How Enterprises Achieve Frugal Innovation: A Configurational Study Based on the Model of Organizational Symbiosis

Abstract

Frugal innovation offers cost-effective, demand-driven products for consumers in emerging markets. By leveraging this approach, enterprises can capitalize on opportunities, boost profits, and nurture beneficial consumer relationships. This study uses the transaction cost theory to explore how symbiotic relationships within environmental turbulence influence frugal innovation. The goal is to unravel the interconnected factors that drive high-performance frugal innovation, providing enterprises with a roadmap for seizing opportunities, enhancing profitability, and cultivating enduring consumer relationships. Data from 218 Chinese enterprises were collected through a survey and analyzed using fuzzy-set Qualitative Comparative Analysis (fsQCA) and Necessary Condition Analysis (NCA) methods. The research findings indicate that factors such as market dynamics, technological dynamics, collaboration with suppliers and customers, relationship governance, contract governance, and inter-organizational trust are not necessary prerequisites for high frugal innovation performance. Instead, the synergy among these factors is imperative for reaching elevated levels of frugal innovation performance. Furthermore, three distinct pathways to heightened frugal innovation performance were identified: a dual-drive mechanism involving membership relationships and governance mechanisms, a membership-driven approach in dynamic technological conditions, and a governance mechanism-driven approach in dynamic market conditions. This study offers valuable theoretical and practical insights for enterprises pursuing frugal innovation in turbulent environments, guiding them towards sustained growth and competitive advantages in new markets.

1. Introduction

According to the World Bank’s “Global Economic Prospects” report released in June 2022, at least 667 million people worldwide are living in extreme poverty. Owing to inadequate purchasing power, these individuals, situated at the base of the economic pyramid, are often excluded from the realm of conventional innovation, which demands costly design and development [1]. Nevertheless, the Base of the Pyramid (BOP) within emerging markets holds a colossal population base and a lot of unmet needs, thereby harboring immense business opportunities [2]. To fully leverage the potential of emerging markets, enterprises in various industry sectors are embarking on endeavors to develop new products in a “frugal” manner [3,4]. Their commitment lies in providing consumers in these emerging markets with products characterized by affordability, user-friendliness, and easy maintenance. For instance, India’s Tata Motors has engineered a Nano car tailored for regions with deficient infrastructure. This model retains the most basic functionalities to reduce manufacturing costs, and the retail cost remains very modest. Meanwhile, China’s smartphone manufacturer, Xiaomi, has achieved tremendous success in emerging markets with its competitively priced yet feature-rich products. The academic community explains the perspective of frugal innovation in response to these scenarios. Frugal innovation represents a solution to resource scarcity, encompassing products, services, processes, and business models. Constrained by resource conditions such as finance, technology, and materials, it can design and produce products that meet essential customer needs at a lower cost than competitors [5].

Enterprises can transcend organizational boundaries to establish symbiotic relationships with their partners, characterized by mutual collaboration and reciprocal benefits. Organizational symbiosis refers to a mutually interdependent, long-term, and closely cooperative relationship formed between organizations with different resources, wherein they cooperate and support each other [6]. Because symbiotic relationships are formed among multiple organizations based on shared goals and visions, they can jointly bear risks and co-create value [7]. The establishment of organizational symbiotic relationships also contributes to enhancing an organization’s adaptability and competitiveness. Enterprises can better respond to changes and challenges through collaboration with external organizations, generating more incredible value. In dynamic environments, organizational symbiotic relationships promote knowledge sharing, resource integration, and innovation collaboration, enabling enterprises to develop sustainably. Thomas and Autio [8] categorized corporate symbiotic relationships into three symbiotic dimensions: membership relations, shared logic, and governance mechanisms. Membership relations focus on the interactions and cooperation among organizations within the symbiotic relationship. Shared logic emphasizes the mutual trust between the organizations involved in the symbiotic relationship. Governance mechanisms constitute a set of tools that ensure the continuous operation of the symbiotic relationship.

Enterprises establish membership relations by venturing beyond organizational boundaries to acquire diverse resources required for frugal innovation. Tiwari and Herstatt [9] drew conclusions based on examples from India, stating that if enterprises could integrate their product development processes into an open innovation network, they could better realize the value proposition of frugality. This implies that by establishing connections with external organizations, enterprises can share and acquire innovation resources, leading to more cost-effective and efficient innovation. Xu and Wei [10] pointed out that by crossing organizational boundaries, some enterprises established influential connections with various external organizations to obtain frugal innovation resources. This cross-organizational collaborative relationship can help enterprises compensate for their resource limitations and enhance the performance of frugal innovation. In summary, individual enterprises often do not possess all the resources needed to achieve innovation [11]. Only through establishing close, trustful, and efficient collaborative relationships with external stakeholders can enterprises acquire more innovation resources, leading to more cost-effective and efficient frugal innovation. This cross-organizational membership relationship holds significant importance for the innovation performance of enterprises.

However, in communication and collaboration between organizations, differences in perceived trust among team members can lead to a decrease in the quality of communication, known as trust asymmetry [12]. This trust asymmetry can hinder reciprocal social exchanges and may even trigger opportunistic behavior during cooperation [13]. To overcome the issue of trust asymmetry, enterprises can establish mutual trust through close and frequent interactions with external organizations, forming a logic of shared belief. This shared logic refers to gradually establishing mutual trust through interactions and collaboration with partners, promoting more effective and reciprocal cooperative relationships [14]. Through frequent interactions, enterprises can better understand the behavior and intentions of their partners, establishing a mutual sense of trust. While trust asymmetry poses a challenge, through proactive interaction and showing shared logic, enterprises can gradually reduce the impact of trust asymmetry and build more stable and reciprocal cooperative relationships. This will help improve the effectiveness of inter-organizational cooperation and reduce the occurrence of opportunistic behavior.

Furthermore, effective governance mechanisms can assist enterprises in managing inter-organizational partnerships, ensuring that all parties adhere to contracts and commitments, and reducing uncertainty and risks during cooperation [15]. Through transparent responsibility allocation, information sharing, and supervisory mechanisms, governance mechanisms can enhance the efficiency and effectiveness of teamwork, promoting the maximization of interests for both parties [16]. In the context of frugal innovation, enterprises need to choose appropriate governance mechanisms to enhance innovation performance. This may involve establishing long-term partnerships, sharing knowledge and technology, and formulating cooperative agreements [17]. The selection of governance mechanisms should consider both parties’ needs and interests, as well as the characteristics and goals of the cooperation. Additionally, enterprises should pay attention to inter-organizational communication and coordination to ensure the effective operation of governance mechanisms. By establishing effective communication channels, holding regular meetings, and sharing information, enterprises can enhance transparency and collaboration during cooperation, ultimately improving the performance of frugal innovation. Enterprises need to effectively manage inter-organizational partnerships and select suitable governance mechanisms to mitigate risks, reduce transaction costs, and enhance the performance of frugal innovation.

