innovation and communities of practice
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INNOVATION IN THE AEROSPACE INDUSTRY:
THE ROLE OF COMMUNITIES OF PRACTICE
Nicolas Rolland
Director Social Prospective, Danone
Affiliated Professor, Grenoble School of Management
France
ABSTRACT
This paper introduces the concept of knowledge networks to explain how firms sustain the
development of innovations. The core premise of this concept is that knowledge networks are
conceptualized in the firm as communities of practice, but it cannot be considered as a
homogeneous concept that lead to a specific type of innovation. More specifically, this article takes
up the challenge of analysing how different types of communities of practice influence the
development of different types of innovations. Resulting from a study of 124 communities over the
last 3 years and based on 93 innovations developments in 7 firms of the aerospace industry, this
research demonstrates that companies wanting to develop radical change need to focus their
attention on both unrelated knowledge and open communities, while the development of
incremental innovation is deeply related to centralized communities.
KEY WORDS
Communities of Practice, Innovation, Knowledge Networks
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Innovation in the Aerospace Industry: the role of Communities of Practice
Why are knowledge management strategies crucial for the management of innovations and
why should the innovation process be considered in terms of knowledge creation, have been
treated extensively by many scholars over this last decade (Nonaka, 1994; Henderson and Clark,
1991; Prahalad and Hamel, 1991, Hansen, 2002) but have left us with an incomplete understanding
as regards communities of practice.
The concept of communities of practice is in vogue in the field of management and can be
considered as a specific type of knowledge network but also as the modern strategy for knowledge
management (Lave and Wenger, 1991; Brown and Duguid, 2000). Nevertheless, the way this
particular approach of knowledge networks is linked with innovation is still misunderstood.
In order to address issues in the field of Management Studies, this paper takes up the
challenge of analysing how different types of communities of practice are related to and influence
different types of innovation.
A knowledge-based theory suggests that the boundaries and the structures of governance
are determined by the value to be derived from the deployment of its knowledge. Thus, this
paradigm focuses on mechanisms and contexts through which knowledge coordination and
knowledge integration are achieved. This theory is supported by the Following this approach, the
ability of the firm to continually configure and integrate knowledge through networks into value-
creating strategies or products is a vital condition for the development of the organization (Grant,
1996, Spender, 1996). In this new context, value creation through profitable growth results primarily
from knowledge creation or innovations. Understanding the link between knowledge networks and
knowledge creation becomes a dilemma for the Management Theory.
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1- INNOVATION AND COMMUNITIES OF PRACTICE IN THE LITERATURE
1.1 Innovation
We understand innovation in terms of product or process and we begin to construct its definition
with the distinction between incremental and radical innovation (Nelson and Winter, 1982; Dewar
and Dutton, 1986).
Incremental innovation introduces minor changes to the existing product or process and
reinforces the dominant design exploited by the company. Radical innovation generates change in
the set of principles involved in the process and implies new ways of thinking (Senge, 1990).
Radical innovation refers to a deep and a wide change:
- A deep change implies that many different levels inside or outside the firm are
influenced by this innovation. Inside the firm, its influences many hierarchical
levels in the same business unit. Outside the firm, it influences different
companies downstream or upstream in the same supply chain.
- A wide innovation is when different business units, divisions, functions or markets
are influenced by this new model inside the firm. Outside the firm, this change
introduces new applications for the product or process.
This classical distinction between radical and incremental innovation can be enriched with the
model developed by Henderson and Clark (1990) which demonstrates the inadequacy of
distinguishing merely between radical and incremental innovation. Following this model, innovation
is conceived in terms of component and architectural change which is essentially dependant to
knowledge involved in components or in the product and process architecture.
-
Component knowledge is knowledge about each of the core design concepts and the
ways they are implemented in a particular component. A component is a part of a
product, embedded in an activity.
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- Architectural knowledge is a structural capital, and concerns the ways in which the
components are linked together to form a coherent whole. For the authors, an
architectural innovation often implies a radical change.
This research views innovation as a continuum confronting 2 dimensions: radical & architectural
with incremental & component. The distinction between radical and incremental is particularly
relevant for process innovation while architectural and component apply to product innovation.
