The strategic organization of innovation: State of the art and emerging challenges

Abstract

Building on the vast literature on technological innovation and new product development, we propose a “strategic organization” framework to inform future research. The framework focuses on two core constructs: “agents” (external stakeholders and internal members of the firm involved in innovation activities) and “capabilities” (activities, systems, and values that retain and unfold organizational knowledge). It also distinguishes between two levels: the “new product development” process (the strategic and organizational sequences of tasks and decisions that compose product development activities); and the “firm” (the strategic and higher-order activities that shape corporate governance, corporate strategy, competitive strategy, and the organizational configuration of the firm). We draw on the framework to highlight how the strategic and organizational management of innovation has moved from a specialized organizational unit, the Research and Development function, to the C-suite. We discuss the implications of this framework for future research and highlight emerging challenges related to short-term financial pressures, sustainability, and digital transformation.