However, when enterprises engage in frugal innovation, they face dynamic environmental factors such as policy changes, market demand fluctuations, new technologies’ emergence, and changes in technical standards in emerging markets [18,19]. These market and technological dynamics may affect the trust and cooperation between enterprises and their partners, consequently impacting the membership relations of the enterprise. Therefore, for enterprises to pursue frugal innovation, they need to pay attention to the interactions among membership relations, shared logic, and governance mechanisms and the symbiotic relationships among organizations, the environment, and external partners. By comprehensively examining and implementing multifaceted approaches to address the challenges posed by market and technological changes, enterprises can enhance their innovation performance and maintain a competitive advantage.

In the context of globalization, frugal innovation, as an important business practice, has demonstrated its significance in both developing and developed economies. This study focuses on the Chinese market, exploring the pathways to achieving frugal innovation in a dynamic environment. The unique characteristics of the Chinese market, such as government support for innovation and a consumer base that rapidly adapts to change [20], provide a distinctive setting for frugal innovation. However, frugal innovation is not limited to developing countries [21]. Although the specific conditions of each country may affect the performance and impact of innovation, the fundamental principles and practices of frugal innovation can be disseminated across cultures and economic systems. Therefore, while the findings of this study are significant within the Chinese market, the insights provided are valuable for understanding and promoting frugal innovation globally. Future research could explore the manifestation of frugal innovation under different national conditions to further validate and enrich the conclusions of this study.

This study addresses two primary inquiries: firstly, under specific environmental conditions, how enterprises employ diverse strategic configurations to realize proficient frugal innovation; and secondly, under analogous environmental conditions, how member relationships, shared logics, and governance mechanisms interact synergistically to achieve high performance in frugal innovation. This study employs the fuzzy-set Qualitative Comparative Analysis (fsQCA) and Necessary Condition Analysis (NCA) methods to analyze survey data from 217 Chinese enterprises empirically. Utilizing an integrated organizational symbiotic relationships framework, this study delves into the driving mechanisms of frugal innovation by analyzing the interactions among member relationships, shared logic, and governance mechanisms within dynamic environments. The research underscores that individual factors exhibit marginal contributions to frugal innovation performance. Through the amalgamation of distinct factors, this study identifies three discernible configurations conducive to high-performance frugal innovation: a dual-drive mechanism involving membership relationships and governance mechanisms, a membership-driven approach in dynamic technological conditions, and a governance mechanism-driven approach in dynamic market conditions.

2. Theoretical Background

To investigate which strategic configurations lead to higher frugal innovation performance, we need an integrated framework that incorporates various strategies. We have drawn upon the integrated framework of organizational symbiosis research proposed by Lu Shan et al. [7], which is based on the three dimensions of symbiosis defined by Thomas and Autio [8]—namely, member relationships, governance mechanisms, and shared logic—and also focuses on the influencing factors and symbiotic effects of symbiotic relationships. This framework offers a multidimensional perspective on the interactions and collaborations between organizations, focusing not only on internal operations but also on how organizations can achieve common goals through symbiotic relationships. Due to its ability to delve into the intrinsic dynamics of organizational cooperation, this framework has been adopted by numerous studies. For instance, Khanagha et al. noted that symbiotic relationships not only facilitate benefits for participants but also help in developing existing opportunities and creating new ones, adapting to environmental changes, and advancing individual and industry development [22]. In the context of frugal innovation, this framework is particularly valuable.

In the integrated framework of organizational symbiosis research, member relationships emphasize the interdependence formed between organizations, providing the foundation for symbiotic relationships. Governance mechanisms refer to a set of mechanisms that coordinate the interactions between organizations, ensuring the continuous operation of symbiotic relationships. Shared logic refers to the mutual trust among symbiotic participants, ensuring the long-term healthy development of symbiotic relationships. Regarding influencing factors, the external environment in which organizations operate, including various factors such as the external market environment and technological environment, plays a crucial role in the establishment of symbiotic relationships [14,23]. As for symbiotic effects, the establishment of symbiotic relationships between organizations can increase output value by reducing internal costs or improving customer service. Additionally, close interaction between organizations, leveraging each other’s strengths and resources, also contributes to the development of opportunities for the organizations [24]. In this paper, we primarily focus on the influencing factor of environmental dynamism and the symbiotic effect of frugal innovation performance in enterprises. The theoretical model of this paper is depicted in Figure 1.

2.1. Organizational Symbiosis and Frugal Innovation

Membership relations, inter-organizational trust, and governance mechanisms constitute the core dimensions of organizational symbiosis. Their interactions and interdependencies create a symbiotic relationship among organizations by sharing, coordinating, and integrating resources and capabilities. This symbiotic relationship enables organizations to respond to the opportunities and challenges presented by the external environment, thereby enhancing the frugal innovation performance of enterprises.

2.1.1. Member Relationships and Frugal Innovation

Membership relations are interdependent relationships constructed based on complementarity among symbiotic participants. The transaction cost theory provides a direction for continuous innovation within organizations, motivating enterprises to choose cooperation with other organizations over internal innovation, primarily to reduce the uncertainty and high costs associated with the innovation process [25]. This cross-boundary organizational cooperation reshapes the patterns of inter-organizational collaboration, moving beyond mere market transactions to require deep cooperation and mutual integration in a unified operational approach to coordinate and integrate mutual interests. By crossing organizational boundaries and establishing effective connections with innovative entities in external networks, enterprises can acquire various innovation resources, build capabilities corresponding to new technological paradigms, and achieve higher frugal innovation performance [10]. Yunus categorizes the member relationships in this cross-organizational boundary cooperation into two types: cooperation with customers and cooperation with suppliers [26].

Collaborating with customers to create value increases customer surplus, while collaboration with suppliers often brings new ideas [27]. In collaborating with customers, enterprises can obtain more precise information about the current and potential needs of customers for innovation [28]. In collaborating with suppliers, enterprises can acquire complementary skills and capabilities, and improve their frugal innovation performance [29]. Therefore, this study selects supplier and customer collaboration relationships as the two core elements of membership relations.

