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The paper aims to address the failure of prevailing international management concepts to utilize the potentials of company wide employee participation in innovation, and give the reader some practical solutions and some ideas about how to exploit these potentials more efficiently.

These solutions and ideas are developed mainly through two Norwegian action research programmes that have been carried out together with industry over a ten‐year period. The main topic of research has been to see how good practice from prevailing international management concepts like total quality management and business process re‐engineering may be integrated with good practice from the Norwegian industrial democracy tradition into a new approach to continuous innovation. A case study approach has been used.

The case studies showed that a better utilization of the potentials of company wide employee participation in innovation gives efficiency as well as working environment improvements.

The case studies also showed that more knowledge and a further development of practical tools that ease participation in innovation is an important challenge for future R&D.

In order to fully exploit the potentials of employee participation in innovation companies and consultants need to adjust their practice in the direction of a more participatory approach.

The paper gives consultants, academics, managers and shop stewards a framework and some practical tools for employee participation in innovation that may be used at the different company levels. It is argued and shown how activities at the different levels may be co‐ordinated and work reciprocal supportive.

Entrepreneurial profits flow from differences in expectations between buyers and sellers regarding the future value of resources. This article investigates whether differences in expectations can be influenced by an entrepreneur to produce greater profits. It is argued that there are several points in the entrepreneurial process where such interventions can occur and that the use of these techniques should be associated with superior wealth creation. The article also explores the ethical implications of influencing stakeholders in this way.