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innovate (OCI)
A dynamic capabilities perspective
Vera-Line Montreuil Received 22 May 2019
Revised 24 October 2019
Universite du Quebec en Outaouais, Gatineau, Canada 13 February 2020
Accepted 16 February 2020
Martin Lauzier
Universite du Quebec en Outaouais, Gatineau, Canada and
Institut du Savoir Montfort, Ottawa, Canada, and
Stephane Gagnon
Universite du Quebec en Outaouais, Gatineau, Canada
Abstract
Purpose – The purpose of this paper is to provide a portrait of the main managerial and organizational
determinants of organizational capability to innovate (OCI). Despite its importance, research on the subject
seems limited, and little attempt has been made, over the years, to offer an in-depth and simultaneous analysis
of these particular determinants, as well as an exploration of the underlying and complex mechanisms
explaining their relationships to OCI.
Design/methodology/approach – A systematic review of articles published between 1991 and 2018 was
conducted in ProQuest (ABI/INFORM Collection) and Scopus databases. A total of 64 articles were selected and
analysed through the use of a coding grid.
Findings – Results highlight five key OCI determinants, namely: leadership, support, communication, culture,
and learning. By using the dynamic capabilities theory (DCT) as a framework, this research suggests ways to
better understand the dynamic action of these determinants as well as their contributions to OCI. Findings also
suggest that OCI should be defined at the confluence of three perspectives (human, procedural and
environmental aspects) to embrace the multiple facets of this complex construct. Proposals for future research
are provided on how OCI can be better examined.
Originality/value – This research helps to understand the five core determinants through an integrated and
holistic view and represents the first attempt to systematically analyse the scientific literature on OCI through
the DCT lens.
Keywords Culture, Leadership, Learning, Communication, Support, Organizational capability to innovate
Paper type Literature review
1. Introduction
Organizational capability to innovate (OCI) is considered as one of the key drivers of
organizational performance and is, today more than ever, a valuable asset in maintaining a
competitive advantage in an unstable environment (Calantone et al., 2002; Crossan and
Apaydin, 2010; Mone et al., 1998; Shahzad et al., 2017). Scholars and practitioners have
become increasingly interested in OCI, since the rise of more complex innovation, the context
of fast-changing economies, the rapidly unfolding industry disruption make a major need for
organizations to have capabilities that allow them to be adaptive and innovative (De Martino
and Magnotti, 2018; Tarraço et al., 2019). Despite its central role in the sustainability
of organizational survival and the increasing attention towards this critical capability, few
studies have attempted to identify the main levers of OCI (e.g. Damanpour, 1991). Fewer
still have examined the dynamic role of OCI determinants in driving innovation. To European Journal of Innovation
Management
date, most of the reviews on the subject have taken a rather macroscopic outlook, lacking a © Emerald Publishing Limited
1460-1060
crucial focus on managerial and organizational determinants (e.g. Becheikh et al., 2006; DOI 10.1108/EJIM-05-2019-0127
EJIM Crossan and Apaydin, 2010). Using the dynamic capabilities theory (DCT) as a guiding
framework, this paper seeks to fill this gap by focusing particularly on these types of
determinants and by defining more precisely their role in strengthening innovation.
Various reasons can explain the need to establish a portrait of the main managerial and
organizational levers of OCI. First, by relying on a theoretical framework such as DTC, this
study seeks to provide a deeper understanding of the dynamic action of managerial and
organizational determinants in driving innovation. Second, this research aims to answer the
call for developing more models on OCI to capture its critical levers (Rodrigues Alves et al.,
2018; Sapprasert and Clausen, 2012). Third, by highlighting the conditions facilitating
innovation, this study could help organizations gage themselves with regards to conditions in
their environment that could nourish their capability to innovate.
Based on these contentions, the objectives of this article are as follows: it aims to provide,
through a systematic literature review, a portrait which allows the integration of previously
fragmented, contradictory and disconnected research results; drawing on various empirical
results, to offer a more holistic understanding of the relationship between managerial and
organizational determinants, and OCI; to shed light on the definition of OCI and the different
ways of conceptualizing it; to propose, through a systematic evaluation of empirical work in
the field of innovation, areas that are in critical need of development; and to provide avenues
for future research aimed at developing a more integrated and comprehensive research
agenda.
