several informants expressed how they went to external events both during and after working hours. Often, these were social events related to innovative topics about their own industry, where they obtained knowledge and brought it back into the own firm, aligning with previous research on the positive impact of technology gatekeepers on innovation in organizations (Allen, 1977). Informants shared that gaining attractive knowledge from external sources during seminars, as well as networking with others, was solely based on their personal interest as informants wanted to gain trust with leaders in the own firm by showcasing their knowledge in the various fields, thus including the element of trust into gatekeeping. However, the same informants also emphasized that the interest in innovation was also personal, and that they enjoyed gaining knowledge about different topics within technology and innovation outside of their work without their managers asking them to do it. The demonstration of knowledge and personal interest during later points of interactions with leaders, led to gaining trust that would then incentivize for additional collaborations.
5.3 Interdependencies between enabling factors for formal and informal collaboration
What furthermore could be analyzed from the empirical findings, were the interdependencies between enabling factors for formal and informal collaboration. Amongst these, an interrelationship between social interactions and trust; autonomy provided managers and organizational awareness; and lastly; between personal interest and trust, were identified. Additionally, an interrelationship between enabling factors for formal collaboration and the enabling factors for informal collaboration was identified, such as; managers knowledge in innovation and their mindset towards innovation.
Autonomy, social interactions and organizational awareness Findings showed that autonomy provided to managers and employees led to more social interactions with colleagues. Especially as autonomy was provided to managers for gaining expertise in a topic, or sourcing competences to their own project teams, managers had no other choice but to reach out to their social networks and navigate themselves around in the organization in order to ensure knowledge and capabilities. This consequently lead to better organizational
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awareness, as informants learned about the organization chart and hierarchy throughout the process. This action was also mediated by self-interest, meaning that managers and employees wanted to ensure their own units success and therefore undertook actions in order to solve the problems they were facing, and therefore supporting previous research on business unit managers and members self-interest as and incentivizer of collaboration.
Furthermore, the more ties that employees had with colleagues in different departments, the better organizational awareness they had. Meaning, the wider their social network was, the more aware they were of the know-what-how-where of the organization. This was also dependent on previous experience from projects, or previous positions in the company.
Social interactions and trust The empirical findings revealed that all of the informants experienced that social interactions with colleagues led to increased familiarity and subsequently trust, independent on their level or role in the organization, and thus supporting previous research on informal collaboration (see eg. Tsai, 2002). This occurred on multiple levels. For example, several informants either explicitly expressed how the lack of social interactions in the office area inhibited their willingness to collaborate as they did not feel any trust, or shared how they needed to socially interact more with colleagues in other geographic locations in order to have trust and want to collaborate with each other. Furthermore, the more familiarity and trust that existed between two employees, the higher was the likeliness that they reached out to each other again for help in another collaboration (Tsai, 2000, 2002), and thus engaging in more social interactions. Additionally, informants expressed how talking and spreading awareness of their work in the office, on events and on social media platforms increased levels of trust and social connections, as people would be more apt to contacting them “next time” for their specific problem.
Furthermore, informants expressed how social interactions with managers by the coffee machines or by their desks led to more trust, as they got to showcase their knowledge of innovation in the manager’s field of expertise through informal office chats and therefore be of relevance for the manager’s own knowledge. This subsequently led to the managers to socially interact with the informants more often as they had built up trust from previous conversations. The importance of trust in initiating collaboration supports previous research within the field of informal collaboration, see Table 3 for references. Furthermore, employees proved themselves being trustworthy of communicating with managers on industry related topics as they gained knowledge from external events which they showcased spontaneously when possibilities emerged. Although not explicitly involving the element of trust, research on the role of technological Gatekeepers in firms have arrived at similar conclusions in how employees are motivated to reach out to the Gatekeepers for knowledge rather than to traditional sources (Allen, 1977; Arora, 1987; Yates, 1970).
Knowledge in innovation, learning and employees’ mindset Lastly, a particularly interesting - however not shocking – finding was the interrelationship between managers’ and employees’ knowledge on innovation, their learning through collaborative projects, and their mindset towards collaborating on innovation. The better understanding of innovation related methods and processes and the value of them that employees had, the less threatened and more open they were towards innovation. Furthermore, the more learning they
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obtained on innovation practices, the better understanding they got of the value of innovation which subsequently influenced their openness for innovation positively. This was often true for senior employees who had worked in certain ways for a long time and thus had little previous experience from working with innovation. Knowledge and mindset within non-innovators, which impacts the overall innovation culture within a firm, is a known problem in research in fields such as inter-organizational collaboration, see for example de Burcharth et al. (2014) and Antons and Piller (2015). However, it is evident that it is of importance in the field of intra-organizational collaboration as well.