Following the work of Nonaka (1994) innovation process is conceived as a knowledge creation
process. As a result, firms should support activities that enhance knowledge creation at the
organizational level. This means, the key for organizational efficiency is to achieve knowledge
integration from individual to a coherent whole. This integration needs cooperation and depends on
coordination between individuals and knowledge they detained. Over the last decade, organization
theorists and sociologists define organization as a set of networks and have viewed organizations
knowledge networks and especially Communities of Practice as ways to support the knowledge
creation process (Nohria and Eccles, 1992 ; Nohria and Ghoshal, 1997; Hansen, 2002).
1.2 Communities of practice
Originally, the notion of Communities of Practice (CoPs) was used to explain the practice based
theory of learning and the theory of situated learning (Brown and al., 1989; Lave and Wenger,
1990). Following Brown and Duguid (1991) learning is defined as the bridges between working and
innovating. Learning enhances organizational performance when it takes place through working
practices and when the acquisition of knowledge is a social process where individuals learn from
each other, based on the same practice. This type of learning is supported by CoPs which are
groups of agents who experience a common occupational history, who frequently interact, who
share knowledge and who face similar problems within and among organizations. They are
organizational forms that encourage individuals to create, refine, share and use knowledge
effectively (Brown and Duguid, 2001). CoPs help to develop the appropriate relationships and
context that allow knowledge to flow between those who have knowledge and those who require it.
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CoPs are social structures whose shared practices, identity and common engagement serve as a
living curriculum for the apprentice (Wenger 1998; 1999). Some authors complete this concept with
the notion of work, and define communities of practice as collections of individuals (informal
groups), bounded by informal relationships, who share similar work roles and a common
professional context (Lesser and Prusak, 1999). This means that individuals or groups interact on a
regular basis around work-related issues and challenges. We argue that this notion of practice
should not be limited to the work dimension but can be extended to a corporate or to a joint
enterprise context. That is Ouchis description of the clan networks in present-day enterprises,
where members operate on an informal basis of shared information and personal trust (Ouchi,
1980). A common ground for all the authors is that CoPs differ from teams or groups that are task-
oriented. CoPs must have a clear identity to really be effective. They give individuals an opportunity
to associate themselves with others who share the same interests or the same functions across the
value chain, or have similar work-related interests. Collective action and social knowledge claims
are legitimized in terms of community identity. With co-specialized knowledge and collective
expertise, the community can solve business problems and build personal knowledge in the same
time. Indeed, CoPs help retain critical expertise and can improve an organizations responsiveness
by enabling the rapid location of knowledge across the organization. Another benefit of these types
of knowledge networks is that they contribute to building a sense of trust, a common language and
the mutual commitment, which are essentials to the knowledge sharing process (Wenger and
Snyder, 2000).
1.3 Innovation and CoPs: the links
Innovation is conceptualized as a process of change and it is refereed as a learning process
(Senge, 1990; Argyris, 1994). Since learning is defined as a knowledge creation process (Nonaka,
1994) we can characterize innovation as a knowledge creation process. In the same time the
literature explains that innovation can be nurtured by knowledge networks (Hansen, 2002).
Knowledge networks facilitate learning and provide an environment for innovation. They foster
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innovation, mainly in terms of enhancing cross-synergies between business units and in reducing
the product time to market (Kostova, 1999; Winter and Szulanski, 2001).
In other words, we suppose that, in transferring good practices and in answering specific issues,
participants of social networks based on knowledge sharing create actively new products or new
processes moreover than project teams.
Some authors attempt to distinguish CoPs from other concepts such as projects and then propose
dimensions that can be used to discriminate different types of CoPs. These dimensions can be
classified as (1) governance, (2) structure, (3) content, (4) motivation and (5) emergence of the
CoPs:
2 Governance: Open versus Closed (Wenger et. al, 2002)
This is the dimension which discriminate the communities regarding to their governance. Open
communities are formed through unrestricted participation on a volunteer basis. They are self-
organized communities developed under self-management. Potential members may need
cooptation but these differ from closed communities where membership is pre-designated and not
open to external individuals. Knowledge generated within these closed communities does not
transpire outside. We argue that the type of governance should influence learning and therefore
innovation.