This paper aims to make six key contributions to the innovation field. First, to date, only a
few theoretical articles have reviewed the literature on OCI. To the best of our knowledge, the
last attempt was the study of Crossan and Apaydin (2010), which was published 10 years ago.
Based on more recent empirical results, this systematic literature review sheds new light on the
current state of knowledge on OCI and in contrast to previous works; it aims to offer an in-
depth analysis of the main managerial and organizational determinants of OCI, as well as
an analysis of the underlying and complex mechanisms explaining these relationships.
Second, there seems to be no literature review to date that has studied the role of determinants
on OCI through the lens of the DCT. Consequently, this contribution offers a fresher look upon
OCI determinants. Third, by studying and categorizing the different existing definitions of OCI
in three major different perspectives that seem to coexist in the literature, this paper advances
the reflections of scholars that some components or ways of viewing OCI have been
extensively studied, while other perspectives have been overlooked and need to be further
explored. Fourth, by taking a closer look at the simultaneous interaction/interplay between the
core determinants of OCI, this paper identifies the direct, indirect and conditional relationships
that need to be further investigated and critical gaps that need to be addressed. Fifth, this study
draws various observations: a lack of consistency in the literature in the way of measuring the
determinants and OCI, which can limit the comparability of results; a very limited use of
dynamic methodologies, such as multi-level or longitudinal research design; and a conceptual
overlap between “learning” and “knowledge management” constructs. These observations are
intended to shed light on the methodological shortcomings in the innovation literature and
suggest some avenues for advancing research. Finally, since most studies seem to examine
only one facet of a determinant when they are linked to OCI, this paper brings together a
number of these different facets of the same determinant to offer a more encompassing scope of
each determining factor of OCI, and formulates new definitional approaches that take into
account both the multiple facets of the determinants as well as the innovative context in which
they are studied.
OCI as a system of The creation or adoption of new Centred on human Jia et al. (2018); Noruzy
beliefs and behaviours ideas, beliefs and behaviours that potential et al. (2013); Salehi and
fosters innovation Naseri (2018)
OCI as an The adoption of new systems, Centred on Hurley and Hult (1998);
organizational procedures, products, services or processes, methods Mardani et al. (2018);
development process processes that leads to and systems Song (2015)
innovation
OCI as an The establishment of new Centred on Crossan and Apaydin Table I.
organization’s responses to environment and relationships with (2010); Montes et al. Three perspectives of
responses to its new ways to build external the environment (2005); Rodrigues Alves organizational
environment relationships conducive to et al. (2018) capacity to
innovation innovate (OCI)
EJIM manage, through new ways, its external relationships with competitors and other institutions
(Naranjo-Valencia et al., 2016; Rodrigues Alves et al., 2018).
In light of these perspectives of OCI, both complementary and distinct, it seems reasonable
to define such a capacity at the confluence of these three perspectives to embrace the multiple
facets of this complex construct. When OCI research is focused only on one or two of these
three perspectives, models may not be completed or offer a thorough understanding of the
concept, as they will have a narrow definition of “what” is being innovated, and the scope of
“how” and “why” innovation occurs. Once all facets of OCI are taken into account, we can
integrate innovation outcomes (i.e. systems, procedures, products, services or processes),
innovative human subjects (i.e. ideas, beliefs and behaviours), as well as the innovation
purpose, which is linked to an organization’s imperative to establish new responses to
environmental pressures.
4. Methodology
4.1 Data collection
4.1.1 Research strategy, inclusion criteria and period under study. Drawing on the
recommendations of Siddaway et al. (2018), a systematic literature review was conducted
to take stock of managerial and organizational determinants of OCI. In contrast to a
traditional or narrative review, a systematic review attempts to search, identify and evaluate,
according to a more objective, transparent and methodical approach, the results of a sample
of studies (Pare et al., 2015; Tranfield et al., 2003).
To be included in this review, articles had to meet the following selection criteria: (a) be
published in peer-reviewed academic journals, and (b) assess the relationship between at least
one managerial or organizational determinant and innovation. Because the review focus on
what is changeable rather than less malleable personality traits, articles that examined solely
individual aspects, such as optimism, originality and tolerance of ambiguity were excluded.
