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We examine the role of internal and external relational social capital (SC) as determinants of radical product innovation (RPI). By analysing both sides of SC, we provide interesting insights on their relative influence and their interaction effect on this type of innovation. Besides, traditional assumptions on SC and innovation are questioned. In our empirical study using a sample of 142 manufacturing and service companies we found that, of the two types of SC analysed, internal SC is the most relevant predictor of RPI in relation to either technological or market dimensions. The influence of external SC is not as strong as the internal one. Regarding their interaction effect, external SC reduces the positive effect of internal SC on the market dimension of RPI. Interesting implications arise for practitioners, who should pay special attention to the higher impact of internal SC on RPI and the need to carefully manage the difficulties that emerge when it is combined with external SC.

In this study we analyse the effect of team diversity, encouragement to take risks and team incentives on the degree of radicalness of innovation. Empirical research has been conducted with a sample of 95 companies from four innovative industries according to their high number of patents. The results indicate that team diversity and the combined use of long‐ and short‐term incentives are associated with incremental innovation, whereas the development of risk‐taking attitudes within the team is associated with radical innovation.

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The literature on new organizational forms offers an up-to-date picture of organizations that combines traditional variables with new ones, and contributes to a more productive analysis of the relationship between organization and innovation. Our review of the literature highlights several research topics dealing with new organizational forms and innovation, such as strategic flexibility (in the form of customization of output, subcontracting or outsourcing and the use of contingent workers), informal communication throughout the entire organization made feasible by information technology and collaboration with other organizations and institutions. These topics have been analysed in a study of four companies that differ in size and sector, but that have all been classified as innovative. This article confirms the existence of certain factors that operate as described in the literature, and reveals other factors that have to be taken into account because they contribute to a better understanding of how innovation takes place in the four companies.

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