INO Research Seminar

Seminar by
Gautam Ahuja, University of Michigan

Combining Capabilities: Process and Product Innovation and Profitability in the Chemicals Industry

Abstract:

Strategy research suggests that combining capabilities or building interdependence between resources or activities helps firms to post superior performance. A natural question to ask is why then don't all firms use resource interconnectedness strategies. In this paper we suggest that one answer to this question is that building interdependence may not be a favored strategy for all firms because higher levels of interdependence entail higher levels of coordination and firms may differ in the degree to which they are able to coordinate activities. We examine this issue in the context of firms building process innovation and product innovation capabilities. Firms can build either product innovation or process innovation capabilities, or build both capabilities but keep them separate. Finally they can build both capabilities and combine or integrate them. These strategies build different levels of interconnectedness and require different levels of coordination. We develop a new set of measures for process and product innovations and demonstrate that the returns to combining capabilities differ for firms with differing attributes thus providing one explanation for why combining capabilities may not be equally rewarding strategy for all firms.

Gautam Ahuja, Harvey C. Fruehauf Professor of Business Administration and Professor of Strategy, is Chair of the Corporate Strategy and International Business (CSIB) Department at the University of Michigan Business School. Dr. Ahuja has received numerous teaching awards including Best Professor in the MBA program in 1997, 1999, 2000 and 2001 at The University of Texas-Austin and in 2003 and 2004 at Michigan. In addition, Dr. Ahuja received the Best Professor award in the PhD program in 2004 at Michigan. He has also been recognized in Business Week's annual guide to the top Business schools. His research on innovation and technology strategy has received several international awards including the Free Press Award for outstanding research in Strategy, the Sage-Pondy and West Publishing Awards for Organization Theory, and the Best Dissertation Award from The Institute for Operations Research and the Management Sciences. His work has also been cited by bodies such as the EPA, OECD and UNEP, and profiled in Sloan Management Review. He is an Associate Editor for Management Science
, Senior Editor for Organization Science
and Editorial Board member for AMR
, ASQ
, and SO
.