With respect to the period under investigation, this review covers studies that have been
published from 1991 to 2018. The choice to use this point in time coincides with the publication
of Damanpour’s (1991) seminal work in Academy of Management Journal. With more than
8,000 citations in Google Scholar, and more than 1,500 citations in ProQuest, this highly
influential paper is well recognized as a landmark study for many scholars vested in
innovation. Moreover, as a result of trade liberalization, the 1990s were fundamental to the A dynamic
growth of innovation. Since then, innovation has increased steadily, and literature on the capabilities
subject has grown considerably. In light of these arguments, papers published between 1991
and 2018 are thus likely to provide relevant research material for the study of OCI determinants.
perspective
4.1.2 Data flow and selection procedure of articles. The data collection was carried out
according to the four standard and commonly used steps of “preferred reporting items for
systematic reviews and meta-analyses” (PRISMA), namely 1-identification, 2-screening,
3-eligibility and 4-inclusion (Moher et al., 2009).
(1) The first step of data collection (identification) seeks to identify articles in ProQuest
(ABI/INFORM collection) and Scopus databases. This strategy was favoured since
both databases contain a wide range of scientific papers in the fields of management
and organizational behaviour and offer extensive coverage of peer-reviewed articles
in many journals. The keywords used to conduct the research were organizational
innovation and management, innovation management and determinants, innovation
and organizational behaviour, organizational innovation and performance. To
complete the research, references of several literature reviews were analysed
(Adams et al., 2006; Crossan and Apaydin, 2010; Koc, 2007; Mumford et al., 2002;
Rodrigues Alves et al., 2018), along with one meta-analysis (Damanpour, 1991).
Making use of the same terms, a search was also conducted on Google Scholar to add
any other articles that seemed relevant to the purpose of this study. Based on the
inclusion criteria, 105 articles were identified and screened. Articles that were
literature reviews, that were developing conceptual models or did not address
innovation were not included. The same treatment was applied to those that were
interested in innovation at the individual level, or were studying the consequences of
innovation rather than its determinants.
(2) The second step of the data collection (screening) seeks to confirm the inclusion of the
articles through reading titles and abstracts. This step led to the removal of 14 articles
as they were studying the influence of innovation on organizational factors rather
than examining the determinants of OCI or they were examining employee variables
only. This second step led to retain 91 articles for full-text assessment.
(3) The third step of the data collection (eligibility) seeks to confirm the inclusion of the
articles after a thorough reading. This step led to the removal of 28 articles.
(4) The fourth step of the data collection (inclusion) represents the final sample size of the
systematic review that is 64. Figure 1 shows the different steps that led to the final
sample according to the process of inclusion and exclusion of articles.
Identiication
Screening
Eligibility
Figure 1.
Data flow chart of
Inclusion
literature search,
highlighting the
process of inclusion
and exclusion of
articles
Based on this contention and results of the pattern-matching analysis, five main
determinants emerged within the sample. These determinants (1) were by far the most
recurrent in reviewed articles, and (2) had systematically moderate to strong correlations
(0.30–0.71) with innovation. Through the literature search, other determinants have also been
identified (e.g. size and age of the organization, organizational structure). However, that these
conditions were far less predominant in the literature. Attention was therefore on the five
main levers of OCI. As the objective of a review is to offer a synthesis of knowledge through a
careful synthesis of information, these determinants were grouped according to two
categories of determinants, namely managerial and organizational determinants. In order to
better explain their role in strengthening OCI, these groupings were based on DCT
nomenclature (Teece, 2009). Table II presents descriptive characteristics of all studies
inventoried (e.g. country, sample size, type of participant), as well as OCI determinants.
Moreover, the 64 articles (final sample) were published in 45 academic journals ranging from
journals in management, business, psychology, organizational behaviour, human resource,
technology, marketing management, innovation management to social sciences.
(continued )
perspective
capabilities
A dynamic
characteristics of 64
descriptive
(1991-2018)
reviewed studies
EJIM
Table II.
Managerial
determinants Organizational determinants
Author/s Year Country Participants n Leadership Support Communication Culture Learning
(continued )
Managerial
determinants Organizational determinants
Author/s Year Country Participants n Leadership Support Communication Culture Learning
Table II.
