Large firms are generally good at managing incremental innovations, yet they often lack the capabilities that are conducive to developing and deploying radical innovations (RI). Even though many large firms recognise the importance of RI, most of them fail to establish a mechanism, that is, a well defined organisational structure, management processes and resource allocation system that facilitates a systematic and continual development of RI. Drawing on extant literature we build a research framework that explains the obstacles which large firms face with respect to developing radical innovations. We collect data among three large firms, namely Shell, Nokia and IBM, and identify the practices that these firms have developed and a radical innovation mechanism that they have established to circumvent the obstacles for tapping into RI. Following these practices we conclude with implications for managers that are building a RI mechanism for their firms.
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