Research PaperNo Access

Characteristics of Chief Technology Officers and Radical Innovation

School of Global Entrepreneurship and ICT, Handong Global University, 558 Handong-ro, Pohang, Gyeongsang 37554, South Korea

E-mail Address: profchung@handong.edu

Search for more papers by this author

and

Minhyung Kang

Department of e-Business, School of Business, Ajou University, 206 Worldcup-ro, Suwon 16499, South Korea

E-mail Address: minhkang@ajou.ac.kr

Corresponding author.

Search for more papers by this author

https://doi.org/10.1142/S0219877019500263Cited by:2 (Source: Crossref)

Abstract

This study examines how characteristics of chief technology officer (CTO) drive radical innovation of the firm. Using data of 140 firms in US manufacturing industries, this study finds that the characteristics of the CTO explains a significant proportion of a firm’s relative radicalness even after controlling for CEO and top management team (TMT) characteristics, organizational capabilities, and other firm characteristics. Specifically, a CTO’s diverse functional experience increases a firm’s radicalness. In terms of individual prior functions, marketing experience was significantly related to radical innovation. In addition, the CTO’s diverse industrial experience increases the firm’s radicalness. In contrast to the existing theories, the CTO’s education level, tenure and age showed insignificant effects. However, the number of degrees in engineering and science showed significant effect on the performance of radical innovation. These results of the analysis on firm-level radicalness provide implications for both academics and practitioners.

Keywords:

