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Ekonomi och samhälle Economics and Society Skrifter utgivna vid Svenska handelshögskolan Publications of the Hanken School of Economics Nr 243 Seppo Laukkanen Making Sense of Ambidexterity A Process View of the Renewing Effects of Innovation Activities in a Multinational Enterprise Helsinki 2012 < Making Sense of Ambidexterity: A Process View of the Renewing Effects of Innovation Activities in a Multinational Enterprise Key words: innovation, ambidexterity, entrepreneurship, strategic renewal, multinational enterprise © Hanken School of Economics & Seppo Laukkanen, 2012 Seppo Laukkanen Hanken School of Economics Department of Management and Organization P.O.Box 479, 00101 Helsinki, Finland Hanken School of Economics ISBN 978-952-232-165-7 (printed) ISBN 978-952-232-166-4 (PDF) ISSN-L 0424-7256 ISSN 0424-7256 (printed) ISSN 2242-699X (PDF) Edita Prima Ltd, Helsinki 2012 i PREFACE It takes extraordinary effort and commitment to make a scientific contribution. This project took three years of persistent hard work, interspersed with short periods of total devotion, spent cloistered, focusing on this research project. These periods of total devotion enabled me as a researcher to dive deep into the minds of the innovators and fly high with the theories. Such immersion fostered lateral thinking and productive writing, both necessary to finalize this work. The unconditional support of my entire family was integral in this undertaking. Hanken has been a great academic home for the doctoral work. The great personalities, the state of the art competences and the rich international networks facilitated an elaborative way of working. The elaborative approach to research has been key to my discoveries. In particular, the vast academic experience and accommodating personality of Martin Lindell was crucial for developing the ability to do research grounded on real business rather than merely theoretical frameworks. The empathetic encouragement and practical advice of Eero Vaara helped me push through the “valley of death” in the research project. Ingmar Björkman’s and Saku Mantere’s guidance on theory studies helped me progress swiftly in building the theoretical foundation of the work. I am extremely grateful for the able support of the Leadership and Organization Department at Hanken. In addition, the help of Petri Rosenlöf, Chris Fogarty and Staffan Dellringer has made the outcome of the research easier to digest. Thank you Staffan, Chris and Pete for your contributions in editing the dissertation. In inductive research, the research object takes on an active role. The discoveries are made together. The findings of this study build on the thoughts and insights of the actual innovators at Nokia. Thanks to the access granted by Heikki Norta, Kai Öistämö and Seppo Aaltonen we were able to study illuminating innovation cases. Pia Erkinheimo’s altruistic effort enabled to get hold on the true innovators in those cases. The open attitude and intellectual participation of the innovators brought novel ideas to the theory development. My heartfelt thanks goes out to Nokia and its innovator communities for the privileged access to their experiences and thoughts. In distilling the insights and thoughts of the interviewees to the theories, I have been blessed with the world’s best scholarly guidance. Thorough and constructive feedback from the examiners Robert Burgelman of Stanford and Yves Doz of INSEAD has profoundly improved the quality of my work. Thank you Yves and Robert for the time and effort that you have put into this dissertation! This research has been conducted in the entrepreneurial spirit. The first phases were conducted as part of a Tekes-project. As the research advanced, the source of funding shifted to the collaborative projects with ICT Shok and Aalto University. Collaboration with Seija Kulkki of CKIR and Reijo Paajanen of TIVIT has been particularly crucial to this work. Thank you, Seija and Reijo for your collaboration and support! In addition, substantial grants from Liikesivistysrahasto have enabled me to devote time to this work. Additionally, Waldemar von Frenkell’s, Ella and Georg Ehrnrooth’s and Marcus Wallenberg’s Foundations have funded individual tasks during the project. Thank you all for funding this scientific endeavor! Finally, I would like to thank my family for their love and support. A special note of gratitude goes out to my wife Mirkka for making this dissertation possible! Without your love and flexibility this work could not have been accomplished. ii This study speaks to the innovators and leaders of organizations. The aim is to provide conceptualizations that help link the creativity of individuals to the progress of organizations and society. I hope the work makes its humble contribution to fostering creativity and innovation for the common good. The work is dedicated to the bright future of our sons Hannes and Lauri! Helsinki, March 25, 2012 Seppo Laukkanen iii CONTENTS 1 INTRODUCTION, RESEARCH GAP AND INQUIRY ............................. 1 1.1. The Research Gap and the Focus Areas of the Research.................................... 3 1.2. The Aim of the Research ..................................................................................... 3 1.3. The Research Inquiry .......................................................................................... 3 1.4. The Structure of the Dissertation........................................................................ 4 1.5. Definitions ............................................................................................................5 2 AMBIDEXTERITY – THE COMBINATION OF EXPLORTATION AND EXPLOITATION FOSTERS INNOVATIONS ..........................................7 2.1. Exploration and Exploitation as Complementary Learning Modes....................7 2.2. Overcoming Exploitation Bias ............................................................................ 8 2.2.1. Structural Separation.............................................................................. 8 2.2.2. Sequential Phasing of Exploration and Exploitation ............................. 8 2.2.3. Enforcing Exploration and Interplay to Foster Innovation ................... 9 2.2.4. Contextual Ambidexterity......................................................................10 2.3. Towards Synthesis of Ambidexterity ................................................................. 11 2.4. Issues to be Clarified on Ambidexterity.............................................................14 2.5. The Ambidexterity Inquiry of this Study ........................................................... 15 3 ENTREPRENEURSHIP AS A DRIVER FOR INNOVATIONS.............. 16 3.1. Entrepreneurship as the Driver of Innovations.................................................16 3.2. Entrepreneurship in the Context of Established Organization......................... 17 3.2.1. Corporate Entrepreneurship and Innovation .......................................18 3.3. Characterizing Entrepreneurial Agency............................................................ 20 3.3.1. Behavioral Traits, which Facilitate Entrepreneurship of Individuals . 20 3.3.2. Subjectivity of Entrepreneurship...........................................................21 3.3.3. Team Entrepreneurship........................................................................ 22 3.4. Entrepreneurship Inquiry of this Study............................................................ 23 4 THE INTERPLAY OF ENTREPRENEURSHIP, STRATEGY AND STRUCTURE ..........................................................................................24 4.1. Strategy as a Fit between External Ecological Forces and Internal Selection Criteria ............................................................................................................... 24 4.2. Autonomous Entrepreneurial Action Brings Novelty to the Strategy...............25 4.3. The Interplay between Entrepreneurial Action and Strategy .......................... 26 iv 4.4. The Process of Determining Strategy.................................................................27 4.5. Championing as the Act of Matching and Linking ............................................27 4.6. Inquiry about the Interplay between Innovation Activities and Strategy in this Study .................................................................................................................. 29 5 TOWARDS SYNTHESIS OF AMBIDEXTERITY, ENTREPRENEURSHIP AND FIRM STRATEGY................................. 30 5.1. Benefit of Exploration and Exploitation – The Paradox of Separation and Integration ......................................................................................................... 30 5.2. Combining Cohesion with the Variance Seeking Behavior to Achieve Ambidexterity .................................................................................................... 30 5.3. Behavioral Traits Driving Entrepreneurial Pursuit of Opportunities ...............31 5.4. Social Configurations as Mechanisms to Accommodate Versatile Subjective Views of Opportunities.......................................................................................31 5.5. The Interplay of Entrepreneurship, Strategy and Processes Development Facilitates the Strategic Renewal of the Firm ....................................................31 5.6. Gaps in the Current Scientific Knowledge and the Research Inquiry of this Study .................................................................................................................
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