Testing the Social Innovation Construct: An Empirical Approach to Align Socially Oriented Objectives, Stakeholder Engagement, and Environmental Sustainability

Abstract

Innovation is not just an economic and or technological tool; it is also a social phenomenon. This paper draws together the concepts of creating shared value, the stakeholder theory, and socially oriented innovation to research companies' decisions on asserting socially related objectives when innovating. We examine the extent to which this decision process is bounded by constraints related to information and the characteristics of innovation. To perform this study we used a dataset that monitors the innovation activities of companies. This study offers an empirical analysis of the influence on firms' social innovation orientation. The empirical analysis supports the theoretical framework and identifies the firm's community links as key factors in developing new innovations, process and product-oriented, which have an impact on the social-innovation orientation of the firm. Additionally, it shows how the setting up of social goals when innovating is affected by the information source and the innovation mode being developed.There is a relationship between the creation process (represented by the product and process orientation) and the human-centered focus, represented by the social innovation construct, as highlighted by Brown and Wyatt (2010), confirming the first and second hypotheses.Specifically, the research findings show that the social innovation orientation within a company is influenced by two types of innovation-oriented activities: process-and product-oriented, and that the source of ideas for process and product innovation can be traced to information sources related to the firms' close environment, including clients and customers, their staff, and competitors and firms from the same industry, and the firm's local and close links. This explains how looking for the benefits of the close environment will also benefit the company and vice versa, as the main idea of the stakeholders theory claims (Freeman, 1984).This social innovation construct is based on six objectives: health, safety, employment, sustainability, growth, and environmental concerns (the model was tested on more than 5900 Spanish companies). Thus, it can be expected that firms looking for costs reduction on energy or waste consumption, process improvements, etc., might also be considering increasing or maintaining their market position and therefore their employment. Similarly, companies that search for new markets and products and aim to increase their market share are trying to maintain or increase their competitive position, and consequently their employment level.Moreover, the social-innovation model considers that the internal sources and the information from customers, competitors, consultants, commercial labs, and private R&D institutes are important drivers of both process and product orientation. It can be expected that other sources of information will have a relevant impact and elucidate companies' process and product orientation when innovating. On the other hand, the higher weightings in the model for sources such as customer...

The Inverted U‐Shaped Relationship between Corporate Philanthropy and Spending on Research and Development: A Case of Complementarity and Competition Moderated by Firm Size and Visibility

“…R&D spending is often used as a precursor and a determinant of the ability to innovate. If approval and support from stakeholders enhances a firm's performance (Segara-Oña et al, 2016), it is now well-demonstrated that CSR, in particular CP, increases stakeholders' support and legitimacy. Thus investing in CSR and in R&D can be seen as both complementary and competing expenses.…”

“…CP is described and perceived as the generous behavior of firms, and generally consists of giving gifts or money to social or charitable causes such as education, health care, disaster relief, and environmental protection (Godfrey, 2005;Wang et al, 2008). It is widely recognized as a useful instrument for firms to build pro-social image and reputation (Godfrey, 2005), and to increase their stakeholder influence capacity (SIC) by cultivating trusting stakeholder relationships (Jones, 1995;Barnett, 2007;Segara-Oña et al, 2016).…”

The influence of financial performance on corporate social innovation

“…Over the years, social innovation has been widely discussed from various approaches: economic (Mulgan, Tucker, Ali, & Sanders, ), organizational (Phills et al, ; Segarra‐Oña et al, ), and socioecological (Rennings & Rammer, ; Westley & Antadze, ). It has also become a key element for analyzing processes of territorial governance and an instrument for promoting country development (Andrew & Klein, ; Citroni, ; Edwards‐Schachter et al, ; Moulaert, Martinelli, Swyngedouw, & Gonzalez, ).…”

“…Social innovation is changing the paradigm for studying innovation. Its impact on society and the concept itself are becoming important and fruitful subjects of research (Avelino et al, ; Cajaiba‐Santana, ; Igarashi & Okada, ; Neumeier, ; Segarra‐Oña, Peiró‐Signes, Albors‐Garrigós, & Miguel‐Molina, ). However, social innovation (SI) is a complex construct that lacks a unifying paradigm in the social sciences (Turker & Altuntas, ).…”

“…In line with arguments on the theory of shared value proposed by Porter and Kramer (), some authors have emphasized the importance of social innovation for the success of firms. Related theoretical papers have suggested a relationship between social investments or corporate social performance and corporate financial performance (Crane, Pallazzo, Spence, & Matten, ; Wilson & Post, ) and the influence of stakeholders in creating CSI (Mirvis et al, ; Segarra‐Oña et al, ). This study focuses on firms' capacity to invest their resources (mainly corporate financial performance) in CSI, that is, their role as generators not only of profitability but also of CSI value.…”