Microfoundations of Process Innovation Capabilities

Abstract

Today’s organizations are faced with an increasingly demanding competitive environment. Pervasive digitalization, disruptive technologies, changing workplaces, more demanding customers, and increasing global competition accelerate the required pace for development. This emphasizes the value of process innovation capabilities for the overall competitiveness of an organization. In addition, there is a critical gap to be fulfilled in the literature. The management of product innovation has received substantial amount of theoretical and empirical attention, but our knowledge of process innovations and particularly how firms become process innovators remains underdeveloped. The situation is even more fascinating in the pharmaceutical industry, since previous studies have mainly focused on product innovation or the discovery and development of new drugs, rather than process innovations, which are generally more related to changes in manufacturing processes. However, the need for process innovations in the pharmaceutical industry can be described as essential for various stakeholders, such as patients, the industry, and the health care system, which together have an impact on the whole society.

The main purpose of this master’s thesis is to identify the underlying microfoundations of process innovation capabilities of a multinational corporation's pharmaceutical Supply Center. Secondly, as an integral part of that purpose, this research aims to identify the fundamental mechanisms, which affect individuals’ innovative work behavior. Thirdly, the research aims to explain how an internally crowdsourced innovation software influences individuals’ innovative work behavior. To reach the overall purpose and to answer the research questions, the empirical results were used to guide the theoretical background. Later, the empirical results and the theoretical background were utilized simultaneously to develop the final conceptual framework for microfoundations of process innovation capabilities.

The findings of the identified microfoundations can be described to summarize the micro-level enablers for process innovation capabilities. The results establish how the case organization is on its way to become a process innovator and reveal some of the organizational and managerial activities through which the case organization introduces process innovations. Since managers cannot intervene the macro-level directly, gaining understanding of the microfoundations provides possibilities for managers to strengthen capabilities by influencing, for example, the underlying microfoundations or routines.

Furthermore, the results disclose several individual attributes, motivational factors, and organizational conditions that were linked with innovative work behavior. This information gives guidance for managers to enhance, for example, the organization-wide motivation and, thus, foster process innovation capabilities throughout the organization. To conclude, the results also highlight the positive effects of internally crowdsourced innovation management software, which has yet remained a rather unexplored field. To summarize, this master’s thesis presents a holistic view of the microfoundations of process innovation capabilities by combining theory and empirical results of innovative work behavior, the related effects of innovation management software, and the overall organizational context.

Keywords: process innovation, innovation capabilities, microfoundations, innovation management, innovative work behavior, continuous innovation, innovation management software, computer aided innovation, pharmaceutical manufacturing

The originality of this thesis has been checked using the Turnitin OriginalityCheck service.