A Study On Influencing Mechanism Of External Knowledge Network Embeddedness To Disruptive Innovation Performance

Disruptive innovation is a suitable innovative approach for developing countries, which is an important mode of indigenous innovation and an important way for enterprises to achieve rapid development. The logic of low-end disruptors and reverse innovation is provoking great imagination for the Chinese enterprises which are facing the rising of raw material costs and the weakening of cheap labor resources.Open innovation provides a new mode of thinking for innovation management, which appeals enterprises to break the traditional boundaries of a closed organization and to absorb external sources of innovation. The vital goal of open innovation is to obtain the external knowledge which flows between organizations and make most use of this knowledge to win the tremendous success which won' t happen to "closed innovation".It is an issue of practical significance to research how enterprises in developing countries take full advantage of "windows of opportunity" to achieve disruptive innovation and sustainable growth, considering the richness of external knowledge sources under open innovation. Unfortunately, the existing theory has not conducted a systematic analysis and discussion, and cannot give helpful management strategies and suggestions to guide business practice. This paper takes the perspective of inter-organization knowledge networks in open innovation and explores how the enterprises manage their external knowledge network to facilitate disruptive innovation.To illustrate the core issue, this dissertation conducts innovative research by combination of theoretical study and empirical study, literature review and investigation, as well as qualitative research and quantitative research.Firstly, base on literature review, this dissertation take the perspective of "embeddedness" of enterprise to explore the "self-centered" external knowledge network mechanism and discuss how enterprises can recognize, assimilate and integrate external knowledge by structural embedded and relational embedded in the external knowledge network.Secondly, base on literature review, the dissertation brings forward a primary theoretical supposition, and then conducts four explorative case studies of Chinese firms to conclude with an initial theoretical framework of influence mechanism of external knowledge network embeddedness on the performance of disruptive innovation.Thirdly, based on the above research, this study proposes two conceptual models of mechanism which illustrate how external knowledge network impacts innovation performance from two perspectives, "structural embeddedness" and "relationship embeddedness".251 Chinese companies are investigated via questionnaires, and Explorative Factor Analysis (EFA) and Confirmatory Factor Analysis (CFA) are conducted to establish and verify the measures, and Structural Equation Modeling (SEM) is applied to testify and modify the concept model. The result shows that the embeddedness of external knowledge networks can promote disruptive innovation performance through absorptive capacity.Fourthly, to explore how enterprise could gain sustainable success by disruptive innovation, the dissertation conduct a comparative study to discover how the embeddedness of external knowledge networks influence disruptive innovation performance and sustainable innovation performance differently. By doing so, we may give managerial suggestions to promote sustainable innovations after the initial success of disruptive innovation.Drawing on the above research, some conclusions can be presented as follows: (1) The embeddedness of the external knowledge networks promotes disruptive innovation performance through enterprises absorptive capacity, in detail, in two ways. Path 1:the centrality of external knowledge network→recognition& acquisition capability→disruptive innovation performance. Path 2:the relational quality of external knowledge networking→recognition& acquisition capability→disruptive innovation performance. Embeddedness of external knowledge network influences disruptive innovation performance indirectly through the mediating role of the ability of recognizing and obtaining knowledge. Therefore, it is the ability to recognize and obtain the knowledge of enterprises that actually affects the disruptive innovation. To achieve high performance in disruptive innovation, the enterprise should pay particular attention to foster the ability to recognize and obtain external knowledge and information. In terms of the control of the external knowledge networks, the enterprises should pay particular attention to occupy the central position in the structure of the external knowledge networks and maintain a high quality relationship in the external knowledge networks.(2) The comparison results of the study shows that the mechanism of embeddedness of external knowledge networks influencing disruptive innovation performance and sustainable innovation performance are different. Centrality and relation quality of external knowledge network influences disruptive innovation performance indirectly through the mediating role of recognition& acquisition capability. By contrast, not only centrality and relation quality but also network sizes and connection frequency of external knowledge network will all influences sustainalbe innovation performance indirectly through the mediating role of assimilation & transformation capacity and application & development capability. In a practical and sustainable view, after the success of initial disruptive innovation companies should turn for sustainable innovation to achieve greater success. Accordingly they should adjust their management focus both on embeddedness of external knowledge network and absorptive capabilities.(3) This paper quantitatively demonstrates that the absorptive capacity is a dynamic capability with three dimensions. It is a dynamic process including:a) the recognition & acquisition capability; b) assimilation & transformation capacity; c) application & development capability. The assimilation & transformation capacity play a partial mediating role in recognition& acquisition capability and application & development capability.The theoretical and empirical research results of this paper enrich and improve the theory of open innovation, disruptive innovation, knowledge network theory and the theory of absorptive capacity. With globalization of knowledge resources and the openness of innovation, this paper provides new and practical perspectives on how to build and manage external knowledge networks to foster absorptive capabilities and to achieve disruptive innovation success for the enterprises in developing countries.