| Clarity | The term ‘innovation’ is multifaceted and even contentious in the voluminous and eclectic literature base. Providing an all-encompassing classification of the concept is indeed a lofty undertaking. However, a definition is offered based on the author’s analysis of a significant number of antecedent definitions from the literature in order to clarify the term as applied to the IBV. |
| Theoretical Glue | The underlying logic and rationale for the IBV theory of the firm was compiled from a structured examination of the notion of innovation vis-à-vis incumbent theories of the firm, as well as recent developments in the nature of the firm largely driven by the rapid expansion of ICT. Hence, the proposed taxonomy of IBV was glued together from the exploration of the concepts of innovation, theory and nature of the firm. |
| Cumulative Tradition | The cumulative tradition of scholarship on innovation, from its origins in the work of Schumpeter and developed over the past number of decades, was synthesised in the literature review and an attempt was made to summarise its evolution in Table 1. However, the author is conscious of the justifiable criticism of such an undertaking considering the volume of studies. Also, IBV was placed in the development of the managerial theories of the firm originating from scholars such as Edith Penrose. |
| Parsimony | The definition of innovation was developed from an investigation and parsing of many antecedent definitions. There was much duplication and redundancy in the resulting spreadsheet containing the main concepts uncovered during the analysis. Consequently, the IBV proposed in the study is a concise formulation that facilitates future investigation and empirical studies. |
| Applicability | This study argued that developments in ICT and the nature of the firm have resulted in the incumbent theories of the firm having limited applicability in the current business landscape. As a result, the encompassing nature of the concept of innovation has ensured that IBV is valid in the broad spectrum of business situations. An additional novelty in IBV is the inclusion of the emerging not-for-profit sector. |
| Abduction | It is argued that the paper makes an academic contribution by providing an example of the initiating theory using abduction (conceiving of theory), which has recently been brought to the forefront of management research by Andrew Van de Ven. Antecedent theories of the firm were largely developed, analysed and researched using the traditional concepts of induction and deduction. |
| Ethics | Ethics is a fundamental area of philosophical inquiry and of managerial practice. The inclusion of ethics in the IBV definition was a response to the virtual absence of any reference to this topic in the analysis of the innovation definitions in the literature. It is proposed that this approach in the current study is an important contribution to the investigation of the nature of a firm. |
