Process Management and Technological Innovation: A Longitudinal Study of the Photography and Paint Industries

TLDR

Process management practices are theorized to reduce routine variance and steer innovation toward incremental, exploitative advances rather than exploratory ones. The study investigates how process management activities influence technological innovation, particularly by building on existing firm knowledge. The authors performed a 20‑year longitudinal analysis of patenting activity and ISO 9000 certifications in the paint and photography industries to examine how process management shapes innovation rooted in existing firm knowledge. Greater process management activity is linked to more exploitative innovations and a higher share of such innovations, suggesting that these practices crowd out exploration and may hinder long‑term adaptation.

Abstract

This research explores the impact of process management activities on technological innovation. Drawing on research in organizational evolution and learning, we suggest that as these practices reduce variance in organizational routines and influence the selection of innovations, they enhance incremental innovation at the expense of exploratory innovation. We tested our hypotheses in a 20-year longitudinal study of patenting activity and ISO 9000 quality program certifications in the paint and photography industries. In both industries, the extent of process management activities in a firm was associated with an increase in both exploitative innovations that built on existing firm knowledge and an increase in exploitation's share of total innovations. Our results suggest that exploitation crowds out exploration. We extend existing empirical research by capturing how process management activities influence the extent to which innovations build on existing firm knowledge. We suggest that these widely adopted organizational practices shift the balance of exploitation and exploration by focusing on efficiency, possibly at the expense of long-term adaptation.