Internal governance structures and capacity for innovation in small Brazilian coffee roasting and grinding firms

Abstract

This study investigates which combinations of internal governance structures (market, bureaucratic, and community) allow the greatest scope for developing the innovation capacity of small firms. It draws on the studies by Grandori and Furnari (2008, 2010), which hypothesize that the capacity to innovate is more consistently found in firms that use plural internal governance structures. This hypothesis was tested through a survey of 110 Brazilian roasting and grinding coffee firms. The type of innovation investigated was the product. To determine the combinations of structures we used the Qualitative Comparative Analysis (QCA) software fs/QCA, version 2.0 (Ragin, 2008). As a result, we found that plural internal governance structures, which combine monetary, bureaucratic, and community incentives, have more consistent innovation results for small roasting firms. By identifying the organizational requirements that create greater opportunities for innovation, these results can help chart the course of public and private policies which will enable Brazilian companies to improve their rate of innovation and competitiveness in their markets.