In Search of a Network Organization for Innovation: A Multilevel Analysis on Transnational Corporations' Global Innovation

Network organization has been a popular research topic for a long time, and the literature has shown that there is a positive relationship between network organization and innovation performance of innovation actors. Yet, as a buzzword, network organization is always very loosely defined in the existing literature, and its definition is highly debatable, especially when it refers to companies’ internal organizational design. This PhD dissertation is an exploratory study on network organization for innovation, aiming to investigate the following two research questions:
• How do transnational corporations perceive/design a network organization to facilitate their global innovation?
• To what extent and how can we manage a network organization?
Research focus of the dissertation is on transnational corporations’ network organization for innovation. The first research question aims to clarify the meaning of network organization for innovation, and based on that, this dissertation further explores the management of a network organization. The two research questions are further discussed and answered within five papers as follows:
Researching the meaning of network organization:
Paper 1 investigates the meaning of network organization for innovation through an extensive literature review, and summarizes a three-level framework to understand network organization for innovation, i.e. contextual level (networks as the global innovation context), interorganizational level and intraorganizational level (internal network organization). Based on Paper 1, the two main research questions are answered using the three levels in the remaining four papers.
The complex triple helix interactions across national borders constitute the global innovation context that transnational corporations are embedded in. Based on the description and analysis of the Danish triple helix’s innovation activities in China, Paper 2 proposes a stage-model of the internationalization of the triple helix, consisting of three stages, i.e. pioneering, exploration and integration stage. In the pioneering stage, we see the establishment of each of the three helix spheres abroad, i.e. internationalization of companies, universities and governments; in the exploration stage, the three spheres start to interact abroad and collaborate with counterparts in the host country; and finally, in the integration stage, helix to helix collaboration emerges.
Paper 4 explores how transnational corporations perceive and design an internal network organization to facilitate global innovation. Based on a multiple case study of three Danish transnational corporations’ global R&D organization, this paper shows three types of network organization design that facilitate global innovation, i.e. market-led, directed and culture-led network organizations. Moreover, different types of network organizations are showing that organizations are dual and even ternary systems of three coordination modes, i.e. the market, the hierarchy and the network modes.
Paper 5 explores how an SME develops a network organization consisting of both interfirm innovation networks and an internal network organization to facilitate its global innovation strategy. Regarding the intraorganizational network organization, market mechanism is adopted to optimize internal resource allocations. It also establishes different types of ties such as formal, informal, deep and wide ties with external innovation partners.
Researching the management of network organization:
Generally speaking, traditional management styles such as commanding and directing are not suitable for network organizations, and therefore new managerial styles such as orchestration, coordination and facilitation are emerging in network organizations. Paper 3 investigates the management of one specific type of interorganizational network organizations, i.e. strategic technological partnership, and explores how relational competitive advantages are generated from two essential stages, i.e. relational rents generation and relational rents appropriation. In order to successfully generate and appropriate relational rents, partnering firms need to integrate three coordination modes, i.e. resource commitment, contract, and trust. Paper 5 investigates the management of network organization by exploring the meaning of orchestration capability in network organizations. Orchestration capability ensures knowledge mobility, innovation appropriability and network stability. This paper argues that orchestration capability can and needs to be applied in both intra-and interorganizational network organizations.
The way the dissertation has been designed has given rise to both theoretical and practical implications. Regarding the theoretical contribution, the dissertation expands our knowledge by contributing to the theories of global innovation organization and management. For example, the dissertation expands the triple helix model by adding an internationalization dimension, and elaborates and expands the emerging concepts of relational competitive advantages and orchestration capabilities. The findings of the dissertation also suggest that in order to improve their innovation activities, transnational corporations need to have a network mindset and facilitate global innovation in three ways: searching for innovation resources in the global business environment, establishing technological partnerships, and designing an internal network organization. Therefore, these findings may serve as guidelines for business managers and policy makers.