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Entrepreneurial Management & Innovation at WIPRO

Introduction to the organization

Wipro was founded in 1945 in India and is currently diversified from producing vanaspati oil during its initial set up to Information technology, consumer care, lighting, engineering and health care sectors. The company has a long history of budding from independent entrepreneurship to corporate entrepreneurship after its diversification. Though founded during the early 20th Century, this company came before economic liberalization and adroitly used the opportunities offered by deregulation to grow businesses. At the same time, they built strong organizational capabilities such as project management, quality of execution and speed. Arguably it is one of the few companies in India that changed its products and services with the pace of technological change and need. Wipro deals with business in IT services, Product engineering solutions, Technology infrastructure services, Business Process Outsourcing and other consulting related services. As of 2010 the company has employee strength of more than 100,000 and is classified as a large company in the IT sector.

Currently the organization is diversified into many businesses with Information Technology services playing a major role in Wipro’s success. Today the Indian IT companies namely TCS, Wipro, HCL are renowned in the global market for their services. The various external factors leading to this situation include the Indian education system, high quality engineers, low cost of creation and high technological infrastructure.

Approach to the document

This report defines the various kinds of innovative outcomes in Wipro and how it evolved over 50 years to its current state that can be classified into the OECD innovation model. After this a few factors that have led to these innovative outcomes have been discussed and further classified as facilitators or barriers. Based on these observations a few recommendations are also provided to improve corporate entrepreneurship at Wipro.

Definition of terms

Academicians and practitioners have defined corporate entrepreneurship in many different ways in the existing literature. A number of authors emphasize that entrepreneurship primarily acts in underpinning innovation (Drucker, 1985b; McGrath, 1996; Stevenson and Jarillo, 1990).

According to Schumpeter (1934) Innovation is

1) The introduction of a new good or a new quality of the good

2) The introduction of a new method of production

3) The opening of a new market

4) The conquest of a new source of supply

5) The carrying out of the new organization of an industry

It can be differentiated between 4 types of innovations, namely “Product Innovation”, “Process Innovation”, “Marketing Innovation”, and “Organisational Innovation” (OECD, 2007). Corporate entrepreneurship is defined as the effort of promoting innovation from an internal organization perspective, through the assessment of potential new opportunities, alignment of resources, exploitation and commercialisation of said opportunities (McFadzean et al 2005).

Corporate Entrepreneurship (McFadzean, 2005)

From 1945 – 2000 individual entrepreneurship

Azim Hasham Premji, the chairman of Wipro, was called upon to manage Wipro when he was 21 years old at the sudden demise of his father in 1966. He has steered the company to a rapid growth since then. In the 70’s, he realized a growing demand for computers in India with a few manufacturers. The company had no knowledge about computer manufacturing but Premji decided to venture into this and decided to collaborate with scientists from the Indian Institute of Science (IIS) to manufacture hardware and later software (when the Indian market was liberalized in 1991). Under his leadership, the fledgling US$ 2 million hydrogenated cooking fat company has grown to a US$1.76 billion IT Services organization serving customers across the globe.

Value based leadership

Premji has established a strong value system in Wipro and believed that values not only helped in achieving success but also made that success more enduring and lasting (2003). Based on the vision created by the leader the organization made its path towards diversifying into various sectors and successfully innovating. Below are the milestones in the value based leadership that led to its growth until 2000

1977 – WIPRO was renamed to Wipro products limited due to its wide range of products

1970’s – First Indian company to manufacture mini computers

1980 – Wipro Technologies was created to manufacture computer hardware and related software

1988 – Wipro Biomed was established to market and service bio-analytical and diagnostics instruments. In 1989 it turned into a joint venture with GE and launched Wipro GE Medical systems limited

1998 – Premji decided to undertake an image building exercise for Wipro and adopted the rainbow sunflower logo and the tag line “Applying Thought”

1999 – First Indian company to receive the SEI-CMM level 5 certification which would help the company in global business development.

All these initiatives led by the leader made Premji one of the top 30 all time great entrepreneurs in the world (Business week, July 2007). The magazine said, “After making the company profitable and expanding from food oil to other consumer goods, Premji led Wipro into the nascent tech economy in the 1970s. Premji is also a hands-on manager involved in day-to-day operations, even making sales calls himself”.

He believed in empowering people allowing them to express their ideas and raise voices freely. There revolutionary policies would help shape the leaders of tomorrow. Employees were free to give feedback in a transparent system and the management at Wipro learnt what was hampering team performance and what could be done to rectify any problems.

Corporate entrepreneurship from 2000 onwards

From 2000 onwards the company focussed on innovation as a measure to sustain its competitive advantage. Since the launch of innovation initiatives in 2000, Wipro had emerged as one of the strongest players in the Information Technology (IT) industry. The company offered a comprehensive portfolio of products based on innovative solutions. Innovation was a prerequisite at Wipro since it believed that this was essential to achieve growth and competitive advantage. It was one of the values on Wipro’s promise statement that said, ” With utmost respect to human values, we promise to serve our customers with integrity through innovative, value for money solutions, by applying thought day after day.”

2000 – In September Wipro established ePeripherals Limited (Wep) diversifying into IT related businesses.

2004 – Wipro’s innovation initiatives focused on the publishing industry resulted in huge success thus expanding the solutions to other areas – finance, insurance, and manufacturing. 900 employees working towards developing innovative business solutions (Business Week, 2006)

2007 – As of March 2007, innovative initiatives contributed to 7.5% of the toal revenues. Had a target of 10% by 2009 and successfully achieved it.

Innovation council

Soon the innovation council was formed and the approach aimed at soliciting ideas from the employees. The collected ideas from employees were discussed at the IC with top management reviewing the proposed ideas and analyzing how they would help the company accelerate growth and increase the quality of its new products. Thus it offered a bottom up approach to innovation although the feasibility was considered by the top management. And with selected ones, the company granted funding, technology and resources to bring into action. This encouraged the employees to suggest more innovative ideas and by the end of 2006 the council had 200 permanent employees to handle requests.

Working framework for innovation at Wipro

The innovation initiative at Wipro began with in depth study of successfully innovating companies like Nike, 3M Technologies and Home Depot. A 2 member team was formed to consult with academicians, experts, industrialists to chart out an innovation initiative. However after thorough examination it was observed that no existing innovation models could be replicated at Wipro. Hence by adopting a ground-up approach a focussed innovation model was built based on the requirements of the company also considering authorized customer ideas. According to Oslo Manual for measuring innovation there are 4 types of innovation product innovation; process innovation; marketing innovation and organisational innovation. However the working framework of innovation at Wipro classifies innovation at Wipro as Process Innovation, Technology Innovation, Delivery Innovation and Business Innovation.

Applied innovation framework

Wipro’s applied innovation was a 360 degree approach to business that focussed on four domains – business, process, technology and delivery. This would help Wipro technologies work collaboratively with its clients to reduce the cost of a project, speed up the process of delivery and identify new opportunities for business.

Innovation at Wipro (Divakaran Mangalath, 2006)

Process innovation

As part of its innovation process Wipro applied the principles of lean manufacturing and six sigma to its process of software design and development. This helped it increase productivity by 10% since it reused tools and components. It was evident that after lean principles of engineering were applied to over 700 projects, 20-30% savings were recovered for the company (director’s report, 2007).

Delivery Innovation

This included the software factory model and the global delivery model. The factory model integrated several IT functions into a centralized supply chain allowing common areas of work to be grouped for better quality and time saving. Wipro observed 10-15% reduction in cycle time of demand to delivery of products. It was globally used across projects and Wipro was credited with pioneering the virtual distributed software development model that enabled companies to manage large projects through virtually distributed teams.

Technology innovation

The company was involved in creating IPs (Intellectual Properties) that effectively enabled its customers to reduce time in the product life cycle and improve the success rates of the products. Eg: the company developed a plug-n-play patent and IP that helped reduce the product’s time-to-market by 20-25%. Also they were the largest bank of patents in bluetooth, wireless LAN and IEEE 1394.

Business innovation

To improve its relation with customers, the company focussed on business solutions that were specific to the related industry. Wipro’s business innovations included Data Privacy and Master Data Management, Clinical Data Management, Integrated Publishing platform, vendor managed inventory, retail pharmacy, etc. Wipro also developed the GCC (Global command center) with IT infrastructure for its customers. The customers were happy to monitor, diagnose, store and secure applications as and when needed.

The outcomes of corporate entrepreneurship

In 8 years, by the end of 2008, innovation became an integral part of product development process. Since the cyclic processs has been inculcated in the employees, the “time-to-market” was significantly decreased for new products and also the products used leading-edge technology.

A work flow solution – Flow-Brix was estimated to generate revenues in the range US$ 75,000 – US$ 1 million.

Innovation had spread across all sectors of the organization and i-Desk was the first one to enable easy HR management – by a collaborating workplace tool for workflow solutions for publishing.

All these innovation initiatives have been fruitful and also helped the company attract prospective employees to fill 29% of vacancies in 2006 (Business week, 2006)

Hence it was certain that the innovation process enabled a strong product portfolio and also brought good revenue streams. In Wipro technologies, the company was focussing on consultancy services which would further enhance its image in the global software industry.

Internal organizational factors to consider for successful innovation

Effect of leadership

In Wipro it was not only recruiting the right kind of people, but also in proper training of its people. Employees were mandated to frequent internal training sessions with major responsibilities showered on them although they may not seem well prepared for the role. Premji (2005) defined 8 leadership qualities which were made a standard against which new employees would be recruited and trained. He believed that training and development at various stages were designed by mapping people’s competencies to specific roles in the Life Cycle Stage Development Plan.

Innovation Culture

Premji also placed utmost importance on innovation and creativity in developing a successful organization. Stressing the importance of innovation for the overall development of the organization, Premji said, “Innovation is essentially the application of high creativity. It need not be restricted to just products; it applies to services, employee attitude and across all levels. Innovation is a fundamental mindset pursued seriously by an organization. It is imperative to imbibe the culture of innovation”(Manu B. 2006). Analysts report that the open and supportive culture at Wipro gives employees the opportunity to develop their skills and as a result, contribute more to the organization.

Management practices

In order to come out with innovative products and services, the top management at Wipro committed itself to fostering innovation in the organization and encouraging employees to come out with innovative ideas.

Value system

The company also strove to make it more customers centric. The company believes in the objective of “customer-in” where the voice of the customers is built in the products rather than being “product-out” where the products are sold by marketing its features to the customer. Premji also believed that this value system has to remain intact even after his tenure which was openly admired by the competitors.

Organizational structure

In Wipro the organizational structure was also responsible for carrying out innovation initiative in selected projects. The company emphasized the commercial viability of an idea along with innovation. The concept was to create components with Intellectual Properties (IP) that would generate revenues over a period of time rather than one-time revenue from projects.

Innovation strategy

Another approach to innovation involved executives of several industry vertical business units identifying new technologies that would be of importance to their clients in the near future. The objective was to have expertise in the new technologies and come up with the products and productive services that could be patented by Wipro. These centres also work with research institutes, technology providers and also provide a platform for the growth of the employees. The company was able to launch new products continuously due to its innovation strategy, which considerably reduced the time between idea-generation and final product development.

A few hindrances to effective innovation

Competitive rivalry

WIPRO was able to produce hardware and software for the domestic market, however due to high competition and low quality; they decided that they could not export their products in a market that had the niche products from the big companies. They were not ready to take the risk of competing with IBM, Intel, and Apple and decided to use the opportunity where doors were open in the Indian market. If in the process, they were able to attain the quality as these giants, they could have made it to the bigger markets in no time and could have proven cost effective than other options. But due to unavailability of high quality raw material and skilled resources, they had to limit to the domestic market.

National culture

India is a developing nation and it takes time for technological changes to occur. Also the initial cost of hardware and software related to new technology is very high and not affordable to most projects. Hence although the Innovation council decides on feasible innovative ideas posted by employees, quite often they are rejected due to unavailability of resources in the country. However the company is striving to compete with global competitors in the technological field and this barrier can cause a major impact on the innovation strategy.

Recommendations

Top down approach

An entrepreneurial vision indicates the strategic intent of the organization. Stein (2002) proposed that the most admired companies set challenging goals. This vision encourages individuals to hold informal discussion with colleagues, friends and share the knowledge that they bring with different project experiences. This helps refine the idea based on the critical analysis by more than one person. Thus the vision setter actually motivates employees to strive to excel beyond their capabilities and routines. Although innovation and creativity cannot be forced on employees, this provides a platform to discuss, relate and generate new ideas. This continuous innovation is also possible only when the employee understands and accepts the vision and strives to deliver it.

Team based activities

In Wipro technologies project work is also carried out in teams. This inculcates an team based culture for working among employees. Although the employee is not forced to discuss innovative ideas within his team he can depend upon forums to find people with similar interests. As part of knowledge sharing the company encourages participation in forums and blogging. Thus a webbed structure is created in sharing ideas. For example, people working for different projects but with similar technological backgrounds can rely upon the forums for their needed expertise. In this way simple tools created in one project can be easily passed on to other projects with similar requirements effectively reducing time to collaborate with the Innovation council. This can also be seen as a knowledge management initiative that fosters innovation.

A new perspective

The organization can look upon innovative ideas as a change management process. The organization has keenly created the Innovation council to take care of the process. However the acceptability of existing teams to these new ideas is not calculated as a risk. People could be inflexible in accepting a novel way of doing business. They are more comfortable with the routine methods and could prove a failure to the case. Along with innovation management the organization should also consider change management as part of the culture. This would improve acceptability of ideas and keep the cyclic process of innovation going on.

Conclusion

Wipro which began with the success of an individual entrepreneur has matured to a corporate entrepreneur that fosters innovation. The innovation discussed about Wipro technologies in particular can be applied to other industries too. Analysts feel that these internal organizational factors – culture, leadership, strategy give employees the environment conducive for continuous innovation and contribute more to the organization. However, the company has to rethink of its methods since close competitors like TCS, Infosys and CTS are also making huge investments in innovation. Hence with increased competition, it is a challenge for Wipro to sustain the current position of the innovation leader in the Indian market.

References

Azim Premji, “8 Steps to Excellence”, The Smart Manager, January 2005.

“Azim Premji’s Interview with IIM Bangalore’s S.Krishna”, www.azimpremjifoundation.com, March 2003.

“Director’s Report,” www.moneycontrol.com, March 2007.

Divakaran Mangalath, “What Makes Innovation Work,” www.wipro.com, December 2006.

Drucker, P.F. (1985b), Innovation and Entrepreneurship: Practice and Principles, Heinemann, London.

Elspeth McFadzean, Andrew O’Loughlin, Elizabeth Shaw, (2005) “Corporate entrepreneurship and innovation part 1: the missing link”, European Journal of Innovation Management, Vol. 8 Iss: 3, pp.350 – 372

Gupta, A.K. and Govindarajan, V. (2000), “Knowledge flows within multinational corporations”, Strategic Management Journal, Vol. 21 No. 4, pp. 473-96.

Jon Tozzi, “The Greatest Entrepreneurs of All Time,” Business Week, July 2007.

Manu A B, “Premji on Innovation, Creativity,” www.rediff.com, February 16, 2006.

McGrath, R.G. (1996), “Options and the entrepreneur: towards a strategic theory of wealth creation”, Academy of Management Proceedings, pp. 101-5.

OECD (2007): OECD Science, Technology and Industry Scoreboard 2007, Organisation for Economic Co-operation and Development, Paris, p. 94.

Stein, J.C. (2002), “Information production and capital allocation: decentralized versus

hierarchical firms”, The Journal of Finance, Vol. 57 No. 5, pp. 1891-922.

Stevenson, H.H. and Jarillo, J.C. (1990), “A paradigm of entrepreneurship: entrepreneurial management”, Strategic Management Journal, Vol. 11, pp. 17-27.

Schumpeter, J.A. (1934): The Theory of Economic Development, 13th Printing 2007, New Jersey: Transaction Publishers.

Wiklund, J. and Shepherd, D. (2003), “Knowledge-based resources, entrepreneurial orientation, and the performance of small and medium-sized businesses”, Strategic Management Journal, Vol. 24, pp. 1307-14.

“Wipro’s New Groove,” www.businessweek.com, February 17, 2006.

“Q&A with Wipro’s Azim Premji,” www.businessweek.com, November 27, 2006.

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Protecting innovation methods

Introduction

Protecting Innovation Methods

Wholly Proprietary Systems are those focused on technology that is company owned and protected through patents, copyrights, secrecy or other mechanisms. The following methods that Everything Everywhere are currently applying to protect its innovation are:

Copyright
Trademark
Trade secret

Copyright

Copyrights are becoming one of the most essential methods to protect innovation due to the advances of new technology, the reasoning behind this is because of the economy rising rapidly relying on the storage, conveying and managing the information.

However the restrictions imposed on the efficiency of the copyright make it more difficult to maintain the regulation. For instance copyright laws have been unsuccessful in keeping up with progress of technology of the Internet as nowadays the materials can be easily plagiarized without gaining permission from the owner.

T-mobile and Orange protects its websites and its contents through copyright and database rights this gives exclusive rights that the data that is presented on the website are protected and licensed to Everything Everywhere Limited. The copyrights at Everything Everywhere, allows protecting the company from illegal replication of their work. For example, Everything Everywhere website provides all necessary information and required details for their customers about the products or services such as browsing the site, downloading and printing materials in order to use for personal and non-commercial needs. However, devoid of prior written agreement or authorization from Everything Everywhere Limited would not permit illegal users to replica, store, allocate, broadcast, or modify the content of their website for any principle. As Everything Everywhere has effectively secured through copyright since it usually limited for outside users. Although the continuation of copyright at Everything Everywhere might not be adequate to maintain stopping illegal users from exploiting their material.

Trademark

A trademark is a symbol or indicator which is used to identify the origin of a product or company, distinguishing it from other source of products, services, or companies. These are one the three essential forms of intellectual possession rights along with patent and copyrights. However, trademarks differ from other type of intellectual property rights this includes patents in assisting to protect the underlying invention and copyrights that protects the expression of an idea.

Everything Everywhere is the symbol and phrase of their trademark, this clearly relates to the company’s network for example their customers will have good access to mobile networks everywhere in the world. Through using an effective trademark identity it allows Everything Everywhere to ensure that they strongly secure and protect their innovative products and services. Since their customers will be very familiar and well able to recognise the services and products offered by Everything Everywhere.

Moreover, they are also aware that the company’s trademark doesn’t develop to be generic. If the company’s trademarks develop to become common this will allow others to make use of their materials with no panic of trademark contravention from Everything Everywhere limited. However, Everything Everywhere Limited ensures that they concerned of protecting their innovation.

Trade Secret

Everything Everywhere has been skilled as a trade secret under the Uniform Trade Secret Act through following the three main criteria required for trade secret information as mentioned below:

The material or details is required to not be in all-purpose familiar or freely ascertainable during genuine.
The information should include economic significance which depends on their information which is confidential.
To protect the secrecy of information reasonable measures should be taken by Everything Everywhere who are the trade secret holder

Everything Everywhere benefits by using trade secret , since this protection can be applied for long period as far as the company’s information are kept and maintained secretly. Furthermore the cost of maintaining the trade secret are low.

Although trade secret protection requires to be controlled and employed frequently in order make sure that the confidentiality of the company are secret.

Bibliography

Alcock, L., Chen, P, H., and Hodson, S. (2003) “Online piracy of recorded music,” Journal of Brand Management, vol.11, iss.2, retrieved August 8, 2004,

Langenderfer and Cook (2001, p.280

http://www.docstoc.com/docs/70352974/Everything-Everywhere-Limited

http://stakeholders.ofcom.org.uk/binaries/consultations/copyright-infringement/responses/Everything_Everywhere_Limit1.pdf

http://www.iccwbo.org/uploadedFiles/BASCAP/Pages/Davis.pdf

http://www.wirelessweek.com/News/Feeds/2010/05/wireless-everything-everywhere-tm-orange-and-t-mobile-u/

http://www.businessknowledgesource.com/marketing/howatrademarkcanidyourmarketing026281.htm

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The breakthrough innovation of Samsung’s Tablet

Abstract

The innovation is a tricky business. The public response to the innovation may be very unexpectedly. The tablet PC is a revolutionary innovation that reduced the size of the laptop. The integrated features of the tablet are very attractive. It is smart device that is very much wanted solution to the customers. The project is about the source of innovation and the types and patterns of innovation for the newly designed device named Galaxy tab PC. The importance of its innovation is to upgrade the technology one step ahead. The upgrading of the cell phones plus the computer features and incorporating them all in one device called tablet was a hell of an innovation. The information about the tablet is gathered through the literature reviews of the articles present in the journals. The surveys are read and the secondary data about the Samsung tablet helped us through the research. The public responded unexpectedly in different areas of the world when it was launched. The business professionals did not get along with the size of the galaxy tablet. The youngsters and the frequently travelling people liked it. but still the innovation was not as big as ipod was. It couldn’t replace the ipod. So the public acceptance for the tablet turned out to be like people were not expecting a thing as minor as the size to be the problem. I learnt that creating something new is a very risky business. People may or may not want to change their ways of seeing technology so when it comes to a technology then it should be friendly enough to meet all the requirements that the previous technology was unable to meet. We were motivated to find a good interest of people for the tablet technology. The type of innovation was a revolutionary innovation just like the computers came around as a breakthrough but the tablet PCs couldn’t reach that level.

Introduction

Overview: This project entails detailed information about the innovation embedding in the Samsung. Samsung is a South Korean company that started in 1938 as the trade export company of perishable things. But later Samsung started manufacturing the electronic devices. The breakthrough in the innovation interested the government and many investors to put in more efforts in the research and development. This project tracks the overall details on the sources of innovation and its journey through the development of the new product of Samsung named Tablet PC Galaxy tab. This is a new launch is a lot of expectations are there from the customers because it has been installed with the best applications demanded by the customers.

Group information:

Group members names

This project is basically about the topics of “sources of innovation” and “types and patterns of innovation” in the product Galaxy Tablet of Samsung. We chose these topics because the electronics devices are nowadays the most prevailing and demanded by customers. The increase in the versatile use of technology like mobile phones and laptops is like a necessity to everyone, ranging from student to highly skilled professionals. The innovation in the technology is so interesting that we decided to choose our favorite and also most famous electronics company nowadays. It’s not only famous in South Korea but it has grabbed a large share in the global market. The reliability and demand of its products are a source of quality life and symbol for good tastes. The tablet took a huge investment in its new product development life cycle.

Industrial / company setting:

The project is done through the industrial setting because there are a lot of interesting researches done on the Samsung progress that caught our attention and interest. It is interesting to know how the innovation management became the crucial part for the success of the digital equipment manufactured by Samsung as compared to its competitors. This innovation boost made its way to the global market and South Korea stamped its quality by doing exports to the rest of the world in its leading technology.

The reason to choose the industrial setting is that there were a lot of other companies already present in 1969 when Samsung started manufacturing but Samsung competed with all of those companies. No wonder this aggressively competing trend and unique way of improving Its technology was the reason it grabbed a quick place in the world of technology. The progress has been improving ever since and quality is remarkable.

Geographical setting:

The country chosen is South Korea. The reason to choose South Korea is that USA has already made its name in the field of technology and development but South Korea started its technology improvement in the 1960’s and soon it was able to compete with the USA’s top most high tech innovation industry. Samsung competed not only in the innovation of its technology but also through its strategies to market its electronic devises and gained success in just a couple of decades.

Aims and Objectives:

The aims of this project is to learn about the implementation of the theories of the innovation management and apply this knowledge at the new innovation named tablet of Samsung in the real business world.

The objectives of this project are:

To learn the ways of the development of new technology of tablet in a unique way.
To learn about the sources of innovation that triggered the development of tablet.
To understand the pattern and types of innovation in Samsung.
To learn how the industry accepted and supported the new technology.
How Samsung made its way to create its place in the world of technology smart companies

The problem:

Our motivation to work on this topic is that innovation is a tricky procedure. The public may or may not accept the up coming product. There has to be an extensive research to make the new product a success. What are the concerns of the new product development or innovation for its success?

The problem under focus is “Is innovation of Tablet going to be easily accepted by the public?”

Methodology

The research methodology for this project involves extensive research and analysis of using qualitative research methods including journal articles, periodicals, newspaper articles, international journal articles, and online publications. Our group efforts have been made to make this project a complete and as transparent as possible to achieve the highest levels of precision and accuracy. The work is done with proper justification of each point described. The secondary data is being reviewed to conduct the research.

Literature Review:

The literature review has been done through the electronic libraries of LSE and MiddleSex Universities. The secondary data had been the part of the literature resources available on the internet. The review of these articles and journals broadened our knowledge of innovation sources and the patterns and types. The surveys had been done to observe the innovation.

Samsung started in 1938. It was not an electronics company in the beginning as mentioned above. In 1969, the revolutionary innovation boosted the company to manufacture the electronic devices. South Korea, started its innovation revolution journey in 1960s when the government invested in science research and development to make South Korea a major innovator of scientific technologies. This was a turning point for Samsung in 1969 when it started manufacturing the electronic devices. These devices are now prevalent all over the world. The digital products of Samsung are worldly recognized and reputed for their quality.

The breakthrough triggered in 1980’s when the private companies invested more in the technology development. The government slowed down its investment but for sure there was a sudden demand of techno-smart machinery. The advancement occurred when during 1990’s the innovation phase started and the exploring of emerging technologies started. In 1998 the government doubled its investment in the research and development of the technology and the workforce was increased. (Temporal 2006)

The constant innovation and competitive experts in technology raised the quality of the products and entered in the digital age with revolutionary change and opportunity. Going to the official webpage of the Samsung its clear how many awards have been won by Samsung electronics. (Samsung 2010)

In 1993, the Chairman of Samsung stressed on the increased branding and advertising of the innovative development of the Samsung digital devices. The completely bureaucratic and centralized organization of Samsung has developed in its research and development capabilities to compete with the next century demands.

Samsung is famous with its LCD and plasma flat screens. The quality of the vacuum cleaner and the rest of its electronics products is remarkable. This characteristic paved the way of many developing technology organizations to partner with Samsung and help innovating the technology in the new and interesting ways. The mobile phones of Samsung are famous with their sound quality and camera resolution. This is due to the constant and consistent efforts of the research and development department of the Samsung. The awards winnings for its technology is written all over the profile of the Samsung website. All of the technology journals are full of the remarkable intelligence of the engineers of Samsung electronics.

The innovation cycle of Samsung continues in the 2000’s and on 11August 2010, Samsung is going to launch a new breakthrough technology named Samsung Tablet Pc. The model of tablet is Galaxy Tab GT-P1000. The tablet is the excellent innovation that combines the features of a laptop and those of the cell phone. Just like the iphone it has got the operating system and the RAM of as much as 512MB. There is 15GB internal memory and the 32 GB micro SD card. It displays the 16millions color capacity and is 7 inches TFT screen with the resolution of 1024 X 600 pixels. It has the feature of the internet and wireless synchronization. The video call facility that makes one feel like you are talking to a person like if s/he is standing right in front of you. The wonder battery life of 12 hours and the voice quality is sheer. The network coverage is remarkable. It is quite compact weighing only 380gm. There are other applications in the tablet like the alarm clock, messaging service, movies, weather, news, mobile games and applications. The soft wares like the MS office suite to make it suitable for the professionals use. The office soft wares are making it very demanding for the business class. (Samsung 2010)

Sources of Innovation:

Samsung has been working with multiple sources of innovation. The first source of innovation is the government interest and investment in the innovation in the technology especially the mobile phones and accessories. The second sources of innovation are the users as they are the key users of the technology. The mobile users are coming up with a new demand everyday. Samsung gets the feedback of its customers and innovates the accessories and embed them in different new mobile phones providing diversified mobile phone set to the demanding users. (Hippel 1988)

Another source of innovation in Samsung is through the joint venture with other partnership organizations. The university of Cape town has recently done partnership with Samsung mobiles to innovate the new mobile phones applications. These are in response to the African needs. The UCT Samsung Mobile Innovation Laboratory (SMILe) is the Samsung’s first manufacturing unit in Africa. This lab had been made to operate for three years. The partners in this project are the Information Systems and Computer science departments, also the Cape IT Incubator and Bandwidth Barn. This laboratory is the effort of the UCT professor named Jean Paul Ven Belle who is the head of Information Systems. The GM of Bandwidth Barn is confident that the new prototypes have been developed by the senior students of the Computer Science department under the guidance of the staff. This source of innovation is users plus manufacturers combined effort that will open new ideas to the world.(sinha 2011)

One big source of innovation is the competitor’s latest products. The increasing demands of the customers are diversified and combining them all in one set is a difficult task. Vodafone, T-Mobiles, O2, Motorolla are the key competitors that are competing with the mobile phones of Samsung. One big competitor is Nokia. These companies are all struggling to manufacture the newest and updated versions of the previous devices.(Gossling 2011)

The research and development department of Samsung has been working hard. The continuous feedback obtained through the online surveys give new ideas. The focus groups always come up with the new demands. All of new ideas are incorporated in the new technology.