3 Structure : Local versus Distributed (Mc Dermott, 1999; Wenger et. al, 2002 )
This dimension explains differences between CoPs in terms of structure. Local communities are
located in a circumscribed location and involved people working in the same place whereas
distributed communities includes cross boundaries issues such as inter-countries, inter-activities, or
also inter-unit. Local communities are composed of. This dimension is important since social
network theory emphasizes the importance of strong links as a feature of efficient networks. Strong
links are based on the frequency of physical meeting, therefore, if the CoP is distributed, it will be
more difficult for members to meet on regular basis.
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4 Content : Related-knowledge versus Unrelated-knowledge (Hansen, 2002)
This dimension explains a difference in terms of content. To be efficient, CoPs require members to
speak the same language. This notion of common language appears as a key dimension for
organizational learning (Cohen and Levinthal, 1990). If the firm has developed coherent networks
where there is similarity in the knowledge content among parts of the network, this refers to related
knowledge networks (Hansen, 2002) If the firm has developed networks with incoherent relation in
terms of knowledge: unrelated knowledge networks. Unrelated knowledge networks concern
projects that require different knowledge (in nature and in action) to be pursued successfully.
Unrelated knowledge networks are structures emergent from individual interactions that can cause
complexity in the firm.
5 Motivation: Knowledge Coordination versus Knowledge Capitalization Intent
One of the dimensions that can discriminate CoP is why they are developed. Usually the literature
describes two main motivations: coordination and capitalization. Coordination communities are
communities based on the principle of optimizing the use of knowledge inside the company. Usually
they are developed for sharing good practices. Capitalization refers to the capacity to identify and to
classify knowledge within the company, in order to disseminate it more efficiently. They are
developed for knowledge saving.
6 Emergence : Self-Emerging versus Management initiated (Wenger, 1998)
Emergent CoPs are historically self-dependant and have emerged without any will from the head of
the company. Sponsored CoPs are initiated, chartered, and supported by management. Both add
value to a company by sharing lessons learned, acting as distribution points for best and emerging
practices, providing forums in which issues and problems can be raised and resolved and, in
general, by promoting joint learning. One of the main differences is that sponsored CoPs are
expected to produce measurable results that benefit the company. They are provided with
resources and have formal roles and responsibilities. Even so, they are much more self-governing
and wide-ranging than the typical cross-functional project team.
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The conceptual framework developed for the empirical phase is the following:
Table I The research framework
2- RESEARCH METHOD
In order to clearly understand the process of innovation and its linkages with the community of
practice concept, we chose a qualitative research method based on the work of Eisenhardt (1989)
Miles and Huberman (1984) and Yin (1984). We carried out this research within seven firms
belonging to the aerospace industry. We chose this industry because as in many other industries
the development of innovation is a key success factor for sustaining a competitive advantage and
also because these companies need to encourage knowledge management in order to capitalize on
knowledge development or to save knowledge as well as to coordinate and continuously integrate
new knowledge. We focused our investigation on the innovation event and we repeat in every
company the same research method process, in following this scheme:
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- As these companies cultivate a strong knowledge management activity, they all
initiate a department an office for coordinating and supporting the initiatives in KM.
The person in charge of this department is the Chief Knowledge Officer (CKO).
-
Firstly, we meet the CKO who helped us to identify all the different CoPs that the
office has previously listed in the company. All these identified-CoPs have a leader a
facilitator who acts as a mediator between the CoP and the CKO. The leaders role is
to support a smart and useful exchange of good practices between members of their
community.
The interview process was in three stages:
-(1) When the CoPs were identified, we conducted a first interview of the CKO
about each community in order to understand the way each community is running and
what their structure is. During this phase, we also tried to understand the nature of the
links between all these communities and the CKO office.
- (2) We conduct structured interviews with the leader of each community. These
interviews deal with the history, the management as well as the characteristics of the
CoP. With characteristics, we essentially mean the number of participants, their position
(hierarchical level, company business unit and department) in the company (or
outside), their main task job, as well as how long do they participate to the CoP. The
purpose at that stage was to classify each CoP in the theoretical framework previously
developed.
