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

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

This is a valuable article and gained my interest. 

Good theoretical background with more than 60 sources used, a well-elaborated theoretical model.

The practical analysis is of high quality and importance. 

The theoretical and practical implications are well-stated, however, at the same time could be presented in a more focused way to better attract the readers' attention. 

Otherwise, this is a high-quality article that deserves to be published.

Author Response

Thank you for your valuable feedback and suggestions. Based on your advice, we have further refined and focused this section to ensure that it can more effectively capture the readers’ attention. We have cut some redundant descriptions, making the arguments more direct and powerful. We have also reorganized the content structure, placing the most critical theoretical contributions at the beginning of the paragraphs.

Based on your valuable feedback, we have revised the article. The changes include:

Existing research primarily explores the causal relationships of corporate frugal innovation from a singular perspective of various dimensions of organizational symbiosis, utilizing single case studies, traditional quantitative methods, or descriptive analysis, thus lacking in-depth examination of the complex causal relationships between frugal innovation and the multiple dimensions of organizational symbiosis. This study adopts a configurational perspective to reveal the core conditions and their intricate interplay that influence enterprises to engage in frugal innovation. It enriches and elucidates the application of cross-boundary integration, governance mechanisms, and trust symmetry in emerging markets, providing detailed evidence and insights for enterprises on how to effectively implement frugal innovation practices.

-line 684 of the Theoretical implications section

More specifically, the fsQCA method enables us to reveal how certain factors affect the dynamic mechanisms of frugal innovation under different combinational conditions, providing a basis for enterprises to develop more accurate and practical strategic decisions. Moreover, the application of the NCA method demonstrates that there is no single decisive condition for achieving high-level frugal innovation, challenging the traditional linear thought process and underscoring the importance of the interplay among multiple conditions.

-line 698 of the Theoretical implications section

Thirdly, this paper integrates the framework of organizational symbiosis with transaction cost theory, introducing the symbiotic relationship framework into the study of frugal innovation and contributing new insights into the intrinsic mechanisms of frugal innovation. Research on frugal innovation, both domestically and internationally, is just beginning, with most studies still focused on defining the concept and describing cases, lacking robust empirical support. This study theorizes that enterprises can significantly break through resource constraints and advance the development of frugal innovation by establishing symbiotic relationships with local markets, thus forming a frugal innovation ecosystem. The findings of this study confirm that establishing symbiotic relationships through cross-organizational collaboration is crucial for enterprises to overcome resource constraints and effectively carry out frugal innovation, also providing a new perspective for subsequent research into the intrinsic mechanisms of frugal innovation.

-line 705 of the Theoretical implications section

Firstly, building symbiotic relationships is crucial for enterprises as it not only helps them better grasp the opportunities provided by the external environment but also effectively addresses potential challenges, thereby significantly enhancing the performance of frugal innovation. Therefore, enterprises should focus on developing their core competencies and complementing resources with symbiotic partners to form a stable and flexible symbiotic network. For instance, enterprises can increase the frequency of communication with suppliers, customers, and industry peers to strengthen the circulation of market information and resource sharing. At the same time, enterprises should also strengthen cooperation with universities and research institutions, leveraging their research findings and technical support to advance innovation projects. Specifically, enterprises can host industry exchange meetings for market insights, partner with academia for R&D and talent development, and foster open innovation for creative synergy.

-line 720 of the Practical implications section

Due to the limitations of emerging markets, the cost and risk of frugal innovation for businesses increase. Enterprises should reasonably select and utilize governance mechanisms based on the local market environment and subject conditions, ensuring the acquisition of key resources while enhancing the capabilities of the BoP group, thereby promoting the realization of frugal innovation. For instance, in an environment with high technological dynamism, to achieve high-performance frugal innovation, enterprises should pay more attention to maintaining relationships with suppliers and customer partners, while employing contractual governance to regulate and manage these collaborative relationships.

-line 734 of the Practical implications section

Once again, thank you for your valuable time and thoughtful comments. Your expert opinion is crucial to our research and will help us further improve the quality of our paper. We look forward to your continued guidance and support.