EJIM 5.1 Managerial determinants
5.1.1 Leadership. The concept of leadership refers to the process shared by members of
management to increase the ability of employees to perform their roles effectively (Sarros
et al., 2008; Yukl, 1999). Notably, leadership is considered as a lever of OCI when it: promotes
new ideas (Siegel and Kaemmerer, 1978); diffuses power (Carmeli et al., 2010); encourages
employee development (Gumusluoglu and Ilsev, 2009a); shares a vision (Jung et al., 2003);
inspires others (Noruzy et al., 2013); allows risk-taking (Aragon-Correa et al., 2007); and
advocates innovative behaviour (Shane et al., 1995). Moreover, leadership facilitates OCI by
encouraging employees to think outside the box, to be creative (Jung et al., 2003), to see
problems from a different angle (Garcıa-Morales et al., 2008), and to question the status quo
(Hater and Bass, 1988).
Most studies in the literature show the positive influence of leadership on innovation
(Alsalami et al., 2014; Harborne and Johne, 2003; McDonough, 2000). Among them, studies of
Aragon-Correa et al. (2007), Mokhber et al. (2018) and Prasad and Junni (2016) point out that a
leader who cares about employees and stimulates them intellectually contribute to the
adoption of innovative behaviour. Naqshbandi and Tabche (2018) who studied the
empowering leadership provide evidence that a leader who fosters empowerment, leads by
example and encourages employee participation, enhances innovative organizational
outputs. Sarros et al. (2008) also find that a management style that has an articulated
vision is associated with a positive climate for innovation. The work of Montes et al. (2005),
which was on the support leadership, shows that a leader who motivates employees and acts
as a mentor is positively related to organizational innovation. More specifically, Stanley Kam
(2013) finds that a proactive management style focused on the implementation of innovative
projects facilitates the introduction of administrative innovation and new products. Zach’s
(2016) study provides evidence that a management style that promotes change is linked to the
development of innovations.
Although leadership is recognized as a critical lever for OCI, this managerial
determinant, depending on the context and conditions in which it is exerting, can also
impede organizational innovation. Much of the research suggests that transformational
leadership, which is characterized by five dimensions according to Bass and Avolio (1997),
namely idealized influence, inspirational motivation, intellectual stimulation, attributive
charisma and individual consideration of employees, has a positive impact on innovation
(Garcıa-Morales et al., 2008; Gumusluoglu and Ilsev, 2009a; Jung et al., 2003; Khalili, 2016;
Sattayaraksa and Boon-itt, 2018; Uddin et al., 2017). However, according to the results of
Mokhber et al.’s (2015) study, idealized influence can be detrimental to innovation when the
leader establishes an unhealthy dependency relationship with his employees and when the
leader’s goals are opposed to those of the organization. Furthermore, transactional
leadership, which can be described as a conventional type of leadership focused on tasks
accomplishment and correcting behaviours in the event of a task failure, seems to have an
ambiguous relationship with innovation (Armandi et al., 2003). While some works (e.g. Jia
et al., 2018) reveal that transactional leadership is negatively related to organizational
innovation, other studies (e.g. Prasad and Junni, 2016) show that this same type of
leadership is positively associated with innovation. This last observation can be explained
by the fact that in certain contexts, this more directive leadership, which establishes clear
objectives and an explicit vision may be necessary, even beneficial, to innovate and
implement new ideas. This conclusion goes in the same direction as what Hou et al. (2019)
advance with regard to authoritarian leadership. According to these researchers,
authoritarian leadership, which exerts strong control and requires subordinates’
absolute obedience, is positively related to exploratory and exploitative innovation in
the Chinese culture. Hou et al. (2019) explain that authoritarian leaders tend to be more
specific and more practical in their innovation directives, which would contribute to
greater efficiency in certain contexts where this type of governance is essential. A dynamic
Nevertheless, excessively strict management tends to be detrimental to innovation as some capabilities
scholars point out (Amabile, 1998; Jia et al., 2018).