- (3) We interviewed the leader a second time as well as two participants of each
community in order to identify the different innovations in which the community was
involved or what innovations were leveraged and sustained by the community. We
defined all these different innovations using the different dimensions included in the
conceptual framework.
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During the interview process we gather data about the structure, about the organization and
management as well as about the ambition of each CoP. The treatment of these data allowed us to
classify each of the CoPs interviewed regarding to the different dimensions described previously in
the theoretical framework.
We identified 196 CoPs in these 7 firms and we observed 124 of them over a 3 years period. We
conducted 317 interviews. These knowledge networks were at the origin of 93 innovations that we
analysed more closely through multiple case studies. Our data gathering activity reached a point of
scientific saturation(Miles & Huberman, 1984) with observations from 93 innovation processes, at
which point the same or similar elements were extracted from each field site. Innovations produced
both process and product innovation. Data were collected using the triangulation technique, through
interviews, studies of internal and external documents, and sometimes by participating observation.
Data were collected through matrices of dimensions, and analysed according to an open coding
technique (Miles & Huberman, 1984; Langley, 1999). Dimensions described in the matrices are
based on the research framework.
For the open coding technique, data are first broken down by taking apart an observation, a
sentence, a paragraph and giving each separate idea or event a name. Data is then regrouped into
categories that pull together groups of ideas and events that become subcategories. These
categories and subcategories are related to the different dimensions and variables described
previously in the theoretical framework. This step aims to identify the characteristics of the different
types of CoPs present within the company and the types of innovation are sustained by the
company. The next step is the axial coding which aims to identify main categories and to make
connexions between these and their subcategories. The purpose of this step is to understand the
relation between the different types of knowledge networks and the different types of innovation. We
tried to identify the most representative characteristic of each community and to link the innovation
with this main characteristic (in Appendix A, B and C all the characteristics are integrated in tables).
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3- RESULTS
This research reveals that innovation is given leverage by communities which are a relevant model
for the enhancement of innovation in a company evolving in the aerospace industry. In some cases,
the innovation developed by CoPs represents more than 33% of the total developed within the
company. That means the innovation strategy of some of these companies is actively supported
with informal networks.
The following table describe the number of innovations observed in each category.
Product Innovation & Process Innovation
Component and Incremental Radical and Architectural
42 51
Component Incremental Architectural Radical24 18 19 32
Table II: Types of innovations observed
To better understand what type of CoPs influences the innovation process, we analyse the results
using the dichotomy between new product development and new process development.
3-1 Product Innovation
The different product innovations observed are synthesised in the following table:
Product Innovation
Component Innovation Architectural Innovation
Knowledge coordination 0 9
Knowledge capitalization 12 0
Related-knowledge 9 0
Unrelated-knowledge 0 8
Open Community 0 0
Closed Community 0 0
Local Network 0 0
Distributed Network 0 0
Emergent Community 2 2
Management Initiated 1 0
Total 24 19
Table III Product innovation
The main results are schematized as follow:
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creation of a new component involved in the suspension of the landing train is the result of a
knowledge sharing experience within a community of specialists in this domain. They all have an
experience and a background in this technology and they were looking for a domain of application
for this component. Members, across units, do not discuss the rest of the product but only the
evolution of the specific component and how it can perform better.
Capitalization communities also lead to component innovation. In these communities each
member accesses resources that he / she could not develop alone. The main purpose is to save
knowledge related to a specific situation and to access knowledge in relation to this specific
situation or with a specific topic, a brand or a specific technology. Capitalization concerns
accumulating knowledge in a learning sense about a specific interest. People interacting in
these CoPs share best practices with a technical context without really trying to understand the
architecture of the product. At A, they sustain CoPs for reusing improved shared experiences. Most
of their innovations initiated from CoPs are component innovations. In increasing the value of each
knowledge of component with the help of a capitalisation strategy, members of the A1 Community
are tacitly encouraged to use this component knowledge in their innovations and then sustain
component innovation. According to the leader of this community, 78% of their innovations are
component.