The source of innovation for the Samsung Tablet PC was the increased rate of the demands for the cell phones that contain the capabilities of the cell phone as well as the computer. The devices that is as small as a mobile phone and as big as to work comfortably like a laptop of small size. The size of the tablet is 7 inches which is appropriate for the frequent use like a computer. It is a mini computer that facilitates with all of the capabilities of the cell phone too. The consumers demand for the i-phones, and i-mates was increasing. The demand for the ipods to listen to music all the time anywhere also increased. This gave Samsung an idea that there should be a device with innovation in design that contains all of these features as one unit. This gave the idea of the tablet PC. The popularity of the tablet was worth watching when the competitors were unable to incorporate the camera and facilitates with the wireless coverage.

Patterns of innovation:

The patterns and types of the innovation depends upon the electronic devise under more demand. The type of innovation in cell phones is different for different customers likewise the other technology.

The pattern of the innovation ranges from the invention of the new technology and its total life cycle and then the marketing strategies to create the product demand in the market. Samsung has increased its demand by opening the sales and design centers in different countries that contribute greatly in the market share. The countries like USA, Germany, Middle East Countries and Brazil have been demanding the high quality products of Samsung.(Hussain 2006)

There are multiple patterns of innovation. One of these patterns is Technology Push or science push innovation. The new invention is push to the market with the help of the Research and development, productions and sales departments with little consideration as to if this invention is going to satisfy the consumer needs or not. This is called the science push model or the linear model of innovation. Another pattern of innovation is the market pull or market driven innovation. This is the type of innovation used by Samsung. Market creates the need for a unique feature in the product and then the research and development starts to work on it. Most of the products of Samsung are manufactured after knowing what the customer wants. A pattern often observed now which has been created by the government interest and investment in the technology is the Innovation double helix. This is like the DNA structure but one spiral of the structure shows the science and the engineering of the technology skills. The other spiral is the marketing, management and entrepreneurial skills. The joint ventures of the Samsung with other collaborating parties are working on this pattern. This depends on the type of the innovation. The mobile phones joint venture with the UCT is the example of innovation double helix. The industrial partners are also working on the same pattern. Another pattern is the integrative approach to Tech-push and market pull. This is the combination of the market push and market pull patterns. Samsung is working on this technique on the products like the LCD and plasma TV. The radical pattern is the new and different element which changes the whole technology. This is a technology that is working on the robots in Samsung or the highly specialized with custom details devices or machinery. The tablet is the example of radical pattern of innovation. The incremental pattern of innovation is very commonly observed in the mobile phones. This pattern deals with the improving versions of the Samsung mobile phones. Just like the memory cards are coming with higher capacity. And the cameras of the mobiles are coming with the better resolution. The revolutionary innovation is the breakthrough introducing a new industry. The evolutionary innovation pattern is like the incremental product or process improvement. All of these patterns of innovation are being used in one way or the other. (huang 2010)

The tablet PC, Galaxy Tab GT-P1000 had the innovation pattern of revolutionary innovation with the mix of the radical pattern of innovation. The invention of Tablet was a breakthrough as the design and shape of the touch screen almost as big as a cell phone was a new look. The incorporation of the cell phones features was like the incremental innovation pattern but this hybrid of innovation patterns for sure brought the technology of advance digital age that left a mark in the history of the technological developments. Galaxy tablets are claimed to the thinnest and lightest weight gadgets that are portable and customer friendly. The introduction to the customers was amazing as the response of the people was like booking of millions of tablets the day it was launched. Many people say that the size of the tablet is not palm friendly but still they use it because of its marvelous features. The patterns of innovation of tablet PC are highly thought and well tested during the manufacturing.

Types of innovation:

Samsung uses the multiple types of innovation. The type of innovation depends upon the type of product that requires the innovation techniques. The sector creating innovations are the specific kind of innovation e.g. the plasma TV. These TV’s are sector specific like the higher middle class or the elite class will want to purchase the flat screen plasma. The performance extending innovation is used in the mobile phones where the performance of the mobiles is extended with the incremental innovation of the product development. The technological reorganization is also the incremental innovation of the technology. The old cathode ray TV’s are now replaces with the flat screens. But this replacement is not completely done to make the cathode ray tv obsolete. The innovation of the plasma screens was the reorganization of the technology. Branding innovation is done with each version having the different brand name. likewise the mobile sets have different faces thus different model numbers. So the innovation is done with the brand names put ahead. Design innovation is the type where the design of the product is considered while manufacturing. E.g, the vacuum cleaners with the shapes of dogs or a robot is the design innovation. The design of the pre-existing thing is re-modeled and refigured to create the new look for the customers. The process innovation is the technology plus the management type innovation. Basically this revolves around the complete process of innovation, managing innovation, marketing and advertising the technology such that the strategy is formed. This is the way the product is engineered phase by phase. The management and monitoring for success is done throughout the process of product development life cycle. Along with this the strategies to offer the product and creating awareness amongst the customers is concerned this is all done through this type. This is an extensive process. Reformulation is the type of innovation where the technology item is recreated altogether. This is the reengineering of the existing product. The service innovation is the total managerial policy. The strategy to target which segment and then how to create the awareness of the need amongst the customers. The packaging innovation is the attractive new package to attract the customers to go for it. For example the new colors of the mobile phones and the versatile laptop flap covers that can be replaced very easily are the examples of the packaging innovation. Great deal of art work and redesigning and beautification of the technology products is involved. This is also an extensive procedure.(huang 2010)

Samsung Tablet PC Galaxy tab GT-P1000 is the design innovation type of innovation. The design of the tablet was the breakthrough and unique of its kind. Its extensive product development life cycle managed to create the demand in the market. As it was a market wanted product as the pattern of innovation shows that it was a market pull product, so it was very much manufactured thinking about the needs of the customers. The customers pattern of use of cell phone plus the laptops was greatly researched. The launch of the tablet was very much appreciated by the customers. It was long advertised and marketed for the home customers and the business customers. The use of the tablet is like replace the blackberries. The total procedure of the innovation was made to be such that it is demanded by all types of customers. The ages of the customers and the usability of the devices was greatly researched to innovate the product that meets the demands of the maximum types of customers.(O’Connel 2005)

Data and Findings:

The innovation is a completely risky process. This may or may not get accepted by the people. In order to make it appropriate for the high levels of sales, it needs to be public/consumers interacted during the developmental process. The tablet market is increasingly exploding. According to an online research and the focus group discussions, 6% of the people want to purchase the tablet in the next six months time period. (Richard 2011) the likelihood of 6% to purchase the netbook, 14% to purchase the smart phone, 14% to purchase the windows based laptops or computers, shows that the tablet is not going to finish these categories. Using these statistics there is still expectation for the selling of 360,000 tablets at the end of the spring in UK. The rumors about the buying of the tablets shows that the apple ipod are not going make much sales next year. These next twelve months are going to change the purchase patterns of the customers. The innovation is highly appreciated and also considered as a style. The customer friendly feature of the tablets gave Samsung once again a bloom in the consumer market. There are quite a lot of complaints from the customers showing that the size of the device is not appropriate. The size is not palm friendly and at the same time its very interesting gadget. The popularity of the tablets is seems amongst the frequent travelers.

Conclusions:

The Samsung tablet Galaxy tab GT-P1000 shows that innovation is helping a great deal in changing the look of the technology. The launch of the tablet pc was a marvelous innovation that was a designed innovation to meet the increasing demands of the customers. The customers responded to Samsung as soon as the Tablet was launched. The popularity was gained all of a sudden but due to the unfriendly size of the gadget, it did not make a big success like the ipod had done.

Samsung has its quality and the customers trust that. The new development of the device was greatly accepted by the people who travel very often and commute long distances. It could not grab the market share of the blackberries or other professional devices available in the market offering business applications. The expectations were high of this device. The uniqueness was expected to prevail but couldn’t make it. The companies researching on how to make it customer friendly in terms of its size are working in the right direction. If the size of the tablet is reduced and the features are enhanced it will for sure be a highly demanded product like the laptops and the ipods were. The innovation should be appreciated but it should be worked well with all the risks. The continuous feedback from the customers for their needs is a good idea. So the companies much not invest too much in the products development and ignore the market aspects of the product that suffice.

References:

Gossling, R. (2011) “Samsun Phones.” EzineArticles, 1-2.

Hippel, E. V. (1988). Sources Of Innovation. New York Oxford University Press.

huang, D. J. (2010). “Management of Technology Innovation and patterns of innovation.” Linghan (University) press: 29-34.

Hussain, S. (2006). “Samsung Took Advantage of the Olympics.

O’Connel, P. (2005). Samsung’s Goal: Be like BMW. Bloomberg Business Week. Bloomberg, Bloomberg publishers: 1-5.

Richard (2011) “The “Tablet PC” market looks promising in 2011.” 1-3.

Samsung. (2010). “Samsung’s History.” from http://www.samsung.com/pk/aboutsamsung/corporateprofile/history.html.

Samsung (2010) “Samsung Tablet PC.” Samsung Tablet PC – Galaxy Tab GT-P1000 Review 1-2.

sinha (2011) “Samsung launch innovation partnership with UCT.

Temporal (2006). Asia’s Star Brands. Singapore, John WIleys & Sons(Asia) Pte Ltd.

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Free Essays

Examination of the Organizational structure and logistics service innovation of Hewlett Packard

Introduction

HP is one of the most famous and well known names in the whole world of IT world. It has branches in more than hundred and seventy countries in the whole world. HP does its best to find out the best ways and solutions to introduce technology and services that is applicable to help people and companies to deal with the problems and challenges they faces in the modern daily life, HP group tries to manage possibilities, aspirations and dreams of its customers around the world. Hp company has the concept of applying what is new in thoughts and ideas, dealing with the technology that is enriched in experience and worthy ideas. So we will discus in this report about the big main problem that Hp company faced with its organizational structure, communication, customer’s services and satisfaction. And without these four factors the company might never success because they are the most important things the company must consider it.

Background

HP stands for Hewlett-Packard who are the founders of the company. When they established the company in 1939, their initial capital investment was US$538. It’s an American company which producing electronic products such as laptops, printers, smart phones, scanners, monitors, electronic, accessories, photo printing service and …etc.

From 1940s until 1990s the company started focusing on producing electronic test equipment. As the business grew and became wider in HP, they hired more product designators and they started using more accessories, supplies, software, and components.

From 1999 until 2005 Carly Fiorina worked as chief executive officer of HP. She is an American businesswoman who was one of the republican nominee for the united states senate. Under her responsibility In 2002, the company united with the its competitor computer company Compaq. Carly did many problems for HP, one of the worst problems is interrelated to organizational structure. She made 11 layers. For example, an owner of virgin store want to purchase printers from HP, he couldn’t contact with the one who is responsible for this transaction , because there were many managerial levels so customers can’t reach the specific demanded employee, they have to go through many steps and appointments. It takes a very long time to get their requirements and demand. So they end up disappointed and not satisfied. On the other hand, the company loss their customers which leads losing profit. For this confusing customers and shareholders which was held by carly, the company end up exposed to shutdown . After that in 2005, she demitted as chief executive officer and chairman of HP. http://en.wikipedia.org/wiki/Carly_Fiorina

Mark hurd became in replacement of Fiorina and took the lead after she stepped down . He became the new chief executive officer and chairman of Hp from February 10, 2005 untill March 28, 2005. Robert P. Wayman was the chief financial officer and executive vice president of the Hewlett-Packard Company. He became interim chief executive officer for several months before hurd came and took the position. Hurd was assigned as the permanent chief executive officer and also appointed as the President. Somark fixed what has been damaged by carly. He tried to remove matrices at every turn, and minimize the levels of management. He did his best in turning hp IT main interior belt up and on strengthening and modifying the real estate achievement and performance over the years that followed his being in the position. Also, Mark gave great intention to technology, and to set up a powerful ties and improved productions to afford to the customers around the globe. These great efforts were crowned with a massive increase in the income and enlarging of the company and raised the price stock of shareholders and dealers, and a minimized the amounts needed for the structure to help HP to have a strong ability to face the market that has other competitors as in the international IT market.

As a result and under his leadership, the company developed and became the top of the sale of desktop computers in 2007, and in 2006 laptop computers. Since 2008, HP developed the market share in inkjet and laser printers to 46% and 50.5%, greatly.

http://en.wikipedia.org/wiki/Mark_hurd

Case Analysis

This case relates to many issues, the case shows that HP had a very long and a bad organizational structure which lead to had no communication inside the organization and between employees. And if any organization have problems in communication inside the organization it self and between employees then employees will not be able to communicate with customers to know the desires, demands and the suggestions of the customers. For this reason, employees will not be able to serve the customers. As a result, the customers will not be satisfied and the organization will lose customers and profit as well.

The main issue and the most important issue in this case appear in the organizational structure. It starts from the organizational structure, it can make the organization rises or falls by making the environment in the organization easy in communication and cooperation or hard.

When managers or people want to start business or work they do planning after they done with the planning, they need to begin to work on the plan and the first step to apply the plan is by designing an organizational structure. The objectives and strategy of the organization that you want to achieve them, determine the design of an organizational structure. According to design an organizational structure, we should first know what is organizational structure ?. We can define organizational structure in one important word which is “the framework” and that’s mean to divide the jobs and duties in the organization in a way that help the organization communicate inside and outside the organization. An organizational structure determines the authority, responsibility, coordinating, overseeing the work and controlling. The creation and the design of organizational structure shows how information flows between the managerial levels which as a result affect on the work flow and productivity. Refrences; Role sets and organization structure

Carly fiorina made a very long structure . When managers create, design and change the structure , they should consider these six points which are the key elements of an organizational design. The six key elements are; work specialization, departmentalization, span of control, chain of command, centralization and decentralization, and formalization.

I feel that we have to add the definition of each one because when I read it I felt it missing we didn’t explain all these points clearly and we didn’t talk about chain of command so just read it again and let me now.

logistics service shows if the organization have a strong and a good structure or not . because it helps in building the relationships with customers, switching costs and making the work performance and the market activities more efficient and effective.Refrence ; Organizational structure and logistics service innovation

We will point here how the relationship between organizational structure and logistics service innovation capability and market performance will affect on the organization. Changes in the organization strategy will cause changes in the organizational structure for example, having a shop in dubai city will be different from having shops in all united of arab emirates and that’s will affect on the size of the organization and the technology which used in the organization. The more the size of the organization is bigger the more the technology is needed and the technology becoming more complicated. Based on that the work environment in the organization will become stable or not .

A successful strategies is based on the objectives, skills and capabilities of the organization, all this will determine the structure. Therefore, managers should consider that structures not a way to show the implementation of the work as carly did , instead they should consider the structure as the basic element of strategy formulation and as the basic resource that help the organization to improve and develop their performance and activities properly.Refrence ; Organizational structure and logistics service innovation

If the organization have all the skills , strategies, capabilities and resources that are valuable , it will attain and achieve a lot of advantages even a competitive ones. This achievement and attainment of these advantages will make the organization improved and developed their short-term and long-term performance.Refrence ; Organizational structure and logistics service innovation

Carly did a lot of issues in HP. She made a high specialization, a high departmentalization and high formalization which prevent people to be creative and innovative. Also, the span of control was narrow which made many managerial levels. she thought that making many levels in the structure would make a lot of jobs opportunity but it turned out that people lost their jobs because many levels made no communication and made a bad work performance and the right information did not get to the right person through all this levels so people couldn’t achieve their jobs so they lost it. She did Centralization in the organization because she gave the authority for top managers to make decisions and she did not make innovation and risk taking by letting low managers make decisions. This led to poor work performance and a slow of work flow because when a non-managerial employee need to have an approval about a task they should wait for a top manager to approve and take the decision and that will take a long time especially if there are many levels . so the task will move from a person to another until the top manager see it and approve, that would take a very long time and will not help any urgent cases by urgent customers. So centralization reduce discussion , sharing information and exchanging new ideas. Refrence ; Organizational structure and logistics service innovation

Therefore, the customer service will be bad and as a result the customer will not be satisfied at the end.

So what carly should understand that The organizational structure should be created based on HP company strategies , objectives, goals , skills and …etc ,that HP may wish to achieve them.

The organizational structure is can be defined in one word “frame work” so it is coordinating and overseeing the work by dividing the work into smaller tasks But not many levels which make it hard for the organization to communicate and to cooperate and that’s a bad work environment .

Refrence ; Organizational structure and logistics service innovation

What carly did led to no communication internally inside the organization it self between employees and that’s led to no cooperation between departments and employees . therefore, this bad environment work led to poor performance because the information flows between levels of management was slow and the flow of the work was slow too. so there were no or less productivity and then no or less profit.

On the other hand , there is no communication externally too. No communication between the organization at the first place led to no communication between organization or employees and customers and that’s led to no cooperation between organization and customers, corporate customer and stakeholders. So the organization will not be able to serve the customer and the customer will not be satisfied . as a result the company or the organization will lose customers and profit as well and that’s will make the company collapse and that’s what carly did with HP.

We put here graph

One of the most important point that organizational structure is affecting on the organization members and their behaviors. As long as the structure is simple and organic, people will have a high attainment and will work efficiently and effectively with a high motivation.

Refrence ; Organizational structure and logistics service innovation

If these 6 points that we’ve discussed are high in the organization then the organizational structure is called “mechanistic” and that’s what carly did with HP . but if these 6 points are low , then the organizational structure is called “organic ” and that’s what mark hurd did to solve the problems in HP. He changed the structure and its properties from “mechanistic” to “organic ”

Check high low

Mark Hurd turned out everything upside down, when he transformed the structure to organic , he canceled 3 layers of the organizational structure it minimized from 11 to 8 layers. As a result of minimizing the levels the span of control became wider , also there were more decentralization in the organization which help to save time , costs and it helps to exchange information, discussion and increase the level of communication internally and externally. and that’s led to what it called ” Cross functional team” which means the departments employees working all together as a team. in addition, Mark Hurd reduced the formalization in HP company . for example, there were an employee didn’t attend the meeting on time , he has an excuse but the manager didn’t accept it , although the employee is a hard worker. The manager is strict and he acted so formal and he wasn’t flexible with employees that will effect employees creativity and they will not be motivated. That’s mean the manager got a high level of formalization . instead of that the manager should be in between not too high formalized and not too low because it will led to have flexibility and communication between managers and employees. If we have the same example but the manager was so low formalized he’ll be easy to go , no one will take him seriously.

When the formalization has decreased the relationship between managers and employees became more flexible and this has made the communication high and it broke the ice between them and it help them to produce more and come up with more new ideas and that called ” cross hierarchical teams”

+refrences in case analysis and background+ search a web for Plagerism

+ add charts they r 3 + table of content + editing + fix the information 3n al cross hierarchical teams + 6 points + high low 6 points

Questions related to the case:

How did Mark Hurd decide to address his company’s structural problemHow do you think the company’s costumers responded to these changes?

Hurd to terminated and sent away inefficient layers of sales management. He represents one top manger that customers can contact and be in contact with.

Top sales representatives started to made better decision with his team due this low waste of time.

We believe that Hurd makes a great and a good change in the company; he makes the dealers pleased by solving Hp problems. He solves the customers contacting problem. He also answered the sales people problem so they can have more time with their dealers.

How do you think the company customers response these changes?

After the company started new structural and eliminated all the problems, they paid big attention for the customers. Customers no longer feel the time consuming. These new strategy made customers very pleased and they help the company to become at the top of leading in computer market again. As every company knows customer are the king. Customers are why organizations became.

Conclusion:
What we learn from this case is ..

We therefore conclude that each company should find out the good and the best CEO depending in their educational rate and their ability to hold this challenging job. Good CEO leads to customer’s satisfaction. Good CEO takes part in the problems with staff and employees so they realize that he is helpful for every situation company needs. Good CEO creates good feelings of enthusiasm among people ” one hand can’t clap without the other, without ambience, ambition cannot success “. Here at Hp Hurd tried so hard to create the ambition. He made them trust and confide in themselves because he realized that ” potential is always higher than where we actually are”.

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Free Essays

Use Ansoffs matrix to evaluate the extent to which innovation has driven the development of Innocent ltd.

Introduction

1. Evaluate the extent to which innovation has driven the development of Innocent from its inception to the present day

To start off with Innocent only had one product which is their renowned smoothie made from squashed up fruits. After entering the market with their famous healthy juice they were able to provide themselves with sufficient finance, in 10 years they were able turn over ?110 million calculating out to ?6m profit. With the additional finance Innocent were able to diversify their product range and widen the scope of their business. This successful turnover led them into creating and developing new products and penetrating into different markets such as,

“Yoghurt thickies”
“Juicy waters”
“Wedged shaped cartons” – Fitting neatly into lunchboxes (entered into the children’s market in 2005)

In relation to the new products that Innocent have introduced it is possible to use the Ansoffs matrix in order to analyse the development of products into different markets and place them into the categories within the matrix.

Source: tutor2u.net

Product Development

Kids smoothies – Instead of appealing to cash rich time poor consumers they have started to bring out new products for kids
Innocent Smoothie– The first product that Innocent launched
Juicy waters– Competing with healthy waters such

Market Development

Yoghurt Thickies
Innocent Smoothies– Trying out new flavours with new fruits

Diversification

Vegetables– Trying to move into the fresh vegetables sector

In order for Innocent to be this popular there would have been certain stages that business would have to have gone through in order to be where they are at the present day. NPD (new product development) would have been a strategy that Innocent used in order to try and see whether or not their first idea was feasible to carry on with. The table below consists of 6 phases that they would have gone through.

StageRelating to Innocent
Strategic logic & AlignmentFirst of all Innocent wasn’t an easy business to set up for the three university friends. As they were young and inexperienced they found it extremely difficult to find financial banking for the business they proposed to set up. 20 banks or so had rejected their business plan due to lack of experienced and knowledge of the sector. Finally after much pursuing they were put in touch with a business angel who invested ?250,000 and who now owns 20% of the company.
Idea generationThe three university students at this stage would have had to look at the current markets and try and find a possible gap that they felt they could penetrate into. Smoothies were a concept they had engaged into.
Concept Development & SelectionOnce they had all of this set in place they needed to develop their idea to be different from any other potential competitor products out there, they made the smoothies from 100% fresh fruit which could be preserved for 14days and still get the same fresh taste.
Programme DefinitionThe idea of the smoothie had originally come from the trio buying ?500 worth of fresh fruit and making them into smoothies then going onto to sell them at a music festival in London. The customers were asked to put the empty bottles in either one of two bins one named “yes” and one named “no”, the question they would be answering was “do you think we should give up our day jobs to make these smoothies” The yes bin was overwhelming so this gave the three entrepreneurs the push they needed to take their idea forward. Giving every consumer “2 of their 5 a day” with one bottle of Innocent.
Design & DevelopmentThe design of the smoothies had to be unique and welcoming to the consumers Innocent also wanted to be a company that built on ethics hence the name. Ethics was decided to play a big part of the business by using fresh fruit for example the banana suppliers have rainforest accreditation, they also strived to try and be carbon neutral and using bio degradable packaging.
ValidationTo try and make sure that customers were willing to invest in the product they had the knowledge from the music festival that customers were interested in their product.
Pre- Commercialization & launchThe launch of their product was on a national level at first finding distribution channels through the market and now there product is stocked at many delicatessens, health food shops and coffee bars. First day they sold 24 bottles from a van.

Innocent were the first company to start selling smoothies which in turn gave them a competitive advantage of being the first on the scene, this gave them allot more experience over the years of operation than other competitors in the market today, factors which play in favour of Innocent are as follows:

Experience– Having years of practice in serving the customers exactly with what they want, also taking on board the customer’s views and opinions to try and increase product ranges but also at the same time satisfy the needs of the consumer.
Scale benefits- Innocent will definitely have this advantage as they will already have bulk order in place and be able to mass produce quicker than any new upcoming smoothie business.
Pre – emption of scares sources- Innocent have key technology and product innovation that makes there smoothies last 14 days from the day of production, so consumers will still get that great fresh taste.
Reputation- In the years Innocent have been operating they have managed to gather a huge client database through emails and feedback this gives them an advantage as they have started to build relations with the customers a long time ago and by listening to what the consumers want and by responding appropriately they are able to keep the interested and having consumers who are brand loyal.
Buyer Switching- As Innocent are big well known business there suppliers would be more than happy to negotiate with them in terms of competitive pricing.

2. Evaluate the extent to which entrepreneurship has driven the development of Innocent from its inception to the present day

As the three young entrepreneurs had a lot to learn about business it was a huge learning curve for them to be thrown into the deep end so fast. Although successful as it is Coca-cola have huge part to play with their ?30m investment into Innocent when sales went down and competitors got tough. Innocent can gain from Coca-Coola distribution channels such as Europe and global distribution something that Innocent wasn’t to geared up with. From being Entrepreneurs they had given 20% away for investment but also taken onboard help and investment from another major drinks company that has been around for a lot longer than they had. On the other hand this could be a partnership between both businesses that could work. Coca-cola can learn how to compete with a whole new style of drinks.

Below is a diagram of entrepreneurial growth cycle which the three young students would have found themselves going through in the early stages when Innocent started up. The diagram will give an insight and relate how the founders of Innocent would have proceeded within each step of the diagram.

Start up capital– For Innocent the start up capital came from on a business angel as the banks had turned them away for being inexperienced, the business angel now owns 20% of Innocent.
Growth– As the business grew so did the amount of employees by 2007 Innocent has 250 members of staff working within the organisation of Innocent.
Maturity– Innocent have handled with maturity very well in terms of them diversifying themselves into different markets offering new products aimed at different ages. They have kept revenue on a positive scale by doing this. Innocent are from maturing as they are constantly innovating new ideas and creations and with the help of their loyal customers they are always trying to find ways to impress their consumers.
Exit– This does not apply to Innocent as of yet as the entrepreneurs are still running the business and the Angel investor still owns 20%.

Innocent have done well to not base their business entirely on profits but have been looking at the bigger picture in terms of social and economical responsibilities. This helps them achieve the business they originally set out to create which was “natural, entrepreneurial, responsible, commercial and generous”.

3. Evaluate the extent to which leadership styles has driven the development of Innocent from its inception to the present day

When starting up a new business it is very important to try and get the leadership styles correct as this can make or break a business from the offset. Having a sound leader for a business can not only help with the direction of the business but also the way in which employees react to the style of leadership. If it is possible to get employees on side with the business values this can help increase efficiency and brand image. Being three young university students it was hard for Innocent to give of a professional image at first as the youth of the entrepreneurs was soon noticeable in their approach to business. Their youth style approach consisted of:

Dress codes- “dress informally, often in shorts and bare feet’
Messages- “funny informal message” on the drink carton labels
Employees- “leaving their personal values at home when they go work”
Buildings- “fruit towers” Office block name

The factors above show the laid back autocratic approach that the founders of Innocent adapted to help the business image and help support employees within the workforce to come up with new innovative creative ideas to help push Innocent forward.

