Corporate Underground

The following sections are included:

• Preface
• About the Editor
• List of Contributors
• Contents

The following sections are included:

• Definition of Bootlegging
• Rationale for the Handbook
• Road Map
• Future Research
• References
• Appendix 1: Related Literature Review

This chapter discusses the prevalence of “bootlegging.” It looks at national and sectoral differences, the percentage of bootleg entrepreneurs, and the time consumed by bootlegging. Probably most importantly, it establishes that bootlegging is not a major phenomenon, either in terms of manpower or resource consumption but an activity common to the initial stages of innovation. The three essential resources involved in bootlegging are materials, tools or equipment, and time, the latter of which is the most important. The purpose of bootlegging is specified, the technological stage associated with disclosure, the size of the bootleg product, and the technology involved. Unsurprisingly, most bootleg output is not radical product innovation as most literature suggests. Bootlegging is mainly incremental technological product or process improvement. It is a continuous learning process and a natural part of experimental R&D. Most companies do benefit from bootlegging. The output meets business needs, and any uncertainty caused by bootleg activity is evaluated as relatively low.

This chapter presents some of the major findings from a study of bootlegging. A large group of R&D employees (all serial bootleggers) were interviewed in-depth about various aspects of their clandestine work. The interviews explored the type of innovations (product, process, radical, incremental) that resulted from bootlegging as stated by the respondents. The research examined the reasons behind why the employees carried out this illicit activity. In the interviews, the bootleggers were asked about how they managed their time so they could work on covert projects. The research also examined how these employees went about the crucial activity of revealing the clandestine projects to the wider organization.

This chapter focuses on three aspects of the bootlegging process summarizing our prior research: First, we compare bootlegging processes to regular processes and explore how the characteristics, which often represent challenges, differ between both. Second, building on the specific and challenging characteristics of bootlegging processes, we lay out what specific support measures are needed. Third, we suggest how selected support measures could be systematically implemented organization-wide via a system of corporate crowdfunding. Before summarizing our findings and propositions in these three areas, we describe the methods by which they have been developed.

This chapter presents a typology of entrepreneurial strategies. It responds to recent calls in research to examine the theoretical underpinnings of corporate entrepreneurial strategies. The typology explains underlying structural dimensions of how entrepreneurial strategies, such as bootlegging, skunkwork, bricolage, and guided evolution, differ, in respect to the origin of an entrepreneurial initiative and the resource availability for an entrepreneurial initiative. In the chapter, the typology is used to examine an exemplary longitudinal case study at Unilever. The Unilever Knorr case exemplifies how managers in practice navigate different entrepreneurial strategies to overcome the corporate immune system. It finds dynamically evolving situations, where new sources of corporate resistance continually arise, navigating between corporate entrepreneurship modes could be more a viable approach for understanding the mechanisms of corporate entrepreneurial initiatives. As such, this chapter contributes to the understanding of how entrepreneurial strategies are a priori choice and in situ navigation depending on the organizational context and furthers the discussion of important underlying structural dimensions for navigating corporate entrepreneurial strategies.

This chapter reviews past quantitative research on individual factors such as self-efficacy and risk propensity as well as contextual factors of formal and social control, which were found to affect employees’ individual bootlegging tendencies. The chapter also puts bootlegging in the context of related innovative behaviors to highlight their conceptual similarities and differences. The chapter also presents various avenues for future research covering further theoretical refinements, studying organizational-level outcomes of bootlegging, and empirical measurement issues that need to be resolved to facilitate progress in the quantitative stream of the bootlegging literature.

This chapter investigates which organizational and managerial factors foster or hamper self-organized or autonomous innovation activities within firms. Based on a case study approach and on a theoretical framework, which is rooted in the complexity science and innovation literature, the informal bottom-up NPD projects of six Austrian electronics companies are examined. The analysis focuses mainly on the role of an open communication culture that delivers autonomy for experimentation, the impacts of financial incentives systems, the rigidity of organizational structures and, finally, the formalism of control systems. The authors deliver evidence how classical formal management systems affect self-organized innovation activities and how they can be designed deliberately to promote and harness such bottom-up activities.

While bootlegging is often reduced to an individual equation, Chapter 7 opens to a spatio-political approach to bootlegging. It depicts how a third space (here a Fab Lab) supports’ low power actors’ bootlegging through three dimensions of transgression (namely cognitio-cultural, material, and socio-political). In doing so, this bootlegging enables them to empower themselves through a triple control of meaning, resources, and processes. It builds on a case study we conducted in the Fab Lab of the French car manufacturer Renault.