On the other side, the research maintains that architectural innovation is mostly driven by
unrelated knowledge. People in unrelated knowledge networks do not depend on the same
business unit, do not specialize on the same component or do not necessarily speak the same
language. This type of community allows cross synergies between specialty and component
knowledge. Participants try to better understand how components are linked and how they interact.
They do not spend too much time on the specificity of a component, but much more on how it
should be better related to another component and what is the most efficient internal map of each
product. At B, the development of the X system for engines propulsion that will considerably change
the way satellite engines and aircrafts will be propelled is the result of an un-related knowledge
network. People from different business units and different technological activities share knowledge
on the same interest in the same network.
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Coordination communities also lead to architectural innovation. Mainly because they aim at
better use knowledge present in the knowledge-base or in the company. They try to link specialists
in different activities or to establish relationships between different projects or units. Focusing on
actionable knowledge and on tacit managerial knowledge, they avoid learning difficulties between
individuals who do not speak the same language and thus increase the number of architectural
innovations. At E, the purpose of CoPs is to create cross synergies between business units. They
define KM as a process that aims to continuously enhance efficiency of business processes
through an improved use of knowledge by people in action. This credo supports coordination CoPs
and most of their innovations coming from knowledge networks are architectural. The landing train
community which involves different business units and different country managers has created a
new product based on new way of organizing component in the XXX landing train.
Theses findings lead to the following propositions:
Proposition 1: the structure and the governance of the community are not
related to the process of product innovation.
Proposition 2: the content of the CoPs influences the product innovation. The
less knowledge between the members is related, the more the innovation is
architectural.
Proposition 3: the intent of the development of the CoPs influences the
product innovation. The more the CoPs are created to facilitate the better use
of knowledge inside the organization, the more the CoPs lead to architectural
innovation.
3-2 Process Innovation
Process InnovationIncremental Innovation Radical Innovation
Open Community 0 8
Closed Community 4 0
Centralized Network 3 2
Distributed Network 2 6
Emergent Community 1 10
Management Initiated 5 3
Coordination Intent 1 2
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Capitalization Intent 1 0
Related-knowledge Network 1 0
Unrelated-knowledge Network 0 1
Total 18 32
Table IV- Process Innovation
The main results are schematized as follow:
Figure 2 Process Innovation
In terms of process innovation, we clearly observed that incremental innovation is driven by closed,
local and management initiated communities.
Closed communities focus on how the process can evolve rather than how components
evolve, but since they are isolated from the rest of the firm, their impact on organizational change
could not be conceived as a deep and a wide change. Firms used closed communities as project
development with no end-terms, and top management often takes in consideration knowledge
developed through these communities to answer specific questions but we never observed radical
innovation descending from this type of community. At E a community belonging to the corporate
finance team located in the South America headquarters has developed a new process for
consolidating accounts in the different business units in a short period of time after the closing date.
As they are not members of the Group Headquarters and as they are located in a specific area,
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they could not share their experience with the other regional headquarters. Their innovation is still
isolated and so has lead to an incremental change.
Management initiated communities are also closed to project management in some ways
and mainly because someone decides when the community begins and what are the deliverables of
this community. According to all the CKO interviewed, if they are not business driven they often
disappear. This type of community is often over the control of the top management and could not
generate a revolution in the way of doing things. This is why innovation is mostly incremental in this
type of community. What we observed is the fact that participants do not want to upset the direction
of the company in generating knowledge that modify the way of thinking. They focus their action in
improving existing things without renewing things.
Centralized communities lead to incremental innovation because they are not wide and
mainly focus on local problems. Sometimes they imply radical innovations when they concern a
local but central activity they can be deep - or when the problem is transversal.
Radical innovation is driven by open, self-organized and distributed communities. Open
communities are wide and when they deal with wide problem they often lead to radical innovation.
The emergence of innovation and new processes is driven by the heterogeneity of people and from
divergences in the points of view. It is often difficult for closed communities to deal with this issue as
it is proper to open communities to be shaped by different natures of people. In fact, this type of
community is based on the order by chaos managerial principle, which means when an innovation
appears; it has more influence on the whole. When the Fcommunity at D has developed a new way
of understanding customers which led to a spectacular increase of sales, the D Company decided
to create a new process for becoming a customer centric organization with the principles developed
by the F community. The change was quick and radical. It introduced new beliefs and ways of
thinking for the whole organization.
