The Role of Managerial Cognitive Capability in Developing a Sustainable Innovation Ecosystem: A Case Study of Xiaomi

Abstract

Establishing a hub-based innovation ecosystem is an effective way for companies to cope with technological transformation and achieve sustainable development. While existing literature has explored how a hub firm develops or manages an innovation ecosystem, little attention has been paid to the strategic challenges in the development and management process. In strategic management, managerial cognitive capability has been proposed as a key factor that influences how firms make strategic changes and adapt to dynamic environments. Hence, from the perspective of managerial cognitive capability, this paper strives to investigate the development of an innovation ecosystem from the perspective of managerial cognitive capability. To do so, we conducted a qualitative case study of Xiaomi’s innovation ecosystem from 2010 to 2019. The research adopts an interpretive approach and finds that (1) the evolution of the innovation ecosystem can be divided into incubation, growth, and regeneration periods, with developing core products, related products, and unrelated products as respective focus; (2) under rapid technological and market changes, it is critical to match the managerial cognitive capability of the hub-firm with its innovation ecosystem; (3) building innovation ecosystems enables the hub-firm to achieve sustainable competitive advantages. The study builds a model for the growth of innovation ecosystems and enriches theoretical research on innovation ecosystems and managerial cognitive capability.

Learning to Swim in the Pool Before Surfing in the Sea A Study of Local Innovation Experimentation

“…Because focal firms shoulder the major responsibility of, and therefore their core capability portfolio is key to, ecosystem development, we argue that heterogeneity of focal firms' capability portfolio at the TMT level can first explain differences in LIE across different focal firms, which in turn probably explain the discrepancies of success rate of new ecosystem birth. In this way, we answer calls for more insights into how focal firms' capabilities enable new innovation ecosystem birth (Cao et al, 2020;Thomas & Autio, 2020;Velu, 2015;Walrave et al, 2018). Overall, our nuanced understanding of how TMT capability portfolio influences on LIE process suggests that future research designs should take the multi-level view to uncover ecosystem birth process.…”

“…Despite literature has revealed main principles related to LIE process, the knowledge on what lead to the high LIE performance remain under-investigated. Current researchers have pointed out that ecosystem growth and governance depends largely on focal firms' single specific capabilities (see Cao et al, 2020;Kashan & Mohannak, 2017;Nambisan & Baron, 2013;Velu, 2015). But particular individuals as agents of focal firms make sense of and react to multidimensional uncertainties from two ecosystem environments requires a broader thinking of dynamic capabilities (Lütjen et al, 2019;Walrave et al, 2018).…”

“…However, to date, scholars showed merely key principles of LIE and its connections to new ecosystem birth (Mahmoud-Jouini & Charue-Duboc, 2017;von Pechmann et al, 2015). When considering new innovation ecosystem birth, literature has indicated that specific dynamic capabilities of focal firms are important antecedents determining whether new innovation ecosystems could take form or not (e.g., Cao et al, 2020;Kashan & Mohannak, 2017;Velu, 2015). Thus, it is reasonable to anticipate that focal firms' dynamic capabilities is likely to play a vital role in LIE process since it is tied with multiple challenges (Lütjen et al, 2019;Walrave et al, 2018).…”

The influence of firm’s feedbacks on user-generated content’s linguistic style matching–An explanation based on communication accommodation theory

“…Among the UGCs' traits, the language styles convey the customers' personalities, thoughts, or attitudes (Xiang et al, 2022), so that firms who understand or influence these styles can gain better market insights and improve the coherence between users and firms (Zhong and Schweidel, 2020). For example, Xiaomi, a leading mobile phone manufacturer in China, has created a unique "Xiaomi style" (Cao et al, 2020), attracting many devotees to constantly contribute their knowledge to the virtual community or even improve the sales performance by deciphering the information cues (Ludwig et al, 2013). The language style in a dialog demonstrates the individual distinction in self-expression (Gonzales et al, 2010).…”

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“…Researches use a tech company in China, Xiaomi, as a core example to investigate the relationship between the innovation of ecosystem with the managerial cognitive capability using Xiaomi's IoT framework. Multiple ways of gathering data and analyzing data are applied; for example, conducting interviews with different employee levels of Xiaomi and cross-checking the data they collected [1]. Yang and Hua aim to analyze the development status of the mobile phone industry and Xiaomi mobile phones.…”