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6 DISCUSSION AND CONCLUSIONS This chapter aims to discuss the specific findings from the analysis and what implications they may have in practice, as well as provide with some guiding principles for practitioners. Furthermore, it will disclose its specific contribution to theory, before arriving to an overarching conclusion.
6.1 Discussion Emerging from the analysis, a few themes were particularly interesting to look further into, namely the impact of the level of centralization on internal collaboration for innovation, the impact of geographical location of units, and the suggested interplay between formal and informal collaboration. This section will therefore discuss these three themes.
Centralization vs decentralization for collaboration One particularly interesting factor that appeared from the analysis of this study was the influence of the level of centralization on collaborative activities for innovation, and thus provided with additional information to be added onto the everlasting debate on whether centralization is good or bad for cross-unit collaboration on innovation. The analysis provided with two takes on how the level of centralization enables formal and informal collaboration: centralized decision making for firm-wide incentives; and decentralized decision making for informal incentives.
Firm-wide incentives carried out by top management for catalyzing innovation throughout the organization - such as in this case by initiating incentives and programs to generate cross-BU collaboration - is in line with extant literature on the corporate-centric process enabling formal collaboration through centralized decision making. Why centralization is an enabler of these activities could be related to the higher “macro” level that corporate executives operate at on a daily basis, being strategists and visionaries for the future. Executives’ daily job include setting firm-wide goals, aiming at financial performance and deciding on BU-incentives - at the same time as having the authority and power to decide how the firm is going to pursue their goals. This gives potential for new innovation departments and innovation initiatives to emerge and receive support in the process of collaborating for innovation. Centralized decision making with top management prioritization also gives power and commitment to innovation in the organization, positioning it on a level that encourages managers and individuals from – perhaps previously negatively oriented towards innovation - to initiate in collaborations. However, it can be discussed whether centralization of these decisions actually enable collaboration for innovation in practice, as the analysis also provided with the insight of decentralization being an enabling mechanism of informal collaboration.
The informal collaborations usually occur between individuals on a lower level, such as business unit managers, contingent on the autonomy provided to them by top management, and mediated by their self-interest of reaching the own business unit’s goals (Eisenhardt and Martin, 2010). Managers of business units often have the responsibility to equip their projects on own hand, or even find projects on their own hand in order to ensure the progressing of the own unit, decentralization becomes key in these processes. Critical for informal collaboration is the possibility to be able to take decisions on collaboration freely without having to consolidate with
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top managers. As middle managers work on the more “micro” level of collaboration and hands-on with innovation projects, they know their team and their industry on a detailed, more practical, level (Eisenhardt and Martin, 2010). Differentiating from corporate executives here, the “micro” level is not motivated by how the whole firm is positioned on the market, but more what problems that need to be solved and what are the direct actions that can be taken in order to solve that specific problem, thus leading to collaborating efforts.
Therefore, while centralized decision making enables the starting of collaborative engagements for innovation, and “putting innovation on the agenda” internally in the organization in order to position the firm as an innovative partner externally, decentralized decision making is critical for enabling collaboration in practice as many of the collaborations that take place in a firm is done through informal means. However, this also means that innovation efforts outside of the core incentives that would need a collaborative partner in order to be seized, will not see the spring of light as corporate executives with the power to decide are focused only on certain activities (Gerwin and Moffat, 1997). The same goes for the entrepreneurial employees within the firm whose personal interest in innovation allows for finding new opportunities for innovation, but are not able to take it to a further level as decisions are made on a much higher level and might not be a pre-defined part of the overall firm-wide goals that top management has set for the firm, but rather the spontaneous knowledge spillovers of innovation from central activities pursued in other locations.
The impact of geographical proximity on collaboration Another point of interest is digging deeper into the influence of social interactions and trust on collaboration when there is a geographical proximity versus a geographical distance. This is of course a multi-facetted problem, where both formal and informal structures are playing on the same grounds as the geographical proximity of collaborating entities.
The analysis revealed that the geographical location of individuals and departments influenced informal collaboration negatively, where being located in two different geographies contributed to less social interactions and therefore less trust and familiarity. Conversely, informal structures that allow for social interactions by the coffee machine, or just sitting close to each other and seeing a familiar face, contributes to a willingness to engage in collaborations as there is a great element of transparency and trust created between them. Additionally, even formal collaboration is negatively influenced by geographical distance. Strategically related entities that would certainly be of help to each other, engage less in collaboration due to geographical distance for reasons expressed as “natural” or due to multiple silos in the organization. However, being able to have a strong communication, i.e. social interactions, in already initiated projects carried out from different locations can instead enable smooth and efficient collaborations for innovation.
