How Resource Challenges Can Improve Firm Innovation Performance: Identifying Coping Strategies

Abstract

Researchers recently suggested that challenges in the form of adversities and constraints can actually promote individuals, teams and firms. However, it remains unclear how such challenges elicit positive innovation performance. Moreover, we still cannot distinguish between the conditions under which challenges enhance or hinder firm innovation performance. In this paper, we review the literature on coping with a specific and central type of challengeresource challenge, such as a lack of financial or human resources -and propose an underlying mechanism through which firms can benefit from resource challenges. The paper presents an integrative conceptual framework and looks at the key constructs that explain the effects of resource challenges on firm innovation performance. Further, it proposes two key strategies for coping with resource challenges: simplification-focus and compensation.

Rare gems or mundane practice? Resource constraints as drivers of frugal innovation

“…Third, our striking findings regarding managerial experience show that sufficient experience is a key boundary condition for the inducement effect of resource constraints on internal efficiency frugal innovations (Type 1), but actually has no effect for external constraints on Type 2 frugal innovation. If an effective search response induced by constraints may be conditional on the presence of enough capabilities to recognise the problem and opportune search pathways, it could explain why so far the literature of problemistic search (Posen et al, 2018) and resource constraint-induced innovation (Rosenzweig & Grinstein, 2016) has suffered from a relatively high degree of inconsistent findings. By including the managerial experience, or more broadly the capabilities and cognition fields, future work into problemistic search could potentially yield more consistent findings.…”

“…This effect was investigated for the case of resource constraints in general, where research showed that resource constraints can indeed induce innovations, in particular so in small, competitive markets and product domains where no major capital investments are required (Katila & Shane, 2005). A second body of literature focuses on the role of resource constraints as opportunities for entrepreneurs, creating efficient and affordable products and services that help their customers deal with these resource constraints (Navi et al, 2012;Rosenzweig & Grinstein, 2016). While both bodies of literatures use the concept of resource constraint, they are conceptually not the same.…”

“…Specifically, the precise role of resource constraints as antecedents of frugal innovation remains ambiguous. Some research posits resource constraints as a driver of frugal innovation (Navi et al, 2012;Zeschky et al, 2014), whereas others call this possibly a 'fable' (Rosenzweig & Grinstein, 2016), others confirming high divergence (Keupp & Gassmann, 2013). Moreover, different streams of literature present different explanatory mechanisms for the expected positive effect of resource constraints on frugal innovations.…”

Leadership versus customer orientation in an innovative enterprise — a contribution to further exploration

“…Thus, discussions regarding customer orientation are impossible without innovation, and these categories depend on the decision of the leader (e.g. Rosenzweig & Grinstein, 2015).…”

IT‐enabled idea competitions for organizational innovation: An inquiry into breakdowns in adaptation

“…This is a concrete example of how to manage idea competitions to overcome the existing cultural patterns of innovation (Erickson et al, 2012;Zuchowski et al, 2016). However, such cultural changes often require long-term objectives, as it requires time to develop and cultivate capabilities for innovation (Rosenzweig & Grinstein, 2016).…”