Reviewer 2 Report

Comments and Suggestions for Authors

The article pertains to an important and interesting issue in management, especially in turbulent times.

 

On the methodological side, it is necessary to take into account comments in three areas:

1. Literature review.

2. Justifications and limitations.

3. Macro and microeconomic background.

 

Ad. 1.

In the line 210: “Existing literature analyzes two main types of governance mechanisms…” The the article says nothing about a literature review process. The lack of information concerns the research procedure for identifying articles: what databases, what keywords, in what time range, in what journals etc. It is necessary to conduct a literature review of recent years, which will show the actual state of the art. Given the description of the research in China, it would be good to show the conclusions of the theoretical review in division to China and other countries.

 

Ad.2.

Several issues need to be substantiated in the text and cited at the end of the article as its limitations:

- lines 148-149: “To achieve this, we draw on the integrated framework of organizational symbiosis research [7].” Why? Is there a broader rationale, e.g. by pointing to other studies that also used such base?

- line 289: “This study conducted a comprehensive survey from August 2019 to December 2019”. From the perspective of April 2024, this is “old research”. I suspect that frugal innovation has become more important, particularly during Covid-19 and the post-pandemic period. But this is just a guess – It would be useful to show in the article whether there are studies / articles on similar topics in the last 4 years and make a comparative summary,

- line 290: “different industries”. The results are not universal, so what guidelines for future research?

 

Ad. 3.

From macro point of view article concerns China market (line 16).

How does this affect the results? Is there state support for such innovations? Would the same results occur in other countries? etc.

 

From micro point of view article concerns different industries (line 290).

Probably the type of industry influences the title “frugal innovation” - there is nothing about this in the article in the presentation of the survey results.

 

Technical aspect:

Line 729 (references no. 7): “…Prospects of Inter-orgnizational Symbiosis…”. The letter “a” is missing from the word “Inter-orgnizational”.

 

Conclusion:

I recommend to publish the article only after supplementing it with the indicated comments.

Author Response

Comment 1: Literature review.

In the line 210: “Existing literature analyzes two main types of governance mechanisms…” The article says nothing about a literature review process. The lack of information concerns the research procedure for identifying articles: what databases, what keywords, in what time range, in what journals etc. It is necessary to conduct a literature review of recent years, which will show the actual state of the art. Given the description of the research in China, it would be good to show the conclusions of the theoretical review in division to China and other countries.

Thank you for your valuable comments and suggestions. Regarding the literature review section you mentioned, we indeed should provide a more detailed literature search process. Here is the supplemented method for our literature review:

Databases and Search Platforms: We primarily utilized the following databases and search platforms for literature retrieval: Web of Science, Scopus, Google Scholar, and CNKI (China National Knowledge Infrastructure). These platforms are widely considered the most comprehensive and authoritative resources in academic research.

Keywords: We used a series of keywords and their combinations for the search, including but not limited to "frugal innovation," "governance mechanisms," "environmental turbulence," and "transaction cost theory." We also paid special attention to keywords related to China, such as "Chinese frugal innovation" and "Chinese market characteristics."

Time Range: Given the timeliness of the research, we limited the publication time of the literature to 2019-2023. This time range helps us capture the latest research trends and developments.

Journal Selection: We gave priority to journals with high impact in the field, such as the "Journal of Management" and "Strategic Management Journal." We did not overlook Chinese journals to ensure the inclusion of the Chinese research perspective.

Based on your valuable feedback, we have revised the article. The changes include:

The unique characteristics of the Chinese market, such as government support for innovation and a consumer base that rapidly adapts to change [20], provide a distinctive setting for frugal innovation. However, frugal innovation is not limited to developing countries [21]. Although the specific conditions of each country may affect the performance and impact of innovation, the fundamental principles and practices of frugal innovation can be disseminated across cultures and economic systems. Therefore, while the findings of this study are significant within the Chinese market, the insights provided are valuable for understanding and promoting frugal innovation globally. Future research could explore the manifestation of frugal innovation under different national conditions to further validate and enrich the conclusions of this study.