While open communities can be management initiated, self-organized communities are free
to create, decide or modify the component as well as the architecture of a product. They develop
mainly radical innovation due to their ability to change architectural knowledge. In these
communities external environments cannot influence systems because anything that influences the
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system is a part of it. Indeed, at T, members of this type of community try to better understand and
change the way components are linked before changing the component in itself. With this approach,
the consequences are often more important in terms of structures and concepts than with other
types of communities.
Distributed communities often lead to radical innovation because participants are present in
different places of the organization and when they adopt new knowledge its implementation will
have more impact on the organization. At the same time, this is a radical innovation because it is
deep and wide. This radical innovation is often cross-frontiers and new processes are adopted by
different levels and divisions of the organization. This type of community is the best adapted for
networked organization which develop specific knowledge within different parts of the network. The
development of the new commercial aircraft at B illustrates this position. The development of this
innovation is the result of a new process created by a community that shares knowledge on the
way things should be done in the B Company. This community thought in 2000 that thinking about
the new aircraft only in terms of market expectation was not enough. The members developed a
new way of thinking product development which include new dimensions such as solutions for
new customers (DHL, UPS,) or Internet development or enhancing competitive intelligence in the
different phases of the value chain. This new way was described in a process that lead to the
development of the new aircraft. This type of community can be the origin of a radical process
development.
These findings lead to the following propositions:
Proposition 4: the governance of the CoPs influences the process innovation.
The less the CoPs are open, the more they lead to incremental innovations.
Proposition 5: the kind of emergence influences the process innovation. The
more the CoPs are self-emergent, the more they create radical innovations.
Proposition 6: the structure of the CoPs influences the process innovation.
The more the community is distributed, the more it develops radical
innovations.
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CONCLUSION
This study has provided evidence of different types of CoPs and of linkages between CoPs
influence and the innovation process. What make this research unique is the established link that it
defines between the different types of communities and the different types of innovation. If a
company tries to develop a specific innovation, it must focus on a specific community. Organization
theory has already explained the role of learning for this type of knowledge network and it is now
possible to describe its implications in terms of organization for innovation process. This study
emphasizes the different roles of knowledge networks in the innovation process and the way to use
them in order to provide leverage for incremental or radical change. At the same time the study
highlights that innovation is closely related to the way that knowledge is created and coordinated in
the product development process
Theoretically, it is interesting to notice that the way knowledge is coordinated influences the way
knowledge in integrated in a coherent whole (new product or new process).
The main limit of this research is that it is limited to a specific industry and further researches can
extend this research to others industries.
The last figure (Figure 3) synthesizes the links of influence between the kinds of communities and
the types of innovation.
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Figure 3 Impact of different kind of CoPs on innovation
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APPENDIX A
Product Innovation & Process Innovation
Component and
Incremental
Radical and Architectural
Communityofpractice
Open vs. Closed 53 (57%) 40 (43%)
Local vs. Distributed 41 (43%) 52 (57%)
Coordination vs. Capitalization 55 (60%) 38 (40%)
Related vs. Unrelated-knowledge
47 (50%) 46 (50%)
Self-Emerging vs. ManagementInitiated
50 (53%) 43 (47%)
Table V Innovations observed
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APPENDIX B
Product Innovation
Component Innovation Architectural Innovation
Knowledge coordination Intent 0 29Knowledge capitalization Intent 50 0
Related-knowledge Network 43 3
Unrelated-knowledge Network 5 40
Open Community 2 3
Closed Community 5 1
Local Network 4 0
Distributed Network 1 3
Emergent Community 10 12
Management Innitiated 3 0
Table VI Product Innovations
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APPENDIX C
Process Innovation
Incremental Innovation Radical Innovation
Open Community 87 1
Closed Community 2 85
Centralized Network 59 30Distributed Network 39 51
Emergent Community 10 61
Management Initiated 58 32
Knowledge coordination Intent 1 8
Knowledge capitalization Intent 1
Related-knowledge Network 1 0
Unrelated-knowledge Network 0 1
Table VII Process Innovations
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