2.1.2. Governance Mechanisms and Frugal Innovation

To ensure the effective operation of symbiotic relationships, it is necessary to establish and implement specific rules to govern the power structure and task coordination among participants. The transaction cost theory suggests that transaction costs always exist when enterprises acquire information and resources from external sources [30]. Therefore, enterprises need to select appropriate governance mechanisms to reduce transaction costs incurred during the process of resource acquisition [31], decrease the uncertainty of mechanisms and rules to ensure supply chain operations [32], manage relationships between suppliers, customers, and other stakeholders, and establish beneficial resource allocation and interest coordination mechanisms both internally and externally. The existing literature has proposed two different forms of governance, contractual governance and relational governance [33], to effectively collaborate and control symbiotic inter-organizational relationships. According to the transaction cost theory, contractual governance coordinates symbiotic relationships between organizations through the establishment of formal, legally binding agreements or contracts [34]. Contractual governance reduces individual opportunistic behavior by coordinating and standardizing relationships between partners, and by clarifying the rights and obligations of both parties to reduce uncertainty and risk [32]. Relational governance emphasizes the role of individual commitment, obligations, and shared goals [35], achieving mutual understanding and trust between partners. Relational governance encourages value creation among partners through open communication, extensive information sharing, joint problem-solving when issues arise, and by establishing trust and personal relationships to reduce the risk of opportunism [36].

Relational governance and contractual governance play different roles in the symbiotic relationships of enterprises [37,38]. Contractual authority emphasizes coordinating partner relationships by establishing formal, legally binding agreements or contracts [34]. Contractual governance provides a fair, cooperative environment for parties involved in transactions by specifying their rights and responsibilities, facilitating interaction and the sharing of information and resources among members in symbiotic relationships, thereby promoting the frugal innovation performance of enterprises. Relational governance highlights the role of interaction and commitment in the alliance governance process [38,39]. Relational governance can help establish a conducive atmosphere for cooperation between partners, provide opportunities for open communication, stimulate tacit knowledge sharing among members in symbiotic relationships, and promote frugal innovation performance.

2.1.3. Shared Logic and Frugal Innovation

Shared logic is a crucial prerequisite that binds symbiotic participants more closely and can be demonstrated through inter-organizational trust [38]. Faith, as a vital foundation for inter-enterprise cooperation, can assist enterprises and their partners in sharing risks and mitigating the negative impacts of uncertain environments. The transaction cost theory emphasizes transaction costs in market transactions and intra-organizational structures, including expense information searches, negotiation, and contract supervision. Inter-organizational trust refers to the willingness of members of a focal organization to assume the risks associated with cooperation with partner organizations [40], and it is a cumulative process. Scholars believe that inter-organizational trust has an incentivizing effect on corporate cooperative innovation, capable of reducing transaction costs for business cooperation [41] and incentivizing rewards and penalties to solidify transaction relationships between enterprises [42], bringing more opportunities for exchange. Trust, as an important foundation for cooperation between enterprises, can help businesses and their partners share risks and reduce the negative impacts brought by uncertain environments [43]. When there is a high level of trust and collaboration within a company or with its partners, the initiation and implementation costs of innovative projects are relatively lower [44]. Trust, as a crucial foundation for inter-enterprise cooperation transactions, aids in enabling companies and their partners to jointly bear risks and mitigate the negative effects of an uncertain environment [43]. Mutual trust not only reduces uncertainty and opportunistic behavior in economic exchanges, lowering transaction costs, but also effectively avoids moral risks, promotes organizational learning, and facilitates joint problem-solving [45]. Trust can stabilize inter-enterprise transaction relationships through incentives, rewards, and other means, thereby providing more opportunities for knowledge exchange and enhancing corporate innovation performance.

2.2. Environmental Turbulence and Frugal Innovation

Various factors can influence organizational symbiosis. Transaction cost theory emphasizes the decision-making process of enterprises in choosing administrative boundaries to reduce transaction costs. In a dynamic environment, transaction costs may change as transaction conditions and the environment evolve. Enterprises must assess and adjust their organizational boundaries based on the environment’s dynamism to adapt to changing transaction conditions [46]. This study considers environmental turbulence as an influencing factor in corporate symbiotic relationships [47]. Research related to influencing factors primarily involves environmental turbulence and technological turbulence. Ecological turbulence refers to substantial changes in the competitive market environment or within the industry. A dynamic environment implies rapid changes and high levels of uncertainty, enabling organizations to challenge traditional industry boundaries [48].

Environmental turbulence mainly consists of two factors: market turbulence and technological turbulence [49]. Changes in customer preferences/needs, price/cost structures, and the composition of competitors characterize market turbulence [50]. For emerging markets, market turbulence may generate more underserved customers and inexpensive resources, thereby promoting the frugal innovation performance of enterprises. As a general environmental condition, technological turbulence is related to the speed of technological change. Technological turbulence may enable emerging market enterprises to acquire cheaper technologies, enhancing their frugal innovation performance.

2.3. Configurational Perspective on the Complex Impact Mechanism of Frugal Innovation

Uncertainty in the market arises from economic condition changes that are beyond the control of enterprises, driven by intensified competition, resource scarcity, and shifts in customer demands. In a turbulent market, a company finds it challenging to comprehend the continuously changing market trends and respond promptly [18]. Therefore, companies are motivated to cross organizational boundaries, collaborate with customers or suppliers, and seek resource and information sharing between organizations. However, market turbulence also poses challenges to collaboration and communication among enterprises. Companies must strengthen governance, including formal contractual and informal relational control. Timely communication and sharing reinforce trust between organizations, which can mitigate risks associated with market changes. Therefore, in highly uncertain markets, enterprises need to enhance their capacity to tolerate innovation risks, strengthen cooperation and communication among each other, and promote the performance of cooperative innovation in enterprises.

In the constantly evolving technological landscape, businesses increasingly rely on external technologies due to the rapid obsolescence of their existing technological knowledge and infrastructure. Consequently, swift changes in technology create a conducive environment for collaboration [51]. In highly volatile technological environments, the resources, technology, and capabilities provided by stable network relationships are insufficient to meet the needs of businesses engaging in innovation activities. Therefore, enterprises seek to strengthen collaborative relationships, enhance inter-organizational trust, develop more effective governance mechanisms, and foster technological exchange and collaboration among members of symbiotic relationships, aiming to achieve higher-performance rudimentary innovation. When businesses face the challenges of technological turbulence, relationship governance assists partners in better coping with uncertainties in the innovation process [35], while contractual governance helps enterprises acquire abundant innovation resources [52].

3. Materials and Methods

3.1. Data Collection

For this study, we conducted a comprehensive survey from August 2019 to December 2019 by sending questionnaires to employees of 300 companies in different industries through internal company visits, emails, and online questionnaires. The survey included questions about the stability of the environment in which the company operates, collaboration with customers and suppliers, governance mechanisms, trust levels, and frugal innovation performance. Because managers have a more comprehensive understanding of their companies’ environmental dynamics, cooperation, and innovation strategies, the respondents of this study were mainly the middle and senior managers of these companies and the grassroots managers who make decisions. Before the survey, we consulted professional researchers and executives to design the questionnaire, randomly selected representative companies for pilot testing, and modified the questionnaire based on their feedback to make it more consistent with the theme of this study. The final questionnaire we distributed to 300 companies received 226 responses, and after deleting 9 cases due to missing data, we formed a research analysis sample of 217 points.

