The diffusion of digital technologies has enabled a notable transformation in the firms' boundaries, processes, structures, roles, and interactions. It is now clear that digital transformation is not just a traditional IT back-end process; rather it affects the organization as a whole, redefining strategies, entrepreneurial processes, innovation, and governance mechanisms. This permeation has led to the emergence of new ways of organizing firms' value chains and interfirm relationships, which now increasingly occur in digital ecosystems and marketplaces. The scope of transformation as well as the modalities of value co-generation and delivery are here used to introduce the content of this Special Issue of California Management Review on Digital Transformation.
This article presents an integrated, contingency perspective on family firm innovation called Family-Driven Innovation (FDI). The framework highlights the need for consistency between a family firm's strategic innovation decisions and its idiosyncrasies to achieve and sustain competitive advantage through innovation. This article also offers some directions for future research on FDI and serves as an introduction to this special section on family firms.
One of the key elements of Fiat's recent resurgence is the superiority of its clean, fuel-efficient engine technologies that were mostly developed during the 1990s by Centro Ricerche Fiat (CRF), the Fiat Group company in charge of R&D and technology development. In the early 1990s, when the Italian carmaker was going through troubling times (along with many other players in the automotive industry), CEO Gian Carlo Michellone radically turned around CRF's organization and innovation strategy, adopting and mastering a strategic approach to innovation that resembles what would become known as the open innovation paradigm. This revolution allowed the Fiat Group to keep its "innovation engine" running, despite the heavy downturn of the industry. The CRF case demonstrates how open innovation can protect the firm's innovation capability from the risk of severe resource rationalizations during periods of crisis while proffering a starting point to replicate innovation capability once the downturn is over. The efforts to streamline the adoption of open innovation need to be targeted at several aspects of a firm's organization, i.e., the structures, organizational roles, the planning and control and performance management systems, corporate values, and individual competencies and attitudes. The role played by the senior executive leadership in promoting the successful implementation of open innovation is critical, especially during tough economic times.
The global semiconductor industry is undergoing several forms of structural change simultaneously. The structure of market demand is shifting from one dominated by personal computers to a more diverse array of heterogeneous niches, largely resulting from global diffusion of the Internet and wireless communications applications. The structure of manufacturing activities is shifting from one dominated by "integrated device manufacturers" (IDMs), which both design and manufacture semiconductor components, to one characterized by vertical specialization, where many firms specialize in either design and marketing ("fabless" firms) or manufacturing ("foundries"). Finally, market demand and technical expertise are growing in geographic regions (e.g., Malaysia, Singapore, and the People's Republic of China) that formerly were much less prominent actors in the global industry. In the face of such far-reaching structural change in the industry, it is surprising that most indicators of the "globalization" of innovation-related activities in the U.S. semiconductor industry--ranging from publicly available data on the share of industry-funded R&D that is performed offshore to the location of inventive activity associated with patenting by U.S. firms--indicate only modest offshore movement in key innovation-related activities. To a surprising extent, this evidence suggests that much of the innovation process in this global industry remains "non-globalized."