-line 133 of the Introduction section

Transaction cost theory provides a direction for continuous innovation within organizations, motivating enterprises to choose cooperation with other organizations over internal innovation, primarily to reduce the uncertainty and high costs associated with the innovation process [25]. This cross-boundary organizational cooperation re-shapes the patterns of inter-organizational collaboration, moving beyond mere market transactions to require deep cooperation and mutual integration in a unified operational approach to coordinate and integrate mutual interests. By crossing organizational boundaries and establishing effective connections with innovative entities in external networks, enterprises can acquire various innovation resources, build capabilities corresponding to new technological paradigms, and achieve higher frugal innovation performance [10]. Yunus categorizes the member relationships in this cross-organizational boundary cooperation into two types: cooperation with customers and cooperation with suppliers [26].

-line 203 of the Theoretical background section

Therefore, enterprises need to select appropriate governance mechanisms to reduce transaction costs incurred during the process of resource acquisition [31], decrease the uncertainty of mechanisms and rules to ensure supply chain operations [32], manage relationships between suppliers, customers, and other stakeholders, and establish beneficial resource allocation and interest coordination mechanisms both internally and externally. Existing literature has proposed two different forms of governance, contractual governance, and relational governance [33], to effectively collaborate and control symbiotic inter-organizational relationships. According to transaction cost theory, contractual governance coordinates symbiotic relationships between organizations through the establishment of formal, legally binding agreements or contracts [38]. Contractual governance reduces individual opportunistic behavior by coordinating and standardizing relationships between partners, and by clarifying the rights and obligations of both parties to reduce uncertainty and risk [32]. Relational governance emphasizes the role of individual commitment, obligations, and shared goals [34], achieving mutual understanding and trust between partners. Relational governance encourages value creation among partners through open communication, extensive information sharing, and joint problem-solving when issues arise, and by establishing trust and personal relationships to reduce the risk of opportunism [35].

-line 227 of the Theoretical background section

Inter-organizational trust refers to the willingness of members of a focal organization to assume the risks associated with cooperation with partner organizations [40], and it is a cumulative process. Scholars believe that inter-organizational trust has an incentivizing effect on corporate cooperative innovation, capable of reducing transaction costs for business cooperation [41], and incentivizing rewards and penalties to solidify transaction relationships between enterprises [42], bringing more opportunities for exchange. Trust, as an important foundation for cooperation between enterprises, can help businesses and their partners share risks and reduce the negative impacts brought by uncertain environments [44].

-line 263 of the Theoretical background section

We hope the above supplement meets your requirements and adds more depth and breadth to our research.

Comment 2: Justifications and limitations.

Several issues need to be substantiated in the text and cited at the end of the article as its limitations:

2.1 lines 148-149: “To achieve this, we draw on the integrated framework of organizational symbiosis research [7].” Why? Is there a broader rationale, e.g. by pointing to other studies that also used such base?

Thank you for your question. We chose to reference the integrated framework of organizational symbiosis research because it provides a comprehensive theoretical foundation for analyzing frugal innovation.

Based on your valuable feedback, we have revised the article. The changes include:

We have drawn upon the integrated framework of organizational symbiosis research proposed by Lu Shan et al. [7], which is based on the three dimensions of symbiosis defined by Thomas and Autio [8]—namely, member relationships, governance mechanisms, and shared logic—also focuses on the influencing factors and symbiotic effects of symbiotic relationships. It offers a multidimensional perspective on the interactions and collaborations between organizations, focusing not only on internal operations but also on how organizations can achieve common goals through symbiotic relationships. Due to its ability to delve into the intrinsic dynamics of organizational cooperation, this framework has been adopted by numerous studies. For instance, Khanagha et al. noted that symbiotic relationships not only facilitate benefits for participants but also help in developing existing opportunities and creating new ones, adapting to environmental changes, and advancing individual and industry development [22]. In the context of frugal innovation, this framework is particularly valuable.