Table 1. Profile of responding organizations (N = 217).

Category	Characteristics of Companies	Number of Companies	Percentage (%)	Category	Characteristics of Firms	Number of Companies	Percentage (%)
Respondent’s position	Chairman/General Manager	34	15.7	Type of industry	Industrial manufacturing	31	14.3
	Department Manager	87	40.1		Coal and energy	25	11.5
	Frontline Supervisor	41	18.9		Chemical and related products	25	11.5
	Other	55	25.3		Food, beverage, and textile	15	6.9
Number of employees	<50	83	38.2		Communication and computer-related equipment	14	6.5
	50–300	74	34.1		Power electric	12	5.5
	300–500	10	4.6		Machinery and equipment	9	4.2
	>500	50	23		Metal products, and smelting and pressing	7	3.2
Ownership type	State-owned enterprises	43	19.8		Rubber and plastics	5	2.3
	Private enterprises	152	70.1		Mining	5	2.3
	Others	22	10.1		Pharmaceutical and medical	4	1.8
Years of operation	<10	146	67.2		Others	65	30
	10–14	38	17.5
	15–19	3	1.3
	>20	30	13.9

shows descriptive statistics for the sample, including categories such as industry, respondent’s position, and type of ownership.

This research analyzed data from 2019, specifically chosen to avoid the confounding effects that the pandemic may have had on frugal innovation from 2020 to 2024. In this timeframe, a significant body of research was dedicated to examining the immediate effects of the pandemic on frugal innovation. For example, Corsini et al. explored frugal innovation in Italy and India during the COVID-19 crisis and suggested that digital manufacturing could be seen as a key impetus for frugal innovation [53]. Similarly, Berndt et al. analyzed survey data from Brazil and highlighted the intermediary role of frugal innovation in the relationship between organizational learning capabilities and business performance. This research, however, aimed to offer an unobstructed view of frugal innovation, one that remains untainted by this specific event. By evaluating data from before the pandemic, we gained a clearer understanding of the enduring trends and patterns of frugal innovation. Furthermore, this analysis aimed to furnish enterprises with actionable strategies and insights for pursuing frugal innovation in the post-pandemic era, thereby providing a historical benchmark and inspiration for innovation activities in the new normal.

3.2. Research Methods

This study used fuzzy-set Qualitative Comparative Analysis (fsQCA) and Necessary Condition Analysis (NCA) methods for the analysis.

A Qualitative Comparative Analysis (QCA) employs Boolean logic and algebraic techniques to facilitate comprehensive comparison and analysis of cases. This enables the investigation of the “combined effects” of multiple interacting factors on a particular phenomenon [54]. The fuzzy-set Qualitative Comparative Analysis (fsQCA) is currently a highly utilized method in QCA by scholars. It is well-suited for investigating asymmetric and configurational arguments. The research problem in this paper was aptly addressed using the fsQCA, and several reasons supported this choice. Firstly, frugal innovation is an intricate process in which the factors impacting its performance are often interdependent. This study explored how multiple antecedent conditions (member relationships, governance mechanisms, shared logic, and environmental turbulences) influence frugal innovation performance. Considering these antecedent conditions’ parallel and interconnected nature, the fsQCA was an appropriate method for this research. Secondly, the fsQCA is well-suited for addressing the problem of equifinality. By comparing the similarities and differences among various configurations that lead to different outcomes, it allows for the analysis of distinct causal pathways [55]. Thus, using the fsQCA, researchers can compare and analyze the diverse paths contributing to high frugal innovation performance in organizations. Thirdly, the causal conditions in this study primarily consisted of continuous variables. By employing the fsQCA, researchers can effectively capture the nuanced impacts of variations on the outcome, in antecedent conditions at different levels or degrees.

A QCA can only qualitatively determine whether a condition is a necessary one, but cannot infer the degree of necessity for a condition [56]. A Necessary Condition Analysis (NCA) can effectively address the limitations of a Qualitative Comparative Analysis (QCA) by quantitatively analyzing the extent to which the independent variables must be present to qualify as necessary conditions for producing a specific outcome [57]. Therefore, this study combined an NCA and the fsQCA to conduct an analysis that mutually complements and verifies both methods, aiming to obtain more robust and reliable results.

3.3. Variable Measures

The measurement instruments employed in this research were subjected to revision by established and pertinent scales. The survey encompassed items designed to measure five constructs: environmental turbulences, member relationships, governance mechanisms, shared logic, and frugal innovation. Interrogatives about each construct were evaluated utilizing a five-point Likert scale (1 = strongly disagree, 5 = strongly agree). The specific measurement items for each construct are detailed in the appendix.

Environmental turbulence. Environmental turbulence pertains to the frequent and unpredictable shifts in both market conditions and technological advancements within an industry. This characteristic is often associated with rapid transformations and high uncertainty. In research conducted by Mokhtarzadeh et al. [47], environmental turbulence is further divided into two dimensions: market turbulence and technological turbulence. Following the approach of Jansen et al. [58], we devised a five-item scale to measure technological turbulence and another five-item scale to capture market turbulence.

Member relationships. Member relationships comprise the cooperative associations established with both customers and suppliers. To assess the company’s collaboration with suppliers, we employed a measurement scale consisting of six items derived from the scholarly work of Vachon et al. [59] and Wu [60]. To evaluate the company’s collaboration with customers, we utilized a set of five items based on research conducted by Feng et al. [61].

Governance mechanisms. Governance mechanisms are crucial in coordinating inter-organizational resources and mitigating the risks associated with opportunistic behavior. These mechanisms can be categorized into relational and contractual governance [36]. Relational governance was measured using a set of six items adapted from the studies conducted by Ferguson et al. [62] and Claro et al. [63]. Meanwhile, the assessment of contractual authority relied on four items adapted from Ferguson et al.’s research [62].

Shared logic. Inter-organizational trust serves as an expression of the shared logic within symbiotic relationships between organizations. To assess the degree of inter-organizational confidence, we designed a set of measurement items based on the research conducted by De Jong et al. [64], who have provided comprehensive insights into this concept.

Frugal innovation. This article categorized frugal innovation into three dimensions: reducing unnecessary costs, the frugal innovation ecosystem, and core product functionality and performance. The aim was to comprehensively measure frugal innovation as much as possible. Drawing on the research of Rossetto, et al. [65] and Zeschky, Widenmayer, and Gassmann [3], and combining it with this study’s definition of frugal innovation, each of these three dimensions was measured using three items. These items collectively formed the measurement scale for frugal innovation, aligning with the theme and context of this research.

