Must-have or nice-to-have? Using Necessary Condition Analysis (NCA) to advance strategy, innovation, and entrepreneurship research
Different conceptualizations of organizational performance and their antecedents have served as key variables for studies in the fields of strategic management, innovation, and entrepreneurship. For example, sustained competitive advantage has been coined as the central performance variable of the resource-based view of the firm (RBV), which depends on a set of antecedents, such as that firm resources have to be valuable (Barney, 1991). Many studies in the realm of innovation management argue that knowledge breadth and knowledge overlap are necessary conditions for knowledge integration in the innovation process (e.g., Vakili & Kaplan, 2021). Furthermore, the literature on entrepreneurship has suggested many necessary conditions for firm emergence, including the preparation of a business plan, the acquisition of outside funding, or the start of marketing and promotion activities (Arenius et al., 2017). Together, these literatures study which factors—for example, key success factors or profit drivers—enable large and small organizations to achieve their goals. At the same time, they also identify factors that are bottlenecks for success. For example, the RBV argues that a competitive advantage cannot be achieved without valuable, rare, inimitable and substitutable resources (Barney, 1991). Such “necessities” or “must-haves” have been stated in other fields, too: without trust in a buyer-supplier relationship, it is impossible to achieve high levels of collaborative innovation (Van der Valk et al., 2016). Without high levels of motivational cultural intelligence, it is impossible for global virtual teams to achieve high levels of social integration and performance (Richter et al., 2021).
Questions about necessities and “must-haves” can be especially addressed with Necessary Condition Analysis (NCA). NCA offers a fresh look at important phenomena and can further advance our understanding of causal relationships (Aguinis et al., 2020; Bokrantz & Dul, 2022; Dul, 2016). Necessary conditions are enablers that must be present for an outcome to occur (Dul, 2016). They often work as bottlenecks, constraints, or barriers: their absence prevents an organization, team, or individual from achieving their goals. While regression-based techniques help us understand which factors on average and ceteris paribus contribute to important organizational outcomes, NCA helps us to separate the need-to-haves from the nice-to-haves. The insights provided by NCA are, therefore, not only theoretically but also practically relevant to researchers, executives, managers, and policymakers. However, despite the ubiquity of necessary condition statements in strategy, innovation, and entrepreneurship research, thorough descriptions of the mechanisms of necessity statements and strong empirical tests are still scarce. NCA offers a methodological and theoretical toolkit to theorize and test necessary condition hypotheses. The aim of the special issue is to invite submissions that use NCA to theoretically and empirically advance strategy, innovation, and entrepreneurship research.
The special issue is a timely one because there is a need for best-practice examples of NCA studies. With the increasing popularity of NCA across many scholarly fields—including entrepreneurship, human resource management, international business, marketing, operations, public and non-profit management, strategic management, and tourism—comes a variety of methodological applications and interpretations. The establishment of best practices—such as those described by Dul, Hauff and Bouncken (2023)—is necessary to move the management field forward. The editors of this special issue are committed to supporting authors with the implementation of theoretical and empirical best practices. A second reason is that the special issue will offer strategy, innovation, and entrepreneurship scholars with a fresh perspective on both new and old phenomena. To explain the relationship between a necessary condition and its outcome, scholars need to use a different type of logic (Bokrantz & Dul, 2022). Developing this logic and incorporating them into established management theories has the opportunity to move the field forward (Aguinis et al., 2020). This special issue will be the first journal issue dedicated to novel perspectives offered by NCA and its underlying logic.
The special issue focuses on studies within the strategic management, innovation, and entrepreneurship literatures that consider necessary conditions, bottlenecks, or constraints for important organizational outcomes. These outcomes include—but are not limited to—firm performance, strategic change, sustainability, intrapreneurship, knowledge recombination, new product or service development, venture funding, new venture creation, and new venture success. Example research questions are:
- Why and how do efficiency and resource scarcity constrain organization’s ability for innovation and growth?
- What are the necessary conditions for successful relational strategies—including alliances, industry clusters, business ecosystems, and strategic networks?
- What are the bottlenecks preventing organizations from developing sustainable (environmental, social, and economic) business models?
- What are the necessary conditions for successfully responding to disruptive technologies such as Artificial Intelligence (AI) and the deluge of available data?
- How can organizations identify and manage the barriers to bottom-up innovation?
- What are the necessary conditions for moving from one stage of the innovation process to the next?
- Considering all the researched factors influencing the innovation process, which of them are need-to-haves and which are nice-to-haves?
- How do start-up ecosystems influence the conditions necessary to start a successful company?
- Why are some founder characteristics necessary for firm emergence while others are not?
- Considering the journey from idea to start-up, what are the bottlenecks preventing entrepreneurs from realizing their ideas?
1. Standalone NCA studies. These studies use NCA as the only empirical method to test hypotheses.
2. Multimethod studies combining NCA and Structural Equation Modeling (SEM). These studies use SEM to estimate latent variable scores and use these scores as input for NCA.
3. Multimethod studies combining NCA and Linear Regression Analysis. These studies use NCA to complement a linear regression analysis with additional insights.
4. Multimethod studies in which NCA is combined with Qualitative Comparative Analysis (QCA). These studies use NCA for the analysis of necessity, and QCA for the analysis of sufficiency.
5. Conceptual studies. These studies use necessity logic to develop necessity propositions or alter existing theoretical models.