Process innovation in milling stage in olive oil sector: Evidence from an empirical analysis in Umbria (Italy)

Purpose The purpose of this paper is to investigate the role of the modes of organizing the technological knowledge (make, buy and hybrid organization) in the decision to innovate the production process. Design/methodology/approach The study first develops a conceptual framework drawing the concept of mode of organization from the Transaction Cost Economics. The three research questions are coherently formulated which concern: the influence of the modes of organization on the decision to innovate and to invest in supporting instruments; the variability of this influence and the complementarity degree between the decision to innovate and to invest. The empirical analysis is carried out with respect to the olive oil sector considering a representative sample of olive millers (Umbria, Central Italy) and a complementary accidental sample drawn from an existing database. Findings The main results of the study provide evidence for the role of modes of organization in the knowledge acquisition finalized to the process innovation. The role of the “buy” option is important, while the collaboration – the “hybrid” organization – seems to influence strongly the innovation and the related investment decision. The important role of the information sources appears effective and articulated. Finally, despite the great economic importance of the quality requirements, the millers appear to be more sensitive to the difficulties to build up a clear process vision in terms of technology. Research limitations/implications The main limitation of the study is that it refers to a specific supply system including small enterprises and does not account for the pattern of innovation in other olive oil production systems. Moreover, one of the samples that was observed and analyzed is accidental in nature and does not allow a clear and robust comparison for the representative sample. Practical implications The findings of this study can contribute to the identification of organizational constraints to the rate on process innovation. Originality/value The originality of the study is based on the main focus, i.e. the attention to the role of the modes of organization in the decision to innovate, which provides complementary information to the extant literature on the choice of modes of organizing the technological knowledge acquisition. Moreover, the conceptual framework and findings are connected to the current research on the variety of the agribusiness organizations which is still a partially explored field of inquiry.