ABSTRACT
Research based on construct quantitative correlations between company size and the efficiency of research and development — R&D — tends to highlight the advantages of large companies with regard to innovation. The objective of this chapter is to show that innovation cannot be considered as a homogenous and uniform process. Rather, we should distinguish between the different forms of innovation, and the efficiency in a firm in each depends on specific capabilities, which we will specify. By examining different dynamic processes of learning and knowledge creation, we demonstrate that the choice of organizational structure has a major effect on the efficiency of the company's innovation process. We then demonstrate that an intrinsic organizational advantage can exist for small firms when the environment is a complex one, and is characterized by high levels of uncertainty and unstable technological choices.