-line 161 of the Theoretical background section

2.2 line 289: “This study conducted a comprehensive survey from August 2019 to December 2019”. From the perspective of April 2024, this is “old research”. I suspect that frugal innovation has become more important, particularly during Covid-19 and the post-pandemic period. But this is just a guess – It would be useful to show in the article whether there are studies / articles on similar topics in the last 4 years and make a comparative summary,

Thank you for your attention to our research and for the valuable comments you have provided. We have given careful consideration to the issue of timeliness in research that you mentioned. We recognize that the impact of the COVID-19 pandemic on frugal innovation is an important area of study; however, our research aims to explore factors influencing frugal innovation beyond the pandemic.

Our choice of data from 2019 is based on the following considerations:

- Excluding Pandemic Interference: The literature from 2020 to 2024 focuses extensively on the direct impact of the pandemic on frugal innovation. Our goal is to provide a perspective on frugal innovation that is not influenced by this specific event.

- Long-term Trend Analysis: By analyzing data from before the pandemic, we can better understand the long-term development trends and patterns of frugal innovation.

- Guidance for the Post-pandemic Era: Our research is intended to provide viable strategies and insights for businesses to achieve frugal innovation in the post-pandemic era.

Based on your valuable feedback, we have revised the article. The changes include:

This research analyzes data from 2019, specifically chosen to avoid the con-founding effects that the pandemic may have had on frugal innovation from 2020 to 2024. In this timeframe, a significant body of research has been dedicated to examin-ing the immediate effects of the pandemic on frugal innovation. For example, Corsini et al. explored frugal innovation in Italy and India during the COVID-19 crisis and suggested that digital manufacturing could be seen as a key impetus for frugal inno-vation. Similarly, Berndt et al. analyzed survey data from Brazil and highlighted the intermediary role of frugal innovation in the relationship between organizational learning capabilities and business performance. This research, however, is to offer an unobstructed view of frugal innovation, one that remains untainted by this specific event. By evaluating data from before the pandemic, we gain a clearer understanding of the enduring trends and patterns of frugal innovation. Furthermore, this analysis aims to furnish enterprises with actionable strategies and insights for pursuing frugal innovation in the post-pandemic era, thereby providing a historical benchmark and inspiration for innovation activities in the new normal.

-line 347 of the 3.1. Data collection

2.3 line 290: “different industries”. The results are not universal, so what guidelines for future research?

We sincerely appreciate your meticulous review and valuable suggestions. Regarding the impact of industry characteristics on frugal innovation, we did not specifically explore this issue in our study. Our research focused on how symbiotic relationships and environmental turbulence affect frugal innovation, rather than differences in industry characteristics. This decision was based on the scope of the research and resource constraints, and we chose to analyze the issue from a macro perspective.

We recognize that industry characteristics may have a significant impact on the practice of frugal innovation. However, due to constraints in length and research focus, we did not delve into this topic in our paper. Future research could specifically explore how different industries implement frugal innovation, thereby enriching the perspectives of existing studies.

To clearly present our research data, we have added a table (Table 1) to the article (line 361), detailing the industry distribution in the questionnaire data. Additionally, we have provided an explanation and reflection on the decision not to explore industry characteristic differences in the limitations section at the end of the article.

Based on your valuable feedback, we have revised the article. The changes include:

Additionally, this study did not delve into the impact of different industry characteristics on frugal innovation, and future research should consider industry-specific environmental factors, such as market demand, technology maturity, and policy support, which may significantly influence the practice and effectiveness of frugal innovation.

-line 744 of the 5.3. Limitations

Comment 3: Macro and microeconomic background.

From macro point of view article concerns China market (line 16).

How does this affect the results? Is there state support for such innovations? Would the same results occur in other countries? etc.

From micro point of view article concerns different industries (line 290).

Probably the type of industry influences the title “frugal innovation” - there is nothing about this in the article in the presentation of the survey results.

Thank you for your valuable review comments. From a macro perspective, this paper focuses on the Chinese market, which indeed has a significant impact on the results.