References

Adler, P. S. [1988] Managing flexible automation. California Management Review, 30: 34–56. Crossref, Google Scholar
Adler, P. S. and Ferdows, K. [1990] The chief technology officer. California Management Review, 32: 55–62. Crossref, Google Scholar
Ahuja, G. and Katila, R. [2004] Where do resources come from? The role of idiosyncratic situations. Strategic Management Journal, 25: 887–907. Crossref, Google Scholar
Ahuja, G. and Lampert, C. M. [2001] Entrepreneurship in the large corporation: A longitudinal study of how established firms create breakthrough inventions. Strategic Management Journal, 22: 521–543. Crossref, Google Scholar
Amason, A. C. and Sapienza, H. J. [1997] The effects of top management team size and interaction norms on cognitive and affective conflict. Journal of Management, 23: 495–516. Crossref, Google Scholar
Bantel, K. A. and Jackson, S. E. [1989] Top management and innovations in banking: Does the composition of the top team make a difference? Strategic Management Journal, 10, S1: 107–124. Crossref, Google Scholar
Barker III V. L. and Mueller, G. C. [2002] CEO characteristics and firm R&D spending. Management Science, 48: 782–801. Crossref, Google Scholar
Benedetto, C. A., DeSarbo, W. S. and Song, M. [2008] Strategic capabilities and radical innovation: An empirical study in three countries. IEEE Transactions on Engineering Management, 55: 420–433. Crossref, Google Scholar
Beyer, J. M., Chattopadhyay, P., George, E., Glick, W. H. and Pugliese, D. [1997] The selective perception of managers revisited. Academy of Management Journal, 40: 716–737. Crossref, Google Scholar
Brem, A., Nylund, P. A. and Schuster, G. [2016] Innovation and de facto standardization: The influence of dominant design on innovative performance, radical innovation, and process innovation. Technovation, 50: 79–88. Crossref, Google Scholar
Bunderson, J. S. and Sutcliffe, K. M. [2002] Comparing alternative conceptualizations of functional diversity in management teams: Process and performance effects. Academy of Management Journal, 45: 875–893. Crossref, Google Scholar
Cannella, A. A., Park, J. H. and Lee, H. U. [2008] Top management team functional background diversity and firm performance: Examining the roles of team member colocation and environmental uncertainty. Academy of Management Journal, 51: 768–784. Google Scholar
Carpenter, M. A. and Fredrickson, J. W. [2001] Top management teams, global strategic posture, and the moderating role of uncertainty. Academy of Management Journal, 44: 533–545. Crossref, Google Scholar
Chatterjee, S., Hadi, A. S. and Price, B. [2000] Regression Analysis by Example. John Wiley & Sons Inc., New York. Google Scholar
Christensen, C. M. and Bower, J. L. [1996] Customer power, strategic investment, and the failure of leading firms. Strategic Management Journal, 17: 197–218. Crossref, Google Scholar
Chung, D., Cho, T. S. and Kang, J. [2015] TMT knowledge specificity and search behavior on innovation: A contingency perspective. 75th Annual Meeting of the Academy of Management, Vancouver. Crossref, Google Scholar
Cohen, S. G. and Bailey, D. E. [1997] What makes teams work: Group effectiveness research from the shop floor to the executive suite. Journal of Management, 23: 239–290. Crossref, Google Scholar
Cohen, W. M. and Levinthal, D. A. [1990] Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35: 128–152. Crossref, Google Scholar
Crossland, C. and Hambrick, D. C. [2007] How national systems differ in their constraints on corporate executives: A study of CEO effects in three countries. Strategic Management Journal, 28: 767–789. Crossref, Google Scholar
Daellenbach, U. S., McCarthy, A. M. and Schoenecker, T. S. [1999] Commitment to innovation: The impact of top management team characteristics. R&D Management, 29: 199–208. Crossref, Google Scholar
Dahlin, K. B. and Behrens, D. M. [2005] When is an invention really radical? Defining and measuring technological radicalness. Research Policy, 34: 717–737. Crossref, Google Scholar
Datta, A. and Jessup, L. M. [2013] Looking beyond the focal industry and existing technologies for radical innovations. Technovation, 33: 355–367. Crossref, Google Scholar
Dearborn, D. C. and Simon, H. A. [1958] Selective perception: A note on the departmental identifications of executives. Sociometry, 21: 140–144. Crossref, Google Scholar
Ettlie, J. E., Bridges, W. P. and O’keefe, R. D. [1984] Organization strategy and structural differences for radical versus incremental innovation. Management Science, 30: 682–695. Crossref, Google Scholar
Finkelstein, S. and Boyd, B. K. [1998] How much does the CEO matter? The role of managerial discretion in the setting of CEO compensation. Academy of Management Journal, 41: 179–199. Crossref, Google Scholar
Finkelstein, S. and Hambrick, D. C. [1990] Top-management-team tenure and organizational outcomes: The moderating role of managerial discretion. Administrative Science Quarterly, 35: 484–503. Crossref, Google Scholar
Geletkanycz, M. A. and Black, S. S. [2001] Bound by the past? Experience-based effects on commitment to the strategic status quo. Journal of Management, 27: 3–21. Crossref, Google Scholar
Grimm, C. M. and Smith, K. G. [1991] Research notes and communications management and organizational change: A note on the railroad industry. Strategic Management Journal, 12: 557–562. Crossref, Google Scholar
Hall, B. H., Jaffe, A. and Trajtenberg, M. [2005] Market value and patent citations. RAND Journal of Economics, 36: 16–38. Google Scholar
Hambrick, D. and Finkelstein, S. [1987] Managerial discretion: A bridge between polar views of organizational outcomes. Research in Organizational Behaviour, 9: 369–407. Google Scholar
Hambrick, D. C. and Fukutomi, G. D. [1991] The seasons of a CEO’s tenure. Academy of Management Review, 16: 719–742. Crossref, Google Scholar
Hambrick, D. C. and Mason, P. A. [1984] Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9: 193–206. Crossref, Google Scholar
Harpaz, I. and Meshoulman, I. [1997] Intraorganizational power in high technology organizations. Journal of High Technology Management Research, 8: 107–128. Crossref, Google Scholar
Herstatt, C., Tietze, F., Nagahira, A. and Probert, D. [2007] The chief technology officer (CTO) in literature and practice — A review and results from field research in Japan. International Journal of Innovation and Technology Management, 4: 323–350. Link, Google Scholar
Hillman, A. J. and Dalziel, T. [2003] Boards of directors and firm performance: Integrating agency and resource dependence perspectives. Academy of Management Review, 28: 383–396. Crossref, Google Scholar
Kelley, D., O’Connor, G. C., Neck, H. and Peters, L. [2011] Building an organizational capability for radical innovation: The direct managerial role. Journal of Engineering and Technology Management, 28: 249–267. Crossref, Google Scholar
Kimberly, J. R. and Evanisko, M. J. [1981] Organizational innovation: The influence of individual, organizational, and contextual factors on hospital adoption of technological and administrative innovations. Academy of Management Journal, 24: 689–713. Crossref, Google Scholar
Kuhn, T. S. [1970] The Structure of Scientific Revolution. University of Chicago Press, Chicago. Google Scholar
Leifer, R., O’Connor, G. C. and Rice, M. [2001] Implementing radical innovation in mature firms: The role of hubs. Academy of Management Executive, 15: 102–113. Crossref, Google Scholar
Li, Q., Maggitti, P., Smith, K. G., Tesluk, P. E. and Katila, R. [2013] Top management attention to innovation: The role of search selection and intensity in new product introductions. Academy of Management Journal, 56: 893–916. Crossref, Google Scholar
Lieberson, S. and O’Connor, J. F. [1972] Leadership and organizational performance: A study of large corporations. American Sociological Review, 37: 117–130. Crossref, Google Scholar
Lin, C., Lin, P., Song, F. M. and Li, C. [2011] Managerial incentives, CEO characteristics and corporate innovation in China’s private sector. Journal of Comparative Economics, 39: 176–190. Crossref, Google Scholar
Lynn, G., Morone, J. G. and Paulson, A. S. [1996] Marketing and discontinuous innovation: The probe and learn process. California Management Review, 38: 8–37. Crossref, Google Scholar
Makri, M., Lane, P. J. and Gomez-Mejia, L. R. [2006] CEO incentives, innovation, and performance in technology-intensive firms: A reconciliation of outcome and behavior-based incentive schemes. Strategic Management Journal, 27: 1057–1080. Crossref, Google Scholar
McCutchen, W. W. and Swamidass, P. M. [1996] Effect of R&D expenditures and funding strategies on the market value of biotech firms. Journal of Engineering and Technology Management, 12: 287–299. Crossref, Google Scholar
McLaughlin, P., Bessant, J. and Smart, P. [2008] Developing an organisation culture to facilitate radical innovation. International Journal of Technology Management, 44: 298–323. Crossref, Google Scholar
Medcof, J. W. [2008] The organizational influence of the chief technology officer. R&D Management, 38: 406–420. Crossref, Google Scholar
Michel, J. G. and Hambrick, D. C. [1992] Diversification posture and top management team characteristics. Academy of Management Journal, 35: 9–37. Crossref, Google Scholar
Mitchell, W. [1989] Whether and when? Probability and timing of incumbents’ entry into emerging industrial subfields. Administrative Science Quarterly, 34: 208–230. Crossref, Google Scholar
Monge, P. R. and Eisenberg, E. M. [1987] Emergent communication networks. Handbook of Organizational Communication: An Interdisciplinary Perspective, pp. 304–342. Google Scholar
Monge, P. R. and Contractor, N. S. [2001] Emergence of communication networks. The New Handbook of Organizational Communication: Advances in Theory, Research, and Methods, pp. 440–502. Crossref, Google Scholar
Morbey, G. K. and Reithner, R. M. [1990] How R&D affects sales growth, productivity and profitability. Research-Technology Management, 33: 3, 11–14. Crossref, Google Scholar
Nerkar, A. [2003] Old is gold? The value of temporal exploration in the creation of new knowledge. Management Science, 49: 211–229. Crossref, Google Scholar
Neter, J., Kutner, M. H., Nachtsheim, C. J. and Wasserman, W. [1996] Applied Linear Statistical Models. Irwin, Chicago. Google Scholar
O’Connor, G. C. [1998] Market learning and radical innovation: A cross case comparison of eight radical innovation projects. Journal of Product Innovation Management, 15: 151–166. Crossref, Google Scholar
O’Connor, G. C. and Ayers, A. D. [2005] Building a radical innovation competency. Research-Technology Management, 48: 23–31. Crossref, Google Scholar
O’Reilly, C. A., Harreld, J. B. and Tushman, M. L. [2009] Organizational ambidexterity: IBM and emerging business opportunities. California Management Review, 51: 75–99. Crossref, Google Scholar
Prendergast, C. and Stole, L. [1996] Impetuous youngsters and jaded old-timers: Acquiring a reputation for learning. Journal of Political Economy, 104: 1105–1134. Crossref, Google Scholar
Raskas, D. F. and Hambrick, D. C. [1992] Multifunctional managerial development: A framework for evaluating the options. Organizational Dynamics, 21: 5–17. Crossref, Google Scholar
Roberts, E. B. [2001] Benchmarking global strategic management of technology. Research-Technology Management, 44: 25–36. Crossref, Google Scholar
Rothwell, R. and Zegveld, W. [1985] Reindustrialization and Technology. M.E. Sharpe, Inc., Armonk. Google Scholar
Schoenmakers, W. [2005] Knowledge Flows between Multinational Companies: A Patent Data Analysis. Maastricht University Press, Maastricht, Netherlands. Crossref, Google Scholar
Shane, S. [2000] Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science, 11: 448–469. Crossref, Google Scholar
Shrivastava, P. and Souder, W. E. [1987] The strategic management of technological innovations: A review and a model. Journal of Management Studies, 24: 25–41. Crossref, Google Scholar
Smith, R. D. [2003] The chief technology officer: Strategic responsibilities and relationships. Research-Technology Management, 46: 28–36. Crossref, Google Scholar
Talke, K., Salomo, S. and Kock, A. [2011] Top management team diversity and strategic innovation orientation: The relationship and consequences for innovativeness and performance. Journal of Product Innovation Management, 28: 819–832. Crossref, Google Scholar
Thomas, A. S., Litschert, R. J. and Ramaswamy, K. [1991] The performance impact of strategy-manager coalignment: An empirical examination. Strategic Management Journal, 12: 509–522. Crossref, Google Scholar
Tushman, M. L. and Romanelli, E. [1985] Organizational evolution: Interactions between external and emergent processes and strategic choice. Research in Organizational Behavior, 8: 171–222. Google Scholar
Walsh, J. P. and Fahey, L. [1986] The role of negotiated belief structures in strategy making. Journal of Management, 12: 325–338. Crossref, Google Scholar
Weiner, N. and Mahoney, T. A. [1981] A model of corporate performance as a function of environmental, organizational, and leadership influences. Academy of Management Journal, 24: 453–470. Crossref, Google Scholar
Wiersema, M. F. and Bantel, K. A. [1992] Top management team demography and corporate strategic change. Academy of Management Journal, 35: 91–121. Crossref, Google Scholar
Yadav, M. S., Prabhu, J. C. and Chandy, R. K. [2007] Managing the future: CEO attention and innovation outcomes. Journal of Marketing, 71: 84–101. Crossref, Google Scholar
[Dataset] COMPUSTAT. Available at http://www.crsp.com/products/research-products/crspcompustat-merged-database [accessed on 10 January 2015]. Google Scholar
[Dataset] Dun & Bradstreet’s Reference Book of Corporate Management, Thomson One executive profile provided by Dun & Bradstreet’s Reference Book. Available at http://www.thomsonone.com [accessed on 25 March 2016]. Google Scholar
[Dataset] United States Patent and Trademark Office (USPTO). Available at http://www.uspto.gov/learning-and-resources/electronic-data-products/historical-patent-data-files [accessed on 3 March 2016]. Google Scholar