Previous meta-analytic evidence has shown several job-design characteristics to be crucial predictors of employee innovativeness. The reality is, however, that many individuals are likely to be in misfit with the experienced characteristics of their jobs. Discrepancy in job-design characteristics (actual versus wanted) has (paradoxically) the potential to explain employee innovative work behavior. In particular, we focused on task identity and entertain the possibility that employee engagement in creative bootlegging interacts with incongruent situations between actual- and wanted-task identity, thereby increasing their creative and innovative performance. The results of moderated polynomial regression analyses from the multisource field study of 233 working professionals and 62 direct supervisors employed by a European bank suggest several interesting findings. First, congruence in actual–wanted task identity at high levels (a high-fit situation) leads to higher levels of innovative work behavior than congruence achieved at low levels (a low-fit situation). Second, we found empirical evidence that task–identity incongruence is driving innovative work behaviors more than congruence does. Finally, incongruence in actual–wanted task identity interacts with creative bootlegging in positively predicting innovative work behavior when employees self-report higher levels of underground innovation activities.

This chapter discusses the role of creative bootlegging as a bridge between individuals’ self-efficacy characteristics and individuals’ tendency to become the lead users. Analyzing the mechanism of bootlegging activities among working employees of small and medium enterprises (SMEs) in the blue sector, this chapter shows that bootlegging is a transitional space between individuals’ self-beliefs in their abilities and their willingness to and generate innovative ideas by providing the opportunity for identity play among employees. The chapter contributes to the bootlegging concept by shedding light on the individuals’ self-exploration characteristics, namely self-efficacy that triggers them to perform bootleg activities through which achieve enough confidence and autonomy to participate in the innovation-related activities.

This chapter discusses the relationship between bootlegging and individual innovation performance, and considers the joint moderating effect of status and creativity. It has been found that bootlegging contributes to the improvement of individual innovation performance on the whole, and individuals with high creativity and high status benefit from bootlegging. In addition, when and only when individual creativity and status (formal or informal) are high, bootlegging will have a significant positive impact on individual innovation performance. This chapter discusses the function boundary of bootlegging, how it enriches and improves the concept of contingency relationship between bootlegging and individual innovation performance, and also explains the complex mechanism of individual level variables on the effect of bootlegging.

This chapter presents how bootleggers uncover their underground projects to their organizations and overcome the initial illegitimacy of their ideas. This study seems to be the first attempt to link bootlegging research with legitimacy research to explain this endeavor.We find that bootleggers just as other innovators need to win legitimacy for their projects. To overcome initial illegitimacy, we find that they follow several known but also several new patterns. Consequently, this chapter expands the knowledge on legitimacy seeking behavior of innovators and closes the research gap of how bootleggers successfully uncover their clandestine projects. Our collection of cases furthermore highlights that managers should listen carefully when being confronted with such projects. Innovations that may appear illegitimate at first can turn into important assets for their firms.

Research on bootlegging shows that individuals, as the origin of corporate entrepreneurship and innovation, often resort to undercover activities to develop and elaborate their initial ideas. Although reasons behind such behavior are well documented in the extant literature, less is known about what drives bootleggers to reveal their ideas. Drawing on field data from in-depth interviews with innovators in R&D departments in different industries of Iran, this research identified five groups of factors at the individual, managerial, firm, industrial, and idea level, which are at play in the revealing stage of bootlegging behavior.

One key source of innovation is the individual employee, who can develop innovations either with or without the official authorization by management. Previous research about bootlegging focused mostly on structural determinants while little is known about individual determinants of bootlegging behavior. We relate two research streams that address deviance and motivation to develop a conceptual model that explains bootlegging behavior in the workplace. Based on the assumption that an innovating agent can simultaneously engage in compliant and in deviant innovative behavior (i.e., bootlegging), we conceptualize these distinctly different types of behavior as two dependent variables and derive intrinsic and extrinsic motivational sources as independent variables. Our conceptual model contributes to existing literature on individual-level determinants of bootlegging and offers a basis to further study workplace innovation.

This chapter explores the innovative engagement in bootlegging projects and some of the many questions coming up when covert commitment leads to innovation against the odds. The author develops a model of innovative engagement that identifies character traits of innovation rebels and the environment they need to thrive in an organization. Based on an empirical study in the chemical and pharmaceutical industry, this chapter presents two specific types of innovation rebels — the ambitious bootlegger and the creative bootlegger — and discusses how to manage their innovative engagement to create ground-breaking innovation.

The purpose of this chapter is to show that potential bootleg entrepreneurs can be identified beforehand, maybe already during the job interview. This can be interesting for two reasons. First, a firm might not want the “hassle” of having to deal with illicit activity and can then prevent with this test those people from joining their organization. Second, the reverse is the case. As bootleggers are particularly creative, a company might want a creative force in its laboratory and can identify them beforehand with this test.

The final chapter is dedicated to hardcore bootlegging or creative deviance and complements prior research on the organizational-level determinants of bootlegging by discussing its individual-level antecedents. Analyzing survey data from 457 employees in a German high-tech corporation, Tenzer and Yang demonstrate that risk propensity as a personality trait is positively related, whereas allocentrism as a personal value orientation and organizational commitment as a personal attitude are negatively related to creative deviance. Risk propensity emerged as the strongest predictor, as it affects hardcore bootlegging or creative deviance both directly and indirectly through allocentrism and commitment.

The following section is included:

• Index