The Process of Technological Innovation Within the Firm

Abstract

The effectiveness of firms in originating, developing, and implementing technical innovations is viewed as a function of three sets of factors: (1) characteristics of the firm's environment, (2) internal characteristics of the firm itself, and (3) flows between the firm and its environment. Environmental factors, primarily the definition and communication of needs for innovation and secondarily the existence and communication of technical information, are viewed as both stimulating and limiting the firm's potential for innovation. Internal factors which affect the synthesis of information into ideas and solutions to development problems are viewed as influencing the effectiveness of the firm in response to its environment. These include diversity in task assignments and the organizational relationships between technical and administrative personnel. Similarly, barriers to communication between the firm and its environment, for a given set of internal characteristics, are viewed as limiting the firm's resp...