Tellis et al –
Radical innovation across nations: the preeminence of corporate culture
Summary/Findings
Which national and/or corporate factors influence the firm-level and nation-level innovation?
Among the factors studied, corporate culture is the strongest driver of radical innovation
across nations
Culture consists of 3 attitudes and 3 practices
o Attitudes: willingness to cannibalize assets, future orientation, tolerance for risk
o Practices: empowerment of product champions, establishing incentives for
enterprise, creation of internal markets within the firm
The commercialization of radical innovation translates to a firm’s financial performance and
is a stronger predictor of financial performance than for example patents
_______________________________________________________________________________
Research aim
Innovation is crucial for both nations and firms
Previous theories have identified labor, capital, government and culture at the national level
to be important drivers of national innovation
This study contrasts these theories with one based on the corporate culture of a firm and its
impact on firm innovation across nations
Intro
Radical innovation simultaneously drives market growth, firm success and a nation’s
economic growth
Radical innovation varies substantially in firms across nations – why is that so?
In contrast to existing studies, this paper focuses on
o The outcome rather than the inputs of innovations
o The commercialization rather than the consumer adoption of innovation
o The comparison of countries beyond industrial nations like North America, Europe
and Japan (inclusion of emerging countries)
o A joint investigation of national and firm-level drivers of innovation
Proposed framework
From previous literature, 4 (bzw. 3) driver of radical innovation (and thus value creation) on the
national (bzw. firm) level have been identified
, Labor Skilled labor of the firm or the nation
Important for technological advances
Capital Financial resources for firm or nation
Important: capital alone does not lead to innovation – it
needs to be invested wisely, e.g. in R&D
Government (only for Protection of intellectual property
nations) Governmental involvement in technology development
Involvement in the diffusion of innovation
Culture Core set of attitudes and practices shared by the members
For nations, 3 aspects of culture supposedly determine
innovativeness: religion, geographic location and values of
the citizens
A Culture-Centric Theory of Radical innovation
The authors propose that corporate culture and NOT labour, capital or government is the strongest
driving force of innovation in firms across nations
3 reasons
1. Markets have developed so that there is increased convergence across developed and
emerging nations in the extent to which labour and capital are accessible to firms
2. Innovative firms can tap the labour and capital markets in capitalist countries but that is not
the case in emerging countries
3. Culture is a uniquely human product that develops slowly within firms – it is thus not as
easily imitable as labour and capital
Components of corporate culture:
The authors identify 3 attitudes and 3 practices that may drive innovation:
Radical innovation across nations: the preeminence of corporate culture
Summary/Findings
Which national and/or corporate factors influence the firm-level and nation-level innovation?
Among the factors studied, corporate culture is the strongest driver of radical innovation
across nations
Culture consists of 3 attitudes and 3 practices
o Attitudes: willingness to cannibalize assets, future orientation, tolerance for risk
o Practices: empowerment of product champions, establishing incentives for
enterprise, creation of internal markets within the firm
The commercialization of radical innovation translates to a firm’s financial performance and
is a stronger predictor of financial performance than for example patents
_______________________________________________________________________________
Research aim
Innovation is crucial for both nations and firms
Previous theories have identified labor, capital, government and culture at the national level
to be important drivers of national innovation
This study contrasts these theories with one based on the corporate culture of a firm and its
impact on firm innovation across nations
Intro
Radical innovation simultaneously drives market growth, firm success and a nation’s
economic growth
Radical innovation varies substantially in firms across nations – why is that so?
In contrast to existing studies, this paper focuses on
o The outcome rather than the inputs of innovations
o The commercialization rather than the consumer adoption of innovation
o The comparison of countries beyond industrial nations like North America, Europe
and Japan (inclusion of emerging countries)
o A joint investigation of national and firm-level drivers of innovation
Proposed framework
From previous literature, 4 (bzw. 3) driver of radical innovation (and thus value creation) on the
national (bzw. firm) level have been identified
, Labor Skilled labor of the firm or the nation
Important for technological advances
Capital Financial resources for firm or nation
Important: capital alone does not lead to innovation – it
needs to be invested wisely, e.g. in R&D
Government (only for Protection of intellectual property
nations) Governmental involvement in technology development
Involvement in the diffusion of innovation
Culture Core set of attitudes and practices shared by the members
For nations, 3 aspects of culture supposedly determine
innovativeness: religion, geographic location and values of
the citizens
A Culture-Centric Theory of Radical innovation
The authors propose that corporate culture and NOT labour, capital or government is the strongest
driving force of innovation in firms across nations
3 reasons
1. Markets have developed so that there is increased convergence across developed and
emerging nations in the extent to which labour and capital are accessible to firms
2. Innovative firms can tap the labour and capital markets in capitalist countries but that is not
the case in emerging countries
3. Culture is a uniquely human product that develops slowly within firms – it is thus not as
easily imitable as labour and capital
Components of corporate culture:
The authors identify 3 attitudes and 3 practices that may drive innovation:
