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The innovation process from an idea to a final product: a review of the

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400 Int. J. Comparative Management, Vol. 1, No. 4, 2018

The innovation process from an idea to a final

product: a review of the literature

Minisha Gupta
IMS Unison University,
Makkawala Greens, Mussoorie Diversion Road,
Dehradun, Uttarakhand 248009, India
Email: reach2minisha@gmail.com

Abstract: Innovation has been previously explored by academic scholars and

organisations to identify its determinants, characteristics and has often ended in
producing incompatible results. This paper advocates the research on
innovation by systematically developing a structure of innovation process. The
study has been incorporated by the underlying theories, types, processes,
antecedent and contextual factors, and sources of innovation process. The
conceptual developments, generation and adoption processes, antecedents, and
influences of innovation on organisations have been explained thoroughly in
the study. Previous research work has been aligned with either one of two
components of innovation process. However, this paper discusses each and
every part of innovation process to combine them in a single framework and
discusses their contribution in generating diversified outputs. By developing an
understanding of innovation as a process, this paper aims to complement
existing theories of innovation to further extend and advance theory and
research on innovation process and outcome in organisations.

Keywords: innovation; managerial innovation; organisational development;

innovation process; organisational strategy; innovation management.

Reference to this paper should be made as follows: Gupta, M. (2018)

‘The innovation process from an idea to a final product: a review of the
literature’, Int. J. Comparative Management, Vol. 1, No. 4, pp.400–421.

Biographical notes: Minisha Gupta is an Assistant Professor at the IMS

Unison University, Dehradun, India. She received her Doctorate in Human
Resource Management from the Indian Institute of Technology Roorkee. Her
current research interests are organisational creativity and innovation.

1 Introduction

Innovation management encompasses a variety of dimensions and fields of application.

Therefore, it has become important for policy makers, managers, and academicians to
understand and manage the innovation process for attaining sustainable competitive
advantage. The rapid changes in societal and economic trends, including digitalisation,
have created a huge demand for initiating change and developing innovative outcomes.
Research studies shows that, medium and small enterprises are initiating change and
effectively implementing new improvised business models (McAdam et al., 2010). They
implement strategies, technologies, structures, and new approaches such as knowledge

Copyright © 2018 Inderscience Enterprises Ltd.

 The innovation process from an idea to a final product 401

management and total quality management (De Jager et al., 2004; Naveh and Erez, 2004;
Prajogo and Sohal, 2004). They also facilitate large organisations in their 2000 expansion
in international markets. This upcoming change in industrial environment has created the
need for initiating something beyond that of incremental improvement (Bhaskaran,
2006). This drives organisations to emphasise and invest in creativity and innovation.
Innovation gives companies a sustainable competitive advantage in a dynamic
environment (Damanpour, 1991; Damanpour and Aravind, 2012). Technological and
organisational innovations are the primary drivers of business success and failures
(García, 1998). Schumpeter (1911) has viewed that innovation adopted by entrepreneurial
and corporate firms provides them a distinct corporate identity. Entrepreneurial firms
generate new ideas, products, technologies, or services.
Whereas, corporate firms with established infrastructure, facilities and resources tend
to support innovation generation and adoption. Innovation generation is developing new
products, ideas, processes, technologies, and venturing into new markets. Innovation
adoption is acquisition of innovation through licensing. However, adopting innovation is
not an easy process. A study was conducted on 199 banks to study the impact of
cognitive resources in adopting innovations such as age, tenure in firm, and education
level of managers, team heterogeneity, organisation size, and team size (Bantel and
Jackson, 1989). Innovation adoption consists of initiation and implementation (Anderson
et al., 2016). Generating awareness of innovation among members, garnering their
favourable attitude, and evaluating its worth to the organisation is called innovation
initiation. The idea approved by the management and accepted by employees is validated
for final implementation in consonance with organisations’ strategy called innovation
implementation (Lee et al., 2009). Successful implementation of innovation is a critical
source of organisational change because it depends on support of employees of the
organisation (Fuglsang and Sundbo 2005; Ramadani and Gerguri, 2011). A study
identified four implementation tactics used by managers in making planned changes by
profiling 91 case studies (Nutt, 1986). The study revealed that, using intervention tactic
gives a 100% success, however it is used in only 20% of cases. Persuasion and
participation tactics produce 75% success. Both these strategies use resources heavily.
Lastly, the edicts tactic attains only 43% success. Intervention tactics and their variations
were effective for all types of changes. The organisations support such initiatives through
innovation in managerial policies. A multi-level framework has been developed for
assembling the prime factors such as structure, organisation, patient, provider, and
innovation level that influence innovation implementation in health care sector (Chaudoir
et al., 2013). A theoretical framework was developed to explain the collective processes
which involve employees and institutional factors to influence implementation outcomes:
implementation effectiveness and innovation effectiveness (Choi and Chang, 2009). A
new term teaming has been introduced for organisations to increase their innovative
activities (Edmondson, 2012). Teaming is an active process where organisations learn to
innovate in the form of teams.
Schumpeter (1911) worked on the central role of innovation on economic
development. Research in this area has continuously grown and has scattered over to
different fields of inquiry including sociology, psychology, business administration, and
public management. Innovation has been studied on multiple levels of analysis
(individual, team, organisation, industry, economy) and probes multiple aspects of this
complex phenomenon (antecedents, processes, typologies, attributes, consequences).
402 M. Gupta

Measuring innovation process at different levels of management helps managers to

evaluate their own innovation activity, identify whether their organisation is innovative or
not, and also helps in exploring whether the innovative outcome is in-line with
organisational goals or not (Adams et al., 2006). An analysis of this literature reveals that,
innovation scholars have always been through this enduring research problem: how to
make models that are testable and also reflect the complexity of real business
environments. Typically, research in organisational innovation has been focused on one
dimension of innovation – type of innovation, radicalness of innovation, level of analysis,
stage of innovation, or consequence of innovation (Hoffman, 1999; Hekkert et al., 2007;
Birkinshaw et al., 2008; Crossan and Apaydin, 2010; Damanpour and Aravind, 2012;
Coates and Bals, 2013; Gosens and Lu, 2013; Binz et al., 2014; Adams et al., 2015;
Gosens et al., 2015). Due to this, many times these dimensions share similarity and
produce inconsistent results. Innovation process is a complex phenomenon encompassing
several social and psychological variables having interdependent relationships (Elenkov
and Manev, 2005). Thus, academic intervention is required for scrutinising the
phenomenon of innovation process.
In this paper, we attempt to address this gap by incorporating all the components and
dimensions of innovation under a single umbrella. Firstly, we aim to incorporate a vastly
diverse literature into a single framework. Secondly, to provides a framework against
which researchers can evaluate their own innovation research and identify the areas for
improvement. The remainder of the paper is presented as follows. Section 2 explains
about the research methodology used for this paper. Section 3 discusses literature of
innovation management including theories, antecedents, processes, types, and
consequences. Finally, Section 4 concludes the study along with some future research
highlights.

2 Research methodology

Since the research in the field of innovation process is not novel, thus, there is a vast
amount of literature available. More than 115 research papers which included studies on
innovation process and innovation management were culled from various sources such as
EBSCO, JSTOR, PROQUEST, Google scholar, academic info, BASE, Eric, Citeulike,
archival research catalogue, Infotopia, Refseek, the virtual LRC, Infomine, Microsoft
academic search, and iSeek. The focus while doing the literature review on innovation
process was on the recent papers so that the current state of the field could be identified.
While doing the literature review on innovation process, though there were umpteen
literatures available, only classical and relevant papers have been used. The keywords
chosen to search the articles/papers were organisational innovation, innovation process,
innovation management, innovation system innovation policy types of innovation,
innovation adoption, innovation implementation, innovation diffusion, managerial
innovation, reverse innovation, frugal innovation, social innovation, creativity and
innovation, and theories of innovation. Besides articles and papers, few surveys and
newspaper articles were also referred. A comparative study of literature has been carried
out using tabular format (see Figure 1, Table 1, Table 2, and Table 3).
 Pictorial presentation of literature review Figure 1

Period of publication Database Statistical techniques Country Type of respondents Type of teams
Australia Auditors • Health care teams
1911-1985 Emerald ANOVA China Engineers • New product
1985-1990 Elsevier Correlation France Firm owners development teams
1991-1995 Sage Factor analysis Germany Knowledge workers • Process teams
1996-2000 John Wiley Regression Isarel
Leaders • Product design teams
2001-2005 Taylor and Francis Structural equation Japan
2006-2010 Springer Korea Managers • Production teams
2011-2016 JSTOR Netherland Members • Project teams
EBSCO Taiwan Scientists • R&D teams
Thailand
UK Students • Self managed teams
USA
Supervisors • Virtual teams

Technology users • Work teams

Nature of the studies Type of studies
Business development firms Case study
Department of Business Conceptual
Innovation and Empirical
The innovation process from an idea to a final product

Skills health care

High technology firms
Hospitals/clinics
Manufacturing plants
Matrix organisations
New business venture
Pictorial representation of literature review (see online version for colours)

Pharmaceutical firms
Space agencies
Telecommunications
Universities
403
404 M. Gupta

Table 1 Year wise papers published in the field of innovation

No. Year Papers published

1 1910–1950 32,100
2 1950–2000 1,420,000
3 2000–2017 1,540,000

Table 2 Most cited papers of innovation

No. Papers Year Citations Source of publication

1 Rogers 1983 86,540 Book
2 Schumpeter 1911 33,600 Book
3 Arrow 1962 12,075 Book Chapter
4 Amabile 1983 8,408 Journal of Personality and Social
Psychology
5 Damanpour 1991 7,287 –
6 Amabile 1988 5,234 Research in Organisational Behaviour
7 Abernathy and 1978 5,093 Technology Review
Utterback
8 Van de Ven 1986 3,974 Management Science
9 Utterback and 1975 3,964 Omega
Abernathy
10 Barron and Harrington 1981 2,201 Annual Review of Psychology
11 Klein and Sorra 1996 1,871 Academy of Management Review
12 Daft 1978 1,772 Academy of Management Journal
13 Anderson and West 1998 1,719 Journal of Organisational Behaviour
14 Duncan 1976 1,359 Book chapter
15 Birkinshaw et al. 2008 1,208 Academy of Management Review
16 Robertson 1971 1,165 Book
17 George and Zhou 2001 1,089 Journal of Applied Psychology
18 Adams et al. 2006 1,071 International Journal of Management
Reviews
19 Knight 1967 1,066 The Journal of Business

From the search, it has been analysed that during the period from 1900 to 1950 only
32,100 papers have been published. However, during 1950 to 2000 a total of
1,420,000 papers were published. This shows an increase in research for innovation in
business area. Most of the keywords used for research were: open innovation, disruptive
innovation, innovation diffusion, innovation implementation, Schumpeter innovation,
Roger’s diffusion, firm’s innovation. A very interesting observation has made from 2000
onwards with the emergence of the keywords like: incremental and radical innovation,
innovation entrepreneurship, innovation R&D, creativity and innovation, and innovation
business model. This explains the diversity and enrichment of innovation literature (see
Table 4).
 The innovation process from an idea to a final product 405

Table 3 Most cited journals

No. Journal No. of papers

1 Academy of Management Review 7
2 Academy of Management Journal 5
3 Journal of Applied Psychology 4
4 Journal of Management 3
5 Journal of Engineering and Technology Management 3
6 Journal of Organisational Behaviour 2
7 Strategic Management Journal 2
8 Journal of Small Business Management 2
9 Research Policy 2
10 Journal of Business Research 2
11 Journal of Change Management 2
12 The Journal of High Technology Management Research 2
13 Journal of Innovation Management 2
14 Management Science 2

Table 4 Innovation process classified

No. Elements Further classification

1 Origin Suchmpeter (1911), Rogers (1983)
2 Theories Ambidextrous theory
Theory of innovation radicalness
Dual core theory
Four factor theory
Componential theory
Roger’s diffusion theory
Interactionist theory
3 Antecedents and contextual factors Individual
Organisational
Team/group
4 Types Product
Process
Reverse
Frugal
Management
5 Sources Imitation
Acquisition
Incubation
6 Types of organisations adopting innovations Innovative
Non-innovative
7 Consequences Direct/indirect
Desirable/undesirable
Anticipated/unanticipated
406 M. Gupta

3 Literature review

3.1 Origin of innovation

The word ‘innovation’ has its origin in the Latin word ‘novus’ or ‘new’. It is an
introduction of a new idea, methodology, device, or process. Innovation is a response to
organisational change both by new and established firms (Schumpeter, 1911).
Source-based and user-based theories confirm that innovation is generated from a source
in the form of new product, technology, or idea and is adopted by organisations and
consumers (Robertson, 1971; Rogers, 1976). Although organisations adopt innovations in
the form of a new product or a process, they recognise generation and adoption together
are essentially the process of innovation. A study conducted on adopting flexible
manufacturing system in the UK firms revealed various factors which are crucial to be
considered before adopting any new technology (Avlonitis and Parkinson, 1986). Rogers’
unitary perspective considers innovation as a unit of analysis. He explains diffusion of
innovation as a process of communicating innovation in the organisations. Organisational
innovation is communicated to all members through a multistep process. Acceptance of
novel idea by these members depends on their perception towards attributes of
innovation. These attributes have been identified as: relative advantage, compatibility,
complexity, trialability, and observability. Relative advantage is advantages of innovation
with respect to time and cost. Compatibility is consistency of innovation with respect to
organisation’s culture and values. Complexity is the degree of simplicity/complexity of
innovation so that members easily accept it. Trialability is degree to which innovation is
experimented for its usefulness. Observability is visibility of idea to members of the
social system or relevance of the idea for end users/consumers. These attributes are
further reviewed through meta-analysis (Kapoor et al., 2014). Innovation helps an
organisation to adapt to change by introducing new behaviours and methods (Daft, 1982;
Rogers, 1983; Van de Ven, 1986). However, multidimensional perspective of innovation
with organisation as a unit of analysis has been explained by Klein and Sorra (1996).
Innovation consists of generation and adoption. Generation is exploration of new
opportunities as well as exploitation of existing resources. It is a creative process
encompassing opportunity recognition, developing research design, commercialising,
marketing, and distributing it (Roberts, 1988; Hitt and Duane, 2002). Developing new
ideas is a key component of the success of large and small businesses (Paulus et al.,
2001). Generation process requires technical, market research, information, and
knowledge sharing competencies of managers (Nonaka, 1990). Adoption is a problem
solving process encompassing initiation and implementation. Initiation is a process of
recognising need to adopt new product, service, or technology, generating awareness of
innovation among members of the organisation, evaluating its economic and technical
worth, and taking decision to adopt or reject the innovation. Implementation is
assimilating innovation in organisation till it is routinised (George, 2007). Simply
implementation of creative ideas is not possible until employees are motivated to put
their ideas into action with their ability (Baer, 2012). Innovation adoption process
requires managerial competencies (Duncan, 1976; Glynn, 1996). Banyte and Salickaite
(2008) discussed factors determining successful diffusion and adoption of innovation.
The study focuses on the importance of innovation creation for attaining innovation
adoption.
 The innovation process from an idea to a final product 407

3.2 Theories of innovation

Ambidextrous theory shows the relationship of structural factors of organisation
with two stages of adoption process: pre-adoption and post-adoption (Duncan, 1976;
Rogers, 1983). Preadoption/initiation activities result in adoption decision.
Post-adoption/implementation decisions facilitate incorporating innovation in
organisation. The theory of innovation radicalness categorises types of innovations as:
incremental and radical. Incremental innovation is minor modification in existing
products, services, or processes. Radical innovation causes fundamental transformation in
existing processes of organisations (Knight, 1967; Grossman, 1970; Normann, 1971;
Nord and Tucker, 1987; Scaringella et al., 2017). Dual core theory differentiates the types
of innovations with respect to degree of innovation in technical and administrative
processes (Daft, 1978). Technical innovation is product and process innovation.
Administrative innovations consist of newness in organisational structure and
administrative processes. They facilitate accomplishment of task. Four factor theory
explains the role of contextual variables supporting innovation such as: participative
safety, support for innovation, vision, and task orientation (Anderson and West, 1998).
Creativity is a social psychological parameter and a root cause for innovation. Thus,
several studies were done to identify the social and environmental influences of creativity
(Amabile and Pillemer, 2012). Componential theory of creativity and innovation focuses
on work environments influencing creativity (Amabile, 1988; Anderson et al., 2014). The
interactionist theory of innovation specified variables at individual, team, and
organisational level promoting innovation (Woodman et al., 1993). At individual level,
knowledge, intrinsic motivation, personality, and cognitive style leads to a creative
behaviour. At group or team level, group composition, characteristics, and processes
leads to creative behaviour. Organisational creativity and innovation is promoted by the
environment.
Rogers’ diffusion theory, ambidextrous theory, dual core theory, theory of
radicalness, four factor theory, interactionist theory, and componential theory have
defined literature on innovation as: stages of diffusion of innovation, innovation adoption
process, type of innovation, degree of innovation, antecedents, and contextual factors at
all three levels affecting innovation. However, these theories fail to explain how
innovation can come about or to consider about investment or destruction. In a study
conducted by Arrow (1962), it has been explained that organisations should focus on
resource allocation for attaining creativity and innovation. He differentiated between
invention and risk bearing as invention is carried out by an agent who may or may not
bear risk. The investor bears all the risk related to invention. According to the study, it is
important to make an estimate about risk involved in developing new things and dividing
it properly after evaluating its consequences.

3.3 Antecedents and contextual factors of innovation

Innovation research has been carried out at organisational, team, and individual level
respectively (Anderson et al., 2014). Innovation can be successfully generated or adopted
with less hierarchical and centralised organisational structures (Cooper, 1998).
85 US delegates from department of business innovation and skills were surveyed
through questionnaire and interview method to identify enablers of innovation generation
408 M. Gupta

and adoption in organisations (Magadley and Birdi, 2012). Product, ideas, and process
innovations are facets of innovation generation. Organisational size, structure, climate,
management style, and market situations are enablers of product innovation. Employees’
personality, knowledge, functional and technical skills, experience, intelligence, talent,
and self-motivation influence idea generation. A review was conducted to address the
research gaps in the area of team creativity (Shalley et al., 2004; Gupta, 2015).
Communication among members, their characteristics of teamwork and learning are
enablers of process innovation. Learning acts as a bridge between working and
innovation (Brown and Duguid, 1991). Employee training is also considered as an
important parameter for improving front end innovations and reducing entrepreneurial
risk taking (Nadan, 2014). A study conducted on 1150 Korean employees and managers
of 81 branches in insurance companies suggest that employees’ cognitions and emotions
are pivotal mechanisms that mediate the effects of organisational contexts on the actual
implementation of the innovation (Choi et al., 2011).
Similarly, there are certain factors facilitating/impeding innovation adoption.
Innovation adoption consists of initiation and implementation. 1,219 managers, team
members, and technology users working in 39 manufacturing plants of US companies
were surveyed to study the successful implementation of computerised technology (Klein
et al., 2001). There are factors that cause success/failure of both innovation adoption and
implementation (Klein and Knight, 2005). Management support, availability of financial
resources, favourable organisational procedures, training and technical assistance, climate
for innovation, R&D investment, learning orientation, and managerial patience are few
antecedents of innovation implementation. These factors are group and organisational
level factors. Support and approval to initiate, and fearless participation in decision
making are group level factors and support for innovation, risk-taking, freedom to
contribute their ideas, and flexible organisational structure are organisational level factors
enabling idea implementation. Likewise, there are organisational and individual factors
facilitating innovation adoption (Frambach and Schillewaert, 2002). Organisational size,
structure, strategies, supplier’s feedback, social network, and business environment are
few organisational factors. A study conducted in health care institutions has identified
perception of employees as enablers of innovation adoption process (West and Farr,
1989). Individual’s attitude towards innovation, their personality and experience, tenure,
cultural background, peer influence, and organisational support gained in the form of
training and development are certain individual level factors (Barron and Harrington,
1981; West, 1987; George and Zhou, 2001, 2002). Innovation is adopted when members
of the group adhere to norms, emphasise on cognitive thinking, improve quality of task
under the supervision of participative leaders, and a favourable organisational climate.
178 Australian members working in 34 teams were surveyed to identify the impact of
charismatic leadership style of a leader on team level innovation (Paulsen et al., 2009).
The findings revealed that leaders’ charismatic leadership style affects innovation
adoption at team level. Leaders influence their followers by communicating vision and
generating enthusiasm (Elenkov et al., 2005; Kesting et al., 2016). They generate a sense
of belongingness among members to work together, and minimise their interpersonal
conflicts. Earlier researchers have focused on organisational and individual level factors
supporting innovation adoption, ignoring team level factors. Therefore, to address this
gap, 48 teams comprising of 321 school staff members were surveyed to identify the
impact of team interaction processes and structure on team level innovation
(Drach-Zahavy and Somech, 2001). Team members’ divergent skills and learning process
 The innovation process from an idea to a final product 409

are enablers of team innovation. Team interaction process mediates the relationship
between team heterogeneity and team innovation.
Reflections of team’s objectives, strategies, and processes have enabled
organisational level innovation to adapt and change (Potočnik and Anderson, 2016).
174 Australian members and their team leaders working in 13 research and
18 development teams have also identified the impact of team climate on innovation at
individual, team, and organisational level (Bain et al., 2001). Favourable climate for
innovation helps members in innovation team to express their views without fear (Scott
and Bruce, 1994). Task orientation facilitates completion of task in a developmental
team. In a study, work pressure has also been assessed as an indicator for improvising
employee creativity and innovation (Gupta, 2015).

3.4 Types of innovation

Innovation is categorised as product and process innovation (Cooper, 1998). New ideas,
technologies, and services, are product innovations. Product innovation focuses on
capturing market and attaining profits whereas process innovation focuses on improving
internal processes of organisation (Utterback and Abernathy, 1975). Product innovation
consists of goods and service to offer a customer or a client. Process innovation consists
of initiation and implementation (Klein and Sorra, 1996; Taylor and McAdam, 2004).
Process innovations are both technical and managerial/administrative innovations
(Gopalakrishnan and Damanpour, 1994). Technical innovations are efforts to improve
existing work methods by implementing new products, processes, or technologies.
However, such changes affect employment adversely. A narrative review of literature
explained that the effect of technological innovation is negative on employment (Piva and
Vivarelli, 2007; Pianta and Vivarelli, 2004a, 2004b). The study takes into consideration
wide range of moderating factors, including labour market flexibility, product market
competition, types of innovation, national innovation system, and international trade.
Moreover, process innovation is associated with job destruction and has negative effect
on employment, whereas product innovation is positively related to job creation. After
analysing 567 estimates from 35 primary studies, it has been identified that the effect of
product or process innovation on employment largely depends upon the moderating and
contextual factors. Managerial innovations are making changes in existing work culture
by evaluating risk and uncertainty in the business environment. They are changing
strategies, structures, decision making, and problem solving. A three-stage model was
developed by Abernathy and Utterback (1978) at the industry level which explained the
relationship between changing rate of adopting product or process innovation and
industry life cycle. Another model of adopting product and process innovation in service
industries was developed by Barras (1986). It showed a reverse relationship between
process/technological adoption and life cycle of industry.
According to the mode of manufacturing and adaptation, two different forms of
innovation were defined as reverse and frugal innovation. Reverse innovations first take
place in any developing economy and later on adapted in a developed nation (Immelt
et al., 2009). Countries like India and China who were earlier playing secondary roles for
big manufacturing companies have started improvising their production processes and
come up with innovative solutions. On the contrary, frugal innovations or ‘JUGAAD’ is
defined as “good-enough, affordable products that meet the needs of resource-constrained
410 M. Gupta

consumers” (Zeschky et al., 2011). It aims at simplifying the production process for
reducing cost of production. Frugal products are simpler and cheaper than the branded
costly products. Frugal innovation is becoming a core competence for addressing
sustainability (Basu et al., 2013). A major distinction between the two is that frugal
innovation focuses on designing solutions for low-income market segments whereas
reverse innovation focuses on developing new products in emerging economies which are
further modified for sale in developed economies (Nunes and Breene, 2011).
Along with the different types of innovation, a new term has been introduced:
management innovation. Management innovation can be defined as a difference in the
form, quality, or state over time of the management activities in an organisation, where
the change is a novel or unprecedented departure from the past (Van de Ven and Poole,
1995; Hargrave and Van de Ven, 2006). Four main perspectives of management
innovation were identified as institutional, fashion, cultural, and rational (Birkinshaw
et al., 2008). Institutional perspective explains the institutional conditions giving rise to
the emergence and diffusion of management innovations. Fashion perspective helps in
identifying the suppliers of new ideas used for management innovation. Cultural
perspective helps in defining the culture in which innovation is initiated. Lastly, role of
managers in inventing and implementing new management practices can be easily
identified from the rational perspective.

3.5 Sources of innovation

From a researcher’s point of view, it is necessary to know how an innovation is adopted
by the firm that is its source of innovation. It explains the capabilities and skills of an
adopting firm (Zahra and Covin, 1994). There is range of sources for adopting innovation
like mergers, acquisitions, joint ventures, takeover, strategic alliances. However, they are
classified as imitation, acquisition, and incubation (Damanpour and Gopalakrishnan,
1998). Imitation is copying innovations of other organisations. Acquisition is procuring
innovations through licensing and purchasing. Incubation is generating new ideas,
products, and services through their in-house R&D and partnership with other firms. To
imitate, acquire, or incubate innovation, the first and foremost thing is to explore and
exploit the resources successfully (Tamayo-Torres et al., 2014). Ranbaxy and Lupin are
involved in R&D projects to develop anti-malaria and tuberculosis drugs through
public-private partnerships with the Medicines for Malaria Venture and Indian Research
Institute respectively (Differding, 2017). Taking into consideration the sources of
innovation is imperative as it determines companies’ strategies. A survey was conducted
on Polish companies from SME sector to identify the sources and barriers of open
innovation processes (Mierzwa et al., 2017). A study conducted in the home appliances
industry using a sample of 864 employees (283 ideas) and 239 users (66 ideas)
differentiated between the quality of ideas for new products adopted both from
organisational employees and the existing user group. The study explains the relevance of
quality of ideas from the point of view of new product development unit (Schweisfurth,
2017).