Based on your valuable feedback, we have revised the article. The changes include:

In the context of globalization, frugal innovation, as an important business practice, has demonstrated its significance in both developing and developed economies. This study focuses on the Chinese market, exploring the pathways to achieving frugal innovation in a dynamic environment. The unique characteristics of the Chinese market, such as government support for innovation and a consumer base that rapidly adapts to change [20], provide a distinctive setting for frugal innovation. However, frugal innovation is not limited to developing countries [21]. Although the specific conditions of each country may affect the performance and impact of innovation, the fundamental principles and practices of frugal innovation can be disseminated across cultures and economic systems. Therefore, while the findings of this study are significant within the Chinese market, the insights provided are valuable for understanding and promoting frugal innovation globally. Future research could explore the manifestation of frugal innovation under different national conditions to further validate and enrich the conclusions of this study.

-line 130 of Introduction section

From a micro perspective, although the research subjects include a variety of industries, the paper does not directly discuss how different industry types affect the results of frugal innovation. We will further explore how industry types influence the implementation and effects of frugal innovation in future research and will address this in the limitations section.

Additionally, this study did not delve into the impact of different industry characteristics on frugal innovation, and future research should consider industry-specific environmental factors, such as market demand, technology maturity, and policy support, which may significantly influence the practice and effectiveness of frugal innovation.

-line 744 of the 5.3. Limitations

Comment 4: Technical aspect:

Line 729 (references no. 7): “…Prospects of Inter-orgnizational Symbiosis…”. The letter “a” is missing from the word “Inter-orgnizational”.

We sincerely thank the reviewer for careful reading. As suggested by the reviewer, we have corrected the “Inter-orgnizational” into “Inter-organizational”.

We sincerely thank you for your meticulous review of our article and the valuable suggestions for revision you have provided. Your professional opinion is very important to us, and this feedback will greatly assist us in further improving the quality of our article. We have carefully considered all your suggestions and have made corresponding modifications to the article. If you have any questions or need further discussion after reviewing the revised manuscript, please feel free to contact us. We are very willing to listen to your opinions and make the necessary further improvements to the article.

Reviewer 3 Report

Comments and Suggestions for Authors

The chosen research direction seems to be very relevant and coherent to the tasks and trends of the current moment.

The main value of the article from the reviewer's point of view is the authors' attempt to substantiate the importance of corporate and inter-corporate work on the implementation of frugal innovation systems in a reasoned manner (based on modern scientific methods).

I consider it possible to make the following comments on the reviewed work

(1) After reading the article, one is left with the impression that it is primarily a theoretical text that substantiates the generally undiscussed thesis that frugal innovation and reduction of transaction costs are good, important and useful.

Perhaps the paper would have been more interesting and attractive if the authors had included some bolder and brighter examples and suggestions.

For example, the phrase "In an environment with high market dynamism, to achieve high-performance frugal innovation, enterprises not only need to establish mechanisms for mutual trust, communication, and collaboration but also need to establish clear contracts and rules" in paragraph 5.2 of the conclusion (Practical Implications) is perceived as a theoretical appeal rather than a real recommendation for practical action.

(2) A more relevant name for 3.1 is "DatA collection", currently "DatE collection"

(3) In paragraph 3.2 on research methods I did not quite understand the meaning of the phrase "Qualitative Comparative Analysis (QCA) is limited to making qualitative judgments regarding whether a condition is necessary and cannot infer the degree of necessity for a disease".

Comments on the Quality of English Language

The paper is written in a good scientific style.

Author Response

The chosen research direction seems to be very relevant and coherent to the tasks and trends of the current moment.

The main value of the article from the reviewer's point of view is the authors' attempt to substantiate the importance of corporate and inter-corporate work on the implementation of frugal innovation systems in a reasoned manner (based on modern scientific methods).

I consider it possible to make the following comments on the reviewed work

Comment 1: Perhaps the paper would have been more interesting and attractive if the authors had included some bolder and brighter examples and suggestions.

