Radical or incremental: which type of innovation do stock options drive?

Su, Hanning; Sun, Wenzhang; Yang, Zhou

doi:10.1080/09537325.2021.1951696

Cited by 3 publications

(1 citation statement)

References 51 publications

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“…Select process does not rely on the commonly used financial analysis of return on investment (ROI), internal rate of return (IRR), Accounting Rate of Return (ARR) and pack-back period analysis. Such financial analysis often constrains the selection of the best ideas as most innovations tend to offer insights on commercial attractiveness to capture the market in their initial stages, but not the exact financial figures on the expected returns on investment (Hanning et al, 2021). Instead, innovators rely on a risk-taking approach that uses personal insights and believe in the extent to which the innovation outcomes would respond to the unfilled gaps and customer needs.…”

Section: Selectmentioning

confidence: 99%

Radical and Incremental Innovations as Critical Leveragers of a Firm's Financial Performance: Best Practices from Tesla and Toyota

Boniface

2022

Univers. J. Financ. Econ.

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Even if the rippling effects of radical and incremental innovations often bolster a firm's overall effective financial performance, managing all kinds of innovation activities is often not a linear process that induces the desired outcome and profitability levels. Thus, given the high rivalrism in the global car market, this paper offers a critical analysis of Tesla and Toyota's radical and incremental innovation management strategies so as to extract the best practices that can be emulated by other innovation ventures to bolster their competitiveness and financial performance. Methodology used in such analysis entailed a systematic review and synthesis of the existing online data, academic journals and textbooks on Tesla and Toyota's radical and incremental innovation management strategies. Combined with the interview of twenty personnel from car dealers in Aberdeen, Edinburgh and Glasgow in Scotland about their perceptions of Tesla and Toyota's innovative products, outcomes of such systematic review were triangulated with the core radical and incremental innovation management theories to discern how they offer coherent explanation of Tesla and Toyota's innovation space and management strategies. Though Tesla and Toyota seem to use similar radical and incremental innovation management strategies of search, select, implement and capture, Toyota was still found to have a radical product innovation disadvantage that undermines the development of better EVs to counter Tesla's premium EVs. Similarly, Tesla also has a radical process innovation deficiency that affects the development of cheaper and affordable EVs to further erode Toyota's market dominance. Given such findings, the paper highlights some of the best radical and incremental innovation management practices that can be emulated by different innovation ventures to create, deliver and capture the desired innovation values that can bolster their overall competitiveness and financial performance.

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Section: Selectmentioning

confidence: 99%

Radical and Incremental Innovations as Critical Leveragers of a Firm's Financial Performance: Best Practices from Tesla and Toyota

Boniface

2022

Univers. J. Financ. Econ.

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State as a path breaker? Path-dependent behaviours and firm innovation: the moderating role of institutional forces

Chen,

Wei,

Yang

2023

Technology Analysis & Strategic Management

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Technological innovation under trade disputes: how does product market competition matter?

Hu,

Xia,

Xie

2023

EJIM

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PurposeThis study investigates firms' innovation behaviour under environmental change. Therefore, it examines the effect of trade disputes on corporate technological innovation and how product market competition moderates this relationship.Design/methodology/approachThis research tests the hypotheses using the fixed effects model based on panel data of publicly listed enterprises in China from 2007–2020.FindingsThe empirical results validate the positive association between trade disputes and corporate research and development (R&D) intensity as well as the U-shaped relationship between trade disputes and radical innovation. Additionally, the moderating effect of product market competition is verified: a concentrated market with less competition flattens the U-shaped curve of radical innovation induced by trade disputes; as the market becomes more concentrated and less competitive, the U-shaped relationship eventually turns into an inverted U.Originality/valueFirst, this study contributes to the corporate innovation and trade dispute literature by expanding the environmental antecedents of technological innovation and the firm-level consequences of trade disputes. Second, this study enriches the theoretical framework of the environment–innovation link through an integrated perspective of contingency theory and dynamic capabilities view. Third, instead of the traditional linear mindset which had led to contradictory results, this study explores a curvilinear effect in the environment–innovation relationship.

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Radical or incremental: which type of innovation do stock options drive?

Cited by 3 publications

References 51 publications

Radical and Incremental Innovations as Critical Leveragers of a Firm's Financial Performance: Best Practices from Tesla and Toyota

Radical and Incremental Innovations as Critical Leveragers of a Firm's Financial Performance: Best Practices from Tesla and Toyota

State as a path breaker? Path-dependent behaviours and firm innovation: the moderating role of institutional forces

Technological innovation under trade disputes: how does product market competition matter?

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