As the company was growing it was very important for the leadership styles to suit the number of employees so that all work could be done effectively and efficiently. After the auto critic approach as there were no employees at that time the leadership style has slightly changed to democratic as there are now 250 employees, but Innocent still ensures that employees play a role in the business and partial decision making processes, giving the employees freedom at work helps with their participation in fundamental decisions.

4. Evaluate the extent to which both the strategic direction and the method of development chosen are suitable

As time went on Innocent found itself in a situation where it needed from help other businesses, this was mainly due to the expensive marketing decision that took them into the European sector this proved to be costly for them and made their financial positioning weaker. This led them into the path of Coca-Cola a large global drinks company that has one of the strongest brands in the world. Coca-Cola currently have operations in over 200 countries and has been around since 1886. The global organisation is currently the leader in the drinks beverage industry. As Innocent have decided to take investment from the global business it is able to use many of the resources that Coca-Cola use for its own products, as well as looking into international investment. There will be certain factors that will drive Innocent in this direction which can be seen in the table below.

Source: Yip, Total Global Strategy

As it is clear to see the above drivers would help Innocent to move forward internationally with the help of Coca-Cola and their global marketing brand.

Objective comparison (Innocent vs. Coca-Cola)

As two totally different businesses the vision, values, & missions would differ a lot which could cause issues in the working partnership and could push toward a change within either of the organisations.

Mission

Vision

Values

Innocent

Make good foodThe earths favourite little companyBe commercialBe generousBe entrepreneurialBe responsibleBe naturalBe generous
Coca-Cola

To refresh the world – in mind, body and spiritTo inspire moments of optimism – through our brands and actions, andTo create value and make a difference – everywhere we engageProfitPeoplePortfolioPartnersPlanetLeadershipPassionIntegrityAccountabilityCollaborationInnovation

Quality

From looking at table above it is clear to see that coca-cola and Innocent both follow similar ways but show their views in different perspectives. Innocent is all about being simple and telling the customers exactly what they are doing where as coca-cola is a much larger organisation therefore they have to try and abide by settling a level platform as they operate globally. Innocent tend to follow the trends of the UK and try and adapt their changes to suit the UK economy as that is their main source of income, compared to coca-cola who have to look at the issues of the world and try and adapt their company values to suit the mass market. Looking at the suitability of each company joining together, it may not have been the best idea. Coca-Cola doesn’t have the greatest image of being a healthy drink where as “Innocent” has a strong backing of being health conscious and the concept of the drink is that it contains “2 of your 5 a day”. This is an immediate clash for both companies whether Coca-Cola can learn from Innocents approach to being health cautious or whether Coca-Cola have only invested for a return on investment.

Strategic capability

In order for a business to be able to be able to survive and trade it needs to have the resources and competences at its disposable to help alleviate the downfall of the business. Innocent seem to have many resources which they use effectively to send out a positive message to all its consumers:

Intellectual

Customer feedback, letters from consumers, emails letting Innocent know how they feel about their products which in turn gives Innocent new innovative ideas.

Financial

Millions made which means investment for expansion and product development, Partnerships, Business angel, 2million Innocent smoothies sold a week bringing in constant revenue

Human

Creativity in the staff that Innocent employ which is showed throughout their products, 250 employees who all have different skills and knowledge that make Innocent who they are, New staff after working with Coca-Cola brining potentially new ideas to the business.

Physical

Innocent have all their products that they sell as well as all the development & production technology that use to create the drinks. They also have “Fruity Towers” where they operate from.

All the resources that Innocent have proved to be a success for the business in the previous years else they would not be who they are today. Innocent having proven themselves to have good customer relations and doesn’t find it hard to communicate with their consumers this could be because of their critical success factors. Innocent have certain product features in order to keep their consumers engaged with the business such as the “funny informal messages” or making sure they are letting their customers know what they are drinking is healthy. Innocent’s honesty with the consumer has paid off as they are well engaged with many of their consumers.

All the different departments within Innocent all interlink together which helps the business run effectively and efficiently. As Innocent is a simple business its logistics and processes flow easily enabling them to create their products and meet the demands of the consumer, compared to that of Coca-Cola who have vast production lines in 100’s of countries with lots more products. The two different value chains could clash as the organisational structure and technology development as well as process methods differ drastically. The technology that relates to Innocent would be the fact they can keep their smoothie fresh for up to 14 days where as Coca-Cola have developed their packaging to ensure the coke tastes fresh when opened. With Innocent juicy possibly entering into international markets as well as European they could benefit from Coca-Cola’s production methods to ensure they would be able to meet the extra demand on time and of high quality. Also when distributing abroad with only 14 days of freshness for the smoothie Innocent will have to work with Coca-cola to help distribute their products quick enough so that they can be on the shelve as long as possible before the best before date runs out. Transportation costs on a global scale could creep up significantly for Innocent if Coca-Cola distribution channels are not feasible to use. Increasing costs in certain areas could cause internal conflict for Innocent as there are different investors that have put capital into the business, the decisions off Innocent as a whole can effect more than just the investors, other effected parties would be the employees and suppliers as well as any other stake holder. Rising costs and changes within the processes could cause possible disruption in parts of Innocents infrastructure leaving employees unhappy and investors concerned about expenditure. The stakeholder interests within both organisations will vary and all stakeholders will be expressing their views and concerns to the board which in turn could leave Innocent torn between following Coca-Cola on an international level or keeping stake holders happy on a more local scale.

Issues that face Innocent and Coca-Cola

The merge of the two businesses can cause serious issues that could affect the brand image and stakeholders concerned.

Ethics

Innocent have a much more ethical approach to business compared with Coca-Cola, partnering up with a less ethical company could bring down customer views and opinions of Innocent which could damage their international venture.

Competition

Although both brands are well established within their fields there is always the fear of a new competitor or substitute products being purchased, if Innocent cannot keep the price of their product at a competitive rate consumers may start to look elsewhere. Innocent currently only make 5p per bottle sold this is a low profit margin, with all the additional costs they will have to look closely or look into cutting costs which may cause a backlash on their ethical programmes. Innocent will have to do lots of market research to see if there is a need for their product in other countries, although consumers may be willing to pay the slightly higher price in the UK for a smoothie this may not be the same in international countries depending on the state of their economy.

Culture

The culture clashes between Innocent and Coca-Cola vary on a large scale, Innocent have the very laid back approach towards business where as Coca-Cola are a lot more formal and diverse. Management techniques and employee relations differ which could cause conflict in the way both businesses work together in order to get things done. The organisational structure’s of both business would look very different as Innocent only have 250 staff where as Coca-Cola would be in the 000’s making the layering of each level and employee powers differ.

Suitability

In terms of Innocent and Coca-Cola working together it needs to analysed whether or not it would be feasible for this to take place.

Strategic Options

Environment

Capability

Stakeholder/Cultural Influences

Consolidation

Innocent can maintain their market position within the UK and Europe. Coca-Cola maintains their global positioning.Build on their brand and product strength and new innovative ideas through the creativity of their employeesStakeholders not wanting to move into the European market as they are comfortable in the markets they operating in currently.
Market Penetration

Try gaining more market share through promotions or new products.Exploiting the resources available to them which were mentioned previously. Coca-Cola exploiting their vast global connection.Stakeholders happy with the current position of both businesses not wanting any change to occur, thinking they might be at risk of a loss in new strategic directions
Product Development

Innocent looking at feedback from the customers on acting on it. Coca-Cola taking a leaf out of Innocents book and engaging with their consumers maybe looking into healthy drinks with less sugar contents.Both companies could use each other’s research and development groups giving each business a different perspective on their products.Trying to make the stakeholders take interest in the better of the business in order for growth and expansion.
Market Development

Innocent and Coca-Cola can both benefit from new products and using existing products to penetrate into different segments of the marketExploiting the current capabilities and products in different market segments. Such as Coca-Cola trying out new kids drinks with an “Innocent” concept.Trying to help stakeholder understand the need for investment into new areas before current market reach the decline stage.
Diversification

The markets that Innocent and Coca-Cola have become to mature/declineExploit the core competences in new areasMust still be able to meet the needs of the stakeholders at the same time.

Source: Exploring Corporate strategy pg 337 exhibit 10.6

As we can see from all of the above analysis it would be fair to say that both Innocent and Coca-Cola can learn new ways of managing, developing products, and targeting different sectors, but this could come at a cost of either damaging brand image or leaving behind the ethical issues that both companies value.

With reference to appropriate models/frameworks analyse the change in management issues that could arise in implementing this strategy

With the merge and assistance of both Innocent and Coca-Cola coming together certain issues could arise in the management styles having knock on effects to other areas of both businesses such as employees and stakeholders the issues that could arise from this have been analysed below using different models.

To help try and overcome these issues there is a 8 step process that can be followed in order to and remove potential unwillingness to participate in new operations.

Step1- Create a sense of urgency

Innocent and Coca-Cola both need to let their businesses know that in order for them to grow and succeed further there visions and strategies need to be fulfilled to the maximum potential.

Step2-Pull together the guiding team

Making sure that the team has strong beliefs and values of what they are doing to show other people that it is a beneficial move.

Step3- Develop the change vision and strategy

Making sure that consumers and investors understand what the future will be able to give them and how they will gain from this and how it is different from the past.

Step4- Communicate the vision broadly

Make sure as many people as possible understand and accept the vision and the strategy this could be done through the media as both Coca-Cola and Innocent have media connections.

Step5- Empower others to act

For example if Innocent had enough money and certain stakeholder such as the business angel did not see the vision that everybody else had seen it may be in the best interest of Innocent to buy certain stakeholders out this would give the entrepreneurs more control and power to drive the company forward with Coca-Cola. Looking at this from Coca-Colas perspective they would have to convince their stakeholders that partnering up with Innocent is the way forward for a better image and more product innovation.

Step 6- Quick success

Produce sufficient short-term results to give their efforts credibility and to disempower the cynics

Step7-Buil momentum and keep pushing

Once the first success point has been reached for example Innocent in the international market they need to keep pushing themselves in order for the vision to become a reality.

Step8- Create a new culture

The old traditions of the business need to become the past and future should be embraced Coca-Cola could do this by leaving the high sugar content drinks behind and getting onboard with Innocent into the healthier beverages, with a strong brand name people may trust the drinks.

The method above is a simple 8 step rule of trying overcoming change management issues but time constraints need to be taken into account as it can be a lengthy process trying to get everyone on side.

References

http://tutor2u.net/business/strategy/ansoff_matrix.htm

http://www.innocentdrinks.co.uk/

http://books.google.co.uk/books?id=3Prwx2sWtPsC&pg=PA583&lpg=PA583&dq=DAVID+RAINEY+NPD+MODEL&source=bl&ots=vJ6Z37tZKT&sig=i8sT69tygn6cSHd3yuYTVRtuwAk&hl=en&ei=5kbYS-WdF4z0mAPezMCnCA&sa=X&oi=book_result&ct=result&resnum=1&ved=0CAYQ6AEwAA#v=onepage&q&f=false (PAGE 10)

http://www.coca-cola.co.uk/About_Us/

Kotter, J., and Rathgeber, H., (2006) Our Iceberg is Melting : Changing and Succeeding Under Any Conditions Pan Macmillan Ltd, London

Categories
Free Essays

The value of knowledge: the role of Knowledge Management and Innovation

Introduction

Knowledge is a powerful weapon for any institution, whether belonging to business, politics, social work or art. It plays a vital role in the functioning of any organisation, especially if the organisation is a business organisation seeking to take maximum advantage of the knowledge that it is has collected and organised, making sure it is managed in a proper way. Systematic organisation of knowledge ensures superiority of the firm over its competitors. The concept of knowledge management refers to modifying the present set of organisational processes so that the level of productivity as well as its outcomes can be enhanced. The key to knowledge management is to understand the value of every part of knowledge; the fast-moving business environment of today is entirely knowledge driven and dependent upon it. The knowledge outcomes of an organisation are not directly managed, integrated or created by the knowledge management but knowledge processes of the organisation are influenced by the knowledge management and also influence the knowledge outcomes (Firestone and McElory 2005).

The term innovation has its genesis from the Latin word “innovatio”, which means renew or change. Renewal or improvement in things is a form of innovation; it brings a change in existing things or brings entirely new things into the market, as the consequence of innovation is novelty. When an individual or unit of adoption perceive any idea, practice or object as new, it is known as innovation (Roger 1962). Innovation comes about when an individual attempts to change his thinking process and decision making process and begins to think “out of the box”. Innovation brings along a complete transformation and replaces old settings with new and better processes. Innovation can be introduced in various fields such as technology, engineering, sociology, business, design, and economics. Furthermore, innovation is brought about in these areas by identifying opportunities and taking the maximum advantages (Rogers 1962). Both innovation and knowledge management are heavily dependent on IT systems; no part of the organisation is untouched from the effect of technology. Hence, both these concepts have had to make themselves technology enabled; it turned into innovation and knowledge management systems.

Knowledge has been a matter of concern from a long period of time for scholars and researchers. The systematic development of the concept of knowledge management took place in last 15-20 years. This concept assumes that, just as human beings are not able to utilise the full potential of their brain, an organisation is also unable to fully utilise the available information; hence, the need of knowledge management arises (Geisler and Wickramasinghe 2009). By introducing knowledge management, an organisation can classify the knowledge into different categories such as confidential, important and moderate. On the basis of this classification, it can be distributed among the workforces, which in turn will utilise the knowledge for creating better outputs (Christensen 2003).

Organisational learning and knowledge management are complementary to each other. Organisational learning has been regarded as the way in which an organisation learns or adapts new things. In this concept, the organisation uses some organisational theories and models that facilitate the process of its learning. Organisational learning seeks to apply knowledge and then develop or create outcomes based on this knowledge. Organisational learning has been regarded as the “bridge between working and innovating.” Similarly to individuals, organisations also need to learn. This learning may come from past experiences or failures or from any other learning program. An organisation needs to learn to be competitive in the present environment (John 2002).

Organisational learning and knowledge management have an inter-relationship because an organisation can learn only with the help of knowledge. However, organisational learning is concerned with the processes whilst knowledge management is concerned with the content of knowledge obtained, created and processed by the organisation. In addition to this, the ultimate goal of knowledge management (KM) is to enhance organisational learning (OL). KM motivates the practices which create, distribute and apply the knowledge in real functioning because the organisation can achieve its goals and objectives by adopting such practices only. From this point of view, it can be said that with the help of organisational learning, an organisation can utilise available knowledge in a better way (Easterby-Smith, Araujo and Burgoyne 1999).

Organisational learning plays an important role in knowledge management. The importance of the concept of organisational learning is increasing gradually with the development of the technology. Technology itself is a part of knowledge and technological implication enhances the level of organisational learning. In addition to the technology, human resources of an organisation are the biggest source of knowledge for the organisation. It is the human resource of any organisation, which learns and applies any knowledge and derives fruitful results. Thus, they learn and in turn the whole organisation learns something new and can find its competitive edge and contribute towards knowledge management (Easterby-Smith and Lyles 2005).

In this process, information and knowledge have a prominent role to play. It is only through the availability of the information and knowledge that an organisation guides its way towards organisational learning. The whole process of organisational learning starts with the procedure of collecting precious information about outside happenings so that it can formulate strategies accordingly. Information and knowledge facilitate the organisational learning by providing necessary information, which is essential to polish the learning capabilities of the organisation. When using the term ‘organisational learning’ then the artificial legal entity that is an organisation does not actually learn itself but its sub-parts, like the human resource and other processes learn and develop. Similarly, accumulation of accurate and timely information is necessary for the application of the knowledge in knowledge management (King 2009).

In knowledge management, it is necessary for an organisation to be aware of events that take place in its surroundings as well as in the far-fetched marketplaces. Knowledge management has become an integral part of the organisation because without the presence of well developed knowledge management systems, organisations cannot create, disseminate and apply the knowledge. Sometimes, even the nuances of the information play an important role in its learning. In addition to the outside knowledge, an organisation should have knowledge about its inside functioning, without the knowledge of this aspect even best of the outside information will be of no use.

In addition to this, it is crucial for the organisation to be aware of the activities of its competitors. Even if the organisation market leader, it needs to have accurate knowledge about its competitors’ move. If it is not concerned about the competitors’ actions then its research and development department needs to be extraordinary so that it can be one step ahead from its competitors. However, it cannot be said for certain that having a potential R&D department would be enough for the organisation because its competitors are also striving for a competitive edge. In addition to this, the organisation needs to have knowledge about the technological changes, international trade and government’s policies.

Knowledge has the power and value to change the organisation; hence, such critical issue needs to be managed. Even though the control function in managerial functions come at the end, it is crucial in managing knowledge. Control needs to be exercised on matters like how to use and disseminate knowledge. Control is not only exercised over the employees who have knowledge, but also on the employees who does not possess knowledge. In addition to this, the control function is necessary because of the manipulation and distortion of knowledge. Adequate knowledge control ensures that knowledge is utilised in favour of the organisation and positively influences the organisational performance (Krogh and Roos 1996).

Furthermore, knowledge should be handled in a way that proves it is legitimate. Knowledge that does not have any relation within the organisational context is a waste of time and money. At times, knowledge can be false and may not possess the importance in an organisational context, which the knowledge manager claims. In such circumstances, knowledge managers should try to collect the accurate knowledge and avoid the unnecessary part. After acquiring the legitimate knowledge, it should be shared with all the employees of the organisation. Every employee on all levels of the firm should be provided with the necessary knowledge so that they can perform accordingly.

The business environment is highly dependent on I.T., computer-based systems play an important role in managing knowledge. Knowledge management system helps in the collection of data, classification, dissemination and utilisation of the information. With the help of internet, companies can collect information regarding latest innovations in the industry and accordingly update its process. Confidentiality is another important feature of knowledge management because all the information cannot be disseminated to every employee. Some of them are confidential in nature, which need to be kept secret. Such knowledge can be connected with new product launches for example, marketing strategy and so on (Krogh and Roos 1996).

There are seven main recent trends in the field of knowledge management. The latest trend among them is convergence which deals with the international management approaches in the field on knowledge. In this growing trend of knowledge management various approaches, practices and concepts if international organisations are clubbed together so as to gain maximum benefit from them. This trend has the view of introducing innovation in information and communication technology and in the consultative approach. This trend is mainly concerned with private sector, knowledge management experiments, social science, evolution of technology, civil society engagement and multi-stakeholder processes and so on (Creech 2005).

Another trend is related with transition i.e. it is developing through various stages. Knowledge management systems are related to creating, developing and dissemination. It provides the facility of knowledge mapping, storage and retrieval to the user. In this transition stage, now the knowledge management can establish direct interaction with the user and who wants to obtain knowledge as well as share the knowledge. Another emerging trend is knowledge mobilisation which influences the working of the organisation. Initially the focus was on establishing a network within the organisation, so that employees can share knowledge and take maximum benefit of this knowledge. Knowledge mobilisation explains that internal and external information should be integrated, so as to develop a new form of knowledge.

Along with these trends, social capital and social networks are also important trends. Social capital states that although one’s knowledge is important, one cannot avoid establishing social connections, which in turn will give them better knowledge. Social networks on the other hand, refer to how information is flowing through these relationships. In addition to this, open source is also one of the attractive trends of knowledge management. This trend states that in knowledge-based organisations, codes of knowledgeable programmes are open to all so that everyone has the potential to gain, hence its name ‘open source’. Another trend is related with the collaboration of different modalities which is concerned with improving the quality of the knowledge. The last and most important trend is adaptive management which refers to adapt every change in the environment (Creech 2005).

Today’s organisations are known as knowledge-based organisations because they cannot survive without having accurate knowledge about external and internal operations of the organisation. Knowledge is essential for success and beating competitors in difficult market conditions. A business starts with an idea and a valuable idea can only be conceived through good knowledge of surroundings. From the inception of a business, through to its processing and end of its life cycle, knowledge is necessary. With the help of knowledge, we rely on innovation to bring about the processes of the business. Without important knowledge about the business and its related elements, innovation cannot thrive within the organisation.

Innovation is the tool through which knowledge is utilised to create a new product and services which are desired by the customers. Innovation has been regarded as the intelligent combination of invention and commercialisation because through innovation, a company earns money by offering totally new products to the market. Innovation is related with new knowledge which in turn may be related with market and technology. The technology sector has the most fast-changing process; as soon as a new product has been unleashed, something more advanced is ready to replace it. Components, linkage and processes altogether form technological knowledge. Market knowledge, on the other hand, relates to the knowledge of the customer’s tastes and preferences and market dynamics.

Knowledge is not a chance relative to innovation, it is the meaningful information which provides a base for the creation of the innovation. Knowledge is a combination of related information, experience and insight, which helps in developing new knowledge and experience. With the help of this new knowledge, new innovations are also created so as to enable the organisation with competitive advantage. In this process, knowledge management also plays an important role by learning from history to develop innovation. One of the important functions of knowledge management is sending the necessary information to the right person, so as to enable them in creating meaningful innovations (Popadiuk and Choo 2006).

Most of the companies motivate knowledge sharing among the employees so that they can have a good level of knowledge about the organisational goals and objectives and contribute towards them accordingly. With the rapid growth of competition in the business environment, business organisations are intensively searching for the strategies that can help them achieve sustainable competitive advantage. These strategies need to be such that the firm can differentiate its products and services from the competitors and be innovative. In this context, a well formed knowledge management system helps the organisation to create knowledge and excel at the marketplace. Thus, knowledge and innovation have a strong and complex relationship because on one hand, it creates competitive advantage for the firm and it is not always necessary that it would create some miracle for the organisation on the other (Popadiuk and Choo 2006).

Knowledge management, organisational learning and innovations are key components of this paper. All of these components are necessary for the development of the organisation. Knowledge management is the key foundation for acquiring, managing and integrating knowledge for the purpose of the innovation. This enables the organisation to create a suitable basis for innovation. Innovation in turn is necessary for the sustainable competitive advantage. In this competitive business environment, no firm can survive without introducing constant innovations in the firm. Organisational learning is related with the learning capabilities of the organisation as a whole. Thus, this paper can be concluded by saying that all three concepts entwined and are important for the organisation to gain and sustain competitive advantage.

References

Rogers, M. 1962. Diffusion of Innovations. Glencoe: Free Press.

Firestone, J. and McElory, M. 2005. Doing Knowledge Management. The Learning Organisation Journal, 12(5), pp. 1-29.

Christensen, P. 2003. Knowledge Management: Perspectives and Pitfalls. Copenhagen: Copenhagen Business School Press.

Geisler, E. and Wickramasinghe, N. 2009. Principles of knowledge management: theory, practices, and cases. New York: M.E. Sharpe.

John, D. 2002. Organisational Learning and Effectiveness. London: Routledge.

Easterby-Smith, M. Araujo, L. and Burgoyne, J. 1999. Organizational learning and the learning organization: developments in theory and practice. London: SAGE.

Easterby-Smith, M. and Lyles, M. 2005. The Blackwell handbook of organizational learning and knowledge management. Oxford: Wiley-Blackwell.

King, W. 2009. Knowledge Management and Organizational Learning. Pittsburgh: Springer.

Krogh, G. and Roos, J. 1996. Managing knowledge: perspectives on cooperation and competition. London:SAGE.

Creech, H. 2005. A Synopsis of Trends in Knowledge Management. [Online]. Available at: www.iisd.org/pdf/2006/networks_km_trends.pdf [Accessed on: 28 April, 2011].

Popadiuk, S. and Choo, C. 2006. Innovation and Knowledge Creation: How are these Concepts Related. International Journal of Information Management 26, pp. 302–312.

Categories
Free Essays

Building organisational culture that encourages innovation in Higher Institutions in the UK

Introduction

The motive for researching this topic is to examine how the way of doing things in an organisation influences innovation from the perception of education. Organisational culture is a very essential determinant of the employees’ behaviour in an organisation and encompasses what the core strengths of an organisation are and what has worked well in the past. It influences how innovative individuals or groups of people are in an organisation. Every organisation that exists has their own culture of doing things. Organisational culture in the higher institutions influences the quality of students produced by a school and the level of knowledge sharing determines how innovative the students are in their learning.

The reason why I am looking into the education sector is that the kind of student produced by a school will determine the kind of employees in the working environment. Graduates are the products being produced by higher institutions. These students are the determinants of the culture existing in an organisation whether strong or weak, and quality of employees we could find in organisations in the future. The stakeholders in the academics have a great impact of change to make on their economy through whichever organisation they find themselves. The culture in every organisation influences the products or services they offer. Innovation is not only restricted to manufacturing firms, service industries and so many other industries but also education sector is there with lot of ideas to consider innovatively. Any organisation where learning and knowledge sharing occurs, there is tendency for them to be innovative.

The school should ensure maintaining a strong organisational culture to keep the students and tutors informed and build them to be innovative , creative based on the learning given to them and knowledge sharing they have gained during their experience as a student. They are able to represent a good image of the school wherever they go and employers can see those quality students who are qualified, being able to perform and deliver value to any organisation they find themselves. Is it all about a strong organisational culture or quality organisational cultureIt appears organisational culture has a great influence on the quality of graduates produces by University of Wales, Newport. It is imperative that the culture of an organisation should not only be strong but also be of a good quality that has great values to add to individuals in the organisation. There should be connection between the culture of the organisation and its values. Blanchard, K et al (2008) argued that, ‘anytime there is cessation between specified values and the way an organisation function, the ethics displayed are ignored. He also said the genuine culture and values always speak louder than the specified ones.’

In the process of ensuring effective culture in an organisation to achieve success, there is tendency for an organisation to make changes at some point in time, which needs to be managed effectively to make sure it does not affect the individuals in the organisation. It is in the process of these changes that learning and knowledge sharing still continues. It is therefore based on this learning and knowledge that innovative and creative ideas comes up and every organisation try to work towards building good corporate values in order to accelerate innovation, learning, knowledge, and creativity in their organisation. Creativity and innovation is not only for organisation but can also be related to individual people. The tutors and the school top management must try to be innovative and creative in the way they function in University of Wales, Newport in order to materialise the mission of the university.

Students are the major stakeholders in the university, therefore, they should be able to deliver good work innovatively, and creatively more than what the tutor has taught them. This can also be linked to the way organisational culture may be stimulated in an organisation through learning, knowledge, creativity, and innovation. Various authors have talked on these and I will build on it by making sure I add to the existing knowledge which is from the perspective of educations and I will be giving some authors’ works and thought from articles and textbooks to defend my explanation.

LITERATURE REVIEW

LITERATURE REVIEW: ON MAIN THEORETICAL FRAMEWORK

The organisational culture of an organisation is a picture of what and how things are done in the organisation. I have found some major frameworks developed by other authors in the process of my research. The literature review will consider different definitions about organisational culture and its role in the organisation. However, the popular definition of organisational culture is, ‘the way we do things around here.’ Terblanche, F et al (2003) defined organisational culture as, ‘mutual beliefs, and values genuinely placed in an organisation.’ Campeanu-Sonea, E et al (2010) cites the work of Armstrong (2006) that, ‘organisational culture is the form of beliefs, customs, and attitudes that are unlikely to be expressed but structures the mode of people’s behaviour and getting things.’ These standards and assumptions are preserved as people continue to relate with one another in the organisation.

