When Innovation Controlling is Counterproductive: Releasing Firms' Dynamic Capabilities.

Together, innovation's complexity, the growing importance of effective and efficient innovation activities for company success, and the increased pressure on R&D to be accountable regarding its actual contribution to company success have aroused the need for innovation control systems.
This paper provides a critical discussion of contingency factors' influence on an innovation control system's design. Previously, just a mixture of studies focusing on single themes and studies exploring unconnected elements of innovation control systems existed. Contingency theory can explain the relationship among innovation strategy, managerial control and performance but was not applied to examine differences in innovation control systems yet. To evaluate the impact of one of the most important influencing variables in the contemporary dimension, namely the industry dynamics that a firm faces, we used a dynamic capabilities approach to define the variable's determinants. We analyzed 12 successful practice companies' innovation control systems according to these determinants. We found that depending upon the degree of industry dynamism, the innovation control systems' influence was indeed relevant in respect of the building of dynamic capabilities. Three different modes of innovation control systems can be distinguished according to their supportive function for developing new capabilities: opportunity driven innovation control, counterbalanced innovation control, and execution focused innovation control. Strategic assumptions are derived to provide useful guidelines for designing an innovation control system.