3.4. Calibration

Before conducting a configuration analysis, it was essential to calibrate each variable into a set membership. This study employed a direct calibration method, employing the 95%, 50%, and 5% quantile values of the conditioning and outcome variables as qualitative anchor points for fully in, crossover, and fully out. Furthermore, to circumvent the configuration membership problem where the degree of membership of antecedent conditions precisely equaled 0.50, a value of 0.001 was added to the 0.5 membership degree [66]. The calibration anchor points and descriptive statistics for both antecedent conditions and outcomes are provided in

Table 2. Calibrations and descriptive statistics.

Variable Class	Variables	Fuzzy-Set Calibrations			Descriptive Statistics
		Fully In	Crossover	Fully Out	Mean	SD	Min	Max
Outcome variable	Frugal innovation (FIM)	5	4	2.88	4.008	0.790	1.63	5
Environmental turbulences	Market turbulence (MT)	4.6	3.6	2.52	3.514	0.798	1	5
	Technological turbulence (TT)	4.6	3.6	2.4	3.595	0.816	1	5
Member relationships	Collaboration with suppliers (CS)	4.83	3.83	2.6	3.687	0.857	1	5
	Collaboration with customers (CC)	5	3.8	2.8	3.795	0.812	1.8	5
Governance mechanisms	Relational governance (RG)	5	4.17	3	4.118	0.804	1.67	5
	Contractual governance (CG)	5	4	3	4.014	0.826	1.5	5
Shared logic	Inter-organizational trust (OT)	3	2	1	2.248	0.799	1	5

.

4. Discussion

4.1. Necessary Conditions Analysis

A Necessary Condition Analysis (NCA) is a tool for identifying necessary conditions within a dataset by assessing whether and to what extent specific causal conditions are indispensable for a given outcome [67]. The estimation of an NCA involves two approaches: Ceiling Regression (CR) and Upper Envelope Analysis (CE). The effect size ranges from 0 to 1, with values closer to 1 indicating a more potent effect. A causal condition is deemed necessary for the outcome when its effect size, represented as d, surpasses 0.1 and the significance test demonstrates its statistical significance.

Table 3. Results of Necessary Condition Analysis (NCA).

Antecedent Condition (1)	Approach	Accuracy	Upper Limit Area	Scope	Effect Size (2)	p-Value (3)
Market turbulence (MT)	CR	100%	0.001	0.94	0.001	0.275
	CE	100%	0.003	0.94	0.003	0.251
Technological turbulence (TT)	CR	100%	0	0.94	0	1
	CE	100%	0	0.94	0	1
Collaboration with suppliers (CS)	CR	99.50%	0.014	0.92	0.016	0
	CE	100%	0.021	0.92	0.023	0
Collaboration with customer (CC)	CR	100%	0	0.9	0	1
	CE	100%	0	0.9	0	1
Relational governance (RG)	CR	99.10%	0.027	0.92	0.03	0
	CE	100%	0.042	0.92	0.045	0
Contractual governance (CG)	CR	100%	0.007	0.9	0.007	0.009
	CE	100%	0.013	0.9	0.015	0
Inter-organizational trust (OT)	CR	100%	0.002	0.95	0.002	0.178
	CE	100%	0.004	0.95	0.004	0.178

Note: ⁽¹⁾ Membership scores are used instead of values in raw variables; ⁽²⁾ 0.0 ≤ d < 0.1: “small size”, 0.1 ≤ d < 0.3: “medium size”; ⁽³⁾ NCA analysis with the permutation test (resampling = 10,000); NCA procedures are taken directly from Dul [67].

reports the results of the Necessary Condition Analysis (NCA) for individual conditions, utilizing the CR and CE estimation methods to compute the effect sizes of each variable. The NCA analysis results demonstrate that the necessary effects of market turbulence, technological turbulence, collaboration with customers, and inter-organizational trust are not statistically significant (p > 0.05), indicating that these conditions alone do not constitute necessary conditions for frugal innovation. Although the essential effects of collaboration with customers, relational governance, and contractual governance are statistically significant, their effect sizes are relatively small (d < 0.1), indicating that they also do not meet the criteria for necessary conditions for frugal innovation.

Table 4. NCA bottleneck level (%) analysis results.

FI	MT	TT	CS	CC	RG	CG	OT
0	NN	NN	NN	NN	0.5	NN	NN
10	NN	NN	NN	NN	1	NN	NN
20	NN	NN	NN	NN	1.5	NN	NN
30	NN	NN	NN	NN	2	NN	NN
40	NN	NN	NN	NN	2.5	NN	NN
50	NN	NN	NN	NN	3	NN	NN
60	NN	NN	NN	NN	3.5	NN	NN
70	NN	NN	NN	NN	4	NN	NN
80	NN	NN	2.8	NN	4.5	1.6	NN
90	0.5	NN	7.3	NN	5	3.4	NN
100	2	NN	11.9	NN	5.5	5.3	5

presents the results of the bottleneck-level analysis for the causal conditions. The term “bottleneck level” refers to the specific level (%) of a causal condition required for a particular outcome to reach its maximum observed range. As indicated in Table 4, to achieve a 100% level of frugal innovation performance, the required level (%) values for the causal conditions of market turbulence, collaboration with suppliers, relational governance, contractual governance, and inter-organizational trust are 2.0%, 11.9%, 5.5%, 5.3%, and 5.0%, respectively. Technological turbulence and collaboration with customers do not exhibit any bottleneck levels.

To examine the robustness of the NCA results, we further employ the fsQCA method to evaluate the necessary conditions. In the fsQCA method, the assessment of necessary conditions is based on consistency. A consistency level exceeding 0.9 indicates that the condition is necessary for the outcome. The data results for the necessity conditions of high/non-high level frugal innovation, obtained through the fsQCA method, are reported in

Table 5. Necessity test of single condition based on fsQCA.

Antecedent Condition	High Frugal Innovation		High Frugal Innovation
	Consistency	Coverage	Consistency	Coverage
Market turbulence (MT)	0.645	0.7242	0.5281	0.5167
~Market turbulence (MT)	0.5696	0.5808	0.7181	0.638
Technological turbulence (TT)	0.7511	0.7524	0.5409	0.4722
~Technological turbulence (TT)	0.4731	0.5419	0.7164	0.7149
Collaboration with suppliers (CS)	0.7297	0.8235	0.4478	0.4403
~Collaboration with suppliers (CS)	0.504	0.5116	0.8205	0.7257
Collaboration with customers (CC)	0.7588	0.8257	0.4712	0.4468
~Collaboration with customers (CC)	0.4916	0.5162	0.8161	0.7467
Relational governance (RG)	0.8062	0.8009	0.472	0.4086
~Relational governance (RG)	0.4047	0.468	0.77	0.7759
Contractual governance (CG)	0.811	0.8068	0.4901	0.4249
~Contractual governance (CG)	0.4219	0.4871	0.7771	0.7818
Inter-organizational trust (OT)	0.6913	0.599	0.7987	0.6031
~Inter-organizational trust (OT)	0.5419	0.7555	0.4689	0.5697

Note: “~” means the absence. For example: ~market turbulence = absence of high MD.

