Unpacking the concept of organizational ingenuity: learning from scarcity

Organizational theorists have recently become particularly interested in the processes and the management of organizational ingenuity (e.g., Harhoff and Hoisl, 2007). Ingenuity in organizations refers to the ability to create innovative solutions within the context of structural constraints, making use of those resources that are at hand, via imaginative problem solving (Lampel et al., 2011; Nalebuff and Ayres, 2003). In a world of scarcity, ingenuity may be a crucial organizational skill. We present ingenuity, the capacity of showing skill or inventiveness, as an umbrella concept (Hirsch and Levin, 1999) that articulates several dimensions and processes that have previously been explored independently. We suggest that these distinct processes may be articulated because they share some features but require different managerial responses. We consider three potential constraints that stimulate ingenious organizational approaches (lack of three factors: time, resources, and affluent customers) as well as three ingenious responses to those forms of scarcity (improvisation, bricolage, and frugality). We extend previous work on the effects of scarcity as constraints for organizational action (Cunha et al., forthcoming) and unpack the concept of ingenuity by reference to constraints resulting from some form of scarcity that triggers the need to adopt some ingenious approach to a given problem. In the face of scarcity, ingenuity is essential. The resource-based view, in both classical and modern versions (Penrose, 1959; Wernerfelt, 1984), argues that companies obtain competitive advantage only by cultivating and using unique resources.