tatheory rating summations show the managerial school to be

the most highly rated, even ahead of the buyer behavior school
(second). The authors state, "We believe it is imperative that
we examine critically the managerial perspective and integrate
its more worthy elements into the theoretical realm" (p. 25).
We agree.
In Chapter 4, on the noninteractive-noneconomic schools,
the buyer behavior school is recognized for its major contributions to the discipline, but is also severely challenged. The
authors write, "Unfortunately, as with other schools of thought
that have generated too much interest, the buyer behavior school
soon began to lose contact with the broader marketing discipline. This separation between marketing and buyer behavior
is currently the subject of heated debate that shows no clear
signs of resolution" (p. 26). The buyer behavior school is rated
relatively well on the metatheory criteria, however, and is
credited with adding to the respectability of the discipline. We
hope these analyses, both pro and con, will stir further debate
in the marketing discipline. The macromarketing school, defined as focusing on environmental variables, is separated from
the "activist school," which encompasses study of the effects
of marketing on the environment. Both schools have made major contributions, but the unrealized potential in the marketing
discipline remains great. The authors note that though interest
in consumerism has waned, intemational competitiveness has
come to the forefront. This historical review and analysis is
excellent.
Chapter 5 on the interactive-noneconomic schools of thought,
presents the organizational dynamics, systems, and social exchange bodies of literature. Because of the paradigm on which
the book is structured, the institutional school is discussed previously and the behavioral dimensions of channels are emphasized in this chapter. Though the loss of integration can be
debated, the summary of this school is well done, the leading
criticism being the limited attention to operational definitions
and empirical tests. The systems school is a collection of applications of social systems and living systems perspectives,
as well as information systems and the use of mathematical
and simulation systems modeling. As rated, the greatest strength
of the systems school is its holistic, integrative perspective,
but the lack of consensus among systems contributors and the
absence of a forceful champion have hindered the full development of this school. Finally, though representing the social
exchange perspective as a school might be questioned, a fiurry
of writing over the past 20 years has affected the thinking of
marketing scholars and, importantly, the boundaries of the
marketing discipline. This writing, though controversial, has
contributed toward developing a general theory of marketing.
We agree with the authors that additional attention should be
given by the exchange school to specification, testability, and
empirical support.
Overall, the identification of leading contributors to the 12
schools of marketing thought is superb and the content is presented very well. For readers who have "lived" in these schools
over the past 30 or more years, it is tempting to add detail and
richness. However, the skeleton of each school is well constructed and, within the space and length constraints, the authors do remarkably well. The call for a new theoretical analysis of the managerial and systems schools is an exceptionally
important conclusion, in addition to the overall observation that
marketing authors should pay more heed to structure and specification. The authors' proposal for a "marketing laws convention," though sure to be casually rejected by many readers,
is a profound recommendation and warrants implementation.
This book provides a compact yet comprehensive review
of the evolution of marketing thought in this century. Marketing history is needed, for we must understand our roots and

the foundations of knowledge as we go forward toward generating theories in marketing. In an age when most scholars
are forced to retire to their own narrow world of research interests, this type of book is like a breath of fresh air. Not
everyone will agree wholly with the authors' classification and
evaluation of the schools of thought or with certain other positions they present. The book is a good place to start, however, particularly for new doctoral students, who can benefit
from the panoramic "view of the forest." It is also worthwhile
for mature scholars who may have developed a myopic view
of marketing after long being immersed in their research niche.
GERALD E. HILLS
University of Illinois at Chicago
LEE HERTZMAN
Governors State University
SUMARIA MOHAN-NEILL
University of Illinois at Chicago
NEIL YOUNKIN
Illinois Benedictine College

The Sources of Innovation

By Eric von Hippel (New York: Oxford
University Press, 1988, 218 pp., $27.00)
The Sources of Innovation's unique contribution is the empirical discovery that innovation is distributed across different
players in an industry and not limited to the manufacturer. Furthermore, contrEiry to all expectations, users generate more innovations than manufacturers, suppliers, and others in many
industries.
In many ways, von Hippel's contribution to innovation-diffusion literature is comparable to Michael Porter's contribution
in competitive strategy. Porter, through case studies and other
empirical research, convincingly demonstrated that competition is not localized among competitors but is distributed across
suppliers, new entrants, substitute technologies, and users, von
Hippel, through case studies and survey research, demonstrates that the source of innovation varies significantly across
industries. For example, 90% of all innovations in pultrusion
process and 77% in scientific instruments were generated by
users, whereas 92% and 90% of all innovations in plastics additives and engineering plastics were generated by the manufacturers. Finally, 56% of all innovations in wire termination
equipment were generated by the suppliers.
Both the managerial and public policy implications of these
findings are enormous. For example, managerially they suggest a more cooperative approach to developing innovations
among suppliers, manufacturers, and users, probably through
strategic alliances. Similarly, they suggest that govemmental
incentives may not work well unless they are targeted to the
correct source of innovation in a given industry.
Like all good scholars, von Hippel tries to develop a theory
of distributed innovation. His fundamental explanation is that
the source of innovation is a function of expected profits or
economic rents accruing to a given source. In other words,
users will be the dominant innovators if they are likely to gain
more profits than manufacturers or suppliers and vice versa.
The book consists of nine chapters and a lengthy appendix.
Chapter 1 provides a good overview of the book. In fact, it is
detailed enough to tempt the reader not to read the rest of the
book. Chapter 2 focuses on users as innovators, which is the