Terblanche, F et al (2003) discussed some roles of organisational culture by citing the work of Furnham and Gunter (1993) that, ‘it helps in internal integration such as socialising and commitment of employees’ to the organisation. It also helps create a competitive advantage, understanding the environment and enhance communication and mutual understanding.’ Johnson, G et al (2010 p.168) conferred that, ‘organisational culture contributes to how groups of people respond and behave in relation to what they face.it has an influence on the development and change of organisational strategy.’ I will consider more of these definitions and roles of organisational culture by analysing in details in my literature review.

More so, the concept of innovation is very crucial for the success of an organisation. Huczynski and Buchannan(2010) inferred that, ‘innovation is unrestricted to new products and most organisations wants to construct an inventive style to organise, develop new and better working practices, and deliver customers and clients with novel service.’ This definition is limited by not considering why they develop ideas and commit to creative process. Brychan, T et al (2011) strongly argues by citing the work of Baregheh et al (2009 p. 10) that innovation is, ‘the multi-stage process whereby organisations transform ideas into new/improved products, services or process in order to advance, compete and differentiate themselves magnificently in their marketplace.’

It appears most organisations makes attempt to be innovative and creative in their activities. When an organisation comes up with ideas, there is need to implement it because without implementation, there cannot be innovation and the innovation will bring about changes to the organisation. Rogers (2003) argued that, ‘innovations is perceived by individuals as one with numerous fundamental benefit, consistent, apparent and less intricate can be easily acknowledged than others.’(Haggman, K.S 2009) To manage innovation effectively, knowledge is very essential. Henry, J (2001 p.64) conferred that, ‘the moment organisations becomes innovative, they construct fresh knowledge and information, from the inside out, in order to express again both the problems and solutions and reform their environment in the process.’

Furthermore, organisational culture and innovation tends to relate in some ways. Martins and Terblanche (2003) described some key determinants of organisational culture, ‘which are strategy, structure, communication, supporting mechanism, and behaviours that encourage creativity. These determinants rely on and interact with one another.’ There is a strong link between organisation culture and employee’s attitude. Gregory, B et al (2009) argued that, ‘individuals in an organisation use the culture as a determinants for their expected behaviour to decide the kind of behaviour that fits a particular situation.’ Valencia, N et al (2010) argued that, ‘organisational culture is one of the aspects that encourage innovative behaviour among individuals in the organisation.’ Terblanche et al (2003) concluded that, ‘organisational culture affects the degree to which inventive clarifications are stimulated, sustained and realised through socialisation process of organisations, individuals learn what behaviour is acceptable and how activities should function.’ It shows it is very vital for an organisation to ensure innovative ideas in whatever type of business they are in and maintain a quality and strong culture.

Valencia, N et al(2010) conferred that, ‘to ensure a competitive edge that is sustainable and succeed in the market, innovation is very crucial because firms that are innovative can sustain themselves when the environment is unstable, respond quickly to changes , create novel opportunities and take advantage of existing market to a greater extent than the competition.’ Organisational culture is a facilitating factor for learning to take place in an organisation and every organisation needs to imbibe a learning culture as a basis for openness for innovative ideas. Rebelo and Gomez (2009) concluded that, ‘learning culture concerned with elevation and facilitating of employees learning, sharing, and spreading in order to contribute to the growth and performance of the organisation.’(Rebelo and Gomez, 2011)

Different definitions were even given for a learning organisation. King, W (2001)argued that, ‘ a learning organisation is one that focuses on developing and using its information and knowledge capabilities in creating highly valued information and knowledge, to change behaviours and improve final outcome.’ Senge, P (1990) defines a learning organisation to be, ‘an organisation that is escalating its capabilities unceasingly to build its future.’(Graham and Nafukho, 2007) This literature review will be critically assessed comprehensively by the start of my dissertation.

LITERATURE ON THE CHOSEN SECTOR

The education sector is one of the important sectors in the entire sector in the UK. It is very challenging and has a very significant influence in the career of individuals because people continue to learn and add to their knowledge every day. My sector will be narrowed down to University of Wales, Newport and the Newport Business school and School of art will be coming together in the next session, the reason for this will be researched later. Recently, there has been increase in school fees of home students, which has caused protests from students. Jamila, M et al(2008) argued that, ‘it is imperative for higher institutions to have customer focus in pursuing excellence in education and top management must ensure quality of undergraduates and graduates students by developing professional abilities of individuals involved in the delivery of teaching and learning. More so, cultivate fresh and flexible ways of learning, teaching and assessing, and exploiting new technologies whenever necessary.’ The school fees remains the same in Wales except for Aberystwyth University that has given it consideration and concluded that only students from other places are going to be paying the ?9000 by September 2012.

According to Eddie, B et al in their paper research, there is a vision 2035 with the aim of reducing foreign students and globalise as they realise the students do not get adequate work experience to complement their learning. The students need to study in their home country to be able to benefit their economy and society as a whole. The Higher Education Funding Council in England is also planning for a 10 years vision to increase merged Further Education (FE) and Higher Education (HE) institution as Joint Corporation.

RESEARCH METHODOLOGY

5.1. Research Paradigms: In order to achieve my aims and objectives, the research paradigms that will be used is positivism because it will test hypothesis and it will help me to show I have achieved validity and reliability. More so, this research will focus on facts from the respondents. It would give me the chance to consult different students from different departments and backgrounds. This will also help me to develop ideas through induction from data collected.

5.2. Research Approach: The approach taken to this research is a quantitative research, as it will help analyses of measurement within data. The research approach will be carried out by conducting a primary research that involves collecting original data from management that makes decision and plan for the running of the university. The secondary data will be gathered from information that will be useful for critical arguments in the literature review and help to explore different authors’ opinion and arguments. Secondary data would be collected from proper journals, refereed articles, textbooks, and official reports from departments/international organisation.

5.3. Research method: The Research Methods to be used in carrying out this research is a questionnaire and observation. With my experience in the University, I have observed a lot but more will still need to be done to carry out a successful work. Bryman and Bell (2011) concluded that, ‘it is possible to record incidents, observe, and record for a short period of time at some intervals or for a long period of time.’ However, the questionnaires will be administered to students in order to test hypothesis because it allows anonymity and can be much clarified but it takes long to analyse. The questionnaire will be self-administered after considering necessary ethical issues.

5.4. The sampling criteria are targeted towards students from different background, age group, course, and discipline. The reason for choosing student is to gather their opinions about how the culture of the university influences their performance and if in any way makes them to be innovative in their learning or keep to the same mode of doing things. It will also enable me to know whether the culture of this university influences them positively or someway negatively. The sample size will be 50 students to ensure my research will be realistic, as it will give me better opportunity to know the extent to which students will agree with some issues in the university, as they are the key determinants for the existence of this university. This would help draw on the existing data to get information from respondents to justify the literature review.

METHODS OF ANALYSISNG PRIMARY DATA

Since a quantitative method would be used to carry out my research, the data collected will be analysed using a SPSS. The relationship in my questions will determine whether to use univariate, bivariate or multivariate analysis. I intend to undertake more readings to ensure a well-presented analysis is carried out. I will research more to know the better options to do a quality and effective analysis.

ETHICAL CONSIDERATIONS

The identity of my respondents will be kept confidential as they would want to be sincere about their opinions and might not want their names to be disclosed. I will ensure I protect their privacy as I know the research will give people the chance to give their honest opinions about the school whether the university is really building organisational culture that stimulates innovation through their students or not. I will ensure I get the consent of people before giving the questionnaire out to them and ensure I do not disclose the name of the respondents. I will ensure I use people’s data to support my dissertation with their consent. I will also ensure good behaviour even when some people failed to accept to fill the questionnaire or fail to turn up for the appointed time. The location to be chosen for filling questionnaires will be a suitable and comfortable place with adequate safety because without them, there cannot be a successful dissertation.

REFERENCES
BLANCHARD, K et al. 2008. Who Killed ChangeSolving the problem of leading people through change. London: HarperCollins Publishers
BRYMAN, A., and BELL, E. 2011. Business Research Methods. 3rd edn. United States: Oxford University Press.
BUCHANNAN, D.A and HUCZYNSKI, A.A. 2010. Organisational Behaviour. 7thedn. Harlow: Pearson Educational Limited.
CAMPEANU-SONEA, E. et al. 2010. Organisational culture in a transitional economy. Employee Relations. 32(3). pp. 328-344
EDDIE, BLASS et al. (PAPER RESEARCH). VISIONING 2035: THE FUTURE OF THE HIGHER EDUCATION SECTOR IN THE UK. [WWW] Error! Hyperlink reference not valid.. (15 June 2011)
HAGGMAN, K. S. 2009. Functional actions and perceptions of innovation attributes: Influence on innovation adoption. European Journal of Innovation Management. 12(3). Pp. 386-407
HENRY, J. 2001. Creative Management. 2nd edn. London: Sage Publications
GRAHAM, M. C. and NAFUKHO. M. F. 2007. Employees’ perception toward the dimension of culture in enhancing organizational learning. The Learning Organisation. 14(3). Pp. 281-292
GREGORY, T. B. et al. 2009. Organizational culture and effectiveness: A study of values, attitudes, and organizational outcomes. Journal of Business Research. 62(7). Pp. 673-679.
JAMILA, M et al. 2008. The role of organisational culture in stimulating creativity and innovation among engineering students. Conference paper. 05-December 2008. P 269- 276
JOHNSON, G. et al. 2011. . Exploring Strategy. 9th edn Harlow: Pearson Education Limited
TERBLANCHE, F and MARTINS, E.C. 2003. Building organisational culture that stimulates. European journals of Innovation Management. 6(1). Pp. 64-74
BRYCHAN, T. et al. 2011. INNOVATION AND SMALL BUSINESS- VOLUME 1. [Online book] http://bookboon.com/uk/textbooks/economics/innovation-and-small-business-volume-1. Cardiff: VENTUS PUBLISHING. (04 May 2011)
REBELO, M and GOMES, D. 2011. Conditioning factors of an organisational learning culture. Journal of Workplace Learning. 23(3). Pp. 173-194.
Valencia, N. J. et al. 2010. Organisational culture as determinants of product innovation. European Journal of Innovation Management. 13(4). Pp. 466-480

Categories
Free Essays

Innovation and Knowledge Management as a Source of Competitive Advantage – a case study of iphone and Blackberry

Abstract

A research proposal setting out a case study of Blackberry and iphone, looking at the role played by innovation and knowledge management for each brand, and how they have helped create competitive advantage.

1. Introduction

The following sets out my research proposal. It utilizes a case study approach, comparing and contrasting the mobile communications brands Blackberry and iphone and how they have harnessed the powers of innovation and knowledge management. It also looks at how each of these have contributed to the distinct market positions of each brand.

The iphone is made by Apple. Previously a maker of niche personal computers with a cult reputation, Apple achieved mass-market brand appeal with their launch of the ipod music device. They built upon this success with the launch in 2007 of their ‘iphone’, a ‘smart’ phone (a device which, in addition to offering mobile calls, also has many of the functions of a personal computer including internet browsing, email connectivity and access to music). Smart phones had been around for some years, , but were largely confined to corporate users: the iphone brought the concept to the general consumer (Porter and Norton 2010).

Blackberry phones are made by Research in Motion Ltd (RIM), a North American company specializing in smart phones. Until recently, Blackberry served the corporate market primarily: however in 2008 Blackberry they two phones designed to tap into the lucrative consumer market (Hutt and Speh 2009). The Blackberry is currently market leader in the USA: In 2008, RIM’s share of the smart phone market in the USA was 45%, compared to iphone’s 25% (Hutt and Speh 2009). However, globally, neither brand has a strong presence, with Apple taking a share of just 0.9%, and Research in Motion 1.9%. Nokia, by comparison, leads at 40% (Pride and Ferrell 2011). In terms of the market in the developed world, however, evidence suggests that “competition in [the] smartphone market is heating up”, and new players including Dell and Microsoft seem likely to move into the market (Butcher 2010). Microsoft, for example, seem likely to partner Nokia, who have recently lost their share of the market in the developed world. A growth to 10% of market share in the US is predicted by 2015 for this partnership. Samsung are also likely to grow their share of the US market, predicted to rise to 21% over the next four years (Strategy Analytics 2011). The smart phone arena has been described as ‘cut throat’ already, with tight margins and a fast moving pace. New developments could include a a move towards ‘open’ systems, rather than the ‘closed’ ones (i.e. operating systems which are unique to the brand) favoured by Apple and RIM (Butcher 2010). Given this, there is now more need than ever before to assess how competitive advantage can be accessed in this market sector, and to find tools that can be used to ensure an organization obtains and keeps a place as a market leader. In the light of this, this study addresses this need.

The following proposal will give a brief overview of the areas to be covered in the literature review, including approaches to gathering information and a brief overview of topics to be covered. This will be followed by a discussion of the proposed methodology, justifying the selection of methods and explaining their use, and also covering any ethical considerations and limitations. In addition, the research areas, specific research problems and overall objectives will be set out, and a provisional time-frame presented.

2. Literature Review
2.1 Interest in Topic, Overview of Relevant Areas

My interest in the topic came about through an increasing awareness of the competitiveness in the ‘smart phone’ market in the UK, and particularly between iphone and Blackberry, with considerable loyalty to the brands from owners. Iphone in particular has a very loyal customer base (Standard and Poor 2009), although Blackberry has been nicknamed ‘crackberry’ due to the way users become ‘addicted’ to it (Strategic Direction 2009). There are, however, some some signs that Blackberry users are willing to switch loyalty and try another smart phone (Stafford [online] 2010). In this competitive market, it is important to understand in more detail how buyers become attracted to smart phones, and how their loyalty is retained. Is the loyalty that iphone owners, for example, often feel for their product due to better innovation and knowledge management compared with Research in Motion, or is it a product of marketing the phone as a ‘cult’ brand(Schneiders 2011).How can innovation and knowledge management contribute to the success or failure of smart phone brands?

Because smart phones have only been in existence for less than 10 years (Fling 2009), there is a lack of research in the area, with relatively few textbooks and academic articles looking at the subject. While some studies look at the two brands in terms of certain aspects ofcompetitive advantage, innovation and knowledge management, and far more studies look at the the brands in general, or take a technological approach, no existing studies seem to combine the elements of interest in one.Given the need to understand how companies operating in this area can develop competitive advantage, and also given this lack of existing research, I felt that the area was worthy of further study.The approach I will utilize is to draw upon existing theories of innovation and knowledge management in order to develop a framework, then execute a detailed case study of both brands in terms of this.

The notion of innovation has, over the last 20 years, become increasingly important in business management. The 80’s saw a wave of renewed interest in the concept, with an emphasis upon individualism and psychology. 80’s innovation theorists pointed out that individuals create companies and drive growth (Sundbo 1998). At the same time, others suggested that the social context in which the entrepreneurial individual operates is also crucial for fostering innovation: for example Peter Drucker (1985). For Drucker, innovation means a new attitude which involves sharing knowledge, and also means being aware of the wider business environment in which an organization operates (Drucker 2007).Another perspective on innovation highlights the importance of marketing, suggesting that innovation consists of reading market information and making informed decisions about what the consumer wants (Sundbo 1998). The literature review will explore and compare theories such as these in depth.

There are also a number of existing models of the link between innovation and competitive advantage which are useful. McGrath et al (1996), for example, propose a model rooted in economic theory which links competitive advantage to a number of factors including causal understanding, the proficiency of the innovation team, and the emergence and mobilization of the new technologies. Others point out the complex nature of the relationship between innovation and competitive advantage, and highlight other factors of importance (Lengnick-Hall, 1992). One particularly useful model was suggested by McKinsey and Company (Buaron 1981). They argued that any innovative and successful new business might utilize a ‘new game’ strategy, by reworking the ‘value chain’ which is predominant in the industry, in order to change the ‘rules of the game’, and protect the advantage they gain by this by erecting barriers to stop competitors being successful (Grant, 2005).

More generally, theories of competitive advantage are also useful. Various theories suggest the role of resources, for example, with both tangible and intangible resources playing a role in creating advantage. Others highlight the importance of company capabilities and competencies and strategy (Hill and Jones 2009). More general theories of competitive advantage, for example the resource-based view, will be used to throw light on the debate. In addition to these models, practical tools for looking at competitive advantage will be used, including appropriate means of analyzing the environment in which Apple and RIM operate. These will include, for example, Porter’s ‘Five Forces’ model, in which the environment is seen in terms of the ‘threat of new entrants’ in to the market, the ‘threat of substitutes’, the ‘bargaining power of suppliers’ and the ‘bargaining power of buyers’ to generate an overview of the competitive power of that organization within the industry. Other useful tools include Brandenburger and Nalebuff’s ‘Value Net’ (1996) which indentify four aspects which impact upon any organizations position: ‘customers’ ‘suppliers’, ‘competitors’ and ‘complementors’ (organizations whose products do not compete with but enhance those of the organization in question) (Avital 2004)

Similarly, there are various ways of defining and conceptualizing knowledge management, and what it can do for an organization. In brief, knowledge management can be defined as ‘finding, keeping and leveraging information assets’ (Avital 2004). There are three main approaches to information management, which are based upon beliefs about the nature of knowledge, and whether it is objective or subjective. Avital distinguishes the ‘codified knowledge repository’ approach, in which knowledge is independent and objective and can be best managed by computer-based databases or documents, the ‘expert directory’ approach, which holds that knowledge is subjective and found in individuals, and the ‘community of interest’ view, where knowledge is seen as a function of a community of connected individuals. Other ways of approaching the matter include making a distinction between data (raw, context free), information (interpreted data, data with meaning) and knowledge (information plus understanding, able to inspire action). This 3-part model can be seen as a hierarchy of use (Geoff and Jones 2003). Knowledge can also be divided into the tacit and the explicit: tacit knowledge is knowledge which is internal to a person, but is not made explicit and is hence personal to the user; explicit knowledge is knowledge which has been written down or otherwise recorded and is thus available for use by others.Knowledge management often involves the process of making tacit knowledge explicit (Geoff and Jones 2003). Ways of applying insights about knowledge management are various, and can include bringing people and groups together collaboratively through all the available means of communication, being able to access expert knowledge easily (this can be facilitated by teamwork or enhanced communication), and developing a strong ‘community of practice’, a group of people with shared interests and expertise who are happy to share their abilities. Other useful tools include the fast availability of information, creating networking opportunities, and an in-depth knowledge of the organisation’s knowledge bank (Marquardt 1996)

The literature review will also look at iphone and Blackberry in detail.The history of both brands will be discussed, and also the wider context of Research in Motion and Apple, looking at their genesis, key markets, strategies and other areas. The telecommunications market in general, and the market for Smart phones will be discussed. Quantitative data concerning performance of each brand, and their market share in the US, Europe and globally, will also be presented. Overall the literature review will help clarify research objectives and questions, and present a foundation for the subsequent analysis and interpretation.

2.2 Research Area, Research Problems, Research Objectives

Both Blackberry and iphone have carved out a niche within the European and US market. This research study will investigate how innovation and management of knowledge (both within and outside the organizations) have contributed to creating these positions as market leaders. It will also look at the extent to which Blackberry is likely to remain in leading position, or whether iphone’s use of knowledge management and innovation mean that this brand is likely to overtake as leader. This area of research interest can be stated as research problems as follows:

How have the Blackberry and iphone brands used innovation to create competitive advantage
How have the Blackberry and iphone brands used knowledge management to create competitive advantage
Given their innovation and knowledge management resources, are Blackberry likely to retain market leading position, or will the iphone take over

The objective of carrying out this research is to look at the input both innovation and knowledge management can have upon a brand’s success. By looking at the ways each feed into this success, by highlighting what approaches are not successful, and by analyzing the factors involved in this process, it is hoped that the research will help show how organizations can better address the challenges of today’s rapidly changing mobile telecommunications marketplace. Because the area is so new, with smart phones only in existence for the last ten years, there is little existing research in the area. While there are many useful theoretical studies of wider concepts including innovation, knowledge management and competitive advantage, few have applied these to either iphone and Blackberry. In addition, the fast pace of technological change means that organizations need to react quickly to changes in the operating environment, so any research which does look specifically at the area is quickly out of date.

3. Methodology
3.1 Approach and Choice of Methods

The research will be informed by a positivist research philosophy. Positivism holds that knowledge is objective, and independent of the researcher. It is based upon epistemological (theories about how knowledge is possible, and how it is validated) assumptions concerning the ultimate reality of the world and its independence from the human subject. This study will assume that knowledge is sharable and objective. Alternative research approaches have been rejected for this study. An interpretivist approach, which holds that social interaction is the basis for knowledge and which suggests that the researcher has an important influence on what is researched, and hence claims that objectivity is not possible (O’Donoghue, 2007) was held inappropriate. I believe that the study will uncover key information about iphone and Blackberry which can be validated by others.

The study will also use a deductive, scientific approach. In deductive research, the study begins with theories about how the world is expected to behave, and derives testable hypotheses from these theories. Deductive reasoning requires a logical approach. It is contrasted with an inductive approach, in which information is collected and patterns are found in the data, which lead to subsequent generation of theories about these patterns (Babbie 2010). In this case, firm ideas about the impact of innovation and knowledge management lead to hypotheses suggesting that these factors can lead to competitive success.

The proposed research will use a case study approach, looking at Blackberry and iphone in the context of theories examined through the literature review. Data will be collected from secondary, as opposed to primary sources. In primary research, information is collected for the first time for the purposes of the study. Sources of primary data can include surveys, observation and experiments. Secondary data is data which has already been collected. It can include academic journals and books, databases from industry and government sources, and official records (McDaniel and Gates 1998). Given the relative lack of information about these brands use of innovation and knowledge management, there is an argument to combine secondary data with a primary study, for example carrying out interviews with key management at Blackberry and iphone asking about their use of innovation and knowledge management. This, like primary research in general, would allow the data collected to be tailored to the exact research questions (Allen and Skinner 1991), and also add to the body of existing studies. However, this method was rejected in this case, as it was thought that a more extensive literature review based study would allow for the full development of useful theoretical models to assess the case of Blackberry and iphone. It was also thought that although there are no studies which look into the precise research area suggested, there is much material available about each of the brands concerned, and this material has not, so far, been approached in relation to wider research aims of this sort. It was also felt that a secondary-sourced study could form the backbone for subsequent primary research studies collecting data to be set in the context of the current research.

3.2 Data Collection

Key academic online and library sources will be used to collect papers, books and databases regarding the issues in question.The university library will give access to relevant journals and textbooks. Useful journals include general business journals, for example the Harvard Business Review, Strategic Management Journal, Academy of Management Journal, and Journal of Marketing. There are also a number of specialist journals covering innovation (for example Innovation Management and knowledge management (Knowledge Management, the Journal of Knowledge Management) and related areas.

Online searches will be key in gathering data, as they allow numerous journals to be searched for key words. There are a number of useful academic databases which include both business-specific databases such as Emerald, Bloomberg, Business Source Premier, Datastream and Global Market Information Database; and general databases with business coverage including Academic Search Premier, IngentiaConnect and JSTOR. These databases will be interrogated through key word searches. Terms used for these searches will include ‘Blackberry’, ‘iphone’, ‘smartphones’, ‘innovation’, ‘competitive advantage’ ‘information mangagement’ and ‘knowledge management’. These terms will be used in combination together, to find literature which already covers the area of interest, but also alone and in combination of just two terms, in case a search on all terms yields insufficient information, and to get further background on theoretical approaches to knowledge management, for example. Should the searches return too much information, advanced search techniques will be used to restrict articles to those from the last five years only, or looking at the UK only.Overall, access to data should be unproblematic, to the extent that the data exists, as the author can use a number of these business databases and other information sources via the university. However, as pointed out above, there seems to be a relative lack of literature which looks at all aspects of the research study. For this reason, academic data will be supplemented by information gleaned from commercial information sources such as Keynote and Euromonitor. These supply a number of reports looking at market areas, for example the mobile phone market, and include a wealth of useful statistics about phone ownership by brand, for example (Keynote 2010). Mintel also produce useful reports, including a regular update on digital trends (Mintel 2011). Another central source will be information from Research in Motion and Apple themselves, as well as the internet sites for Blackberry and iphone. Their websites contain a wealth of useful information including annual reports on financial status. The sites also contain information for the press, though of course this is likely to be subject to bias.

The reliability, validity and generalisability of information can usually be assured by using where possible, meta-analyses of data and avoiding non-academic sources such as unverified internet websites. However, it has already been established that there is relatively little available information of this type. With this in mind, the study will include information from a wider range of sources, but will bear in mind the issues regarding reliability and validity this might raise.

Because the study is primary research only, questions of ethics are less relevant, as the study does not involve human subjects direct. However, It is important to at least think about the ethics of the research, not just from the point of view of the researcher but from the position of all stakeholders (interested parties). For example, the research should be carried out honesty and accurately (Wilson 2010). In this case, I will attribute all textual sources to the correct author, and interpret the information as best as possible

3.3 Data Analysis

Data analysis will consist of interpretation of the data collected about iphone and Blackberry in the context of theoretical perspectives on the roles played by innovation and knowledge management in creating advantage. Do either organization display particular approaches which means they have been more successfulHow do the approaches of Blackberry and iphone compareThe information discussed will also generate recommendations for other players in the mobile phone market. A number of considerations will be kept in mind, in order to analyse the data in the most appropriate and rigourous way. As Boslaugh points out, it is vital to ask, for any piece of information, what the original purpose of collecting it was, what kind of data it represents, how it was collected and when.If the data is quantitative, for example a database, it is also important to know if it has been cleaned or recoded. Because at least some of the information from this study will be collected from sources which are likely to be biased towards a particular viewpoint, primarily the information from RIM and Apple, it is particularly important to be aware of the background, and separate out data which can be used from data which is being used for a promotional end by the organization. This will be the case particularly for press releases and other data designed for the media. However, even with academic studies, it is also important to know as much as possible about the details of the study, for example, if questionnaires were used to collect data, how they were worded, and how respondents were selected (Boslaugh). It will also be important to be aware of the size of any primary study (how many cases were considered), and how any results are interpreted in terms of the research aims. In general, information gathered about models and theories of innovation, knowledge management and competitive advantage will shape the approach to case studies of Blackberry and iphone. Data gathered about the companies will be interpreted in the light of these theories.

Finally, it should be pointed out that there are clear limitations on the research. As mentioned, the study will be limited to published information, rather than including a primary component, which would allow the research to be tailored to the objectives. However, it is hoped that the study will allow such primary research to be carried out more effectively at a later date.

4. Conclusion

The above has set out a structure for my research study, looking at the role innovation and knowledge management play in the competitive advantage of both Blackberry and iphone. The research area and proposed questions have been set out, areas to be included in the literature review were discussed, and the methodology to be used has been included.

4.1 Expected Findings / Implications
Based on my intuitive awareness of the two brands, on the image of each brand presented in the media, on the impression I have gained from hearing colleagues and friends talk about iphones and Blackberrys, and also upon the reading I have done so far for this study, I predict at this stage that iphone have a more comprehensive grasp on competitive advantage. I expect to find objective confirmation of this, and also evidence to suggest that their advantage comes from a better grasp of both ways of managing innovation and knowledge management. I expect the main limitation to be that previous study in this area is scant. Because the development of smart phones is very recent, there has been relatively little academic research in the area, and much of the existing information is technically related. Had more previous work existed, this would have been useful for the study. For instance, a body of existing work on how smart phone makers use both innovation and knowledge management would allow this study to have an academic context, and would give ideas about the interpretation of information. This is, to some extent, a disadvantage, however it also means that the planned study will present useful information which might be useful to see how organizations making smart phones might best approach the market. I also feel that the study will provide useful information and evidence which can be used in the future to shape primary studies in this area.
The time chart below sets out a list of activities which need to be carried out, stage by stage, and also shows the time period allocated to each. While the planning and design will take some time, as well the literature review, it is also important to allocate sufficient time to think over the findings, and interpret them. In particular, I feel it is important to allow a gap between data collection finishing and data analysis starting (the data analysis includes interpreting the case study in the light of overarching theories). The data analysis stage should also be given sufficient time, as new ideas might develop during this stage.
Time Chart

—————————— Stages (Weeks) —————————
Task123456789101112
Research design –– – –
Planning––––
Lit review/ data collection––––––
Data analysis–––––

Dissertation
Draft–––
Final––––

References

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Avital, M (2004) Constructive discourse and human organization, Emerald Group Publishing, Oxon.

