How Enterprises Achieve Frugal Innovation: A Configurational Study Based on the Model of Organizational Symbiosis

Zhe Zhang, Hongyan Liu and Yunhui Zhao ()
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Zhe Zhang: School of Computer & Information Management, Inner Mongolia University of Finance and Economics, Hohhot 010051, China
Hongyan Liu: School of Business Administration, Inner Mongolia University of Finance and Economics, Hohhot 010051, China
Yunhui Zhao: School of Business Administration, Inner Mongolia University of Finance and Economics, Hohhot 010051, China

Sustainability, 2024, vol. 16, issue 11, 1-21

Abstract: Frugal innovation offers cost-effective, demand-driven products for consumers in emerging markets. By leveraging this approach, enterprises can capitalize on opportunities, boost profits, and nurture beneficial consumer relationships. This study uses the transaction cost theory to explore how symbiotic relationships within environmental turbulence influence frugal innovation. The goal is to unravel the interconnected factors that drive high-performance frugal innovation, providing enterprises with a roadmap for seizing opportunities, enhancing profitability, and cultivating enduring consumer relationships. Data from 218 Chinese enterprises were collected through a survey and analyzed using fuzzy-set Qualitative Comparative Analysis (fsQCA) and Necessary Condition Analysis (NCA) methods. The research findings indicate that factors such as market dynamics, technological dynamics, collaboration with suppliers and customers, relationship governance, contract governance, and inter-organizational trust are not necessary prerequisites for high frugal innovation performance. Instead, the synergy among these factors is imperative for reaching elevated levels of frugal innovation performance. Furthermore, three distinct pathways to heightened frugal innovation performance were identified: a dual-drive mechanism involving membership relationships and governance mechanisms, a membership-driven approach in dynamic technological conditions, and a governance mechanism-driven approach in dynamic market conditions. This study offers valuable theoretical and practical insights for enterprises pursuing frugal innovation in turbulent environments, guiding them towards sustained growth and competitive advantages in new markets.

Keywords: frugal innovation; environmental turbulences; organizational symbiosis; governance mechanisms; inter-organizational collaboration; inter-organizational trust (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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