Book Reviews/139

subject of the original research work for which von Hippel is

recognized for his contributions. Chapter 3 discusses all sourees
of innovation including the users. As would be expected.
Chapters 2 and 3 have a lot of overlap but it is occasionally
minimized by the different contexts of industries.
Chapter 4 is devoted to developing an economic explanation for the source of innovation. It asserts that who invests
in developing an innovation depends on who is likely to gain
temporary profits from that innovation, von Hippel suggests
two preconditions of control, (1) how difficult it is to switch
the roles among suppliers, manufacturers, and users (i.e., the
degree of vertical integration in an industry) and (2) whether
the innovator can make money by licensing the invention or
discovery rather than by developing it independently. In other
words, lack of economic altematives is a second precondition
for a source to invest in new product or process development.
Chapter 5 is a feeble attempt to prove that the economic
hypothesis is working in five separate empirical tests. Unfortunately, from a metatheory viewpoint, the validity of the hypothesis is not convincing. There is simply too much speculative interpretation of the data in support of the economic
theory.
In a somewhat disconnected way, von Hippel introduces
another concept in Chapter 6: informal trading of technical knowhow among competing parties. Apparently, the author has discovered in his empirical research that there is considerable cooperation among competitors within an industry in terms of
sharing or trading proprietary technical know-how. He analyzes this situation in four steel minimills and finds that it occurs. Unfortunately, this chapter stands by itself without any
connection to the author's earlier research or the economic rationale for the sources of innovation. In fact, it tends to contradict previous explanations based on economic self-interest.
Chapter 7 is an attempt to develop yet another explanation
for shifting the source of innovation between suppliers, manufacturers, and users as a function of changing the expected
profits each party can make from that innovation. Chapter 8
reports an experimental study on lead users as sources of innovation and a potential test of different expectations among
lead versus nonlead users as sources of innovation.
Finally, Chapter 9 is an attempt to provide managerial and
public policy implications of distributed sources of innovations. An Appendix summarizes various research studies conducted by the author and his colleagues.
The main strength of the book is the discovery that product
or process innovation is not limited to the manufacturer, but
is distributed among the suppliers and decidedly the users. A
second major discovery is that lead users are even more prone
to innovation than other users.
The weakest part of the book is the author's attempt to
theorize the empirical findings. To claim that who innovates

140/Journal of Marketing, January 1990

is solely a function of who benefits most is not only simplistic,

but also a highly rational model of corporate behavior. It is in
direct contrast to other findings and observations that suggest
most technological breakthroughs are accidental and occur despite the organization culture and structure. In fact, many experts strongly suggest that product or process innovation requires skunk works, bootlegging, sabotage, and maniacs. This
activity does not match the rational or purposeful corporate
behavior hypothesized by the author.
A second weakness of the book is its organization. The
chapters do not fit together to develop a cohesive study or theme;
there is too much repetition among chapters. Finally, the author has the irritating habit of putting long sentences in parentheses.
Despite the shortcomings, the book makes a contribution
to the field. Like Michael Porter in the strategy literature, von
Hippel is perhaps the first scholar in the innovation literature
to point out that innovation takes place in many uncommon
placesfor example, among the users. This major discovery
has obvious managerial and public policy implications.
JAGDISH N. SHETH
University of Southern California

FORTHCOMING BOOK REVIEWS

1. "The Collective Works of Kenichi Ohmae." Reviewed
by Rajan Varadarajan (Texas A&M University).
a. Ohmae, Kenichi (1982), Mind of a Strategist: The
Art of Japanese Business. New York: McGraw-Hill
Book Company, 304 pp., $23.50.
b. Ohmae, Kenichi (1985), Triad Power: The Coming
Shape of Global Competition. New York: The Free
Press, 192 pp., $21.95.
c. Ohmae, Kenichi (1987), Beyond National Borders:
Reflections on Japan and the World. Homewood,
IL: Dow Jones Irwin, 150 pp., $19.95.
2. Ames, Charles B. and James D. Hlavacek (1989),
Market Driven Management. Homewood, IL: Dow
Jones Irwin, 186 pp., $29.95. Reviewed by A. Coskun
Samli (University of North Florida).
3. Huber, Peter (1988) Liability: The Legal Revolution and
Its Consequences. New York: Basic Books, 288 pp.,
$19.95. Reviewed by J. Scott Armstrong (University
of Pennsylvania)

Reprint No. JM541109