While previous research on social network analysis mainly has emphasized on the importance of geographical proximity on knowledge sharing (Cross, et. al. 2002), it is evident that this is a component important in research on trust and collaboration as well. Therefore, it is possible to draw conclusions on the impact that geographical proximity has on collaboration. Informal collaboration, when almost spontaneously initiated between individuals, is enabled through geographical proximity between collaborating entities as these involve social interactions that enable transparency, familiarity and trust. Formal collaboration, when managers reach out to other
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strategically related managers to engage in, for example, resource sharing, lack the component of trust and familiarity that is generated through social interactions and social relationships, leading to managers turning to someone in closer proximity to them.
Interdependencies between formal and informal structures for collaboration A third observation that can be made from the analysis which is of interest to acknowledge and look deeper into is the interdependencies between certain formal and informal structures for collaboration for innovation related endeavors. What could be identified is that first points of collaboration with innovation through centralized - “forced” - means, lead to social relationships and trust that can lead to additional collaborations in the future. As innovation projects are naturally riskier than “normal” projects, as well as often containing elements of processes, knowledge and methods unfamiliar to the counterpart with no experience of innovation at all, it can be even more decentivizing to engage in these type of projects as managers do not know if the outcome will b e successful or even benefit their business units. However, it is suggested that when the first collaboration for innovation is carried out, and the outcome was of success as well as the point of connection now is facilitated, the proven track record and the new social relationship will incentivize and enable for further informal collaborations to occur. This meaning, that the successful result of a formal incentive for collaboration generates a social relationship containing elements of trust, which will later incentivize for additional collaborations through informal point of contacts, such as social interactions by the coffee machine or through other social platforms. This goes hand in hand with previous research that has pointed out that managers who have social relationships with mutual trust are more prone to engaging in projects that contain more risk with each other (Tsai, 2000; Tsai, 2001). In combination with previous knowledge on that managers are more prone to reach out to each other for additional collaborations when trust has established after an initial collaboration, the conclusion that formal structures for collaboration for innovation could lead to informal structures for collaboration can be drawn.
This revealing also contributes to the notion that formal and informal structures for collaboration should not be separated or measured separately. Instead, they exist in an interplay and catalyze and accelerate each other. Corporate executives can take advantage of this in order to facilitate collaborations and maximize its output in the firm.
6.2 Practical implications In their quest of enabling effective internal collaborations for innovation, corporate executives and managers can undertake certain actions in order to facilitate the initiation and progressions of these collaborations. The analysis from the findings revealed certain interdependencies between enabling factors that managers and corporate executives can take advantage of when organizing for innovation.
Firstly, the importance of social interaction through formal and informal mechanisms were clearly an enabler of both trust and social networking internally, which consequently led to the establishments of collaborations. Managers can therefore enable social interactions through the facilitation of touchpoints between strategically related units for knowledge exchange. For example, by generating accessibility and time to connect with other business units in the office, or setting up gatherings between units positioned in different locations. Further, managers can
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encourage their employees to be active on social platforms for connecting with employees across in different geographical locations. For example, by encouraging managers and employees to share what their department is currently working on, and to use these digital platforms for receiving input from others on their projects and ideas. However, to actually enable this, managers need to give their employees time and freedom to be able to prioritize social connections within the organization. In today’s knowledge intensive industries, having meetings all day long leave little room for social interactions in the office, or engaging in internal social media platforms. Therefore, managers need to formalize the allocation of spare time for their employees to spontaneously connect and discuss. Additionally, managers can facilitate regular knowledge exchange sessions between units in the organization to include them in the innovation work, such as idea hackathons, where seniors get the opportunity to learn about innovation practices and exchange field expertise with innovation departments. This will also increase trust, and thus further relationships to be established.
Secondly, to bring innovation efforts in to the light, managers need to ensure that decisions on innovation activities on micro level is carried out on a business unit level rather than a strategic, corporate executive level. This means that top management need to provide with resources to innovation departments to operate freely on the micro level, as well as identifying where innovation is carried out in the organization in order to be able to support and prioritize it. Furthermore, managers can enable the smooth knowledge sharing and networking between gatekeepers and employees by connecting these through formal incentives such as knowledge sharing platforms, internal social events and internal social media platforms. In a similar way, managers should devote resources onto encouraging cross-silo leadership to employees which can easily facilitate the collaboration between units by becoming the connecting bridge between them.
Overall, there is a strong need for analyzing and optimizing the balance between formal and informal structures in order to facilitate collaboration for innovation within a firm. This is not an easy task, as managers often do not realize when their decisions on structures and processes are enabling or inhibiting innovation, as exemplified by Cross et al. (2002), for example. In Table 7 below, a few guiding principles and important factors are presented to managers in their effort to effectively enable collaboration in their organizations.
