ANALYSING THE INNOVATION PROCESS : NETWORKS , MICROPOLITICS AND STRUCTURAL CHANGE by Oswald Jones and Martin Beckinsale

Over recent years there have been an increasing number of studies concerned with detailing the innovation process. Many researchers have utilised the idea of innovation networks to illuminate the way in which social interaction influences the shift from idea to conception. While this work has improved our understanding of the complexity associated with innovation there has been a tendency to ignore managerial political actions. In this paper we expand on network mapping by introducing the concept of micropolitics. As pointed out by Burns (1961) micropolitics refers to the way in which managers attempt to further their careers by gaining influence and status. The empirical data are based on a longitudinal study of innovation management in a mid-corporate manufacturing firm. During the course of our six-year study we outline the development of informal and formal networks which strongly influenced the nature of organisational restructuring which took place on three separate occasions during the course of our study. Aston Business School Research Institute is the administrative centre for all research activities at Aston Business School. The School comprises more than 70 academic staff organised into thematic research groups along with a Doctoral Programme of more than 50 research students. Research is carried out in all of the major areas of business studies and a number of specialist fields. For further information contact: The Director, Aston Business School Research Institute, Aston University, Birmingham B4 7ET Telephone No: (0121) 359 3611 Fax No: (0121) 333 5620 http://www.abs. aston.ac. uk/ Aston Business School Research Papers are published by the Institute to bring the results of research in progress to a wider audience and to facilitate discussion. They will normally be published in a revised form subsequently and the agreement of the authors should be obtained before referring to its contents in other published works. Analysing the innovation process: networks, micropolitics & structural change 2 Introduction: Innovation and Networks By the mid-1960s there was an extensive and coherent US literature concerned with the management of innovation (Allison, 1969; Bright, 1964; Cole, 1967; Lothrop, 1964; Pelz & Andrews, 1966). In 1967 an R&D Unit was established at the newly-founded Manchester Business School with a mission to make ‘an impact on the theory and practice of management of research and development’ (Pearson, 1988:100). The R&D Management journal was founded in 1970 by the Unit’s Director (Alan Pearson) followed in the mid1970s by an annual conference focusing on industrial innovation. Furthermore, writers who have investigated the role of new technology have exerted strong influence over the development of organisational theory (for example, Woodward, 1958; Thompson, 1967, Perrow, 1972). Even today there are few organisational theory courses that do not make reference to the influential work of Burns & Stalker (1961). Although, as discussed below, their work is generally misrepresented as belonging to the crude school of contingency theory in which structure is determined by environment (see Hatch, 1997). Since the 1970s there have been a number of important research projects which have attempted to identify the factors which influence successful innovation. These vary from large-scale efforts such as Wealth from Knowledge (Langrish et al, 1972) to case studies describing intrapreneurial success in overcoming corporate indifference (Katz, 1994). Some, such as Project Sappho (SPRU, 1972) attempted to distinguish between successful and less successful innovators. Studies also scrutinised innovation at the level of the organisation (Clark, 1995), the sector (Walsh, 1984) as well as the so-called national systems of innovation (Lundvall, 1992; Nelson, 1993; Porter, 1990; Edquist, 1997). As a result of this substantial body of research, the interactive model of innovation (Rothwell and Zegveld, 1985) has replaced traditional linear models such as ‘science-push’ (Schumpeter, 1934; 1943) or ‘market-pull’ (Schmookler, 1966). In recent years it has been increasingly acknowledged in the literature that networks are central to effective innovation management. While it is recognised that innovation networks have existed for many years: ‘information technology has led to the widespread diffusion of modes of networking which were previously far less common’ (Freeman, 1991:510). Similarly, Rothwell’s (1992) ‘fifth generation model’ of innovation management emphasises the importance of IT as a facilitator of inter-organisational linkages. Hence the need to develop a revised research agenda: ‘With growing complexity, a focus on the role Analysing the innovation process: networks, micropolitics & structural change 3 of innovation networks will be more appropriate than the behaviour of specific firms in isolation’ (Tidd, 1997:16). At the same