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http://dx.doi.org/10.1287/orsc.2015.1022
2015 INFORMS
Todd R. Zenger
David Eccles School of Business, University of Utah, Salt Lake City, Utah 84112, todd.zenger@utah.edu
n this paper we develop the outlines of a theory for the firma theory that guides a firms path to value creation,
in response to the critique by von Hippel and von Krogh [von Hippel E, von Krogh G (2016) Identifying viable
needsolution pairs: Problem solving without problem formulation. Organ. Sci. 27:207221; henceforth HippelKrogh]
of the problem-solving perspective as a theory of value creation. HippelKrogh argue (a) that problems and solutions
cannot always be separated because they often emerge as problemsolution or needsolution pairs that are discovered
serendipitously, and (b) that deliberately formulating or choosing a single, fixed problem restricts the firm from accessing
the vast array of external problem solvers and restricts the firm from valuable reformulations of the problem and rich
landscape search. Although HippelKrogh raise interesting and important arguments, we claim that they miss what is most
central about the problem-solving approach: the comparative, organizational, and strategic aspects of the theory. However,
their critique is also important because it draws attention to a critical void in the problem-solving perspective, namely, the
need for firms to possess a theory to guide their efforts at value creation.
We argue that this theory for the firm links problem solving with a broader theory of value creation, thus responding
to the concerns raised by HippelKrogh. We discuss how firms theorize the process of value creation by articulating an
overall architecture and bundle of problems around which each firm uniquely organizes and governs as a path to value
creation. We provide two brief, informal examples (Starbucks and Apple) to illustrate our points, linking these examples
to the needsolution landscape proposed by HippelKrogh. In all, we provide a broad sketch and outline of a theory of
value creation as it relates to problem finding and problem solving while concurrently responding to points raised by
HippelKrogh.
Keywords: strategy; innovation; problem solving; governance
History: Published online in Articles in Advance.
1.
Introduction
Felin and Zenger: CrossroadsStrategy, Problems, and a Theory for the Firm
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2.
Felin and Zenger: CrossroadsStrategy, Problems, and a Theory for the Firm
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and von Hippel 2012, Benkler 2002, Chatterji and Fabrizio 2013, Cohen et al. 2002, Fey and Birkinshaw 2005,
Garriga et al. 2013, von Hippel and von Krogh 2003, von
Krogh et al. 2003, Laursen and Salter 2006, Love et al.
2013, Roper et al. 2013). HippelKroghs critique of the
problem-solving perspective builds on this precise theme,
focusing on the knowledge, information, and solutions
that are available to firms outside their boundaries. The
general tenor and assumption of this research is that firmcentric innovation is unnecessarily delimiting, and thus
there are significant opportunities in opening up innovation by incorporating users, customers, and various external constituents (e.g., universities and partners) in the process of innovation.
This theme is carried through in the target paper.
HippelKrogh specifically discuss how innovation
emerges through serendipitous interactions with external
stakeholders and the environment, rather than deliberate problem finding and problem solving on the part of
focal firms. They argue that problem solving often happens when firms inadvertently discover fully developed
solutions to problems that were unforeseen to them. For
example, they discuss how an employee of a firm, walking through a trade show, might find solutions to problems that she did not even recognize her firm had (e.g., a
problem associated with payroll processing). Problem
solutions thus emerge without problem formulation in
the form of what HippelKrogh label needsolution
pairs. Furthermore they argue that restricting problem formulation to a specific focal firm unnecessarily
restricts the firm from a vast array of alternative formulations and solutions accessible through rich landscape
search. That is, external actors not only might provide
feasible solutions to problems, but they might even redefine the problem (e.g., going from where do I source
chemical x? to how could we produce without chemical x?). Throughout their discussion they emphasize
both the value of rich landscape search and the role
of serendipity in this process, thus linking their arguments with a broader conversation about the importance
of both openness and the role of luck in strategy.
We certainly recognize the value of broader and
more open search (see Leiponen and Helfat 2010), as
well as the need to maximize the value that serendipity offers, for instance, by being open to external problem formulations and needsolution pairs. However, as
we have discussed elsewhere (Felin and Zenger 2014),
the central questions are when, why, and how should
firms search more broadly or rely on serendipity, and
what governance forms are best suited for such activity?
The goal of the problem-finding and problem-solving
perspective is to develop a comparative, strategic, and
normative theory of value creation that is analytic and
actionable for a focal firm in its efforts to create value.
Thus, innovation, from our perspective, is not merely
rich landscape search for extant needsolution pairs,
Felin and Zenger: CrossroadsStrategy, Problems, and a Theory for the Firm
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3.
Felin and Zenger: CrossroadsStrategy, Problems, and a Theory for the Firm
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Felin and Zenger: CrossroadsStrategy, Problems, and a Theory for the Firm
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information is aggregated or decision rights are allocated) of a firm are likely to play a central role in how
effectively these theories guide strategic and innovative
activity (e.g., Burgelman 1983, Felin and Zenger 2011).
Overall our focus on theorizing emphasizes the deliberate processes associated with strategy and innovative activity, as a counterbalance to recent work that
emphasizes serendipity in strategy (e.g., Denrell et al.
2003, Winter 2012). However, we certainly recognize
that serendipity also plays a central role. For example,
solutions to problems may emerge from serendipitous
encounters (Cohen et al. 1972). Even the recognition of
something as a solution, particularly as a novel solution, requires some kind of a priori theoretical intuition
that guides attention and recognition. Thus we prefer to
emphasize those aspects of strategy and innovation over
which focal firms have (at least some) control and the
theorizing that drives decisions about which problems to
address, solutions to search (or recognize), and how to
govern these activities.
3.1.
Felin and Zenger: CrossroadsStrategy, Problems, and a Theory for the Firm
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4.
Felin and Zenger: CrossroadsStrategy, Problems, and a Theory for the Firm
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Endnotes
1
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