Strong Ties, Weak Ties and the Management of Innovation
Department of Border Region Studies University of Southern Denmark Sønderborg, Denmark
Institute for Human Resources and International Management Helmut-Schmidt-University Hamburg Hamburg, Germany
International Institute of Management (IIM) University of Flensburg Flensburg, Germany
The Case of Danish and German Small and Medium Sized Enterprises
Frequently innovations are essential strategic resources of small and medium sized enterprises. At the same time innovations of SMEs have an impact on the competitive capacity of national economies. According to this the importance of SMEs should not be underestimated. In particular organizational trends of decentralization and outsourcing during the last two decades have enhanced the dependence of large enterprises on the innovations of small and medium sized suppliers. These are reasons for the institutional policies supporting innovation to concentrate partly on the innovations of SMEs. In praxis supporting innovations encounters several difficulties. While focusing on the perspective of an individual firm conventional approaches of strategic management tend to overlook the institutional support system of innovations.
Through the socio-economic lens of social network analyses the shaping recommendation referring to entrepreneurs is to limit their communication on innovations to "strong ties" but the process of innovation is dependent on a high level of information from the very beginning.
Based on the resource dependence approach this study develops a theoretical framework which integrates the system of public innovation support and enables the development of hypotheses on the utilization of ?weak ties? in the process of innovation (Pfeffer/Salancik, 1978). Based on this framework the study discusses the differences between the governance structures of the Danish and German systems of supporting innovations and their strengths and weakening in consulting SMEs. Empirical our study is based on a survey of SMEs situated in West Denmark in Northern Germany (Cornett/Sørensen, 2005). The multivariate analyses (correspondence- and cluster analyses, logit models) of the survey data on the determinants of successful and failed innovations in SMEs (n = 378, paper and pencil questionnaires in Northern Denmark, n = 380, computer assisted telephone-interviews in North Germany) provides insights on factors of success using the institutional system of supporting innovations in both countries.