Harnessing capabilities and practices for sourcing innovation: an exploratory study

Abstract

Sourcing innovation has become prevalent only in the recent years; therefore, researchers address the practice of sourcing innovation using various terminologies and there is no fixed definition in the extant literature for sourcing innovation. While there are several explanations and terms mentioned in the literature for the same concept, this research incorporates all the works related to sourcing innovation and synthesizes them under the umbrella ‘sourcing innovation’. This research adopts [87] definition of sourcing innovation as an ‘affair between two firms’ and broadens it in accordance with today’s supply chain relationship perspective. This research paper attempts to propose a boarder definition based on sourcing personnel perspectives and to recommend key dominant capabilities and observable practices that would help in enriching the practice of sourcing innovation based on the extant supply chain management literature. This is an exploratory study that includes five semi-structured interviews accomplished within five Danish firms. As sourcing innovation presents many challenges to organizations, this research not only conceptualizes the notion in terms of practice but also identifies dominant capabilities and observable practices to operationalize it. In consideration of dynamic market environment, this research advocates firms to practice sourcing innovation from dynamic capability perspective so that they could innovate more efficiently through intense strategic collaboration with their supply chain partners. In addition, this form of strategic collaboration would support firms in acquiring win-win innovations and achieving solid growth as well as sustainable competitive advantage. Future research to further validate and test the proposed framework is needed.