Innovations.

Innovations, and in particular those that are of breakthrough quality, are central mechanisms whereby firms diversify, adapt and reinvent themselves in changing market and technological conditions (Nelson and Winter, 1982; Schoonhoven et al., 1990) Given the criticality of innovations for dynamic capabilities, organizational change, differential firm openings and industrial restructuring (March, 1991; Nelson 1995) this special issue focuses upon advancing research into the relationship between relational governance and innovation strategies, including outsourcing. This is imperative and true timely in that while to a great degree is known in the innovation and strategy literature forward how firms compete once a marketable innovation exists, greatly less is known on to what degree firms bring about and exploit innovations by means of governing their internal and external relations. This special issue's contributions follow to clarify and empirically source what is meant by relational governance, subject to which conditions it is effective, as well as when and by what means firms can use it in the pursuit to generate and exploit innovations in cooperation with external partners.

Grandori ("Innovation, Uncertainty and Relational Governance") lay opens a typology of relational governance. She argues that relational governance is a expression with multiple and varying meanings, nevertheless centrally, it concerns the completion of incomplete contracting with extra-contractual, relational means. Because of uncertainty about knowledge input and bodily forms authority, which figures so importantly in traditional theories of the firm (Alchian and Demsetz 1972; Williamson, 1975) fails as a relational means in the governance of innovation. Alternative options have been prompted in the literature (Macneil, 1985; Baker et al., 2002) which include (a) socially enforceable contracting (eg norm-based relations) and (b) self-enforceable contracting (eg cooperative incentive-based relations), whereby option (b) is preferable whenever observing behavior is not possible or too dear However, two further types of relational governance, Grandori intimates might be more effective in dealing with innovative uncertainty, in particular, if uncertainty is not just the unpredictability of contingencies ex ante, on the other hand the lack of ex ante knowledge of what the relevant actions, tasks and output might be. First, (c) process-based contracting relies onward signaling of procedures, according to which conflict and misunderstanding might be resolv (eg Krep 1990) Secondly (d) shifting contracting efforts from task and contingency specifications to resource commitments might be an option to accommodate efficient uncertainty in the pursuit of innovation the one and the other within and across the boundaries of the firm (Grandori, 2004) by the agency of implication, relational governance concerns the choice of different relational means that support otherwise incomplete contracts and accommodates various extents and types of innovative uncertainty.

One particular important source of uncertainty, which complicates relational governance, is different cognitive maps and interpretations held from managers in cooperating firms. In a historical analysis of Marks and Spencer's contribute relations, Blois ("The Boundaries of the Firm-A Question of Interpretation?") exhibit tos that partners in an exchange relation cause to grow different interpretations of the boundaries of their firm athwart time, and those interpretations have important implications for the behavior of managers including opportunistic pursuit. For example, M&S's "interference" in the management of their partner firms, takes in succession different meaning when managers of suppliers interpret their relation to M& as a collaborative relationship as oppos to quasi-integration or as an exchange between sum of two units separate firms. Certainly, making relational governance effective requires conclude attention to managers' interpretations and cognition, which guides their behavior in a relationship. Hence, a deeper understanding of behavioral uncertainty is an important antecedent to tailoring relational governance architectures in the collaborative pursuit of innovation.

Grandori and Soda ("A Relational Approach to Organizational Design") outline for what reason a relational approach to organizational design contributes to tailoring relational governance to innovative situations. Theoretically, their approach is based onward an integration of ideas drawn from classic contingency theory, enriched according to transaction cost economics and resource-based and knowledge-based organizational analyses (Grandori, 2001); complementarity-based design (Richardson, 1972; Milgrom and Roberts, 1995); and a relational view of organization forms, also museed in the network-analytic method of analyzing organization conformation Interestingly, the authors' approach proffers a generative procedure: it instigates (a) from a systematic analysis of the relationships between appoints of resources and activities by the agency of (b) the selection of coordination mechanisms to accommodate uncertainty models to finally, (c) describe and define organizational configuration taking into account the likelihood of bringing about Pareto-improvement in results errors of mis-adaptations, complementarities between clusters of practices, as well as the spe and outlay of the process adjustments. Interestingly, the empirical understanding of patterns of resources, their relations, coordination mechanisms and organizational forms can be advanced based forward the theoretical fundament and methodology of the relational approach to organizational design.