Babbie, E (2010) The Practice of Social Research (12th edn.), Cengage Learning, Mason OH

Boslaugh, S (2007) Secondary Data Sources for Public Health: A Practical Guide, Cambridge University Press, Cambridge.

Brandenburger, A M and Nalebuff, B J (1996) Co-opetition, USA.

Buaron, R (1981) ‘New Game Strategies’, McKinsey Quarterly, Spring 1981, Issue 1

Butcher, D (2010) ‘Competition in smartphone market is heating up’, Mobile Marketer, May 18th 2010.

Drucker, P (2007) Innovation and Entrepreneurship: The classic Drucker collection (2nd edn)., Butterworth Heinemann, Oxon.

Fling, B (2009) Mobile Design and Development: Practical Concepts and Techniques for Creating Mobile Sites and Web Apps, O’Reilly Media, Inc., Sebastapol CA

Grant, R M (2005) Contemporary strategy analysis (5th edn.), Wiley-Blackwell, 2005 UK

Groff, T R, and T P Jones (2003) Introduction to Knowledge Management, Butterworth-Heinemann, Burlington, MA.

Hutt, M D and Speh, T W (2009) Business marketing management: B2B, Cengage Learning, Mason, OH.

Jones, G (2009) Strategic Management Theory: An Integrated Approach, Cengage Learning, Belmont CA.

Keynote (2010) Keynote Market Report 2010 ‘Mobile Phones’, Keynote, UK

Lengnick-Hall, C A (1992) ‘Innovation and Competitive Advantage: What We Know and What We Need to Learn’, Journal of Management, 18:2, 399-429

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McGrath, R G, Tsai, M-H, Venkataraman, S and MacMillan, I C (1996), Innovation, Competitive Advantage and Rent: A Model and Test, Management Science, 42:3, 389-403.

Marquardt, M (1996) Building the Learning Organization, McGraw-Hill, New York.

Mintel (2011) Mintel Digital Trends Spring – UK – April, Mintel, UK

O’Donoghue, T A (2007) Planning your qualitative research project: an introduction to interpretivist research in education, Taylor and Francis, Oxon.

Porter, G A and Norton, C L (2010) Financial Accounting: The Impact on Decision Makers (7th edn.), Cengage Learning, Mason OH.

Pride, W M (2011) Marketing (16th edn.), Cengage Learning, Mason OH.

Schneiders, S (2011) Apple’s Secret Of Success – Traditional Marketing Vs. Cult Marketing, Diplomica Verlag, Germany.

Stafford, P (2010) ‘RIM to launch BlackBerry tablet, but customer loyalty falling’, [online] (cited 11th June 2011), available from

http://www.smartcompany.com.au/information-technology/20100803-rim-to-launch-blackberry-tablet-but-blackberry-customer-loyalty-falling.htm

Standard & Poor (2009) Standard & Poor’s 500 Guide 2009, McGraw-Hill Professional, 2009 USA

Strategic Direction (2009) ‘BlackBerry still a favorite tasty treat Punching above its weight in brand icon stakes’, Strategic Direction, 25:5, 5-7.

Strategy Analytics (2011) ‘US Smartphone Market Competition Set to Heat Up’, [online], cited 11th June 2011, available from

http://www.euroinvestor.co.uk/news/story.aspx?id=11661973&bw=20110317005136

Sundbo, J (1998) The theory of innovation: enterpreneurs, technology and strategy New horizons in the economics of innovation, Elgar Publishing, Cheltenham, Glos.

Wilson, J (2010) Essentials of Business Research: A Guide to Doing Your Research, SAGE Publications Ltd, 2010 London, Thousand Oaks, CA.

Categories
Free Essays

Innovation in a small business context: Factors that contribute to successful innovation in small firms

Abstract

Innovation is essential in the modern day business environment in the quest to satisfy the needs and expectations of customers thereby driving their preference. Continual change and evolution in the business environment among several other factors exert unrelenting pressure on business firms to develop and implement strategies to adapt and sustain their competitiveness. This is especially true for small businesses given their low capacity and predominant lack of expendable resources to facilitate experimentation and innovative shifts.

Factors that contribute to successful innovation in small firms are identified and explored. These include their flexibility and adaptability in response to changing market demand and evolving needs; lean organizational structures enhancing flexibility and speed in decision-making and performance of tasks; efficiency and effectiveness in the use of meager resources, given their lack of expendable resources; their potential for focus on particular areas of corporate strategy enhanced by their simple and lean corporate/organizational structure and smaller scale which enables easier switching to new developments; and, the particular traits of individual participants in the workforce which are unhindered by bureaucracy and hierarchy, among others. Compared to larger corporations or firms, small businesses through the exploitation of these factors are able to better adapt to the fast paced innovation and technological cycles with successful innovations being their fundamental source of competitive advantage.

Introduction

Innovation refers to the process of translating an idea or invention into a good or service, creating value and further satisfying the needs and expectations of customers and thereby driving preference. It is also defined as the development of new values through solutions that meet inarticulate needs, new requirements, or adds value in new ways thereby meeting customer or market need (Bala, 2005; Tushman and O’Reilly, 1997). Innovation differs from improvement, which implies doing the same things in better ways, with innovation implying doing something different. Innovation can be in many forms and may include changes in products, processes, marketing, business models among others and is divided into two general classes: evolutionary innovation, which refers to the continuous, dynamic and evolutionary change brought about by incremental advances in technology and processes; and, revolutionary or discontinuous innovation, which are often disruptive and new (Baldwin, 1995; Utterback, 1994).

Continual change and evolution in the business environment among several other factors exert unrelenting pressure on business firms and organizations to develop and implement strategies to adapt (Tushman and O’Reilly, 1997; Carpenter and Sanders, 2007). This is especially so for small business given their low capacity and lack of significant expendable resources that can be used to facilitate innovative experiments and endeavours. Such pressure is enhanced by the increased pace of technological development and the breath-taking speed of advent of new solutions which have significantly shortened innovation cycles (Carpenter and Sanders, 2007; Reisman, 2004). Strategy is essential in enhancing competitiveness and positioning in the hostile business environment and therefore, strategic management is a forte of innovation strategy.

This paper discusses innovation in a small business context with particular regard to factors that contribute to successful innovation in small firms.

Overview of innovation in small business

Small business is variedly defined around the world with common characteristics shared being private ownership, fewer numbers of employees and financial measures such as asset value, balance sheets, or sales, which are relatively low compared to the large corporations. Small businesses are also characterized by their reduced capacity for dominance in their particular fields of operation, often challenged by bigger players (Storey, 2000). Despite these challenges relating to their capacity however, small businesses often have the advantage of adaptability and flexibility, as well as pragmatism in response to emerging need over the bigger players and competitors with enhanced capacity (Yusuf, 1995; Bridge, et al., 2003). This is a window through which strategies towards their success and survival in the hostile market should be focused.

Innovation in the new world economy is an essential source of competitive advantage for small firms and is consistently identified as a key characteristic associated with success, a crucial determinant (Hitt and Ireland., 2000). However, in Schumpeterian tradition, large firms are often perceived as better endowed and having superior ability to innovate (Reisman, 2004). This is partly based on the basic observation that they have more long-range plans, a very structured process and formal mechanisms that encompass comprehensive research and development (R&D) mechanisms taking up significant investments aimed at the generation of innovative products and processes. By default then, small businesses are perceived to be less innovative based in part on the observation that considering total R&D expenditures, they account for a small percentage (Storey, 2000).

However, small firms/businesses are probably no different than their larger counterparts and rivals in the need to adapt to the increasing importance that needs to be placed on technological capability. This is required in their adaptation to the increased pace of technological development and the breath-taking speed of advent of new solutions which have significantly shortened innovation cycles characteristic of the modern capitalist economy. Thus, innovation is also crucial to the success and viability of small businesses as it is to larger entities (Tushman and O’Reilly, 1997; Bala, 2005).

There are several factors that contribute to successful innovations in small firms which are discussed hereafter.

Factors that contribute to successful innovation in small firms

A company or product in its economic life undergoes shifts and fluctuations characteristic to the capitalist economic system. The Marxian view, upon which the capitalist economic system is based, views profit as the major engine driving the market economy. However, through the business cycle which entails shifts between periods of relative rapid economic growth, periods of relative stagnation, and eventually, periods of decline, profitability (business capital) in the capitalist economic system has a tendency to fall creating crises (Reisman, 2004; Hirsch, et al., 2008). This outlines the dynamism in the market which makes it necessary for firms to seek appropriate strategies to adapt.

Schumpeter, who subscribes to this Marxian view, argues that competition among participants in a market leads to the desire to improve technologies, processes and other advantages so as to increase profit margins and overall growth. This is the foundation upon which his idea of creative destruction is founded (Reisman, 2004). Creative destruction refers to the replacement of old innovations by the new driven by the rampant copying of new innovations upon entry into a market. This drives down profit margins and thereby creates incentives to seek out new innovations, the essential idea behind the capitalist economic system (Carpenter and Sanders, 2007; Hirsch, et al., 2008).

Failure to innovate hinders the firm’s differentiation, a significant edge that enhances competitiveness in its market making it prone to the ever present challenge of creative destruction. It also hinders the capacity of the business to garner requisite revenues and profit, as well as to attract capital investment, which form the backbone of successful businesses without which sustenance of business success and growth is impeded (Hirsch, et al., 2008; Carpenter and Sanders, 2007). This is especially significant for small business ventures with their low capacity and capitalization/resource base, hindering their ability to outcompete and/or challenge the major established players in the market.

Among the factors that contribute to successful innovation, with particular regard to small firms include: their flexibility and adaptability; lean organizational structure; efficiency and effectiveness in their use of their meagre resources; their potential for focus on particular areas of corporate strategy; and, the traits of particular individuals within the workforce among others.

Flexibility and adaptability

Notably, small firms are oftentimes better placed than large firms with regard to quick efficient response to the changing patterns of market demand, as well as to take advantage far more easily of opportunities that are opened by innovative developments in operational and production processes. This factor is enabled by their comparatively higher flexibility and adaptability, giving small firms the capacity and better placement in the development and implementation of new ideas (Yusuf, 1995; Storey, 2000). With age, maturity and specialization of resources, characteristic of large, established firms, it is often the case that firms become increasingly complacent and unresponsive, particularly if their products or services dominate the market. Also hindering flexibility and adaptability of large firms is the characteristic scale of asset investments required for their high production, as well as the long-range planning associated with massive R&D investments (Olson, et al., 2005; Bridge, et al., 2003). This results in high switching costs with the result being larger entities holding on to technologies in spite of the finite life cycle of products and technologies given the modern day pace of innovation cycles (Carpenter and Sanders, 2007).

Small firms have better capacities in mutating their core competencies over time in tandem with market and economic life cycles and thus are able to sustain attractive returns. These firms in this quick mutation and response to demand through innovation are better able to serve niche markets and special production that may not have sufficient requirement for large scale production (Storey, 2000). In this way, small firms are often successful in their innovations, in their enhanced ability to pursue distinctive competences and/or innovations.

Organizational structure

Given the lean and significantly horizontal hierarchical structure characteristic of organizations with fewer employees, small firms are consequently closer to customers enhancing their ability to adapt their products and to respond to changing customer demand. It is therefore easier for them to find the differences that matter to customers, a factor which offers them significant distinctive competences (Yusuf, 1995; Unger, et al, 2011). This simple administrative structure also enables quick decision-making and flexible operations enabled by the shorter hierarchy and lack of bureaucracy unlike those found in larger entities which is often a notable impediment (Olson, et al., 2005; Bridge, et al., 2003).

With the low levels of formalization and centralization in lean, simple organizational structures, innovation within the firm is better promoted. Centralization relates to the focus on authority in decision-making referring to minimal involvement by participants in an organization while formalization refers to the extent to which the activities of an organization are closely controlled by sets of rules and procedures (Unger, et al, 2011; Hitt and Ireland, 2000). Such structural elements of larger organization structure hinder the ability of firms to respond quickly to external market conditions and also hinder most innovative pursuits. It is noted that a vast majority of innovations resulted from informal group processes far higher than in more formal work rules which therefore gives greater weight to success of innovations in small firms (Unger, et al, 2011).

Influence of resource availability (e.g. Munificence)

Munificence refers to the availability of scarce resources in a firm’s environment. The availability of adequate resources significantly impacts innovation which often requires substantial expenditure of time and money. With reduced capacity and resource availability, innovation by small firms is constrained, with larger entities standing out with their massive expenditures on research and development (R&D) (Yusuf, 1995; Olson, et al., 2005). It is however noted that while small businesses account for smaller proportions of important innovations than their share of output, they also account for an even smaller share of official R&D expenditures meaning that they are relatively more efficient than their larger counterparts in their innovative production. The low risk and receptivity of small firms are essential features that facilitate their innovation successes far better than the long-range planning, more formalised structures and huge investments in R&D in larger entities (Bridge, et al., 2003; Baldwin, 1995).

Corporate strategy

The ability of small firms to produce high quality and appropriate output for special niche markets makes them successful niche players often existing with the larger firms in a dual economy that is often not characterized by significant competition between them (Olson, et al., 2005; Bala, 2005). Their scale and quick response to demand, given their flexibility and adaptability, enables their success. This feature often enables small firms to avoid disturbances such as the currents shaping the world economy (due to globalization), which significantly impacts the larger entities (Storey, 2000; Bridge, et al., 2003).

In a comparison of small and large businesses operating in hostile competitive environments, characterized by intense rivalry among firms for diminishing opportunities, it is noted that small firms tend to adopt innovations with greater frequency leading to the differentiation of product or services and therefore competitive advantage. This is crucial to the success of small firms unlike the economies of scale that larger entities can exploit. Larger firms, on the other hand, tend to act in more defensive ways, conserving their organizational resources rather than adopting a more proactive, innovative orientation (Bridge, et al., 2003; Bala, 2005).

Due to resource constraints and reduced capacity, small business owners and managers might be better advised to examine the external competitive conditions and resource availability prior to developing a strategic focus, with far less risky behaviour and experimentation. Hence, their strategic focus has the advantage of better alignment and more focused on potentially successful strategies (Carpenter and Sanders, 2007). Firms with proactive and more market-oriented strategies were more likely to be innovative and to introduce new, commercially successful products which were customer oriented (Utterback, 1994). This corporate strategy capability and attribute of small firms significantly contributes to their success in innovation.

Individual traits of participants in the business

The background and role of entrepreneurs on whom the enterprise depends entirely are crucial for innovations of small firms. Innovative activity in small enterprises is often directly related to the training and education of managers and employees, which is a greater influence in smaller firms more than in large corporations or entities with a higher number of employees and participants (Unger, et al, 2011). The proportion of technical workforce in the total force matters for a firm’s innovative capability. It is often likely that small firms and enterprises have technically qualified people with innovative attitudes (Unger, et al, 2011; Hitt and Ireland, 2000). Also beneficial to the success of innovations in small firms, its pursuits tend to be much less formalized and based more on the inspiration and preferences of owners and managers (Hirsch, et al., 2008).

Individual traits such as creativity, the emergence of new ideas, and innovation, the application of these ideas, are necessary conditions for entrepreneurship and are special means through which firms realize success. This is better illustrated by Kirton’s Adaptation – Innovation theory in which he maintains that individuals are systematically different from each other in decision-making, problem-solving and creative style. Differences in individual creative style are influenced by group conformity, efficiency, and originality. It follows therefore that a low standing on originality but a high standing on efficiency and group conformity (characteristic of bureaucracy and hierarchy in large firms) makes a person an adaptor. On the contrary, a high standing on originality but low on the two other aspects (often characteristic of small flexible and adaptable firms) makes a person an innovator (Unger, et al, 2011; Olson, et al., 2005). The individual traits of participants in a small business context, given the flexibility and adaptability of small firms as well as its favourable corporate strategy is a significant contributor to the success of innovation of small firms.

Conclusion

Innovation is essential in the modern day business environment in the quest to satisfy the needs and expectations of customers thereby driving their preference. Strategy is essential in enhancing competitiveness and the positioning of a business in the hostile, complex and dynamic business environment. A number of factors contribute to successful innovation in small firms including their flexibility, adaptability and responsiveness enhanced by their lean and simple organizational structure, focused corporate strategy, and the individual traits of participants.

References
Reisman, D., 2004. Schumpeter’s Market: Enterprise and Evolution. pp.4; Cheltenham: Edward Elgar Publishing.
Hirsch, R., M., Peters, and D., Shepherd, 2008. Entrepreneurship. 7th ed. McGraw-Hill.
Olson, E., S., Slater, and G., Hult, 2005. “The performance implications of fit among business strategy, marketing, organization structure, and strategic behaviour.” In: Journal of Marketing, 69: 49-65.
Bala, S., 2005. “Technological Innovations in Small Enterprises: A Comparative Perspective of Bangalore (India) and Northeast England (UK).” In: Technovation, 25, pp. 269-280.
Unger, J., A., Rauch, M., Frese and N., Rosenbusch, 2011. “Human Capital and Entrepreneurial Success: A Meta-analytical Review.” In: Journal of Business Venturing, Volume 26, Issue 3, pp. 341-358.
Baldwin, J., 1995. Innovation: The key to success in small firms. No. 76; Micro-Economic Studies and Analysis Division, Statistics Canada and Canadian Institute for Advanced Research,
Economic Project Growth
Bridge, S., K., O’Neill, and S., Cromie, 2003. Understanding Enterprise, Entrepreneurship and Small Business. 2nd New York. Palgrave Macmillan.
Hitt, M., and D., Ireland, 2000. The intersection of entrepreneurship and strategic management research; In: Handbook of entrepreneurship, D. Sexton & H. Landstrom (eds.), 45-63. Oxford: Blackwell.
Storey, D., 2000. Understanding the Small Business Sector. London: Thomson Learning.
Yusuf, A., 1995. Critical success factors for small business: perceptions of South Pacific entrepreneurs. In: Journal of Small Business Management, 33 (2), p.68-73.
Utterback, J., 1994. Mastering the dynamics of innovation. Harvard Business School Press (256). Boston, MA.
Carpenter, M., and W., Sanders, 2007. Strategic Management: A Dynamic Perspective. Harlow: Pearson Prentice Hall
Tushman, M., and C., O’Reilly, 1997. Winning through innovation. Harvard Business School Press, p. 171.

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The investigation into the impact of organisational culture on innovation and performance: A case study of Apple Inc.

Abstract

Innovation and performance are important elements of organisational culture as they help with business growth and development. As a result, it is vital that all businesses adopt and create an innovative culture in order to be successful. How this can be attained is unclear, yet many organisations attempt to instil innovation into their companies through the creation of various programs. Whether this works or not is a matter for debate, yet it is apparent that those organisations which lack innovation are unlikely to be as successful as those who have innovation. Apple Inc provides a good example as to how building an innovative culture and enabling internal systems to drive innovative behaviours leads to success.

The Proposed Plan of Work

Introduction

The creation of new products is at the forefront of economic growth, which is why the focus on innovation and performance within small and large organisations has greatly increased over the years (Hall and Mairesse, 1995, pp. 263-293); (Klette and Kortum, 2002). It has been said, nonetheless, that innovation creates productivity (Loof and Heshmati, 2002, p. 21) because of the fact that the growth rate of productivity only grows when new innovations are introduced. In accordance with this, it seems as though innovation and productivity are simultaneous and that organisational culture has a lot to do with the degree of novelty the innovations possess. Organisational culture thus has a significant impact upon innovation and performance and helps to determine how new methods, ideas and products are to be created. If an organisation fails to create a corporate culture of innovation, it is unlikely that the business will grow and the performance of individuals will effectively be stifled. Establishing a corporate culture of innovation requires the creation of teams sharing the same horizontal positions of power so that each person within that team can play a theoretically equal role. This is in comparison to the more traditional hierarchical organisation, which does not place individuals on an equal footing and leads to a lack of incentive to innovate (Barone, 2010, p. 1). Apple Inc is one the biggest organisations that have developed an organisational culture of innovation and performance and has recognised that “creativity and innovation skills are critical to future success in life and work” (ACOT, 2012, p. 1).

Research Objective

The objective of this study is to determine the effects organisational culture has on innovation and performance. A case study on Apple Inc will thus be provided in order to establish whether the creation of an innovative culture within any organisation is one of the most important parts of a business’s organisational structure.

Research Questions

Is innovation an important part of any businesses organisational structure?

Can innovation be created?

What impact does organisational culture have on innovation and performance?

Is innovation what drives a business’s success?

Do innovation programs work?

How important is it to build an innovative culture within an organisation?

Is the success of Apple Inc the result of the innovative culture that has been established?

What advantages does innovation bring to an organisation?

What does the innovation process consist of?

Is there a difference between innovation and invention?

Does innovation affect performance?

Key Words

Innovation

Performance

Organisational Culture

Apple Inc.

Innovative Programmes

Innovative Process

Innovation and Invention

Methodology

Secondary research will be used for this study so that existing data can be gathered and thereby analysed. This is the most appropriate form of research that is required for this study as the collection of primary data would be too costly and lengthy. In addition, it would be very difficult to collect data from large organisations such as Apple Inc and given the projects aims; it would be unwise to embark upon this type of study. Quantitative and qualitative research methods will be used so that the literature can provide a wider analysis of the subject matter. Quantitative research gathers information that is in numerical form, whilst qualitative research gathers information that is not in numerical form but which contains descriptive data. Whilst this type of data is a lot more difficult to analyse than quantitative data, a better evaluation of the topic in question can be made. The resources that will be used include text books, journal articles, online databases, government reports and applicable websites.

Main Body

Chapter 1 – Innovation and Performance Overview

Innovation is defined as “the introduction of new methods, ideas or products” (Oxford Dictionaries, 2012, p. 390). In accordance with this it is thereby evident that innovation takes place when something new is introduced into the market which subsequently leads to economic growth. Because of how important economic growth is, it is vital that innovation is part of any organisations culture. This is because, a lack of innovation will significantly affect the success of the business and the businesses’ overall performance will be impaired. How an organisation can improve innovation and performance is difficult to determine because whilst businesses want to be successful, they do not necessarily want to be innovative. Nevertheless, as put by Ryan (2012, p. 1): “A successful organisation achieves the goals and objectives that it sets itself. Innovation is simply a lever that delivers success rather than an end in itself.” However, it was further made clear by Ryan that whilst levers that can be used as a means of delivering success, it is important that innovation is placed in context with the objectives and aims of the organisation in question. Arguably, this suggests that innovation is the most important lever of an organisation that helps to deliver its success. Innovation should therefore be at the forefront of any organisation’s structure and should be promoted throughout its life cycle.

Chapter 2 – Organisational Culture and Innovation

Whilst it is vital for innovation to become part of an organisations culture, there has been much debate as to who drives innovation. It was traditionally argued by Schumpeter (1934, p. 65) that small businesses drive innovation, whilst large businesses simply dominate innovation by investing in its research and development. Not all agree with this, however, and instead it has been argued by Szirmai et al; (2011: p. 8) that innovation exists within the individual and that it does not matter whether the business is small or large. Regardless of this, small businesses are likely to be more innovative than large businesses simply because of the fact that small businesses have a greater desire and need to be successful. Essentially, small businesses are therefore more likely to embed innovation into their organisational structure by creating an innovative culture. However, as noted by MIT Sloan (2011, p. 8); “there are no quick fixes, panaceas or one size fits all solutions.” Not all businesses can successfully create innovation, but it is imperative that they make some attempt to create an innovation culture as innovative businesses generally yield high returns (Douhan and Henrekson, 2007: p. 2).

Chapter 3 – Apple Inc and Innovation

An innovative culture has certainly been created within Apple Inc., which is why this organisation has had so much success. Steve Jobs, the co-founder and CEO of Apple Inc, thus made it clear early on that innovation is what created his success: “innovation is what distinguishes between a leader and a follower” (Raup, 2012: 1). Although Jobs did not believe that innovation could be taught through innovative programs he did believe that it could be established by following his seven general principles (Gallo, 2010, pp. 15-209). He believed that the seven principles provided sufficient guidance to undertake innovative practices within any organisation and thus generate new ideas. This is because, it was felt by Jobs that innovation existed within all human beings. Conversely, innovation within an organisation could not be ascertained without the establishment of an organisational innovative culture. This is because; the whole of the organisation would need to possess an innovative mind, which would require a greater awareness and understanding of the innovative process: “Becoming innovative requires an organisational culture which nurtures innovation and is conducive to creativity” (Ahmed, 1998, p. 1).

Chapter 4 – Innovative process

The innovative process will depend entirely upon the organisational culture and climate that has been created. This is because, whilst innovation is present within all human beings it will depend upon the particular organisation as to whether the innovative attribute is to be triggered or not. The importance of “simultaneously introducing product and process innovations” was highlighted by Walker (2004, p. 1) when he made it clear that innovation plays a mediating role in the management-performance relationship of an organization. Nevertheless, whilst it became apparent just how important the creation of an innovative culture is, it could not be established how a strategy of organisational innovativeness should be pursued (Walker (2004, p. 1). Provided that businesses’ understand the innovative process; innovation will undoubtedly be created. In addition, as put by Brown and Frame (2003, p. 11); “in managing innovation, it is important for all groups to understand the subjectivity of each group’s value judgements.” If the subjectivity of each group’s value judgements is not fully understood, difficulties will ensue when trying to interact and integrate with each other and the growth of the business will be constrained.

Chapter 4 – Innovation and Performance Lessons from Apple Inc

Much can be learnt from the way Apple strives on innovation and performance within its company, which is clear from the fact that Apple has one of the most valuable empires of all time. Because innovation is the main driver of Apples organisational structure, it is apparent that innovation is the main attribute all businesses need if they want to be as successful. Nevertheless, “while experts remain optimistic about Apple’s future, they predict the strength of the Apple empire could be undermined by politically unrealistic growth expectations” (Bosker, 2012, p. 1). Whether this means that Apple’s future remains uncertain is questionable, but given the innovative nature of Apple’s business structure, it is unlikely that Apple’s success will fade as new products will continue to be introduced into the market. Thus, it does not matter that Steve Jobs is no longer with Apple since his innovative legacy will live on because of the innovative organisational culture that has been created. If innovation was not part of Apple’s business structure, it is likely that Apple would have been doomed from the start, which illustrates the importance of innovation. Consequently, as pointed out by Muller (1); “innovation and creativity have long been regarded as the lifeblood of organisational success.” In addition, it was also added that; “in the 21st century innovation practices and initiatives have become more important than ever due to a fast and unpredictably changing global business environment.” Essentially, innovation has never been more important and because of the continuous advances in society, it is vital that the principles of innovation management are being embraced by all. This is because, “organisations that do not innovate will not survive” (Swaim, 2010, p. 78).

Conclusion

Overall, it is evident from the above findings that innovation and performance are integral attributes of a business’s structure. This is because; businesses that do not create an innovative organisational culture will not be successful since innovation is the lifeblood of any organisation within today’s society. Because advances in technology are continuously being made, new products need to be introduced into the market on a continual basis in order to satisfy consumers. Therefore, organisations that fail to introduce new things will ultimately fail since they will not be deemed relevant in the 21st century. Whilst innovation cannot be created, however, it can in fact be instigated by following the seven general principles of innovation as laid down by Jobs. Provided that these principles are followed, all businesses will most likely be successful which is evident from the success of Apple Inc. Innovation was the main attribute of Apple and because of this, the Apple empire will continue to live on. How innovation can be effectively managed is open to debate but given that the general principles are followed, an innovation culture will be created.