. As demonstrated in Table 5, all the antecedent conditions in this study exhibit consistencies below 0.9, which aligns with the NCA findings, suggesting the absence of any necessary conditions for generating high-level frugal innovation.

4.2. Sufficiency Analysis for Performance

Adhering to the prescribed QCA procedure, we conducted a comprehensive sufficiency analysis, setting the frequency benchmark at ≥2, the raw consistency benchmark at ≥0.9, and the proportional reduction in inconsistency (PRI) at ≥0.85.

Table 6. High frugal innovation and non-high frugal innovation configuration.

Antecedent Condition	High Frugal Innovation			Non-High Frugal Innovation
	S1a	S1b	S2	S3	NS1	NS2
Market turbulence (MT)	⊗		•	⬤	⊗	⊗
Technological turbulence (TT)			⬤	•	$\otimes$
Collaboration with suppliers (CS)	⬤	⬤	⬤	⬤	⊗	⊗
Collaboration with customers (CC)	⬤	⬤	⬤		⊗	⊗
Relational governance (RG)	⬤	⬤	⬤	⬤	$\otimes$	$\otimes$
Contractual governance (CG)	⬤	⬤	⬤	⬤	⊗	⊗
Inter-organizational trust (OT)		•		•		•
Consistency	0.9457	0.9628	0.9656	0.9757	0.9432	0.9404
Raw coverage	0.3367	0.4047	0.4145	0.3222	0.4446	0.4118
Unique coverage	0.0332	0.0136	0.081	0.0162	0.0555	0.0227
Overall solution consistency	0.9484			0.9386
Overall solution coverage	0.5626			0.4672

Note: ⬤ = core causal condition present; ⊗ = core causal condition absent; • = peripheral condition present; and $\otimes$ = peripheral condition absent. Blank spaces indicate the “don’t care” condition [66,68].

presents two sets of results, distinguished as configurations leading to high-level and non-high-level performance of frugal innovation. Among the four designs capable of generating high-level performance of frugal innovation (S1a, S1b, S2, and S3), the core conditions S1a and S1b can be classified into a second-order equifinality configuration.

4.2.1. Configurations for High Frugal Innovation Performance

Table 6 shows three first-order configurations (S1, S2, and S3) associated with high-level frugal innovation performance. We conducted a qualitative analysis and assigned a name to each design.

• Configuration S1: dual-driven type with “member relationship + governance mechanism”.

In configurations S1a and S1b, the core conditions consist of collaboration with suppliers, collaboration with customers, relationship governance, and contractual governance. Additionally, the S1a configuration has a peripheral condition absent of market turbulence, while the S1b configuration has a peripheral condition with the presence of inter-organizational trust. The consistency of S1a is 0.95, indicating a 95% likelihood of achieving high-level performance of frugal innovation. The consistency of S1b is 0.96, implying a 96% likelihood of attaining high-level performance of frugal innovation. The original coverage of S1a is 34%, suggesting that approximately 34% of the cases can be explained by this configuration. The original coverage of S1b is 40%, indicating that about 40% of the cases can be defined by this configuration.

Dual-driven enterprises are characterized by an integrated operating model that relies on member relationships and governance mechanisms. This allows businesses to establish trustworthy and cooperative relationships with suppliers and customers and effectively manage and regulate these relationships through governance mechanisms. Such enterprises value communication and collaboration among members when establishing symbiotic relationships with the external environment, focusing on building cooperative relationships with suppliers and customers. Moreover, to ensure the effective maintenance of symbiotic relationships between organizations and mitigate risks such as opportunism, these enterprises also develop governance mechanisms to uphold sound member relationships. Enterprises can effectively manage risks during collaborative processes by leveraging member relationships and governance mechanisms. Contract governance enables the establishment of explicit contracts and rules, reducing uncertainties and disputes in cooperation. Additionally, sound relationship governance allows enterprises to anticipate and resolve potential issues in advance. Dual-driven enterprises, driven by “member relationships + governance mechanisms,” aim to achieve symbiosis and mutual gains with stakeholders through robust external relationships and effective operational mechanisms. This approach can facilitate enterprises attaining significant innovation performance.

Lenovo Group possesses a globally dispersed supplier network that facilitates worldwide procurement, manufacturing, and logistics operations. The organization’s adept collaboration with clientele enhances its nuanced comprehension of market requisites, enabling the provision of tailored solutions. Simultaneously fostering close affiliations with global suppliers and clients, Lenovo Group prioritizes the maintenance of intimate connectivity through mechanisms such as shared information, communication, and collaboration. This strategy aims to adeptly navigate market dynamics and evolving demands. In the collaborative milieu, Lenovo formalizes relationships with suppliers and clients through the execution of precise legal documents, including business contracts and service agreements, thereby codifying and managing the respective rights and obligations of all parties. This ensures the constancy of business relationships. Consequently, Lenovo Group is proficient in delivering economically advantageous products and services to consumers, culminating in elevated levels of frugal-style innovation performance and enduring competitive advantages. The ThinkPad X131e laptop, introduced by Lenovo Group, is competitively priced, commencing at a minimum retail valuation of RMB 2200. Renowned for its superior attributes in design aesthetics, after-sales support, and performance metrics, the laptop aptly caters to the diverse needs of the majority of end-users, garnering a favorable reception upon its market debut.

• Configuration S2: member relationship-driven type under technological turbulence.

In configuration S2, the core conditions include technological turbulence, collaboration with suppliers and customers, and contractual governance, with market turbulence absent. The consistency of S2 is 0.97, suggesting a 97% likelihood of achieving a high-level performance of frugal innovation. The original coverage is 0.41, indicating that around 41% of the cases can be explained by this configuration.

In technological turbulence, member relationship-driven enterprises are business models propelled by collaborative relationships and contract governance with suppliers and customers, placing technological innovation and development at the forefront. Enterprises face a constantly changing and rapidly evolving technical environment, necessitating close cooperation with suppliers and customers to obtain and utilize the latest technological resources and knowledge. Establishing trusted and stable partnerships with suppliers and customers enables information sharing and risk mitigation, thereby minimizing the impact of technical risks on enterprises. Such enterprises also employ contract governance to regulate and manage their cooperative relationships. By implementing contracts and agreements, they ensure that collaboration with suppliers and customers is based on clear rights and responsibilities, standardized behavioral guidelines, and effective risk management mechanisms. Member relationship-driven enterprises achieve continuous growth in technological and collaborative advantages through technology sharing, risk allocation, and contract governance. They sustain a competitive edge in rapidly changing technical environments and attain high levels of frugal innovation performance.