3.6 Types of organisations adopting innovations

Due to the difference between the processes of generation and adoption of innovation
there is an important distinction related to organisations involved in generating and
 The innovation process from an idea to a final product 411

adopting innovations. According to this differentiation, organisations can be innovative

or non-innovative. They either generate/adopt or have both generation and adoption
facility (Damanpour and Wischnevsky, 2006). Innovation generating organisations are
suppliers of innovation. They generate new products and services through technical and
market research competencies. The major issue in these organisations is to manage
innovation project timely and efficiently. Innovation adopting organisations are users of
innovations. Their major issue is to assimilate the product, or technology to be used for
final consumption. Managerial competence is required to adopt innovation. Initiating
changes in organisational processes, strategies, structures, units, and routines is termed as
managerial innovation. The main concern while adopting any idea is that it should be
new to both organisation as well as individuals also (Winand and Anagnostopoulos,
2017). Since Schumpeter’s focus on innovation is central to economic development, vast
research has been conducted in the fields of sociology, psychology, business, and public
organisations. Innovation is a risky venture for organisations either generating or
adopting. Researchers have identified that, entrepreneurs and managers both are equally
risk seekers in the terms of innovation (Brockhaus, 1980; Masters and Meier, 1988).
Moreover, non-profit organisations also favour risk taking and innovation (Hull and Lio,
2006). Four exploratory interviews were conducted with highly placed health
professionals to identify their attitude for innovativeness of health departments (Mohr,
1969). The study identified that innovation is a function of motivation, obstacles
(organisation and community), and resources. The results obtained from interviewing 30
senior R&D managers from Fortune 1000 companies revealed that, although managers’
focus of innovation success factors is more on human capital, however innovation
training is rarely provided to the employees (Michaelis and Markham, 2017). The study
suggests that, companies should start with a systematic approach to innovation training
which focus on developing core competencies of individuals for initiate and adopt
innovation. Training improves the knowledge and skills require for generating and
adopting innovations (De Saá-Pérez et al., 2012; Donovan et al., 2013).

3.7 Consequences of innovation

Innovation is an outcome of employees’ skills (Leiponen, 2005). However, consequences
are the results of innovation decision. Innovations are categorised by outcome
uncertainty (Eisenhardt, 1989). Rogers (1995) divided consequences as: direct/indirect,
desirable/undesirable, and anticipated/unanticipated. Direct/indirect consequences depend
upon types of changes (radical/incremental) in organisation such as increased production,
high income/profits, more flexibility, and increase in cost and time. Desirable/undesirable
consequences are the outcomes of innovation as functional/dysfunctional.
Anticipated/unanticipated consequences depend upon the perception of organisational
members accepting change. Unanticipated consequences are rejection of product and
poor response to market innovation. Innovation consequences also depend on the risk
taking ability of the company. For example, US pharmaceutical industry has become
world leader in science and medicine due to its continuous innovation as a consequence
of risk taking ability (Tan, 2004).
412 M. Gupta

3.8 Processes of innovation

In the above discussion of innovation research, theories, antecedents and contextual
factors, types of innovation, sources of innovation, types of organisations adopting
innovation, and consequences of innovations have been explained. Process of innovation
discusses generation, diffusion, adoption, and implementation. Types of innovation
specify product, process, service, managerial, and technological innovation.
Consequences of innovation are for firm, industry, society, and economy. From the above
discussion, it becomes apparent that managerial innovation helps in long-term
sustainability and growth of organisations. Managerial innovations are innovation in
structures, administrative systems, management practices, processes, and techniques that
could bring change in organisations (Kimberly, 1981; Birkinshaw et al., 2008). TQM,
quality circle, just-in-time, 360 degree feedback, change in structure, and strategy are few
managerial innovations. Managerial innovations help in developing strategies to facilitate
organisational change and renewal. With technological innovations organisations cannot
sustain for long. Thus, organisations need to emphasise on managerial innovations to
compete and sustain in dynamic environment (Damanpour et al., 2009). Organisations
implement new management practices, policies, and strategies for renewal and
improvement in performance. Strategic analysis, balance score card, quality of work life,
project management, goal setting, and performance appraisal system are few such
managerial innovations (Bodas Freitas, 2008; Arnaboldi et al., 2010; Vaccaro et al.,
2010). However, these managerial innovations have been analysed in the form of case
studies and conceptual studies. The case studies discussed failure of implementation of
managerial innovations of performance appraisal system and lean manufacturing system
(Arnaboldi et al., 2010). Another case study by Palmera and Dunford (2001) compares
diffusion of managerial innovation in private and public organisations in Australia. This
study highlights that managerial innovations are quickly adopted in flexible
organisational structure. A holistic model of innovation process has been developed using
in-depth interviews of nine Australian biotechnology firms (Bernstein and Singh, 2006).
The study used grounded theory approach and data analysis method to develop
innovation process model. However, the study focuses on biotechnology sector and failed
to give a generalised approach of innovation process. These outcomes show a gap
incurred in innovation literature and asks for a deep study of innovation process as a
whole.

