Key  findings  and  implications  for  managing  innovation  in  Telenor  Bulgaria

the Bulgarian telecommunications market, initiated by the competitors. This has forced Telenor Bulgaria to think about proactive moves and thus creating a need for innovation.

Telenor Bulgaria is the second largest mobile operator in Bulgaria (Telenor Group 2013).

However, Telenor Bulgaria has significantly lower revenues (1151 MNOK), compared to Telenor Pakistan (5406 MNOK) in 2013, partly explained by the price war, which has resulted in lower rates and thus lower revenue (Telenor annual report 2013). Furthermore, Telenor Bulgaria is a less mature subsidiary than Telenor Pakistan, with focus on basic services as opposed to value-added services that may generate more revenue for the subsidiary, such as ‘easypaisa’ and ‘Wimp’ in Telenor Pakistan.

As noted, Telenor Bulgaria is an immature Telenor Group subsidiary. The focus has been on upgrading infrastructure and systems in transitioning the subsidiary to become a Telenor Group company. Therefore, above average expenditure in infrastructure and services

characterises innovation in Telenor Bulgaria. These investments are seen as a prerequisite for

innovation in the future (TB1 2015). Consequently, there has been less focus on innovation extending beyond upgrading infrastructure, networks and support systems.

Telenor Group largely controls creation of innovation in Telenor Bulgaria (TP1 2015).

Regarding innovation processes, Telenor Bulgaria has loosely implemented the Telenor project model, and project management per se is not a strong feature of their corporate culture. The Telenor project model is strictly applied in large enterprise projects and in the commercial department, whereas other departments may apply a more unstructured version of the model, or just work on projects on an ad hoc basis, all depending on the manager leading the project.

Furthermore, Telenor Bulgaria has a high rate of adoption of innovation, compared to the other two subsidiaries. This may be explained by several factors, for instance low levels of local autonomy, and a high density of internal communication with other subsidiaries and Telenor Group (Ghoshal and Bartlett 1988). Lastly, due to the lack of local created

innovations in Telenor Bulgaria, there has not been any diffusion of innovations (TP1 2015).

In relation to the degree of global integration and local responsiveness it was found that due to the transformation phase the subsidiary is in, there is a high degree of global integration.

However, there are increasingly initiatives that focus on being locally responsive and addressing the competitive situation. The respondents also stressed that the subsidiary attempt to adapt whatever products and services available from Telenor Group to the local market needs in Bulgaria. Even though Telenor Bulgaria is starting to enter a phase of more locally driven initiatives and innovation projects they are still closely monitored and

controlled by the Telenor Group (TB2 2015).

Implications

The competitive situation in the Bulgarian market implies a need for innovation in Telenor Bulgaria. Innovation may according to the OECD (2005) lead to increased efficiency and reduced cost. Furthermore, innovation may enable Telenor Bulgaria to charge a higher price for it product and services (OECD 2005), thus moving away from the price war.

The implications of the current innovation processes in Telenor Bulgaria are a somewhat unstructured approach to innovation. This means that there is no continuity in applying Telenor project model (or any other model for that matter) across the subsidiary; rather it is more up to the specific manager. This implies that innovation processes and its outcome become more dependent upon project managers. This may raise several concerns. As noted in the analysis there has been little focus on innovation in the previous Globul and now Telenor Bulgaria. Thus, the respondents (TB1 2015; TB2 2015) points out that there is a lack of a culture and a mind-set for innovation in the subsidiary. This may imply that there is a need for a standardised innovation model and a more strict application of it, thus making

innovation projects less dependent upon the people who are managing it. Furthermore, given that there is not a culture of working with innovation, the question - to what extent may the projects be assured of quality if the Telenor model is not applied, arises.

Though the fact that Telenor Group is controlling the creation of innovation in Telenor Bulgaria may ensure that the subsidiary is transformed into a Telenor Group subsidiary, this may further inhibit Telenor Bulgaria’s ability to be innovative.The previous company, Globul, has not had a culture for innovation. If the creation of innovation is centrally driven and there is a high level of adoption of innovation, it may imply that Telenor Bulgaria’s ability to create local innovations and in extension diffuse them, remains immature.

High density of internal communication with Telenor Group and other subsidiaries, in addition to a high degree of cooperation with Telenor Group following the transformation phase may on the other side increase Telenor Bulgaria’s normative integration in Telenor Group. Normative integration entails having shared strategy, goals and values (Ghoshal and Bartlett 1988), subsequently normative integration may be an element in building a culture for innovation in Telenor Bulgaria.

The current transformation phase of Telenor Bulgaria implies that the subsidiary has less possibility to exercise it local autonomy, which is reflected by its high degree of global integration. A high degree of global integration may enable cost-efficiency for Telenor Bulgaria, as the unit price of an innovation decreases for each unit it is scaled to (TP3 2015).

However, adopting scaled innovation may imply a weaker satisfaction of local user needs (Ghoshal and Bartlett 1988; Marin and Bell 2005) thus, the need for a balance between the two positions.

A high degree of global integration and low levels of local autonomy, paired with the lack of a culture of innovation may explain and imply a comparatively lower level of local

innovative activity in Telenor Bulgaria. However, due to the immaturity of the unit, centrally driven innovation and a high level of adoption may be what this subsidiary needs at this moment.