Considering these contentions, transformational leadership, empowering leadership,
perspective
support leadership, proactive leadership seem to be a significant determinants of OCI to
establish a climate in which innovation is encouraged. However, current knowledge
regarding transactional and authoritarian leadership still seems ambiguous as to which
contexts these types of leadership act as levers or barriers to OCI. We believe that more
research should be done to gain a better understanding of the effect of these types of
leadership on innovation and thus, help organizational leaders to make more informed
decisions about their practices. While the majority of studies in the field of innovation have
examined stable types of leadership, such as transformational or transactional leadership, we
believe that more research should examine the evolution of leaders’ behaviours according to
the different stages of innovation. Ford and Ford (2012) found that leaders in times of
organizational change alter their behaviours to sometimes be transformational and at other
times more directive. We believe that these kinds of avenues of research for the innovation
field would allow us to better understand in what context a type of directive or
transformational leadership is more appropriate. Moreover, while a large proportion of
studies have focused on the impact of leaders’ behaviours on OCI (e.g. sharing their vision,
encouraging employee development), more research should also focus on leaders’ motivations
to better understand how these motivations have an impact on their decision-making. For
example, according to Burke (2018), the desirable manager profile for change management
includes three elements: a high need for power, a low need for affiliation and a high inhibition,
in order to put the good of the organization before self-interest and being concerned with
getting things done, even for unpopular decisions. Finally, while most reviewed studies have
examined leadership through the individual lens, we believe that the innovation literature
should pay more attention to distributed leadership (e.g. joint leadership such as in unionized
setting or leadership involving different stakeholders) to gain a better understanding of such
still understudied phenomenon. We agree with Butler and Tregaskis (2018, p. 542) that “there
is a need to move away from ‘individually conceived leadership’ towards an appreciation of
leadership as a collective phenomenon”.
5.1.2 Support. Support refers to the degree of encouragement provided by management, as
well as the degree to which employees perceive how management values their contributions
(Eisenberger et al., 1990; Mumford and Gustafson, 1988; Sarros et al., 2011). More specifically,
support is key for OCI when employees receive help and encouragement in their attempts to
implement new ways of doing things or new initiatives (Anderson and West, 1998; Sarros
et al., 2011). Support enhances innovation also through actions undertaken by management to
facilitate, promote and establish an entrepreneurial spirit (Alpkan et al., 2010). It is the same
when management welcomes the diversity of opinions and when employees have the
necessary resources (e.g. material, equipment, time) and autonomy to innovate (Scott and
Bruce, 1994; Siegel and Kaemmerer, 1978).
Several studies show the existence of a positive relationship between support and
innovation (Arif et al., 2012; Farnese and Livi, 2016; Gumusluoglu and Ilsev, 2009b; Howell
and Avolio, 1993; Hsiao et al., 2014; Kwon Choi et al., 2013; Rhoades and Eisenberger, 2002).
Among them, the work of Shahzad et al. (2017) provides evidence that support for change,
which includes granting awards and adopting a positive attitude towards flexibility,
promotes innovation. Lin (2007) also shows that top management support is associated with
firm innovation capability so that when employees receive help and resources, they are more
likely to adopt innovative behaviours. Jung et al. (2003) also find that a structure in which
employees can express their creativity contributes to strengthening organizational
innovation. Scott and Bruce (1994) point out that support for innovation, which is the
EJIM degree to which employees perceive their organization open to change, is positively related to
innovation. A study by Eisenberger et al. (1990) shows that support is positively associated
with the number of suggestions made by employees to improve working methods. Zekic et al.
(2017) also find that when the organization encourages employees in their creative
approaches and rewarding them based on their innovative ideas, this practice fosters the
establishment and maintenance of a climate conducive to innovation.
Taken together, these studies highlight the general idea that employees, who feel
supported and have the perception that their contributions bring value added to the
organization, would be more likely to adopt innovation-oriented behaviours. Therefore,
employees who have autonomy, flexibility, and opportunities to express their ideas would be
more inclined to innovate.
6. Discussion
6.1 Interplay between the five determinants and OCI
Surprisingly, only a small part (13 articles out of 64; 20.3%) of reviewed studies have
examined the interplay between two or more determinants of OCI and none have investigated
the five core determinants simultaneously. Specifically, learning has often been studied in
empirical studies as a mediator in the relationship between leadership and OCI, suggesting
that leadership can indirectly exert influence on innovation by supporting knowledge
acquisition, development, sharing (Aragon-Correa et al., 2007; Noruzy et al., 2013). However,
the literature seems fragmented since some studies suggest that learning acts as a complete
mediator (e.g. Montes et al., 2005; Sattayaraksa and Boon-itt, 2016, 2018) and sometimes a
partial mediator (e.g. Garcia-Morales et al., 2008; Naqshbandi and Tabche, 2018), even in the
presence of the same type of leadership.