Literature Review

Text Books

Ahmed, P. K. (1998) Culture and Climate for Innovation, Emereld 1.

Gallo, C. (2010) The Innovation Secrets of Steve Jobs: Insanely Different Principles for Breakthrough Success, MgGraw-Hill, 1st Edition.

Muller, C. (2011) Apple’s Approach Towards Innovation and Creativity: How Apple, the Most Innovative Company in the World, Manages Innovation and Creativity, GRIN Verlag.

Oxford Dictionaries. (2012) Paperback Oxford English Dictionary. OUP Oxford. 7th Edition.

Schumpeter, J. A. (1934) The Theory of Economic Development, Cambridge MA, Harvard University Press.

Swaim, R. (2010) The Strategic Drucker, Singapore: Saik Wah, Press Pte Ltd.

Journal Articles

ACOT. (2012) Culture of Innovation and Creativity, Apple Classrooms of Today – Tomorrow, [Online] Available: http://education.apple.com/acot2/innovation/ [30 December 2012].

Barone, L. (2010) How to Create A Corporate Culture of Innovation, [Online] Available: http://www.businessinsider.com/how-to-create-a-corporate-culture-of-innovation-2010-6?op=1 [30 December 2012].

Bosker, B. (2012) Will Apple’s Empire Decline Like Microsoft’s, [Online] Available: http://www.huffingtonpost.com/2012/08/21/apple-valuation_n_1819316.html [31 December 2012].

Brown, C. and Frame, J. (2003) Small Business Innovation Management, [Online] Available: www2.warwick.ac.uk/fac/soc/wbs/conf/olkc/…/brown__frame.pdf [30 December 2012].

Douhan, R. and Henrekson, M. (2007) The Political Economy of Entrepreneurship, 2nd Draft, Prepared for ISNIE Conference in Reykjavik.

Hall, B. H. and Mairesse, J. (1995) Exploring the Relationship Between R&D and Productivity in French Manufacturing Firms, Journal of Econometrics 65(1).

Klette, T. J., and Kortum, S. (2002) Innovating Firms and Aggregate Innovation, NBER, Working Paper No 9919.

Loof, H. and Heshmati, A. (2001) On the Relationship Between Innovation and Performance: A Sensitivity Analysis, Royal Institute of Technology, Industrial Economics and Management, [Online] Available: elsa.berkeley.edu/~bhhall/EINT/Loof_Heshmati.pdf [29 December 2012].

MIT Sloan. (2011) Top 10 Lessons on the New Business of Innovation, A Special Collection of Innovation and Management Insights from MIT Sloan Management Review, Massachusetts Institute of Technology.

Raup, M. R. (2012) Innovation Distinguishes Between a Leader and a Follower – Steve Jobs, PSEL, [Online] Available: http://www.personal.psu.edu/mrr18/blogs/psel/2012/06/innovation-distinguishes-between-a-leader-and-a-follower—steve-jobs.html [30 December 2012].

Ryan, A. (2012) Innovation Performance, Managed Innovation, [Online] Available: www.managedinnovation.com/Text/…/1150260519468-4125.pdf [30 December 2012].

Szirmai, A. Naude, W. and Goedhuys, M. (2011) Entrepreneurship, Innovation and Economic Development, Oxford University Press.

Walker, R. M. (2004) Innovation and Organisational Performance: Evidence and a Research Agenda, AIM Research, [Online] Available: http://www.aimresearch.org/Publications/working-papers/working-papers-1—10/wp-002—innovation-and-organizational [30 December 2012].

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Free Essays

Sustainability in Entrepreneurship, Innovation

Discuss the relationship between entrepreneurship, innovation and economic development. What role does sustainability play in this relationship? Refer to both theory and examples from the business world to support your discussion. In today’s economy, entrepreneurship is an important subject and entrepreneurial abilities have become a pivotal requirement both nationally and globally. However, enterprises that succeed mostly do so as they are capable of change for the better, through innovation. So for an enterprise to be successful innovation is required.

Creativity and innovation is at the heart of the 21st century. For example in the United States alone, more than 16,000 firms operate their own research labs! These successful enterprises and their advancements in innovation as a result lead to a country’s economic development. Economic development has become a focus of attention by governments around the world. As the UK Office of Science and Technology (2007) put it, “Innovation is the motor of the modern economy.. ” Thus there is no doubt that a connection between entrepreneurship, innovation and economic development prevails.

The three factors are complementary because innovation helps any form of entrepreneurship to prosper, thereby increasing its economic value, thus contributing to economic development. This paper will examine this relationship of entrepreneurship, innovation and economic development, and explore the extent of its connection. To begin, it will define these terms, and then connect them accordingly, using economic literature and real life examples for evidence. Secondly, the essay will look at what sustainability is, types f sustainable innovation, whether it’s a threat or opportunity for enterprises, and its effect on economic development.

The term entrepreneurship can take numerous definitions. Simply put, entrepreneurship is the act of an entrepreneur, and that is someone who assumes the risk for and organizes a business project. Economist Richard Cantillon first used the term entrepreneurship in his book Essai Sur La Nature de Commerce en General (1959) where he explains that an entrepreneur is one who buys things at a lower price, and sells them at a higher price, undertaking the risk factor. More recently, Joseph Shumpeter provided a thorough description, where he divided entrepreneurship to two types: allocating and catalytic.

Further, Shumpeter (1934) stressed on the importance of an entrepreneur to be innovative, “Whatever the type, everyone is an entrepreneur only when he actually carries out a new combinations and loses that character as soon as he has built up his business”. This leads into the connection of entrepreneurship with innovation. Mintzberg (1983) defined innovation as “the means to break away from established patterns. ” Innovation is the creation of something new; and in the business world, it would be for moneymaking benefit. According to Shumpeter, it can be the creation of a new product, opening a new market and so on.

Thus, it can be stated that innovation is required for an enterprise to succeed, so is a factor contributing to the process of entrepreneurship. Innovation can take two forms, incremental or radical. A radical innovation can be stated as a “gap-filler” as economist Harvey Leibenstein (1968) put it, which is a novel creation that fills a “gap” in the market. Radical innovation is a vital for economic development as the problem is missing markets is solved. There we see the connection of innovation with economic development.

Economic development can be defined as a positive progress in an economy, usually through government expenditures to promote the wellbeing of the economy and society as a whole. It can be measured by taking into account a country’s standard of living, economic health, environmental sustainability and other factors. According to Harvey Leibenstein in his book The American Economic Review (1968 p77), there is no universally accepted theory of economic development, but there are two important elements that contribute to development, one of which is the “Interaction between the creation of economic capacity and the related creation of demand [.. The entrepreneur is probably the prime mover of the ‘capacity creation’ part of these elements of the growth process. ” In addition, as said in the Hamilton Project (2012), “Innovation has transformed the American economy through the development of automobiles and highways, airplanes, telecommunications, and the internet, all of which have made it progressively easier for businesses to market their products.. ” which as a result, help the business enterprises. Thus, it is undeniable that there is strong connection between entrepreneurship, innovation and conomic development, as has been stated in literature time and time again. It can also be proven with the use of real life examples, for instance in the software industry, which today is globally worth $489 billion. Microsoft, “the worldwide leader in software technology”, an innovation founded by Bill Gates, had a revenue of $28. 37 billion in the year 2002, and employed more than 50,000 employees in 78 countries as said in Andriopoulos and Dawson’s, Managing Change, Creativity & Innovation Textbook (2009 p94).

Microsoft’s software is an example of an incremental innovation, and a successful enterprise, which thus became a major contributor to USA’s economic development. An example of a radical innovation that majorly contributed to economic development was Henry Fords simple invention of the assembly line method of production in the 1920’s. Its application to the production of Ford cars reduced the time to produce the Model T Ford by 68%, thereby increasing efficiency, and reducing its cost by 62%, thereby increasing the demand for the car.

This a result increased employment in America, increased travel around the country, helped all businesses reduce costs, and raised the standard of living of the middle-class American family who could now afford a car, which had once been a luxury. All these factors contributed to of economic development of the US economy, which was booming at the time. Therefore, it can be firmly stated that a strong connection between entrepreneurship, innovation and economic development does exist, and that they are often times co-occurring.

A change in one can have an effect on the other; however, they are not dependent upon on another. For example, economic develop does have other factors contributing to it, aside from entrepreneurial gain. Secondly, I believe that entrepreneurships can succeed without innovation. This is where I disagree with Schumpeter’s theory of Creative Destruction. In this, Shumpeter claims that an entrepreneur has to do something novel to be successful, however in world of business there have been instances that prove his theory wrong.

For example, in the 1990s’s, a team of entrepreneurs from the US implemented a set of multi screen cinemas in Mexico City called Cinemax, which was a well-known and established business model in the US. This was very successful in Mexico City, and the chain of cinemas was sold for $300 million ten years later. This is very entrepreneurial, but not innovative. Therefore I believe that whilst innovation and entrepreneurship go hand in hand, an entrepreneur does not necessarily need to be innovative in his/her thinking to be successful.

Hence, I agree with Schumpeter’s theory only to an extent, in that they are strongly related, but disagree with the fact that an entrepreneurship has to be novel in order to be successful and contribute to economic development. Almost all economies today are growing rapidly, China and India for example. Though this is a primary objective of all countries, governments and other environmentally friendly organizations are far more concerned on ensuring that this development occurs without excessive damage to the environment.

The aim is to ensure human needs are met; but also conserved for the needs of the future generations, and as a result conserving the environment. This is also known as sustainable development. According to the Brundtland report (1987), sustainable development is “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs. ” Sustainability can take many forms, including economic, social and environmental. This essay will look at sustainability in the economic form and understand sustainability from the business point of view.

The implementation of government regulations, such as UK’s DEFRA, which look at conserving and protecting the environment, and fine or reprove businesses that do not, may initially seem as a problem for many companies. But in actuality, in can help the businesses and even be an opportunity for innovation. The need to be sustainable has created environmentally friendly inventions, an internal driver of sustainability, boosting economic growth accordingly. Sustainability in business encourages enterprises to cut down on its costs and produce more with less. Companies today reduce, reuse and recycling waste material.

In addition, it gives way for invention of environmentally friendly products, such as the Panasonic’s Rhythm eShower for water conservation and Toyota’s invention of the Prius, an electric car, which would in turn reduce fuel consumption. Toyota even won the title of “Best Global Green Brands 2012” (BusinessWeek, 2012) for the second time in a row. Further, it has resulted in the invention of renewable energy methods such as solar photovoltaic cells and tidal stream generators, a new industry in the market. British company, Lunar Energy has decided to build the worlds first tidal energy farm deep sea, providing energy for 5000 homes.

As a result, creating employment too. The requirement for businesses to be sustainable has created employment, promoted innovation and has even opened up a whole new industry in renewable energy, thereby contributing to economic growth. The contribution sustainable development makes to the economy is clear in the long run, as the economy is sure to sustain in the future as well. The Stern Review on the Economics of Climate Change (2006) explains how there is a negative impact on economic growth if governments and businesses are not environmentally friendly.

Economist Nicholas Stern stated that if we don’t act in a sustainable manner, the impacts that occur would cost damage worth of 20% of a country’s GDP. Whereas in contrast, investment in greener and more sustainable development today, would only cost 1% of global GDP each year. I believe that while sustainable development may result in some businesses to lose out, overall it opens new industries, encourages innovation and also works in favor of the economy in the long run.

To conclude, It can be stated that sustainability can play an important role in economic development, and can encourage enterprises to innovate environmentally friendly technology, cut costs, and thus be more successful. It also helps a country’s economy in the long run as it would not have to heavily spend on the damages caused by global warming. As said by Schumpeter, (1934 p367) “The entrepreneur is the prime mover in economic development and his function is to carry out new combinations. ” This is true in the sense that through innovation, enterprises can succeed and contribute to an economy’s development.

Thus, it is clear that businesses and innovation have a positive effect on economic development are strongly connected. But again, I do not believe that all enterprises must be innovative to succeed, and that for a new business to open, a current one must be eroded. Therefore in conclusion it can be stated that entrepreneurship, innovation and economic development are complementary in real life, and are at often times co-occurring, but are not dependent on one another. And encouraging businesses to be sustainable will only have a positive impact on the economy, when taking the long run impacts into account.

Bibliography The American Economic Review Harvey Leibenstein. (May 1968) Page 77. Volume 78, No. 2, American Economic Association. Entrepreneurship and Small Businesses Paul Burns. (2007) 2nd Edition, Palgrave MacMillan, New York Stern Review of the Economics of Climate Change Nicholas Stern. (October, 2006) The Theory of Economic Development Joseph A. Shumpeter. (1983) Transaction Publishers, New Brunswick, New Jersey Our Common Future (The Report of the Brundtland Commission) United Nations World Commission on Environment and Development. 1987) BusinessWeek Bloomberg. (July 2012) Power In and Around Organizations (The Theory of Management Policy) Henry Mintzberg. (January 1983) Published by Prentice Hall, College Division Hamilton Project Michael Greenstone, Adam Looney and Leslie B. Samuels. (May 2012) Managing Change, Creativity & Innovation Constantine Andriopoulos and Patrick Dawson. (2007) Published by TJ International Ltd. Padstow, Great Britain Essai Sur La Nature de Commerce en General Richard Cantillon. (1959) Published by Frank Cass and Co. , London

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Disruptive Innovation

1 Introduction This assignment provides the study on Disruptive Innovation using Clayton Christensen’s framework. Apart from this, this assignment also tells how the companies should react to the upcoming technologies and what should be the course of action for the same. 1. 1 Innovation There is no specific definition for innovation as such. But, according to me, innovation is creating something new or changing the old to achieve the competitive advantage and meet the increasing customer demands.

This is achieved either by introducing new products, new ideas, and processes or just by changing the design of the product or the processes as per the customer demands. Innovating and creating new products and services has become very important topic of concern for all the organizations in today’s rapidly changing world. If you are not innovative, you may never know when your products become obsolete. 1. 2 Types of Innovation There are three main types of Innovations: Sustaining innovation: This type of innovation needs to be developed to ensure that the customers are satisfied with the products and services and to stay in the game.

For example upgrading the processor from dual core to Intel core i3 to i5 and enhancing the performance of computers. Breakthrough Innovations: These innovations upgrade the level of existing category of products or services. For example I phone was a breakthrough innovation in the world of mobile market. It changed the perspective of the customers and eventually other companies started following the trend. Disruptive Innovation: In this type of innovation a new product or a sevice is introduced that creates a new market or massively alters an old one so that old players cannot compete.

They are called disruptive because they disrupt the current behavior of the market. For example Introduction of computers was a disruptive innovation for companies who manufactured typewriters. According to Clayton Christensen Disruptive innovation offers lower performance initially as per the current market demand. But, at the same time it provides some new attributes which prosper in some different market. After conquering different markets, it eventually displaces the former market. Here we will talk about the hydrogen fuel Cell vehicle a disruptive innovation.

How the introduction of hydrogen fuel cell vehicle will disrupt the market for oil industry, current internal combustion engine manufacturers and many others. At the same time we shall talk about how the companies are responding to this upcoming technology and how are they coping up with the new technology. Before going into the statistic part let us know in brief how the hydrogen fuel cell works, how it is different from internal combustion engine and what the benefits of hydrogen fuel cell are. 2 Hydrogen Fuel Cell a disruptive Innovation

A fuel cell is an electrochemical device which converts chemical energy into electrical energy. It uses hydrogen and oxygen from air to produce electricity. Since no combustion is involved, it does not emit harmful gases and the efficiency of such device is much higher than an internal combustion engine. Apart from this it does not involve any moving part hence making it more silent and reliable source of energy. 2. 1 Working Hydrogen fuel cell consists of two catalysts anode and cathode, and an electrolyte. Hydrogen is fed to anode and oxygen from air is fed to cathode.

At anode, catalyst causes hydrogen to split into positively charged ions protons and negatively charged ions electrons. The electrolyte, that is polymer electrolyte membrane allows only positive ion to flow through it. So the protons pass through membrane towards cathode and electrons pass through the external circuit towards the cathode. The flow of electron from the external circuit causes the current and eventually it goes to cathode and combines with positive ion and oxygen to emit water or water vapor. Hydrogen is is a fuel of great potential.

Thought it is not an energy source, but it is an energy carrier. Hydrogen can be manufactured using renewable energy resources such as wind, solar etc. the research is still on on how to produce hydrogen on a larger scale. Following Figure show the working of a hydrogen Fuel Cell. Figure 1: Working of a Hydrogen Fuel Cell 2. 2 Benefits of a Hydrogen Fuel Cell Following are the benefits of a hydrogen fuel cell Zero green house gas Emissions: As water is the byproduct of the fuel cell, the emissions of harmful gases such as carbon dioxide, sulphur monoxide, etc is not there.

Hence, it is a zero emission product. Though some amount of carbon dioxide is produced during manufacturing hydrogen, but research is on to manufacture hydrogen using renewable energy resources. Reduced Air Pollution: As there are no harmful gases emission involved in fuel cell, air pollution will be reduced considerably. Improved efficiency: Fuel cells are more efficient than internal combustion engine. A conventional combustion egine generates efficiency up to 40% whereas a fuel cell generates efficiency more than 50% and has the potential to reach 85%.

Other Benefits: the transportation will be oil independent, since there are no moving part, it is more reliable. 2. 3 Applications Fuel cells have wide range of applications. Following are the applications of a fuel cell: Transportation system: currently oil industry and internal combustion engine dominates the transportation system. But keeping environment and diminishing resources of fuel in mind it is predicted that by 2025 – 2030, hydrogen fuel cell will dominate the transportation sector. Power Generation: Fuel cell can also be used to generate power.

It can be stationary power or a portable power. 2. 4 Challenges Following are the challenges that a fuel cell faces today: Cost: Cost of a fuel cell is a major concern right now. Due to expensive materials like platinum is used as a catalyst, the cost of fuel cell shoots up. but the research is on and it is most likely that the cost of a fuel cell will come down to $30 – $50/KW for transportation and $1500/KW for stationery power. Storage: Storage of hydrogen is again another concern especially for the transportation system since it has very low density in terms of volume.

Research in this area is also going on to store the hydrogen fuel at high pressure. Infrastructure: Again to develop infrastructure for hydrogen is a big challenge cost wise. To develop infrastructure a collaboration will be required between automotive and energy companies. Other challenges include the safety issues to carry hydrogen, Durability of the fuel cell and public acceptance. But research I going on in all the areas and there will definitely be a solution to all the challenges. 3 Clayton Christensen’s Theory of disruptive technology

Christensen developed a framework that could be applied to any market at any point of time so long as the attributes to be measured qualify for the characteristics presented in his framework. According to Christensen, companies fail because of the following reasons: Companies depend on customers and investors for resources: if the company doesn’t satisfy the customers or the shareholders, it will be difficult for the company to survive Small market cannot provide the growth needed by large companies: Large companies concentrate their efforts where the returns are high and often concentrate where the cost of sales is high.

Technology supply exceeds the demand: Rapidly developing technology may often outpace the customer’s needs. When such thing happens opportunity for new entrants develop to enter into the market and come with a new product. Companies with best technology tend to improve the existing product often incrementally. And while focusing on the top end customers, a lower end market remains unserved until a new entrant comes with a potentially disruptive technology. And eventually new market begins to grow. And once this new market starts gaining the footage, it causes the existing technology to become obsolete.

Following graph will help us understand Christensens framework more clearly. Figure 2: Clayton Christensen’s Framework of Disruptive Technology The market is always divided into tiers the higher end market that represents the main customers who buy the product and the lower end market represents the customers who are least to buy the products. And performance is the main criteria by which customers buy the product. Sustaining innovation: As explained earlier, it could be incremental or radical that improves product performance for the main customers.

The focus is mainly on improving the performance of the existing products and satisfying the main customers. Disruptive Innovation: It enters in the lower tier of the market with lower cost and attractive value for the lower market customers. Following are the charecteristics of a disruptive technology. * Offers low performance * Targets small market * It is tied with uncertainties * It introduces a new performance criteria in a new dimension * Generally non market leaders introduce such new products in a lower tier market with attributes to benefit lower end market.

Moving back to the graph on Christensen’s framework for disruptive innovation, disruptive technology with an innovation enters at point ‘a’ with a lower rate for lower end market. At the same time market leaders are improvising their product using sustaining technologies and satisfying the mainline customers. And when the sustaining technology reaches point ‘b’, it is the peak time for the sustaining technology and after that the market gets saturated. This is the time when the market leaders need to innovate something new and create the new market. After point ‘b’, supply crosses demand.

On the other hand, disruptive innovation enters at point ‘a’ satisfies the lower end customers and after improvising it reaches point ‘c’ the main stream customers. At point ‘c’ now, it is very late for sustaining technology to develop a new product for the main stream customers. Here it is very important to distinguish between different types of innovation. Incremental innovation occurs when small improvements are made to products/services. These, basically strengthens the market position of the firm and entrenches the industry. Radical Innovation occurs when major improvements are made to the products/services.

These changes require new marketing channels and often put other firms out of competition and at the same time make old technologies obsolete. Transformational innovation occurs when the innovation is of such a nature that it destroys whole industry and changes the nature of the market. So if we have to summarize Christensen’s framework it would be, as the sustaining technology improves along the mainstream customer, disruptive technology enters at the lower end market, improvises along the existing dimensions and enters the main stream market.

It eventually changes the basis of the competition from functionality to reliability and from reliability to convenience and eventually to price. Now, let’s apply this Christensen’s framework to today’s automotive world that is internal combustion engine as the sustaining technology and the hydrogen fuel cell as the disruptive technology. 3. 1 Comparison of Hydrogen Fuel Cell technology with the Christensen’s Framework of Disruptive Technology Let us compare the performance of fuel economy and green house gas emissions of internal combustion engine and hydrogen fuel cell vehicles.

From the graph, we can agree that internal combustion engine is a sustaining technology incrementally improving its performance. Initially let’s say in 1980’s the fuel economy of a vehicle was around 4-6 km/l of gasoline and now it is around 12-15 km/l. green house gas emissions have also reduced by introducing hybrid option. But it is predicted that internal combustion engine will reach the point ‘b’ somewhere by 2015. That is it will reach the saturation level of innovation. Further development in internal combustion engine will result in more of supply than demand.

This is the time when people will anticipate the change, and the change of disruptive technology in our case it is hydrogen fuel cell vehicle. Initially it keeps emerging and improves the performance in new dimension and tries to attract the main market stream. During the time emergence hydrogen fuel cell through experimentation seeks commercialization. And it is predicted by 2020 it will seek commercialization. Meanwhile, the internal combustion engine will steadily grow beyond the customer demand and will start losing its hold in the main market.

In 2020, at point ‘c’, the market is ready to accept high performance vehicle, in terms of fuel economy. And beyond this point, the hydrogen fuel cell vehicle keeps on improving rapidly. This will eventually bring the phase out of an internal combustion engine and forcing it out of the market by 2030 – 2040 completely and hydrogen fuel cell vehicle becoming the base technology. Beyond this it will improve incrementally until the new disruptive comes and phase out the hydrogen fuel cell technology. Green House Gas Emission

Global warming is one of the prime reasons fro shifting the paradigm from internal combustion engine to hydrogen fuel cell vehicle. Following graph shows the global warming potential of gasoline, flex fuels and hydrogen fuel cell in various stages from manufacturing to the end of life of a vehicle. Figure 3: Global Warming potential comparison of 3 different types of Engine. It is clear from the graph global warming potential that is emission of harmful gases from a fuel cell vehicle is less than a gasoline and the flex fuel vehicle.

From the graph, it is seen that only while production for the fuel of hydrogen fuel cell vehicle, the emission of harmful gases is high, but it is very less compared to the gasoline and flex fuels. Apart from that, research is also going on for producing hydrogen using renewably resources such as wind, solar and nuclear. 3. 2 Conclusion It is evident that hydrogen fuel cell vehicle is a disruptive technology and will cause a phase out for the internal combustion engine. But when we compare it to the Christensen’s framework, it slightly contradicts.

Hydrogen fuel cell vehicles in literal sense are not targeting the lower market initially. The cost of the product is not low. But all other parameters remain the same. It is focusing on the new dimension and at the same time it is threat to the internal combustion engine world. Apart from this slight difference, hydrogen fuel cell vehicle is definitely a disruptive innovation, and will definitely lead to transformation of technologies and will change the basis of competition from fuel economy to green house gas reductions with the environmental pressure. 4 Current Scenario

If we talk about hydrogen fuel cell in today’s world, it is still an emerging technology which looks solid and promising in terms of fuel economy and reduction in green house gas emission. Research in this particular area is going on all around the world since the global warming level is increasing and the environmental pressure is acting on all the governments. In this scenario, the companies who are already into research in this area will survive and the companies that are still not doing any kind of research or innovation and still trying to improve the sustaining technology might just phase out of the competition.

Further we will see cases and findings of various companies in this area including oil industry, automotive industry and the industries related to this huge sector of industries. 4. 1 Oil Industry: Today, the energy sector is run majorly by oil industry. And majorly oil after refining is consumed by transportation industry. Around 90%of the oil is consumed by the transportation industry, and out of that around 50% of the industry consumes gasoline and the rest is diesel, LPG, Naphtha etc. Major players in this oil industry today are Saudi aramco, shell, BP, Exxon Mobil and chevron.

Saudi Aramco (Saudi Arabia)is the major producer of the oil today and has the maximum exports all over the world, then it is followed by other companies. Apart from green house gas emissions and environmental pressure, the increasing rate of oil so frequently gives us an idea that even the oil reserves are diminishing day by day. Now increasing research and development in this area poses threat on oil industry as well. Even the oil industries have started doing research in this area. Basically these companies are doing research on how to produce hydrogen using the existing technologies in large scale.

Following are some of the findings of the oil companies in this area. 4. 1. 1 Saudi Aramco (Source: http://www. keei. re. kr/keei/download/seminar/101117/II101118_b02. pdf, www. saudiaramco. com, www. mbifoundation. com/media/18961/final%20bpr. pdf) Following are some of the conclusion made by research and development department of Saudi Aramco. : * H2 production using existing petroleum infrastructure will be a potential economical option compared to other technologies. * Need to integrate the carbon capture and storage (CCS) technologies along with hydrogen production for efficient carbon management. Alternate hydrogen production technologies, such as electrolysis and renewable sources, have significant technical and economical challenges (energy intensive and high capital). * Significant progress made in the demonstration of liquid hydrocarbons to hydrogen. Apart from this, Saudi Aramco has also filed a patent in US office for the naphtha based fuels which can also be used for vehicular purpose. 4. 1. 2 Shell ( Source: http://www. shell. com/home/content/environment_society/environment/climate_change/biofuels_alternative_energies_transport/hydrogen/, http://articles. atimes. com and http://www. thelivingmoon. com/41pegasus/02files/Alternate_Fuel_Shell_Oil_Hydrogen. html) Shell had started its research on this topic since 1999 and had anticipated the change in the world of automotive industry and power sector long back. Shell has joined hands with the leading car making companies and power companies and working on this project. Shell is already working in collaboration with Siemens, Toyota, Daimler Chrysler and has reached a long way in this area. It has also opened various hydrogen fuel stations in United States of America, Europe and Asia.

And it is offering free fillips at various fueling station just to promote the upcoming technology. Following picture is one of the fueling station in United States of America where hydrogen fueling is provided. Figure 4: Hydrogen fuel Station by Shell 4. 1. 3 BP: (Source: http://www. bp. com) Like Shell, BP is also one of the world’s largest energy enterprises, BP has been extensively involved in hydrogen energy demonstration projects around the world to explore feasible solutions to hydrogen economy.