Table 7. Guiding principles and important factors for practitioners to facilitate.
Enablersofcollaboration Importanttofacilitate
• Trust• Socialinteractions• Rightlevelofcentralization• Clearmandateandownership• Geographicalproximity• Autonomyprovidedmanagersandemployees• Prioritizationbytopmanagement• Employeeswidthofsocialnetwork• Employeesorganizationalawareness• Mindset
• Accesstoeachother• Time• Socialrelationships• Gatekeepers• Cross-Siloleadership• Bestpracticesforaccessingand
findingresourcesandcapabilities• Learning• Culture
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6.3 Theoretical contributions This research confirmed previous research within social network theory and collaboration, as well as provided with new insights on their interrelationships which could further guide researchers and practitioners in these theoretic fields. It did so by firstly revealing the enablers of both formal and informal collaborations; where trust, social interactions and the level of centralization were present in both formal and informal structures. Secondly, it added a new dimension to theory of formal and informal structures, where interrelationships between their enabling factors were identified and mapped out accordingly.
Its most specific contribution to theory, however, involves the clarification and the new light that it sheds on the never-ending debate around whether centralization enables or inhibits intra-organizational collaboration. Rather than suggesting that centralization is either good or bad for collaboration – which most previous research has discussed – it suggests that different levels of centralization are enablers for different type of structures and at different organizational levels. Thus, revealing that centralized decision making contributes positively to collaboration on a firm-wide level, incentivizing collaboration between units, whereas decentralized decision making contributes positively to collaboration on a more practical, hands-on, level carried out by individual employees or managers on more informal grounds.
6.4 Conclusions
Given the purpose to explore intra-organizational collaboration for innovation, this study aimed at mapping out the enabling factors for formal and informal collaboration through a qualitative study on an IT-service company. The findings revealed support for previous theory on formal and informal collaboration, stating that centralized decision making, managers self-interest and a clear mandate enables formal collaboration; while decentralized decision making, social connections, employees’ mindset and geographical proximity enables informal collaboration. Particularly important for enabling informal collaboration is the possibility to engage in social interactions between employees, their level of organizational awareness and the trust they have for one another. Furthermore, the results highlighted the presence of interdependencies between enabling factors for formal and informal collaboration which can act as catalyzers on each other. For example, that social interactions lead to trust and vice versa; as well as a high level of autonomy provided to managers lead to social interactions that consequently lead to a wider social network.
The study further provided with a new light on the debated topic on whether centralized decision making enables or inhibits collaboration. Where previous research mostly has discussed whether centralized decision making either has a positive or negative impact on collaboration, the conducted research provides with a clarification of when centralization is an enabler of collaboration, how it enables collaboration and where firms benefit from decentralized decision making instead. The results indicate that centralized decision making enables collaboration on a strategic, “macro”, level, carried out by corporate executives to create incentivize for units to collaborate on innovation. However, on a “micro” level between managers, decentralized decision making enables collaboration as managers rely on their own navigation, communication and agility in order to carry out collaboration for innovation projects successfully.
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7 LIMITATIONS AND FUTURE RESEARCH The findings from this research opens up several possible avenues for future research. As the scope of this research was very broad and thus providing insights on internal collaboration on a macro level, the results could be further researched upon in a more micro level setting. Firstly, the results from this research was tangential with several narrower fields, such as social network theory, information processing theory and knowledge management in organizations. Thus, the findings can be applied and further used for research in these fields.
Secondly, the findings revealed several interdependencies between enablers for formal and informal collaboration which opens up for further research to further investigate these and look deeper into their contingencies. For example, by conducting a social network analysis. Additionally, as this research only consisted of qualitative research, statistical evidence in further research can provide with strength, or rejection, of these findings through quantitative measures. Quantitative measures can also be used to further map out and detail the specific interdependencies, and allow for additional interrelationships to be revealed. Furthermore, the findings revealed insights about how centralization enables collaboration for innovation which could be further investigated in regards with the findings about interdependencies. For example, what level of centralization that can enable certain interdependencies to emerge and exist, and thus provide with additional information about the interplay between formal and informal structures.
Thirdly, as this research included the whole scope of collaboration and did not consider potential differences during the process of collaboration, for example the enablers of initiating collaboration versus the enablers for the actual collaboration itself, further research can define collaboration more specifically as a unit of analysis in order to understand the entire process on a detailed level.
Lastly, as this study was carried out in one firm only, future research could include multiple firms in similar, or different, industries in order to strengthen the findings from this research, and identify possible differences amongst industries and organizational settings.
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