Tesla operates within the dynamic domain of electric vehicles and sustainable energy, characterized by rapid technological progress. The company has forged collaborative alliances with key suppliers of essential raw materials. It has entered into enduring contractual arrangements with Albemarle, a preeminent global provider of lithium batteries, establishing a structured framework delineating reciprocal rights and responsibilities to ensure the constancy of production and delivery processes. Additionally, Tesla is inclined towards fostering close collaborations with its clientele, specifically vehicle owners. Through proactive solicitation of customer feedback and comprehensive comprehension of their requisites, Tesla systematically refines and innovates its product portfolio. The Tesla Model 3, situated among the economically accessible models within the company’s repertoire, serves to democratize access to electric vehicle technology. Its economical pricing, ecologically conscious design attributes, and cutting-edge technological features position it as the preferred choice for a discerning consumer base, thereby contributing to the progressive expansion of the electric vehicle market.

• Configuration S3: governance mechanism-driven type under market turbulence.

In configuration S3, the core conditions are market turbulence, collaboration with customers, relationship governance, contractual governance, technological turbulence, and inter-organizational absence. The consistency of S3 is 0.98, implying a 98% likelihood of achieving high-level performance of frugal innovation. The original coverage is 0.32, indicating that around 32% of the cases can be explained by this configuration.

Within market turbulence, governance mechanism-driven enterprises establish symbiotic relationships and foster commercial trust with suppliers and other organizations through effective relationship governance, contract governance, and successful collaboration with suppliers. In the face of ever-changing and highly competitive market environments, cooperative relationships between enterprises and suppliers must be built upon mutual trust and mutually beneficial cooperation. Therefore, relationship governance must manage and regulate collaborative relationships between organizations by establishing trust, communication, and collaboration mechanisms. In market turbulence, contractual relationships between enterprises and suppliers must clearly define each party’s rights and obligations, regulate behavior, and standardize cooperation. Therefore, contract governance is needed to control and manage cooperative behavior between organizations through legal frameworks such as contracts and agreements. In dynamic market environments, trust between organizations is also a vital factor, in addition to relationship and contract governance. Only when a foundation of mutual trust is established can the cooperative relationship between enterprises and suppliers be stable and long-lasting, enabling effective responses to market challenges and changes. Through the dual roles of relationship governance, contract governance, and organizational trust, mechanism-driven enterprises in dynamic markets can establish stable cooperative relationships, regulate collective behavior, enhance competitiveness, and achieve high levels of frugal innovation performance.

The technology sector remains situated within a milieu of perpetual change and swift developmental dynamics. The advent of emerging technologies and the expeditious evolution of market trends pose challenges to enterprises, necessitating the formulation of adaptable strategies and governance mechanisms. Alphabet, in response to these challenges, engages in collaborative ventures with global technical suppliers, hardware manufacturers, and service providers, ensuring the innovativeness and reliability of its products and services. Establishing intimate affiliations with partners, developer communities, and advertising clientele, Alphabet adeptly manages intricate collaborative networks through the exchange of data, information, and cooperative initiatives, thereby enhancing its capacity for market adaptability. To formalize and regulate the rights and obligations of all involved entities and ensure the constancy of commercial relations, Alphabet employs explicit legal instruments, including business contracts and service agreements, in its engagements with partners and advertising clients. Within Alphabet’s purview, Google, through its proficient, cost-free, and highly pertinent search engine, provides an exemplary search experience to users, reflecting the organization’s unwavering commitment to technological innovation excellence.

4.2.2. Configurations for Low Frugal Innovation Performance

As shown in Table 6, two configurations result in non-high levels of frugal innovation performance.

In configuration NS1, market turbulence, technological turbulence, collaboration with suppliers, customer collaborative relationship, relationship governance, and contract governance are all identified as core missing conditions. This implies that, even in a stable environment, failing to establish good collaborative relationships with suppliers and customers actively and to regulate and manage these relationships through relationship governance and contract governance mechanisms impedes the achievement of high levels of frugal innovation performance.

In configuration NS2, market turbulence, collaboration with suppliers, collaboration with customers, relationship governance, and contractual governance are also core missing conditions. In contrast, inter-organizational trust is recognized as an edge condition. This suggests that, even in a stable market environment, without actively establishing positive collaborative relationships with suppliers and customers and without implementing relationship governance and contract governance mechanisms to regulate and manage these relationships, combined with low levels of inter-organizational trust, it is not possible to achieve high levels of frugal innovation performance.

In both cases, the inability of companies to access critical external resources through symbiotic relationships increases the costs and risks associated with frugal innovation, ultimately resulting in non-high levels of frugal innovation performance.

4.3. Robustness Checks

This study conducted robustness tests by adjusting the consistency threshold and PRI consistency to examine the configurations that lead to high-performance frugal innovation [69]. Suppose the newly generated configurations have a clear subset relationship with the original configurations, and the changes in consistency and coverage are not significant enough to alter the substantive interpretation of the initial configurations. In that case, it indicates the robustness of the results.

Firstly, drawing on the detection method of Ordanini, et al. [70], we increased the original consistency threshold from 0.9 to 0.95 to assess the robustness of the results. The specific outcomes align with those discussed earlier and are detailed in

Table 7. Results of robustness tests.

Antecedent Condition	Original Consistency Improved to 0.95				PRI Consistency Improved to 0.87
	S1a’	S1b’	S2′	S3′	S1”	S2”	S3a”	S3b”
Market turbulence (MT)	⊗		•	⬤		•	⬤	⬤
Technological turbulence (TT)			⬤	•	⬤	⬤		•
Collaboration with suppliers (CS)	⬤	⬤	⬤	⬤	⬤	⬤	⬤	⬤
Collaboration with customers (CC)	⬤	⬤	⬤		⬤	•	•
Relational governance (RG)	⬤	⬤		⬤	⬤		⬤	⬤
Contractual governance (CG)	⬤	⬤	⬤	⬤	⬤	•	⬤	⬤
Inter-organizational trust (OT)		•		•		$\otimes$	•	•
Consistency	0.95	0.96	0.97	0.98	0.97	0.98	0.98	0.98
Raw coverage	0.34	0.40	0.41	0.32	0.46	0.30	0.32	0.32
Unique coverage	0.03	0.01	0.08	0.02	0.09	0.01	0.01	0.02
Overall solution consistency	0.95				0.94
Overall solution coverage	0.56				0.51

Note: ⬤ = core causal condition present; ⊗ = core causal condition absent; • = peripheral condition present; and $\otimes$ = peripheral condition absent. Blank spaces indicate the “don’t care” condition [66,68].

. The overall consistency level of the solutions remains unchanged, and the causal conditions of all configurations are identical. Therefore, raising the consistency threshold does not substantially change the research findings of this study.