In China, BP and PRC Ministry of Science ; Technology have been co-working on a hydrogen energy project to set up China’s first hydrogen fueling station in Beijing. As one of the world’s largest energy enterprises, BP has been extensively involved in hydrogen energy demonstration projects around the world to explore feasible solutions to hydrogen economy. In China, BP and PRC Ministry of Science ; Technology have been co-working on a hydrogen energy project to set up China’s first hydrogen fueling station in Beijing.

Apart from this BP has joined hands with the leading companies like Daimler Chrysler, Ford Motor Company, General Motors, Solarex and working on various projects like fuel efficiency, CO2 management, Hydrogen Fuel Cell. Apart from the companies all these companies also join their hands with various Universities who help the in doing their research. 4. 1. 4 Exxon Mobil: (Source: http://www. exxonmobil. com, http://www. dutchdailynews. com/air-products-and-exxonmobil-start-up-new-world-scale-hydrogen-production-plant-in-rotterdam/) Exxon Mobil again is not left ehind in the research of hydrogen fuel cell and the production of hydrogen on a large scale. Following are some of the research that Exxon Mobil is working on * It is conducting breakthrough research on Hydrogen Production Technology * It is also trying to improve its existing technology at the same time by continuously improving the efficiency of internal combustion engine and reducing the emission of harmful gases. * On 10th Feb 2012 Air products and Exxon Mobil started a large scale Hydrogen Production Plant in Rotterdam. Apart from this, ExxonMobil is also developing an innovative on-board hydrogen-powered fuel cell system that converts conventional hydrocarbon fuels such as gasoline or diesel into hydrogen for a fuel cell right under a vehicle’s hood. Apart from this there are various other small industries that are into this hydrogen fuel cell research for example Reliance from India is also doing its bit in this area. 4. 2 Automotive Industry We have seen the response and reaction of oil Industry so far, Now let us see the response of automotive industry worldwide.

We shall go country wise in this case to know the response of various industries and development in various countries in this specific area. 4. 2. 1 United States Of America: United States of America is spending millions of dollars every year in the research of hydrogen fuel Cell. They have demonstrations with many private companies. Daimler Chrysler Company developed its first fuel cell truck in 2000. The main aim of USA is to make Fuel Cell Vehicle available at an affordable cost. General Motors: General motors one of the oldest companies of USA is planning to get 1000 fuel cell vehicles on road by 2013-2015.

Ford Motor Company: Ford is also planning to launch its commercial hydrogen fuel cell vehicle in 2015. 4. 2. 2 Japan: One can say Japan is the very first to start the research in this area and it is since 1981. It was in Japan in Tokyo electric Company, Toshiba and an American based company fuel cell company manufactured and installed an 11 MW power plant (Source: www. platinummetalsreview. com/pdf/pmr-v33-i1-010-012. pdf). Apart from this the major Japanese automotive companies look promising in terms of Hydrogen uel cell vehicle compared to other companies in the world. Toyota: Toyota has promised in its recent Autocar show that it will start selling the hydrogen fuel cell vehicle in USA specifically in California, since by 2015 it is predicted that there will be 68 hydrogen fueling stations in California. (Source: http://content. usatoday. com/communities/driveon/post/2012/08/toyota-to-start-selling-hydrogen-fuel-cell-car-in-2015/1#. UHFOcE3Mj38) Honda: CEO Takanobu Ito just announced that Honda will launch a new fuel-cell electric car in the U.

S. and Europe starting in 2015. It will “showcase further technological advancement and significant cost reduction. ” Honda has already been letting consumers test its fleet of FCX Clarity hydrogen fuel-cell cars for a couple of years (Source: http://www. firstcoastnews. com/news/article/276774/11/Automakers-take-fresh-look-at-hydrogen-fuel-cells) Nissan: Nissan has also announced its interest in hydrogen fuel cell vehicle and has declared that it is ready to mass produce hydrogen fuel cell cars by 2015 (Source: http://www. irstcoastnews. com/news/article/276774/11/Automakers-take-fresh-look-at-hydrogen-fuel-cells) 4. 2. 3 Europe: Europe is not left behind in this research. All the major brands BMW, Mercedes Volkswagen etc have shown interest in hydrogen fuel cell, but at the same time have said hydrogen fuel cell will take at least 10 more years to commercialize. 4. 2. 4 India: India is the place where we can say Christensen’s framework is applicable perfectly. Here the auto rickshaw for the lower end market has been made using hydrogen fuel cell. t was displayed at pragati maidan in January 2012 and is expected to hit the road by 2015. Source: http://www. nytimes. com/2012/10/02/business/energy-environment/hydrogen-fuels-autorickshaws-and-dreams-of-cleaner-air. html? pagewanted=all&_r=0) Apart from this biggies like TATA Motors and Mahindra and Mahindra have shown interest in this area. Tata Motors have manufactured the bus based on hydrogen fuel cell technology known as starbus. Following figure shows the Auto Rickshaw and the Hydrogen fuel cell Bus

Figure 5: Hydrogen fuel cell vehicles in india Following are some of the comments from various high profile executives from various companies: * Executives from Ford, General Motors, Chrysler and Volkswagen see fuel-cell vehicles as being further out, and most have not said when they’ll have vehicles on the market. * “We don’t see it as early as Toyota does,” said Oliver Schmidt, general manager of engineering with the VW Group. “We see it in the 2020 time frame. * Joe Bakaj, Ford vice president of powertrain engineering, said, “The question is when (will) fuel-cell vehicles become affordable to customers,” specifically when the fuel-cell stack competes with the battery pack on cost. * “Within 10 years, I think they will be as affordable as full battery vehicles, and the fuel cell will have a big advantage in range,” Bakaj said. “We think it will happen in the next 10 years. ” * Gary Smyth, GM executive director working on global research and development, said he sees little commitment in the U. S. to the necessary infrastructure by 2015. Source: http://content. usatoday. com/communities/driveon/post/2012/08/toyota-to-start-selling-hydrogen-fuel-cell-car-in-2015/1#. UHFOcE3Mj38) Part from all this various other countries and companies have shown immense amount of interest in hydrogen fuel cell Recently Korea and Korean company Hyundai has also announced an hydrogen fuel cell vehicle launch by 2015. So the major companies all around the world and the allied companies are responding really well to the upcoming technology of hydrogen fuel cell and all of them are doing their bit to save the environment. 5 Conclusion:

It is very clear from the above assignment that hydrogen fuel cell is the future of the world. It is definitely one of the biggest disruptive technologies of all time. Biggest because, once the technology is commercialized, many big players all around the world will have to change their base of technology. Technology innovation and upcoming technologies are posing threat on the current industry and are eventually forcing companies out of business. New technologies are exerting power to shape the market and change the basis of the competition. Hence, it is important for the companies to continuously assess the technologies and capabilities.

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Distripute Innovation

A disruptive innovation is an innovation that helps create a new market and value network, and eventually goes on to disrupt an existing market and value network (over a few years or decades), displacing an earlier technology. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect, typically first by designing for a different set of consumers in the new market and later by lowering prices in the existing market.

In contrast to disruptive innovation, a sustaining innovation does not create new markets or value networks but rather only evolves existing ones with better value, allowing the firms within to compete against each other’s sustaining improvements. Sustaining innovations may be either “discontinuous”[1] (i. e. “transformational” or “revolutionary”) or “continuous” (i. e. “evolutionary”). The term “disruptive technology” has been widely used as a synonym of “disruptive innovation”, but the latter is now preferred, because market disruption has been found to be a function usually not of technology itself but rather of its changing application.

Sustaining innovations are typically innovations in technology, whereas disruptive innovations change entire markets. For example, the automobile was a revolutionary technological innovation, but it was not a disruptive innovation, because early automobiles were expensive luxury items that did not disrupt the market for horse-drawn vehicles. The market for transportation essentially remained intact until the debut of the lower priced Ford Model T in 1908. [2] The mass-produced automobile was a disruptive innovation, because it changed the transportation market. The automobile, by itself, was not.

The current theoretical understanding of disruptive innovation is different from what might be expected by default, an idea that Clayton M. Christensen called the “technology mudslide hypothesis”. This is the simplistic idea that an established firm fails because it doesn’t “keep up technologically” with other firms. In this hypothesis, firms are like climbers scrambling upward on crumbling footing, where it takes constant upward-climbing effort just to stay still, and any break from the effort (such as complacency born of profitability) causes a rapid downhill slide.

Christensen and colleagues have shown that this simplistic hypothesis is wrong; it doesn’t model reality. What they have shown is that good firms are usually aware of the innovations, but their business environment does not allow them to pursue them when they first arise, because they are not profitable enough at first and because their development can take scarce resources away from that of sustaining innovations (which are needed to compete against current competition). In Christensen’s terms, a firm’s existing value networks place insufficient value on the disruptive innovation to allow its pursuit by that firm.

Meanwhile, start-up firms inhabit different value networks, at least until the day that their disruptive innovation is able to invade the older value network. At that time, the established firm in that network can at best only fend off the market share attack with a me-too entry, for which survival (not thriving) is the only reward. [3] The work of Christensen and others during the 2000s has addressed the question of what firms can do to avoid oblivion brought on by technological disruption.

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Impact of Innovation Technology in Banking Sector

The impact of IT in efficiency and effectiveness of banking sector in Sri Lanka the information technology and its impact in efficiency and effectiveness of the banking sector in sri lanka (with refernce to people’s bank and plc commercial bank plc in sri lanka) author: m. r. m. fazmeer 2005/2006 fmc south eastern university of sri lankaWhat is information technology? The study or use of computers and telecommunications for storing and sending Information (Oxford dictionary, 2003) “The information technology refers to all forms of technology applied to processing, storing, and transmitting information in electronic form.

The physical equipment used for this purpose includes computers, communication equipment and network, fax machines, and even pocket organizer. Information on system executes organized procedures and/or communicates information. We define Information as an intangible or intangible entity that severs to reduce uncertainty about some state or event. Data can be originated from the internal operation of the form external entities such as suppliers or customers. Data also come from external data bases and services, for organization purchases a great deal marketing and competitive information.

An information technology usually process these data in some way and present the results to users with easy availability of personal computers, users often process the output of formal system themselves in an ad ho manner. Human interpretation of information is extremely important in understanding how an organization reacts to output of system . Different result may mean different things to two managers. A trends or problems with sales. A financial manager may see problems with cash flow given the same sales data, where the marketing manager may use the statistical programs and graphs to look for trends or problems with sales.

The recipient of a system’s output 2 1 AUTHOR: M. R. M. FAZMEER 2005/2006 FMC SOUTH EASTERN UNIVERSITY OF SRI LANKA The impact of IT in efficiency and effectiveness of banking sector in Sri Lanka may be an individual, as in the examples of the marketing manager, or it may be a workgroup. Many systems are used routinely for control purpose in the organization and require limited decision making. The accounts receivable application generally runs with little senior management over sight. It is a highly structured application with rules that can be followed by a clerical staff.

A department manager handles exceptions. The output of some systems may be used as a part of a program or corporate strategy. The system it self could be implementing a corporate strategy, such as simplifying the customer order process. A system might help manager make decision. Information technology, however, extends far beyond the computational capabilities of computers. Today, computers are used extensively for communications as well as for traditional roles of data storages and computations. Many computers are connected together using various kind of communication line to form networks.

Through a network, individuals and organization are link together and these linkages are mass market networks like CompuServe, America on – line, and prodigy are a more recent phenomenon of course, the most famous network of all is the internet and shall explore its potential for business. Today every organization is faced with various information technology architectures. A manager is always concerned with various sources available for product and services. In the technology field. There are options on suppliers for both hardware and software.

The area of information technology as an integration of communication technology. (Asoka S. Karunananda,1998) History of Impact of Information Technology In 21st century, the role of information technology is very important in every sector, whether it is agriculture industry and services. The information system’s functions in an organization have expanded significantly over the years. Information systems of the 1950’s forecast on reducing the cost of routine paper processing, transaction data processing, record keeping, accounting and other electronic data processing.

By the 1960’s organizations started viewing information system differently recognizing that information system could be used for general management support, such system was called as Management Information System (MIS) that collected, stored and processed were seen as providing special purpose, customized management control over the organization, such 2 AUTHOR: M. R. M. FAZMEER 2005/2006 FMC SOUTH EASTERN UNIVERSITY OF SRI LANKA The impact of IT in efficiency and effectiveness of banking sector in Sri Lanka system were called Decision Support System (DSS) and Executive Support System (ESS).

Their purpose was to improve and speed up the decision making process. Now information technology has become very important all activities of the organization. On the other hand, service sector more contributes to the economy of the country under the service of the banking sector is very important one. In our country, there are two forms of banks namely, State banks and private banks. The State banks are financed by the government through budget and controlled and managerial functions are carried out by them.

On her hand private banks are financed by private sector itself and control and management is in the hand of them. Today we can see the private bank highly use the information technological systems in their every activity rather than in state banks. So, for my research study purpose I’m taking the sample as People’s bank as a state bank and Commercial bank as a private bank. Now information technology is changing day by day. So these two banks introduced system to their organizations. So information technological system has become the one of the important resource of the organization.

Today world is globalized. It has startling polemical phenomenon that brings nations into “one global village” with “One broad less economy” so the effective and efficient use of information technology is vital to the organization. Information technology is vital like other resources such as man, money, material, machinery and methods. Without information technological system cannot function in the competitive market. The banking sector is very important to the country because it has contributed lot to the country’s national income.

And also each and every bank facilitates to every citizen to maintain accounts and other facilities as well. So there is a need to identify the impact of the information technology on efficiency and effectiveness of banking sector. In the case of Sri Lankan banking sector there are two leading domestic banks one is People’s bank another one is Commercial bank PLC, and IT usage of People’s bank (state bank) in their banking activities are very rare with Comparing with Commercial bank PLC (private bank).

So we need to find out the reasons for the varies of IT usage between state banks and private banks. 3 AUTHOR: M. R. M. FAZMEER 2005/2006 FMC SOUTH EASTERN UNIVERSITY OF SRI LANKA The impact of IT in efficiency and effectiveness of banking sector in Sri Lanka The Importance of information technology Organizations have various managerial levels. These all managerial levels have different managerial functions, such as planning, organizing, staffing, and controlling. These functions are necessary for successful organizational performance.

To support these functions, especially planning and controlling systems for supping information to managers are of special importance. Only with accurate and timely information can managers monitor progress toward their goals and turns plans into reality. (Peter Drucker, 2000) The manager must handle the information system effectively and efficiently to achieving their goals of an organization. Therefore we have seen information, requirement of information organization characteristics of information and information system of their types.

Information is not natural resources. Data are facts, events, transactions and soon witch have been recorded. They are input raw materials from which information is produced. Briefly data is pool of observation . Information is data that have been processed in such a way as to be useful to the recipient, in another view the information is a statement about the structure of an entity that enables a person to make a decision or commitment. System is a group of components that interact to achieve purpose.

Commonly, system 3 basic components they are inputs, output and processing. In this way information system is a group of components that interacts to produce information. Here data or raw materials as input information as output is gotten and processing component help to change the inputs to outputs. Briefly the minimum information system consists of people, procedure and data. People follow procedures to manipulate data to produce information. The following figure explains it. Impact of Information Technology (Henry C. Lucas. 998) Many times information technologies have failed because the reactions of users were ignored or because designers did not consider the impact of the system on the organization. A technology elegant system is successful only it is used. Most 4 AUTHOR: M. R. M. FAZMEER 2005/2006 FMC SOUTH EASTERN UNIVERSITY OF SRI LANKA The impact of IT in efficiency and effectiveness of banking sector in Sri Lanka early studies of the import of computers were completed after the systems had been installed. These studies were broad not are and in general were not oriented toward the design of better information system.

More recent research has leg to the development of a mode of information systems in the con text of the organization, that describes how in formation systems impact and in tract with organizations. From this mode it should be possible to predict the impact of systems in advance and plan for a successful inter face with the organization Best – known sets ore dictions for the impact of computers on organizations (Leavitt and whistler 1998) These authors sequester that firms would recentralize as a result of new computer technology, the availability of more information than previously possible would allow management centralize.

The trend until the development of computer technology to word decentralization because centralization. Management could not cope with the amount of information and number of decision required in lounge organization. Computers offer the power to make centralized management possible so the organization can be tightly controlled by a group of top managers.

Little evidence supports this early redetection (Lucas 1975) another problem in validating precisian of computer impact occurs in defining variables such as centralization and decentralization (Information systems concepts for management Moreover, early predictions assumed that decentralization is negatively motivator there make other reasons to decentralize In other hand the information technology effect the distribution of power among the department of the organization. Different departments in organization have different levels of power and a theory proposed by Hick son et al (1971) offers some insight into these power relationships.

As were shall see, the information services department meets conditions that are describes by the Hick son et al for high power, and by its activities, this alters the distribution of power in the baking sector. There are four major conditions describes by the several researchers. The one hypothesized determinants of power is the extent to which the department copes with uncertainty for other departments. Uncertainty is destined as the lack ok information about future events that make their outcomes less predictable. An information services 5 AUTHOR: M. R. M. FAZMEER 2005/2006 FMC

SOUTH EASTERN UNIVERSITY OF SRI LANKA The impact of IT in efficiency and effectiveness of banking sector in Sri Lanka department cope swath aureate deal of uncertainty for user departments. When a new system is designed the user often yields control over an operation to the information services department. For example consider the department that used to prepare budget statements manually but that has just implemented a computer system to process budgets. Before the information technological system. When a gluepot clerks and analysts prepared the budget the manager of the department had complete control.

If the department was behind schedule the manager could arrange over time or employment help to see that job was completed. A solution to most problems wow within the manager is own department Now, with the computer system, the manager has added uncertainties about whether the information services department will finish processing on time and with acceptable accuracy. The development of this computer system has created uncertainty for the manager where non existed before. Interesting enough, only the information services department can cope with this new uncertainty.

The information department of every organization is very important in every organization. So the uncertain ting also controlled by the information services department. A second hypothesized department of high power is whether or not a department can be replaced easily. These are a few alternatives to mature information services department. Dissatisfied company management could hire an entirely new computer staff, but this would create chaos during the transition period. One can also turn to service bureau for processing, but it would be difficult and expensive to covert all present applications.

Another alternative to the information services department is a facilities management arrangement in which a consultant contracts to run an information service services department. However, most facilities management contractors hire proportion of the people currently working in the information services department. A facilities management agreement also meets hesitance form management, which is often uneasy about hexing another organization responsible for the processing of vital information. These for a mature information services department, there are not many possible substitutes. AUTHOR: M. R. M. FAZMEER 2005/2006 FMC SOUTH EASTERN UNIVERSITY OF SRI LANKA The impact of IT in efficiency and effectiveness of banking sector in Sri Lanka A third proposed determinant of high power for a department is the number of links between other department, the great its power clearly, here is another situation where the information services department has the potential for becoming quite powerful. The information services department may accept input from a wide variety of departments in the organization and provide the all with some type of service.

The importance of each link also must be considered in assessing departmental power. It a link were separated, how long would be only an in convenience; In most organizations the final output would no the affected drastically. For the information services department, the number of links and the importance of out put depend on the type of applications developed. Transactional and operational control systems are usually associated with greater power since these systems have immediate impact on workloads in the company.

Most organizations, For an examples, are heavily dependent or on line transactions processing systems. The degree of interdependence between the department of interest and all other departments in the organization is a final condition for power, The greater the dependence of department marketing on department human resources department, the greater is department Marketing’s power. The information services department tends to exhibit reciprocal interdependence with user departments. That is the information services department and user departments mutually depended each other to process work, and unfortunately.

This type of mutual dependence is the most demanding An information services department depends on users during systems design to supply information and provide and understanding of what is needed. On the other hand, the user is dependent on the information services department for the technical aspects of design and for seeing that a system is implemented. During operations, the user must supply input and help maintain the database. The user in turn is dependent on the information services department to provide processing services.

Information Technology (IT) refers to hardware, software, procedures, personnel, and data employed in the production, dissemination, and utilization of information, both formal and informal, in an organization (Davis and Olson, 1985). While traditionally IT has been 7 AUTHOR: M. R. M. FAZMEER 2005/2006 FMC SOUTH EASTERN UNIVERSITY OF SRI LANKA The impact of IT in efficiency and effectiveness of banking sector in Sri Lanka defined to include only “formal” information systems, such as reporting systems generated by a database, increasingly IT is utilized to facilitate informal interpersonal communication.

The key technologies include computers, computer-controlled devices, and telecommunications networks; we also include electronic mail, teleconferencing, voice mail, and facsimile transmission as part of IT. IT consists not only of tangible pieces of equipment and programs; it represents the capacity of the organization to produce, disseminate, and digest information. IT has been used in a number of ways including the mechanization of information processing, the augmentation of knowledge work, and for supporting coordination in the organization.

A significant amount of investment in IT is for basic mechanization of the records of production and distribution of goods and services (e. g. , invoices) or the actions themselves (e. g, electronic money transfer). A centralized database makes it possible to produce and disseminate information for management control as a by- product of mechanization. This category also includes technology used for manufacturing such as CAD/CAM and computer-integrated manufacturing (CIM). Information technology also contributes to the support of individual workers.

Drucker (1964) identified “knowledge work as a specifically human activity, distinct from physical labor which could be automated. The notion of augmentation was first defined by Englebart (1963) as “increasing the capability of a man (sic) to approach a complex problem situation, gain comprehension to suit his particular needs, and to derive solutions to problems” (p. 1). Today, personal computers are used widely by individuals to augment knowledge work. Increasingly IT is being used to increase the ease of connection between individuals, organizational units, and even different organizations.

Applications such as electronic mail, voice messaging, and facsimile transmission facilitate the communication and coordination of information required for organizational Processing. Some terms used for this class of applications are: interpersonal computing (Goldberg, 1987), coordination technology (Holt, 8 AUTHOR: M. R. M. FAZMEER 2005/2006 FMC SOUTH EASTERN UNIVERSITY OF SRI LANKA The impact of IT in efficiency and effectiveness of banking sector in Sri Lanka 1988; Malone, 1988), groupware (Richman, 1987a), and computer supported groups (Johansen, 1988).

Efficiency and Effectiveness of Information technology Advances in information technology and intensified competition in the marketplace have contributed to the timely delivery of products and ser- vices. This in turn has contributed to increased benefits and reduced costs of IT project management. Depending on the size, scope, and complexity of a project, a number of conflicting elements challenge IT project management. Project delivery may address the equally important need for reliability in delivering the project as promised, as well as its cost and benefits. equirements for effectiveness and efficiency in IT project management. Given the critical importance of project delivery and reliability as well as the economic rationale in project planning and implementation, the future of any business will be determined by how well projects are managed today. In general, short period cycle times may lead to substantial incremental earnings while the penalty for long project cycle times may mean missing market opportunities al- together. In addition, multi-project organizations may often tend to launch projects as soon as they are understood.

These organizations launch the projects concurrently with existing projects, simultaneously with other new efforts, or without sufficient regard to the capacity of the organization. This would commonly lead to an array of projects with conflicting priorities. Project resources and managers are responsible for sorting these priori- ties. Of particular concern in this regard is that the priorities established within a functional area may not be in synchrony with other areas, or more importantly with the company-wide priorities.

It can be argued that smaller projects are more manage- able and it is usually easier to ensure their success, and thus, smaller projects are more likely to succeed than large projects. On the other hand, one can argue that larger projects would have more funding and resources and therefore should have a higher probability of success. However, 9 The recent developments in IT have also brought significant ramifications with regard to the critical AUTHOR: M. R. M. FAZMEER 2005/2006 FMC SOUTH EASTERN UNIVERSITY OF SRI LANKA

The impact of IT in efficiency and effectiveness of banking sector in Sri Lanka we argue that while the smaller projects may be more manageable, project management can be the critical factor in ensuring the success of the projects, regardless of the size. Some of the critical factors to project success are user involvement, executive support, and a clear statement of business objectives In this context, SWOT analysis and the Theory of Constraints provide a comprehensive framework that can address the effectiveness and efficiency of project planning. (Sabbaghi and Vaidyanathan, EDSIG, 2003, p. 2) (Wei, et al. 2002) proposed a resource con- strained-based project management model for project planning, implementation and control. The research does not include Theory of Constraints as a tool for effective project selection. Another model used SWOT analysis to make decisions on effective use of resources for housing projects (Ziara and Ayyub, 1999. ) The methodology considered both the options and constraints of relevant socio-economic factors in the planning and construction of urban housing-project developments. A selection of R&D projects models consist of integer decision variables for both the number of researchers allocated nd project selection. Re- searcher allocation and project selection are subject to several linear and nonlinear goal constraints (Taylor, et al. , 1982). In this study, we have pro- vided a framework for effectiveness and efficiency of IT project planning using SWOT analysis and Theory of Constraints. There is a potential for further research using both these tools to address the selection of projects in a more efficient and effective manner. (Sabbaghi and Vaidyanathan, EDSIG, 2003) 10 AUTHOR: M. R. M. FAZMEER 2005/2006 FMC SOUTH EASTERN UNIVERSITY OF SRI LANKA

The impact of IT in efficiency and effectiveness of banking sector in Sri Lanka Information Technology in Banking Sector (Ranee Jayamaha, 2008) The rapid advancement in Information and Communication Technology (ICT) has had a profound impact on the banking industry and the wider financial sector over the last two decades and it has now become a tool that facilitates banks’ organizational structures, business strategies, customer services and other related functions. The recent “IT revolution” has exerted far-reaching impacts on economies, in general, and the financial services industry, in particular.

Within the financial services industry, the banking sector was one of the first to embrace rapid globalization and benefit significantly from IT development. The technological revolution in banking started in the 1950s, with the installation of the first automated bookkeeping machines at banks. This was well before the other industries became IT savvy. Automation in banking became widespread over the next few decades as bankers quickly realized that much of their labor-intensive information-handling processes could be automated with the use of computers. The first Automated Teller Machine (ATM) is reported to have been introduced n the USA in 1968, and it was only a cash dispenser. The advent of ATMs helped both to improve customer convenience and reduce costs, as before ATMs, withdrawing funds, accounts inquiries and transferring funds between accounts required face-to-face interaction between bank staff and customers. :-Rapid advancement and gains to the banking sector Overall, technological innovation has brought about the speedy processing and transmission of information, easy marketing of banking products, enhancement of customer access and awareness, wider networking and, regional and global links on an unprecedented scale.

IT development has thus changed the product range, product development, service channels and type of banking services, as well as the packaging of such services, with significant efficiencies not only in the banks, but also the ancillary and feeder services to banks. The financial services industry has thus become virtually dependent on IT development. Most banks make visible efforts to keep up with new systems and processes. 11 AUTHOR: M. R. M. FAZMEER 2005/2006 FMC SOUTH EASTERN UNIVERSITY OF SRI LANKA The impact of IT in efficiency and effectiveness of banking sector in Sri Lanka

The development in ICT has enabled banks to provide more diversified and convenient financial services, even without adding physical branches. The present day ATMs are more sophisticated machines that can scan the customer and a bank teller, accept cash or cheques, facilitate customer application for loans and allow for face-to-face discussion with a service representative via video. The development of Internet services, which is an extensive, low-cost and convenient financial network, has facilitated banking services to customers, anywhere and anytime.

Along with Internet and Web-based services, a need for changing core banking architecture has emerged. The introduction of new core banking systems by some banks and their links with the improved telecommunication network has enabled banking transactions to be done on-line, in contrast to the batch-processing mode used earlier. The integration of etrading with internet banking and banks’ websites is also a notable feature. These IT advancements have enabled banks to gradually replace manual work by automated procedures with on-line real time processing. -Adoption of Information Technology in Sri Lankan Bank industry The banking sector in Sri Lanka has undergone a rapid transformation with the adoption of IT-based banking solutions. The widespread usage of IT in Sri Lanka’s banking sector began only in the late 1980s with the introduction of the first ATM by HSBC Bank in 1986. The introduction of ATMs and automated processes has reduced the cost per transaction significantly, as staff overhead costs have decreased. Initially, the banks adopted systems developed in-house or used vendor provided systems on a decentralized basis, thus transforming manual systems to automated processes.