Moreover, almost no study has examined moderating relationships between the five
determinants, with the exception of Tien and Chao (2012) which examine the moderating role
of leadership in the relationship between organizational culture and innovation, as well as
Khalili (2016) who studies the moderating effect of support in the relationship between
leadership and OCI. Finally, while the reviewed studies have paid significant attention to the
mediating role of learning in the relationship between communication/culture and
innovation, as well as the mediating effect of culture in the relationship between
leadership and COI, studies are completely silent on the direct and indirect relationships
between communication and culture, communication and support as well as support and
learning when these determinants are studied in the context of innovation.
According to these conclusions, it seems that there is a critical need to explore in more
depth these gaps or inconsistencies observed in the innovation literature in order to gain a
deeper and comprehensive understanding of the interplay between core determinants of OCI.
We believe that more research efforts in this direction will allow both researchers to refine
their understanding of the complex relationships between these determinants, the underlying
mechanisms and innovation, and practitioners to make better decisions in contexts which are
expected to become more and more changeable, necessitating the need to adapt/modify one’s
practices quickly.
Innovation-oriented Refers to a style of management that (1) Management has a clear and common
leadership creates a proper context for change, and vision
which is centred on the empowerment (2) Management seeks new opportunities
of employees and the sharing of power for the organization
that facilitate the emergence of new (3) Management motivates and guides the
ideas troops
Innovation-focused Refers to the support granted by (1) The organization provides resources
support management, and encouragement for innovation
provided to employees, in their efforts (2) The organization values employees’
to initiate innovative projects in the attempts to implement new ways of
organization doing things or new initiatives
(3) The organization is open to change
and welcomes the diversity of opinions
Innovation-centred Refers to a continuous flow of open, (1) Communication is frequent
communication fluid, two-way exchange between the (2) Communication is made in due course
different members of the organization (3) The organization encourages
as well as between the organization and employees to express themselves
its environment
Innovation-oriented Refers to the instilment of values and (1) The organization calls into question
culture norms within the organization that the status quo
promotes creativity, employee (2) The organization attaches importance
participation, freedom of opinion, to solving problems with flexibility
calculated risk-taking, and (3) The organization promotes employee-
collaboration in a change value way driven initiatives
Innovation-focused Refers to all organizational processes (1) The organization has processes to
Table III. learning involved in the acquisition, integrate knowledge
Definitions of the five development, sharing, use and storage (2) The organization has processes to
main determinants of of knowledge that aim to develop a share knowledge
organizational competitive advantage (3) The organization uses critical skills
capacity to and capabilities to create a competitive
innovate (OCI) advantage
In light of these findings, this review notes that when managerial determinants take the A dynamic
form of dynamic capabilities, they facilitate OCI as they establish an organization that can capabilities
continually respond to its changing environment. Accordingly, these determinants are
seeking to develop, renew and reconfigure the organization to innovate and maintain a
perspective
competitive advantage against its competitors.
6.7 Limitations
Although this study seems to be the first to provide a portrait through the dynamic
capabilities lens, some limitations need to be considered. While an effort was made to cover a
set of publications, all journals on organizational innovation could not be included. It is also
likely that if other databases were used to carry out the research, other relevant work might
have been identified. We recognize that the strategy used for selecting articles (e.g. namely
holding at first articles on the basis only of reading the titles and abstracts) might lead to
missing certain articles. However, cross-reference strategies used (i.e. considering reference
lists of major contributions, using other research engines) limited such possibilities. Lastly,
another limit could stem from the way the determinants were assembled. Although five were
identified and retained in this review, other determinants might have been found, and some of
them could have been subdivided into more precise categories (e.g. learning could be
separated from knowledge management). Hence, the five-factor structure is based on the
reflections of the authors as well as their appreciation of the literature.
7. Conclusion
The purpose of this paper was to provide a portrait of the main managerial and
organizational determinants of OCI. Through a systematic review of the literature published
between 1991 and 2018, five core OCI determinants have been identified, namely: leadership,
support, communication, culture, and learning. Studied through the lens of DCT, these levers
were found to be essential capabilities for an organization to innovate and maintain a
competitive edge.
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