Secondly, the PRI consistency was increased from 0.85 to 0.87 to test the robustness of the results. The configurations that lead to high-performance frugal innovation are consistent with the previous ones, as shown in the tests in Table 7. Although there is a slight change in the overall consistency level of the solutions, all configurations still have corresponding ones. “Configuration S1” corresponds to both S1a and S1b, “Configuration S2” corresponds to S2, and “Configurations S3a” and “S3b” correspond to S3. Therefore, increasing PRI consistency does not result in substantive changes in the research findings of this study.

The robustness tests mentioned above demonstrate the relatively robust nature of the results in this study.

5. Conclusions

Frugal innovation has attracted increasing attention from scholars, but research perspectives vary. Combining transaction cost theory, this study explores corporate frugal innovation from the theoretical perspective of three dimensions of organizational symbiotic relationships. By employing NCA (Necessary Condition Analysis) and fsQCA (fuzzy-set Qualitative Comparative Analysis) research methods, it reveals the interactive effects of different dimensions of organizational symbiotic relationships on frugal innovation from the viewpoint of transaction cost theory. This study tentatively identifies different patterns of corporate frugal innovation. The research conclusions, from a configurational perspective, uncover the core conditions influencing inclusive innovation in enterprises and their complex interactive mechanisms. This provides a basis and reference for enterprises in choosing frugal innovation models.

5.1. Theoretical Implications

This study contributes to existing research on frugal innovation in three crucial aspects. Firstly, departing from a configurational perspective, the research explores the impact of various elements’ mutual combinations and configurations on frugal innovation, thereby advancing the shift from a singular perspective to a configurational view in frugal innovation research. Existing research primarily explores the causal relationships of corporate frugal innovation from a singular perspective of various dimensions of organizational symbiosis, utilizing single case studies, traditional quantitative methods, or descriptive analyses, thus lacking in-depth examination of the complex causal relationships between frugal innovation and the multiple dimensions of organizational symbiosis. This study adopts a configurational perspective to reveal the core conditions and their intricate interplay that influence enterprises to engage in frugal innovation. It enriches and elucidates the application of cross-boundary integration, governance mechanisms, and trust symmetry in emerging markets, providing detailed evidence and insights for enterprises on how to effectively implement frugal innovation practices.

Secondly, by employing both Necessary Condition Analysis (NCA) and fuzzy-set Qualitative Comparative Analysis (fsQCA) methods, this study enriches the methodological toolbox in the field of frugal innovation research. It offers a holistic view of the complex interactions and causal asymmetries among various conditions underlying the enhancement of frugal innovation performance. More specifically, the fsQCA method enables us to reveal how certain factors affect the dynamic mechanisms of frugal innovation under different combinational conditions, providing a basis for enterprises to develop more accurate and practical strategic decisions. Moreover, the application of the NCA method demonstrates that there is no single decisive condition for achieving high-level frugal innovation, challenging the traditional linear thought process and underscoring the importance of the interplay among multiple conditions.

Thirdly, this paper integrates the framework of organizational symbiosis with the transaction cost theory, introducing the symbiotic relationship framework into the study of frugal innovation and contributing new insights into the intrinsic mechanisms of frugal innovation. Research on frugal innovation, both domestically and internationally, is just beginning, with most studies still focused on defining the concept and describing cases, lacking robust empirical support. This study theorizes that enterprises can significantly break through resource constraints and advance the development of frugal innovation by establishing symbiotic relationships with local markets, thus forming a frugal innovation ecosystem. The findings of this study confirm that establishing symbiotic relationships through cross-organizational collaboration is crucial for enterprises to overcome resource constraints and effectively carry out frugal innovation, also providing a new perspective for subsequent research into the intrinsic mechanisms of frugal innovation.

5.2. Practical Implications

The research conclusions of this study have significant guiding implications for the strategic choices of frugal innovation in Chinese enterprises.

Firstly, building symbiotic relationships is crucial for enterprises as it not only helps them better grasp the opportunities provided by the external environment but also effectively addresses potential challenges, thereby significantly enhancing the performance of frugal innovation. Therefore, enterprises should focus on developing their core competencies and complementing resources with symbiotic partners to form a stable and flexible symbiotic network. For instance, enterprises can increase their frequency of communication with suppliers, customers, and industry peers to strengthen the circulation of market information and resource sharing. At the same time, enterprises should also strengthen cooperation with universities and research institutions, leveraging their research findings and technical support to advance innovation projects. Specifically, enterprises can host industry exchange meetings for market insights, partner with academia for R&D and talent development, and foster open innovation for creative synergy.

Secondly, according to the research in this article, enterprises can align their characteristics and resource capabilities, referring to the configurational perspective in the research results, to rationally configure innovation elements. Due to the limitations of emerging markets, the cost and risk of frugal innovation for businesses increase. Enterprises should reasonably select and utilize governance mechanisms based on the local market environment and subject conditions, ensuring the acquisition of key resources while enhancing the capabilities of the BoP group, thereby promoting frugal innovation. For instance, in an environment with high technological dynamism, to achieve high-performance frugal innovation, enterprises should pay more attention to maintaining relationships with suppliers and customer partners, while employing contractual governance to regulate and manage these collaborative relationships. In an environment with high market dynamism, to achieve high-performance frugal innovation, enterprises not only need to establish mechanisms for mutual trust, communication, and collaboration but also need to establish clear contracts and rules.

5.3. Limitations

Although this study extends the discourse on frugal innovation, it is not devoid of certain limitations. Primarily, the merits of the fuzzy-set Qualitative Comparative Analysis (fsQCA) lie in its utilization of inferential logic to elaborate upon theories grounded in necessary and sufficient causal relationships [71,72]. The incorporation of deductive logic could prove advantageous as a supplementary tool for a more nuanced comprehension of the intricacies inherent in causal relationships. Secondly, notwithstanding the adoption of Necessary Condition Analysis (NCA) and fsQCA methodologies, the paper falls short of providing targeted and comprehensive explications and analyses of paradigmatic cases. Future research endeavors may contemplate the integration of case study methodologies with the fsQCA method to undertake thorough longitudinal examinations of individual cases, thereby refining or expanding upon the findings of this study. Furthermore, the dimensions of organizational symbiotic relationships within the employed theoretical framework predominantly encompass member relationships, governance mechanisms, and shared logic. The richness of organizational symbiotic relationships is extensive, and the current investigation may have inadvertently overlooked other dimensions that could contribute to a more exhaustive elucidation of frugal innovation in corporate contexts. Lastly, this study relies on cross-sectional data, thereby failing to encapsulate the dynamic trajectories of frugal innovation within enterprises. Subsequent research initiatives could enhance the temporal dimension within the QCA framework by acquiring longitudinal data that encapsulates the evolutionary trajectories of these innovations. Additionally, this study did not delve into the impact of different industry characteristics on frugal innovation, and future research should consider industry-specific environmental factors, such as market demand, technology maturity, and policy support, which may significantly influence the practice and effectiveness of frugal innovation.