4 Discussion and concluding remarks

This paper endeavours to combine the various parameters of innovation process under a
single umbrella. The paper explains the theories of innovation process which helps
researchers in identifying the unearthed dimensions from these theories. Moreover, one
can also develop a grounded theory for the same. It has also tried to explain the different
types of innovation. This paper identifies the antecedents or contextual factors of
innovation process. Although it is unidentified whether these factors perform in the same
manner in every field like hospitality, information technology, manufacturing, and
tourism. So further research can be carried out to explore this hidden phase of innovation
process and enrich the literature. It is important for organisations to identify that which
type of innovation can be initiated. Instead of simply following others, it is important to
 The innovation process from an idea to a final product 413

identify the niche areas which can be explored or where more opportunities exist. Many
times organisations are unaware of the underlying sources of innovation. One of them is
intrapreneurship that is infusing entrepreneurship within organisation only (Gupta, 2016).
To attain innovative growth and sustainability organisations need to promote
intrapreneurship within the organisations. Organisations can risk investing in
intrapreneurial initiatives with government support with experienced and trustworthy
employees. It is essential for organisations to be aware of their strengths and weaknesses.
It helps them in selecting the most suitable method or sourcing of initiating innovation. It
is important for organisations to rely on intangible assets like knowledge creation and
assimilation as sources of competitive advantage (Santos-Vijande et al., 2012). Sustained
innovation requires firms to explore new capabilities and exploit current capabilities
which depend on learning (Tamayo-Torres et al., 2014). Learning has emerged as an
important factor for creativity and innovation, if it takes place in specific cognitive and
organisational settings. Innovation has a strategic dimension linked with the creation and
exploitation of competitive advantage through exploitation of resources. Innovation and
its expected consequences cannot be isolated from uncertainty and risk taking
capabilities. Also, previous research work explains that creativity is the essence for
innovation, but to facilitate creative outcomes, it is equally important to understand
innovation process (West and Farr, 1990). It helps organisations in transforming
themselves into learning organisations. These organisations equipped with required
organisational climate, encourage creative initiatives and also enhance innovation which
can result in sustainable competitive advantage. Thus, an academic intervention is
required in this field of innovation management.

Figure 2 Conceptual framework of innovation process (see online version for colours)

Source: Extended based on Lenka et al. (2016)

414 M. Gupta

Focus of firms has shifted from cost saving to improving productivity and attaining
sustainable efficiency. To attain sustainable competitive advantage, it becomes important
for organisations to understand a full-fledged model of innovation process. Companies
are initiating cross-boundary teaming as a strategy to increase innovation (Edmondson
and Harvey, 2017). Earlier research by organisational scientists has resulted only in
empirical works related to manufacturing organisations (Amabile, 1983; West, 1987;
Van de Ven et al., 1989). Despite four decades of research on innovation, there are
inadequate theories to guide the research. There is inconsistency in literature on
innovation process (Hon and Lui, 2016). Moreover, managerial innovations have not
been empirically tested in the existing innovation literature, creating a gap for further
enquiry. Innovation within departmental units has not been studied so far such as research
and development and new product development units. Research and development units
are innovation generating units and new product development units are innovation
adoption units. Innovation generating, adopting, and integrating units within
organisations facilitate innovation process. To understand significance of innovation in
R&D units and the entire process of innovation, it is imperative to unearth various social
and psychological processes by developing a conceptual framework (see Figure 2).
Such a study will have practical utility for the organisations such as software,
telecommunications, biogenetic engineering, chemical companies, and research-oriented
pharmaceutical firms. Further research can be carried out to compare the innovation
types, their impact on organisational creativity and innovation.

Acknowledgements

Special thanks are due to two anonymous reviewers for their productive comments that
significantly improved the quality of the previous versions.

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