There are different opinions about how to link business environment and organization. Some say the outside world is not something the organization should care about, while others on the contrary, argue that the outside world is an important influencing factor for every organization.
The purpose of this licentiate thesis is to investigate the interaction between the organization, external signals from the outside world and innovation, and to illustrate these relationships in a comprehensive model.
The model follows the external signal’s path through the organization, from identifying which signals that at all are observed in the organization, over how the organization creates meaning around these signals, to how it handles interpretation, strategy and decisions concerning the external signals. The model also includes a link to innovation and innovation capacity. Little to the side in the model, there is ”The Unexpected," which, referring to John Dewey, is a reminder about the risk in trying to capture the outside world in a model.
The organization's construction- how it is organized - is described in the model with the terms history, structure and culture. How it handles external signals are expressed in three dimensions: how the organization recognizes external signal, how it creates meaning around this signal, and what conclusions the organization draws in terms of learning. The four components of innovation in the model are category, origin, orientation and character.
The model also includes an attempt to formulate how the management of external signals can be expressed in the capacity for innovation. Used here are the two theories Blue Ocean Strategy and First Mover Advantage as a measure of innovativeness. The capacity for innovation either targets the well-known in the form of red oceans or the unknown in terms of blue oceans. The innovative capacity can also lead the organization either to be a First Mover or a Second Mover.
The model is illustrated by four examples - Google, Apple, Microsoft and Virgin. All of them are successful companies and well known for their innovative capacity. The result is that it has been possible to apply the model to the studied companies and then catch some connections between the organization and its capacity for innovation, with particular focus on external signals. Another conclusion is that innovation hardly can be regarded in isolation, detached from the outside world, but must be seen in its outside world context.