Joakim Björkdahl

Organizational climate and capabilities for innovation: a study of nine forest-based Nordic manufacturing firms

Abstract Forest-based manufacturing firms are currently under pressure to achieve higher margins and increased profits. Many firms have tried to maintain profits by cutting costs, however, the effects of this, in markets suffering from overcapacity and declining demand, are temporary. Instead, innovation is seen as being the key to firm growth and sustained profit. This article presents a study of nine large Nordic (Swedish and Norwegian) forest-based manufacturing firms, with operations ranging from pulp and paper chemicals, pulp production, packaging boards, packaging paper, and specialty paper to food processing and packaging solutions. The purpose of this study is to investigate the prerequisites for innovation at firm level in terms of firms’ organizational climate and capabilities for innovation, and how these firms could improve their innovation processes. The paper draws on data from a collaborative research project that includes these nine firms, derived from interviews and questionnaires. The results show that forest-based firms are creative and have the potential to be innovative. However, the capabilities for innovation, that is the capabilities to do things differently and to exploit ideas, differ among firms. The study highlights two capabilities that may be obvious but are critical for innovation – management willingness and awareness, and the implementation of a strategy for innovation – and that the potential exists for increased output through appropriate managerial action.

Assessing firm capabilities for innovation.

The capability to innovate has been described as key to firms remaining competitive. Scholars and managers have tried to understand how firms renew themselves in response to changes in the environment or the strategic need to be innovative. Drawing on the literature on organisational capabilities and experience gained from working with and assessing firms’ capabilities for innovation, this paper presents a firm relevant framework for capabilities for innovation in large firms and the subsequent tool for assessing these capabilities. It contributes to the growing stream of literature on the capabilities for innovation by explaining and operationalising some key dimensions of the capabilities for innovation and by providing a tool that is actionable, i.e., easily translated into action.

Financial analysis of the Swedish 3G licensees : Where are the profits?

There are many different opinions on the prospects of UMTS or 3G mobile telephone systems. Our paper investigates the financial consequences of the implementation of UMTS on mobile operators. Our analysis is limited to the Swedish market, and we analyse the Swedish 3G licensees with a financial model, which shows annual cash flows, net present values (NPV), breakeven, paybacks and sensitivity analyses. Our results suggest that there will be a substantial profit problem. One of the reasons for the lack of profitability is the increased competition. The market size will set limits to the profits. Besides, the operators’ cost will increase and we do not believe that the average revenue per user will increase much more from today’s level.

Business model innovation processes: Looking forward and looking backward

Business model innovation processes in established firms that are running profitable businesses are currently poorly investigated. By drawing on the problem-solving perspective, this papers shows that the identification and formulation of problems guide business model innovation processes. Findings from case studies of three world leading manufacturing firms show that the main encountered business model problems included product-market fit, value capture failure, and customers’ lack of trust and risk aversion towards novel solutions. Based on the empirical evidence, this paper proposes determinants necessary for progression of the business model innovation process: (1) By theoretically equating business model innovation processes with search, to profit firms shift from experiential or backward-looking search to forward-looking or cognitive search to create or discover new business model options. This shift is not sufficient for business model innovation; (2) To progress there may be a need for changes in the complexity of the problems, altering the firm’s fitness landscape allowing for backward- looking problem-solving by drawing on existing knowledge and capabilities, and (3) Firms need to ‘risk their business’ by moving from offline evaluation to online evaluation for the business model innovation to come to fruition. In the general case, each of the main problems may need to progress across (1)-(3) for a business model innovation to emerge. The contribution of the paper is a change in the unit of analysis by focusing on problem formulation and problem solving, and introduces a mechanism for explaining how business model innovation processes unfolds. This mechanism is also able to handle prior explainations on business model innovation processes; the sequential and experimental approaches.

Managerial challenges when integrating ICTs in established products

By adding information and communication technologies (ICTs) into established mechanical engineering products, the customer value provided by these products can be substantially increased, thereby offering an interesting means of differentiation. At the same time, the specific task of integrating ICTs in established products poses new challenges to management. In order to explore these challenges, an in-depth case study of this type of development has been performed at the Swedish multinational company Alfa Laval. The results from the study indicate that the integration of ICTs has consequences for management, particularly in terms of the handling of technological competences and the reformulation of existing business models. Even though most firms developing and manufacturing traditional mechanical engineering products rely on external providers for the integrated ICT components and systems, they nevertheless need to build up absorptive capacity in order to facilitate coordination. The integration of ICTs opens up new opportunities to create value for customers. However, to realise this value and also allow for the appropriation of parts of it, it may be necessary to change the established way of doing business, in terms of the business models used.