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Supplier firms, especially the more resource constraint SMEs, form alliances for product innovation. Supplier firms can try to push in creative inputs while needing to align them with the overall solution of the buyer. Our study zooms in on this push and alignment balancing act. Our theoretical model is informed by the attention-based view. It considers two centralization mechanisms, relationship intensity and formalized specifications of the buyer firm. Our dependent variable is innovation of the SME supplier. The model hypothesizes linear and non-linear effects by relationship intensity and the buyer’s detailed and formalized specifications (e.g., functional principles, features, and design elements). Data collected from 279 European supplier SMEs reveals that moderate levels of “post-formational specifications” proposed by the buyer firm are associated with greater product innovation of the supplier. Interestingly, less product innovation results when the specifications of the buyer are either minimal or high. Stronger relationship intensity allows greater product innovation as it enables partners to capture more benefits from the post-formational specifications as they constructively work together.Plain English SummarySuppliers collaborate with buyer firms for innovation. To coordinate innovation, firms can implement soft but also hard-formal mechanisms. A soft mechanism is greater relationship intensity. A hard-formal coordination mechanism pertains to post-formational specifications. These are preset by the buyer firm about detailed specifications related to product’s functional parameters, features, and design elements. Interestingly, both extremes of either weak or detailed post-formational specifications limit innovation. Instead, medium levels post-formational specifications bring superior innovation guidance. Greater soft coordination of intense exchanges, frequent meetings, and good relations among firms supports product innovation. It limits the drawbacks of either low or high hard-formal post-formational specifications. The principal practical implication of this study is that SMEs in alliances with their buyer firms can boost product innovation, when having good relationship with their buyer and when receiving some formal guidance from the buyer firm. It is the “fluffy cuffs” that encourage innovation best.

Corporations with attractive core business prospects focus their attention on those core businesses and away from ICVs they may be pursuing, thus influencing how those ICVs are treated from a corporate parenting perspective and, in turn, how well they perform. Using data collected from 145 ICVs operating in 72 corporate parents, this research reveals that corporations with more attractive core businesses grant greater planning autonomy to their ICVs’ managers, and planning autonomy contributes to ICV performance. Additional results reveal the moderating effects within our structural model of venture manager experience and the similarity of the ICV’s product to those of other businesses within the corporation. Considered collectively, this research demonstrates why corporations that “need” their ICVs to be successful – because of poor prospects in their core businesses – are most likely to mismanage them. Unattractive core business prospects can be viewed as justifying corporate managers’ involvement in the direct management of their firms’ ICVs. However, venture planning autonomy is needed to avoid placing undue expectations on ICVs as the “saviors” of corporate performance. By extension, this need for autonomy is also anticipated to apply to other entrepreneurial contexts where experimentation and learning are significant concerns (e.g., business incubators, corporate venture capital investments, new venture divisions).Plain English SummaryThis research demonstrates how and why corporations that have attractive core business operations are most likely to be good corporate parents to their internal corporate ventures (ICVs), and vice versa. In a sense, when it comes to internal corporate venturing, “the rich corporations get richer, and the poor corporations get poorer.” Parent corporations with more attractive core business prospects were found to grant greater planning autonomy to the managers of their ICVs, and autonomy is needed to give ICV managers the discretion and flexibility they need when navigating their ventures though unchartered business territory. Overall, this research demonstrates the importance of corporate managers (1) granting ICV managers autonomy in planning their venture operations, (2) being willing to consider engaging in internal corporate venturing even though their firms’ existing, core business operations may be attractive (i.e., before these ICVs “need” to be successful), and (3) not putting too much pressure on ICVs to “perform,” and avoiding meddling in the management of those ventures, when prospects in the corporation’s core business are unattractive. We argue that autonomy is likely efficacious in most entrepreneurial contexts where experimentation and learning are significant concerns (e.g., business incubators, corporate venture capital investments, new venture divisions).

Despite interest in innovation teams, we have only limited insights into how team members make sense of innovation teams’ inherent ambiguity. By referring to the sensemaking literature and to the research on task discourse, our study introduces task discourse as a valuable sensemaking mechanism in innovation teams. We argue that team creativity and feasibility testing increases the need for task discourse, which in turn improves team performance. Beyond this, we consider ambivalent effects of team spirit. On the one hand, team spirit allows leveraging smoothly synergies to emerge but on the other hand, high team spirit can limit team member’s willingness to challenge each other’s different perspectives and opinions critically. Data on 250 innovation teams of German manufacturing teams support the assumed beneficial effects of task discourse and the ambivalent effect of team spirit. Teams need sensemaking through task discourse when they want to achieve benefits from team creativity. The total effect of creativity on team performance is insignificant, while the indirect effect of team creativity on team performance is significantly positive. Our study enriches current research on ambiguity and sensemaking in innovation teams, answers the call to elaborate benefits and drawbacks team spirit might bring to teams, and provides valuable managerial implications.

This study builds on recent research on the external workforce by examining the effects of (1) temporary work (2) independent contracting, and (3) consulting on firm performance, considering the client firms’ tasks, the qualification requirements for carrying out these tasks, and its strategic context. The findings are based on a survey of 261 firms in the German manufacturing industry. At the operational level, the results indicate that the difficulty of the tasks to be performed by external workers influences their performance. Whilst temporary work and consulting are better suited for simple tasks with low qualification requirements, independent contracting increases firm performance when appointing individuals to perform complex tasks. At the strategic level we research effects by two strategic orientations; one generally increasing the internal innovation performance (innovation orientation), the other generally increasing the performance of external relationships (alliance orientation). The innovation orientation here reduces the negative effect of temporary work, whereas a high alliance orientation precipitates a positive effect of consulting on firm performance. This paper demonstrates that clients’ task requirements and their alignment towards innovation and alliances have a significant influence on the benefits to the firm conveyed by highly qualified externals.