time, Granovetter (1985) points out, all activity is embedded in complex networks of social relations which include family, state, educational & professional background, religion, gender and ethnicity. Certainly, we believe that it is impossible to consider decision-making without examining networks of personal relationships. Managers do not simply examine ‘transaction costs’ when making decisions about the purchase of materials, components or technologies (Williamson, 1975; 1985). As pointed out by Sako (1992) trust between individual employees and a firm’s customers and suppliers is an essential feature of business relationships. Certainly, by combining the institutional links associated with transaction cost analysis and the social processes identified by actor network theorists ‘there is some potential for convergence in the future development of networks and alliances’ (Coombs et al, 1996:8). In our view the major failing of the network approach is that there is usually no attempt to analyse the role played by internal politics. Those who do discuss the links between networks and political action generally focus on the way in which inter-organisational power is exercised as a means of accessing or securing resources (Salancik, 1995). Krackhardt and Hanson (1993) examine the way in which political actions influence innovation but they see the mapping of informal networks as a managerial tool. As discussed in Jones et al (1998) a number of research projects at Aston Business School have been at the forefront of establishing the validity of mapping as a legitimate approach to the study of innovation (Steward & Conway, 1996; Conway, 1994; 1995). However, in our view this work also fails to acknowledge the political and power dimensions which are associated with innovation. As Krackhardt and Hanson (1993:104) point out, the shift away from formal hierarchies to flatter, organic structures means that informal networks are analogous to an organisation’s central nervous system. Mapping these informal networks is essential if we are to ‘uncover the source of political conflicts and failure to achieve strategic objectives’ (op cit, 106). Simply identifying the political actors may not provide sufficient information to anticipate the overall dynamics of political influences on innovation (Krackhardt, 1990). Network mapping provides a method for precisely identifying political actors and the way in which they influence decisions. The approach is also useful for revealing ways in which organisational structure influences access to power. Over recent years there has been increasing standardisation in the techniques associated with mapping innovation networks. For example Conway (1997) maps internal and external structures as well as the way in which individual actors are positioned in a particular organisational context. This technique provides a network template for identifying the information flows and transaction Analysing the innovation process: networks, micropolitics & structural change 4 content (goods and artifacts) which link various actors (Conway, 1997). Network templates also encourage a longitudinal approach because it is possible to accurately compare changing structures and network arrangements. Hence, the political actors and political decision makers can be mapped and the outcomes of their political decisions evaluated. We believe that the micropolitical actions associated with acquiring resources for successful innovation are not susceptible managerial intervention: ‘Under these conditions, organizations can be viewed as loose structures of interests and demands, competing for organizational attention and resources, and resulting in conflicts that are never completely resolved’ (Narayanan and Fahey, 1982:26). In this paper we focus on the way in which micropolitics influenced the development of informal and formal networks in a ‘mid-corporate’ manufacturing company over a six-year period. We define micropolitics as the way in which managers pursue their own individual career interests by attempting to gain political influence and status (Burns, 1961; Narayanan and Fahey, 1982; Knights and Murray, 1994). Although as pointed out by Thomas (1994) engineers and scientists involved in the innovation process can also be powerful political actors. Ironically, few of the numerous authors (see Fincham et al, 1994) who reference The Management of Innovation discuss what Burns, introducing the third edition, describes as his ‘preoccupation with the structure and dynamics of interpersonal relations’ (Burns and Stalker, 1994:xiii). In fact, Burns goes on to say that the distinction between organic and mechanistic structures owed at least as much to ‘internal politics’ as it did to changes in the external environment (also see Burns, 1961:267). The Politics of Innovation Given the internal conflict which usually accompanies innovation it is surprising that the political dimension has received little attention from those concerned with innovation management. Although Burns and Stal