For example, the phrase "In an environment with high market dynamism, to achieve high-performance frugal innovation, enterprises not only need to establish mechanisms for mutual trust, communication, and collaboration but also need to establish clear contracts and rules" in paragraph 5.2 of the conclusion (Practical Implications) is perceived as a theoretical appeal rather than a real recommendation for practical action.

Thank you for your valuable comments and suggestions. We recognize the importance of integrating theory with practice and providing concrete and vivid examples and recommendations to enhance the appeal and practicality of our paper. Regarding the content in section 5.2 that you mentioned, we agree that it may appear overly theoretical. Therefore, we will include the following content in the revised manuscript to strengthen the practicality and clarity of our recommendations:

Firstly, building symbiotic relationships is crucial for enterprises as it not only helps them better grasp the opportunities provided by the external environment but also effectively addresses potential challenges, thereby significantly enhancing the performance of frugal innovation. Therefore, enterprises should focus on developing their core competencies and complementing resources with symbiotic partners to form a stable and flexible symbiotic network. For instance, enterprises can increase the fre-quency of communication with suppliers, customers, and industry peers to strengthen the circulation of market information and resource sharing. At the same time, enter-prises should also strengthen cooperation with universities and research institutions, leveraging their research findings and technical support to advance innovation pro-jects. Specifically, enterprises can host industry exchange meetings for market insights, partner with academia for R&D and talent development, and foster open innovation for creative synergy.

-line 720 of the 5.2. Practical Implications

Due to the limitations of emerging markets, the cost and risk of frugal innovation for businesses increase. Enterprises should reasonably select and utilize governance mechanisms based on the local market environment and subject conditions, ensuring the acquisition of key resources while enhancing the capabilities of the BoP group, thereby promoting the realization of frugal innovation. For instance, in an environment with high technological dynamism, to achieve high-performance frugal innovation, enterprises should pay more attention to maintaining relationships with suppliers and customer partners, while employing contractual governance to regulate and manage these collaborative relationships.

-line 734 of the 5.2. Practical Implications

Comment 2: A more relevant name for 3.1 is "DatA collection", currently "DatE collection"

Thanks for your careful checks. We are sorry for our carelessness. Based on your comments, we have corrected the “Date” into “Data”.

Comment 3: In paragraph 3.2 on research methods I did not quite understand the meaning of the phrase "Qualitative Comparative Analysis (QCA) is limited to making qualitative judgments regarding whether a condition is necessary and cannot infer the degree of necessity for a disease".

Thank you for your question. In paragraph 3.2 on "Qualitative Comparative Analysis (QCA)," it is mentioned as a research method based on set theory. A key feature of QCA is its ability to identify different configurations of conditions related to the observed outcomes. When we say that QCA is "limited to making qualitative judgments about whether a condition is necessary," it means that QCA can determine if a condition is necessary for the outcome, but it does not provide a quantitative measure to judge the degree of necessity of that condition. In other words, QCA can tell us whether a certain condition is needed to achieve a specific result, but it cannot tell us how necessary that condition is. This is because QCA uses the concept of set membership rather than traditional variable measurement. For example, if we are studying the occurrence of a disease, QCA may indicate that a certain health condition is a necessary condition, but it will not quantify the degree of necessity of that condition. This is different from statistical methods, which might use probabilities or correlations to quantify the influence of a condition.

We believe the confusion regarding this sentence arises from our lack of clarity in expression. Therefore, we have revised the sentence in our paper to read:

QCA can only qualitatively determine whether a condition is a necessary one, but cannot infer the degree of necessity for a condition.

-line 384 of the 3.2. Research methods

We deeply appreciate your thorough review of our article and the highly valuable suggestions for amendments you have provided. Your professional insights are crucial to us, and these recommendations will play a key role in enhancing the quality of our article. We have seriously considered each suggestion you made and have accordingly adjusted the article. Should you encounter any issues or require further discussion upon reviewing the revised manuscript, please do not hesitate to contact us. We eagerly anticipate your feedback and are willing to make further refinements to the article.

Round 2

Reviewer 2 Report

Comments and Suggestions for Authors

Thank you for your comprehensive response to my first review and for making changes to the article. I believe that in its current form it can be published.