However, most of the core-banking systems provided by different vendors were ad hoc solutions and on piecemeal basis, i. e. separate modules and technology platforms for key operations such as deposit mobilization and lending, trade finance, treasury operations, and more recently card transactions. Those who opted to implement new core-banking systems together with other sub systems and integrations may have made relatively large 12 AUTHOR: M. R. M. FAZMEER 2005/2006 FMC SOUTH EASTERN UNIVERSITY OF SRI LANKA The impact of IT in efficiency and effectiveness of banking sector in Sri Lanka investments with sustainable gains to compensate costs.

The arrival of new foreign and private banks with state-of-the-art technology-based services pushed other banks in Sri Lanka to move towards the latest technologies so as to retain their customer base and meet competition. The increasing competition in Sri Lanka’s banking industry has widened the scope of the IT infrastructure development to meet diversified demands made by numerous users. Today, customers of some banks enjoy services through Internet banking, Tele banking, Mobile telephone banking and Visa/Master Credit and Debit card facilities.

The growing competition and expectations have also increased awareness amongst banks of the role and importance of technology in banking. ; -Information Technology of Commercial Banks. The Bank has vital information system to their organization activity. They have invested more and more on new information technology. Last year they have received the edge over other banks and they will continue to invested in information in order that they to stay ahead. Last year they invested Rs. 302. 13million in IT. Two new cutting edge products they rolled out.

In partnership with Dialog. They enabled the customers to top up their pre-paid mobile phones by way an SMS to the Bank. The SMS debits the customer’s Bank account and tops up his/her pre-paid mobile phone account. Intermediary truncation are eliminated truncation costs reduced and a win-win scenarios is created for the services provided, the customer and the Bank This year they will clinch deals with other operators as well and offer the product to abroad group of the customers. This new product has concept of “pre-paid” telephone cards.

A similarly facility has now been extended to customers who have obtained “Pahan” personal loans obtained those eligible to get their loans immediately topped up merely by sending SMS to the Bank. Thorough the Mobile ATM process the collective wealth of the Bank is enhanced enabling the previous of superior potations to our customers. They have several electronic products which are operating using an information technology; they are e-Exchange, e-load, Com Tel, Mobile ATM operating on GPRS Technology, Online banking, Telephone Banking and etc. 13 AUTHOR: M. R. M. FAZMEER 2005/2006 FMC

SOUTH EASTERN UNIVERSITY OF SRI LANKA The impact of IT in efficiency and effectiveness of banking sector in Sri Lanka They have giving several facility and technology to their customer to attract the customer and improve the efficiency and effectiveness as well in the committee market. So they have use effective information technological system to their function. ;-Information Technology of the People’s bank. Having worked on a revolutionary IT platform last two years, 2005 become the year in which information Technology became the platform, for People’s Bank to drive its business. he strategic plan 2005-2008 maps out of the years, in which the bank will create a business responsive IT culture, built on an anytime anywhere sever ice; where Information is available at the click of button- easily accessible and very comprehensive; where knowing their customers empowers employees to develop the required business Through the responsiveness, and where carrying for customers become priority integrated banking solutions and multi-channeled delivery systems, the Bank will be able to deliver a complete range of banking services .

This will enable to the Bank to earn revenue which turn contributes to the business performance that makes it a vital financial instate. The implication of Bank’s Core Banking solution vital for the enhancement of the function and severances which the management and the employees could extent to provide excellent customer service e core Banking salutation will also bring in effective control, policies and dissiliences in providing a customer centric knowledge based cultural which enhances productivity and competitiveness.

The Core Banking salutation was rolled out to 37 branches including corporate Banking division, trade finance division, overseas customer services unit, central clearing and cash and the finance and MIS division of the bank during2005. During the year 2006, the Bank copes to roll out the salutation to 200 branches. This would enable all the main branches of the bank to use the Core Banking salutation. The Bank has also installed a central Archiving system and the MIS / Data Ware house system during 2005.

The effectiveness and productivity relating to the MIS / Data ware house system and the Central Archiving system would be important areas to fours during 2006. The linguini of the credit card center, FCBU and the corporate II system would be some of the key areas of the Core Banking implementation other than the automation of 14 AUTHOR: M. R. M. FAZMEER 2005/2006 FMC SOUTH EASTERN UNIVERSITY OF SRI LANKA The impact of IT in efficiency and effectiveness of banking sector in Sri Lanka the 163 branches during 2006archiving system.

The It personnel of the Bank attached to the Data Center, operating IBM e Server I Series system have also been provided with specialized training from IBM, their partners Blue Chip Customer Engineering Lanka (Pvt) Ltd. And silver lake. The training provided covers the technical aspect and operational aspect of IBM e Server I Series, the Archiving system together with the application system in use (SIBS). Training was also provided to the team managing the Central switch with regard to the operation and technical aspect of the Central switch system and its connectivity.

The PABS team was provided with advance SCO – UNIX, training conducted by SCO- UNIX. USA in Sri Lanka. The IT department staff continues a process providing training to branch uses using the PABA system and the ATMs in odder to the tramline the operational efficiency and support to the branch. This training program was conducted through out the year. The offices attached to the IT department continued to receive training areas of technical Development, Management, Management Development and Leadership. The aim of developing their skills in adaptation to technical skill has been constantly addressed.

During 2005 the bank has strengthen its control with regard to IT operations and Viruses protection, relating to all system used by the Bank. The Bank is continue sly working on improving its vigilance process and maintains stringent security with regard to all its system. During 2006 setting up of firewalls will be given priority consideration. 15 AUTHOR: M. R. M. FAZMEER 2005/2006 FMC SOUTH EASTERN UNIVERSITY OF SRI LANKA The impact of IT in efficiency and effectiveness of banking sector in Sri Lanka REFERENCES 1.

Abdul QawiAthman & Lynn Owen, “Adopting and Measuring Customer Service Quality (SQ) in Islamic Banks: A case study in Kuwait Finance House”, International Journal Of Islamic Financial Services Vol. 3 2. Banking Journal, 1996-2000, Institute of Banks of Sri Lanka. 3. Copeland and Mc Kenney, 1985 the impact of information technology in air lines industry 4. Haron. s, Ahamad. N and Planis . S (1994), “Bank patronage Factors of Muslim and NonMuslim customers”, International Journal Of Bank Marketing Vol. 12,No. 1 PP. 32-40 5. Hentry C. LUCAS, JR. 1982, “Information Systems For Management” Edition O- O7- O36924 -1.

McGraw- Hill series in management information system. 6. Lears Silver and Fatima Vegholm “The impact of the enabling organization on customers Satisfaction: Banks and their small business customers” (KTH-DrottningKristinalVag 30,SE- 10044 Stockholm, Sweden, 1996) 7. Peter F. Drucker, (2000). The importance of information technology ,ISBN 8. Rosenblatt. J Laroche. M. Hochstein. A. Mehlavish. R and Sheahan. M (1998), “Commercial Banking in Canada: A study Of the selection criteria and service expectations of treasury Officers”, International Journal Of Bank Marketing Vol. ,No. 4, PP. 20-30 9. Website i. Outer Banks website http:/www. outer banks . org. ii. Using. ch website http:/www. using. ch. /org. iii. http://www. statistics. gov. lk iv. http://www. wikipedia. org 16 AUTHOR: M. R. M. FAZMEER 2005/2006 FMC SOUTH EASTERN UNIVERSITY OF SRI LANKA The impact of IT in efficiency and effectiveness of banking sector in Sri Lanka BIBLIOGRAPHY 1. Chorofas, D. , Steinman, H. (1991) Expert systems in banking – A guide for senior managers, UK, Macmillian. 2. Gandy, T. , (Jan. 1996) Big picture, Banking Technology 3.

Gardner, P. (1994) Electronic trading – A practical handbook, UK, Butterworth Heninemann 4. Mckenzie, H. , (Mar. 1995) Attack of the hackers, Banking Technology 5. Mills, A. ,( Mar. 1996) At your service, Banking Technology 6. NatWest Group, Perspectives on technology(1995). 7. Norton, J. , Reed, C. , Walden, C. ,(1995) Cross-border electronic banking 8. Websites: i. ii. iii. http://www. wikipdea. org http://www. 123journals. com http:www. emaraldinsight. com 17 AUTHOR: M. R. M. FAZMEER 2005/2006 FMC SOUTH EASTERN UNIVERSITY OF SRI LANKA

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Fortu Powercell GmbH Case

Nowadays, it is critical for the companies of many industries to pay a lot of attention and efforts on the management of technology and innovation. Indeed, the development of new technologies is a potential source of competitive advantage and the ability of the companies to innovate and/or to respond to competitors’ innovation determine their survival in a long-term basis. This ability is more or less developed in companies, regarding their maturity and their structure.

Most of the start-ups, which usually function as adhocracies, have a good ability to innovate but struggle to bring these innovations to the market. fortu Powercell GmbH represents a typical example of a start-up with a promising technology offering a lot of possibilities, a new type of battery, but which does not know what strategic direction to take in order to achieve long-term profitability.

Studying its situation would the occasion for us to present several concepts that managers in fields where technology and innovation matter need to embrace if they want to take relevant strategic decisions. We are going to start our analysis with a quick reminder of the case, what are the critical points to keep in mind before to present some considerations relative to the work of several experts, researchers in the management of technology and innovation. Finally, we will conclude with some suggestions for the executive team of fortu Powercell.

It would help us to answer adequately to the questions of fortu Powercell’s executive team. Another work we would like to quote is the work of Christensen on disruptive innovation. To summarize, we can differentiate two type of innovation: sustaining and disruptive. A sustaining innovation targets demanding, high-end customers with better performance than what was previously available. A disruptive innovation consists in the introduction of a product, a service which is not as good as currently available products but compensates thanks to its simplicity, its convenience, its low cost which would appeal new or less-demanding clients.

Thus we distinguish two types of disruptive innovations, the new-market disruption and the low-end disruption. The first one is competing with non-consumption, at the beginning, before pulling out customers out of the mainstream market into the one because of the convenience of the product/service. The second one is focusing at the low-end of the original mainstream value network, on the customers whose expectations regarding the product are lower than what is actually proposed on the market.

It is quite critical to define what kind of innovation is the fortu Powercell because the way people should manage sustaining and disruptive innovations are totally different. A sustaining technology strategy is not a viable way to build new-growth businesses for instance and usually once they have developed and established the viability of their superior product, entrepreneurs who have entered on a sustaining trajectory should turn around and sell out to one of the industry leaders behind them.

Also, an idea that is disruptive to one business way be sustaining to another. If this is the case, it is better to redefine the product or the service in a way that it would be an opportunity which is disruptive relative to all the established players in the targeted market space or another solution is to not invest at all. Otherwise, it could be extremely difficult to beat the established companies which would defend their positions. Burgerlman and Siegel would also contribute to our analysis with their work on the minimum winning game.

This is the “first ajor market opportunity that is limited enough to provide a clear target for technology and product development efforts in the short-to-medium term, and sufficiently large that successfully pursuing it provides a foundation for long-term corporate development”. When the MWG has been defined, the top management can set relevant milestones against which meaningful progress can be measured. The risk of an undefined MWG is a focus on a set of feasible but fairly limited and unconnected milestones along a road that leads nowhere or the elaboration of a serie of vague visions.

The first MWG is influenced by 3 drivers, the technology development, the product development and the business strategy. The management team should put a lot of efforts to balance their influence in order to prevent one of them to dominate the interplay, because of the potential negative effects related to each one of these driver. Nevertheless, one of them should be the main driver but not all the time the company is trying to achieve its MWG. Shifting the balance of drivers in due time is necessary to achieve this goal.

We mention this work because we would like to determine if one of the options considered by the fortu Powercell management team is a correct MWG, if they have developed a correct thinking about the options they defined. Considering the nature of the product fortu Powercell wish to sell, we must consider the work of Henderson and Clark on architectural innovation or the technology S-curve for components of Christensen. About the first named, it raises a distinction between several innovations as they could be incremental, modular, architectural or radical.

Incremental innovation basically refines and extends an established design whereas radical innovation establish a new dominant design. A modular innovation is an innovation that changes a core design concept without changing the product’s architecture and finally a architectural innovation change a product’s architecture but leaves the components and the core design concepts that they embody unchanged. Qualify the fortu Powercell innovation would give us some clues about how established firms would react if the product is commercialized.

The input of the S-curve theory in our thinking is that it forces us to not forget that the other technologies are maybe not mature and still have some potential that could lead to a fierce competition between them and the fortu Powercell technology. Finally, we would like to mention the work of Christensen, Musso and Anthony about capturing the returns from research, which talk about when, where and why integration is needed and introduce the notion of decoupling point.

Basically, it illustrates the fact that a product with proprietary, interdependent architecture is subject to an interdependence of its components. The way one component is designed and made depends on the way the other components are being designed and made. In this case, the control of the design and manufacturing of every critical component of the system by a process of integration allows companies to develop a competitive advantage. A product with a modular architectures means that individual sub-systems can be upgraded without redesign everything.

In this case, being specialized, not-integrated, is the best solution. We think it is important to keep in mind these notions as fortu Powercell is looking to enter the market of batteries for defined products. If the product has an interdependent architecture or a modular architecture, that makes a difference on how fortu Power should define its strategy. As a conclusion for this part, we want to remind that these theories and works presented are what we mainly used to mold our thinking about this case, to evaluate the situation of fortu PowerCell and its possibilities. III. Suggestions

In this part, we are going to present a few suggestions for the fortu Powercell executive team regarding what we presented before. They should give them enough indications to help them find satisfying answers to their questions. If we look at the theories we mentioned, it seems that we can just start by defining a set of questions related to them and to other constraints and see if the first option, the plant in Lepzig, is such a good solution. We could also try to see if there is another solution, another market segment which appears to be better to the point it overcomes the loss of a potential market segment.

First option: The plant in Lepzig (Market segment: Power Tools) -How well the fortu battery respond to the four set of questions of the management criteria theory, in the case of the power tools market ? Quite well actually. It appears at first sight that the fortu battery technology would be a profitable technology for the power tools market as it lift a fundamental prior constraint, provide enhanced effectiveness… -Is the fortu battery a disruptive innovation or a sustaining innovation for the power tools battery market ?

This question is subject to debate but as we see it, the fortu battery system is in part a disruptive innovation for the power tools battery market. Indeed, it would allow the creation of more powerful cordless tools which lead us to think that this is a new-market kind of disruptive innovation. On the other hand, if we only consider only the less powerful tools such as the screwdrivers, we can see the fortu battery technology as only a sustainable technology.

It represents a battery with better characteristics compared to nickel based batteries and that is all. -Is the conquest of the power tools battery market a suitable MWG ? What are their following milestones ? We do not think that the power tools battery market is a suitable MWG because this is only a sustaining innovation for the single largest product category, which means than established players in the market would try to defend their market shares and, in a long-term perspective, we can imagine they would have to sell the business.

 

Second option: fortu Powercell gives up the power tools battery market and license its technology Another way to formulate the relevance of this option is to ask the question: is there a better MWG that fortu Powercell could choose ? A MWG that will compensate the loss of the power tools battery market segment ? After what we said in the previous argument, that the power tools battery market segment was not a very good MWG, and considering all the other opportunities offered by this technology, it would be surprising not to find a better one.

The advantage with this option is that the first entrant with this technology in the global market won’t be fortu Powercell. They would have the chance to have a concrete feedback about what their technology is really capable of when it comes to mass production, what would be the reactions of major players in the business. Quick reminder: the first entrant is rarely the one that would capture the value of the technology.

Also, it would give them some funds to be relatively independent from external capital, to keep doing some research or for a potential new venture. They will not have to use such a complicated financial operation to gather the funds and maybe they would not have to deal with conditions defined by their partners or at least it would be less constraining. Finally, they will have some time to think about everything we mentioned and there will maximize their chances to define what could be the perfect MWG for them and what milestones it could imply.

But they have to keep in mind that is possible that this technology is not a disruptive technology for any market and consequently that long-term development would be difficult. So we think that there must be a better MWG for fortu Powercell and its technology but what would that be Final suggestions In this final part, now that we have defined that the second option is the best, as we see it, we are going to present what we think is a proposition of better MWG for fortu Powercell and we will conclude with a few recommendations.

It is important to precise that this is only a proposition, we are not going to develop this thought too further as we think that the question of the fortu Powercell management team is answered and that they consequently have time to evaluate their different options. We think that the pedelecs (bicycle with electric assistance) would be a good MWG for fortu Powercell as it is limited enough to provide a clear target for technology and product development efforts in the short-to-medium term, and sufficiently large that successfully pursuing it provides a foundation for long-term corporate development.

Indeed, the prices and margins are high in this market segment and most of the price depends of the battery. The segment size is important, around 100 million, which is big but not too much. It would be a low-end disruptive innovation compared to the NiCD and Li-on cells in the sense where the bicycles would be simpler, with a smaller battery that won’t need to be recharged too often, which is much more convenient. Indeed, we think that the technological advantage of the fortu Powercell would lead to these improvements, these enhancements for the product.

The bicycles could also be cheaper as the price per Wh would be lower which could drive new customers, previously repelled by the high price. The important market of Netherlands will not be far from Karlsruhe, so a plant could be build over there. If this MWG would be a success, it would be possible to move to a sequence of MWG: electrical scooters (Italy is also not that far from Karlsruhe) – electrical cars (which can be considered as the ultimate target, the maximum winning game).

Beyond the choice of the MWG, and as a conclusion, we would like to recommend fortu Powercell to pay attention to develop its absorptive capacity, in order to remain to the peak of the battery technology and then be able to respond with energy to the responses and attacks of other players, and in a long-term perspective, in the case they would be successful, to put a lot of efforts to define clearly its strategic intent.

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Management: Innovation

Business is said to consist of four elements: Principles, Models, Rules and Behaviours, the first constrains the company scope, the third the procedures, both being static elements. The interplay (feedback) between changing models and behaviours however is what drives innovation – the exploration of adjacent new possibilities. This is a step at a time mode of innovation, yet rules actually prevent these improvements which, it is shown, derive largely from the staff breaking rules.

After looking more closely at complexity concepts (see later), the importance of language and metaphor is considered, especially the need for free format communications (stories) between employees. The knowledge and ideas thus exchanged are considered far more valuable to the company, in the new thinking, than any time wasted. This leads on to applications of the co-evolution metaphor central to complexity thinking, stressing that the future is no longer predictable from the past.

The importance of ideas in defining company possibilities, and the need for a high ratio of information (ideas) to infrastructure (events), brings us to the successful franchise system, said to be the current best model of CAS thinking in action. This highlights the importance of independent feedback between control levels in achieving adaptation, plus the superiority of information flow over infrastructure change.

The ramifications of understanding and challenging our basic assumptions (including principles) in order to make the necessary paradigm shift cannot be stressed enough, otherwise we merely tinker with the parts. Anyway, these serve to illustrate the benefits of devolving power and decision making to individuals or groups in the company (who form purposeful agents in the CAS). The self-organization that then occurs allows the rule transcendence (going beyond routine) necessary to generate that flexibility crucial to success in a modern co-evolutionary environment.

The point that such emergence takes time is well made, and highlights one possible problem in the management of such complexity based systems – impatience. Another problem is the ability of staff to adopt such lateral, divergent thinking (the creative basis of adjacent innovation), and this requires that the employees change their mindset also, to embrace and not abuse the new freedoms. This both necessitates and will drive a society wide change, following the same devolution of power – complexity thinking isn’t a change just to company behaviour, but to overall lifestyle.

Many of the concepts are presented in a guru style, as claimed ‘truths’, without justification, and this lack of depth means that inadequate background is given to many of the complexity terms used (e.g. attractor, fractal, fitness), so much so that their true relevance could be missed by the intended business audience. For example, the important idea of crossover, the re-combination of old ideas in new ways to cause step jumps in performance, with stress being placed instead on mutation style evolution (a move to an adjacent point on the fitness landscape).

Additionally the emphasis on breaking down barriers, and the resultant freedom and unpredictability, neglects the spontaneously appearance of new dynamic barriers (by self-organization effects), which can prevent the feared chaos dissolving the business.

On a more detailed level, there is inadequate mention of the many computer programs using complexity techniques available (outside the Santa Fe environment), which could help businesses gradually introduce this style of thinking, targeting specific existing problems (e.g. using Genetic Algorithms, Neural Networks, Fuzzy Logic, Artificial Life and Cellular Automata techniques). Those seeking a more in depth knowledge of general complexity ideas should therefore look elsewhere, but considerable scope is still provided here for the remodelling of overall business structures, along the lines of the organic complexity paradigms recommended.

It would have been nice to have seen simulations used to give quantitative comparisons between the new, complexity, assumptions and the old (in the style of Epstein & Axtell’s ‘Growing Artificial Societies’). It is not specific enough however, in my opinion, to convince old style managers to alter their ways. The implications that they must give up power, status and possibly reward for unpredictable ‘cognitive’ gains is unlikely to appeal to closed minds, unless a suitable ‘bottom-line’ accountant focus is given, emphasising a point that the book itself makes – that new thinking must be phrased in terms of the old concepts to make an impact.

It is suggested that there are different types of patterns found in the organizational structure of a group. The patterns are referred to as paradigms.

Closed Paradigm

The structure is a traditional hierarchy of authority (similar to a CC team). This kind of team is good at creating software that is similar to its previous experience and it is less likely to be imaginative.

Random Paradigm

The team is not strictly centered and depends upon the members of team to be responsible for their tasks. When innovation or technological breakthrough is required, teams following the random paradigm will excel. Unfortunately, this type of team will not always excel if everything is completely organized.

Open Paradigm

The open paradigm is a combination of the closed and random paradigms. It structures the team so that there is control of tasks similar to the closed paradigm and has the attempts at innovation found in a random paradigm. Work is performed collaboratively with heavy communication and consensus-based decision making. This type of team structure is appropriate for teams that must deal with complex problems. Unfortunately, it may not be well suited for many people.

Synchronous Paradigm

This depends on the modularity of the entire project that is being solved. The problem can be broken down into smaller parts where team members work on a section independently. There is not much communication required among members.

Such patterns, when changed to another pattern, can be called paradigm shifts, and form the underlying structure for talking about the future. They are pervasive and would be included in the driving forces as well as scenarios. They are the “unwritten rules” of how the emerging society might function.).

 

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Leaders and Innovation

The staff members that are having knowledge depend a lot on the leaders of the organizations.  It is important that the leader makes an attempt to innovate rather than orders his/her staff members to do so.  The leader should be able to lead his/her staff by example.  He/she should also be able to create an environment existent in the organization that is conducive for innovation.

An attitude or relentless growth should be formed.  This would not only permit the organization to achieve its objectives, but also enable the staff members to do so.  Once the staff members are able to achieve their objects, they would be motivated to develop and grow father, and the best instrument to develop and grow would be innovation.  The leader of the team should ensure that there is free-flow of ideas in the team, and the communications links between the members of the team are strong and effective.

The leader should also be able to develop a strategy, structures and functions within the organization that would enable innovation.  A corporate culture (which includes norms, assumptions, values and attitudes, shared by the staff that function in the organization) should be created that would help in the innovation development.

Many of the leaders in the corporate sector suggest that it is utmost important for the leader to motivate his staff members using various methods, so that innovation is possible.  The leader would have to conduct research to determine the means by which the staff embers would get motivated.  He/she should then use these means to encourage the staff members to innovate further (Kotelnikov, 2007).

In several branches of science, controversy follows innovation, and threatens to affect the social structures present in the organization.  Various parties may come up with their own assumptions with a new technology brought out by an organization.  This may be a subject of debate in the field.  This should be considered as an opportunity to provide answers to several difficult questions.  Several others who consider that they are experts in that field would question any new technology brought about by recent research.

A strong communication link should be existent between various intellectuals of the field so that unanswered questions are effectively addressed.  This would certainly help to advance the field and provide benefits for mankind.  It is important that in any controversy situation, the roots of the conflict be recognized and addressed properly.  However, if these issues are not understood and addressed (and if not taken in the right spirit), the controversy could worsen, which would have a negative impact on the organization, the particular scientific field and ultimately on the society (Baldwin, 2007).

References:

Baldwin, D. V. (2007). “Innovation, Controversy, and Consensus in Traumatology”, Retrieved on November 3, 2007, from Trauma Pages Web site: http://www.trauma-pages.com/s/dvb-96a.php

Kotelnikov, V. (2007). “Corporate Culture Defined,” Retrieved on November 3, 2007, from 1000 Advices Web site: http://www.1000ventures.com/business_guide/innovation_system_culture.html

Kotelnikov, V. (2007). “Leading With a Growth Attitude,” Retrieved on November 3, 2007, from 1000 Advices Web site: http://www.1000ventures.com/business_guide/im_leadership.html

Kotelnikov, V. (2007). “Understanding the Innovation System – Unlocking the Black Box,” Retrieved on November 3, 2007, from 1000 Advices Web site: http://www.1000ventures.com/business_guide/innovation_system.html

 

 

 

 

 

 

 

 

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Innovation and Change Management

| Companies that successfully innovate also successfully manage change | INNOVATION & CHANGE MANAGEMENT MHN221935-12-A| Malgorzata Glowacka S0915718 International Tourism & Hospitality Enterprise | Innovation and change management have been and continues to be an important study on a number of levels. It plays significant part in economic growth as well as it is vital for firms’ survival and development. New ideas, new approaches and new products become critical guidelines in organisational strategy, especially for managers and business leaders.

According to The Boston Consulting Group (2010) employers’ ranked innovation as a strategic priority with 26% citing it as a top priority and a further 45% ranking it as a top-three priority. Organisations such as Apple or Google adapted this tactic and thanks to their right management of change, now are recognized as one of the most revolutionizing and prosperous companies in the world (Business Week, 2010). It proves that successfully innovating companies are the winners and they play major role in industry market.

Therefore, this essay aims to critically evaluate the connection between innovation and change management. The term of innovation is hard to define as it can mean different things for different people. According to Druker (1985) innovation is the specific tool of entrepreneurs, the means by which they exploit changes as an opportunity. West and Farr (1990) pointed out that organizational innovation can be characterized as a tangible product, process or procedure within company and something what is new to the social setting within which it is introduced although not necessarily new to the individual introducing it.

They also exanimated innovation being more intentional rather than accidental, mainly aimed at producing benefit to the organization. Traditional categorizations of innovations divide them into four types (Tidd and Bessant, 2010, Fig1): -product innovation can be a change in the function or feature of a product such as Window Vista replacing XP. This kind of innovation is intended to improve the function of the offering to make sales more likely -process innovation is based on transformations in the ways products/ services are created and delivered like for e. g. nline banking system which allows customers to manage their finance. This kind of invention introduces new, or significantly improved, method for production or delivery of output that adds value and better performance -position innovation target changes in market or customer base for a product or service. This kind of strategy change meaning of a product in customer’s eyes like for e. g. four-wheel cars which originally were used for off road work became fashionable family car -paradigm innovations are based on changes in how companies frame what they do; for e. . Air Canada (the largest airline of Canada with scheduled and charter air transport) launched a discount, new low-cost international carrier in Vancouver (The Globe & Mail,2012) Fig 1. Types of innovation. Adapted from Tidd and Bessant, 2010 Innovations are often classified as either radical or incremental (Gallouj and Weinstein, 1997). Radical innovations are generally based on a big change in development that modifies the competitive market and it may results in new markets and product opportunities.

Good example of radical innovation is Apple with their first PC Lisa which had graphical interface. The innovation, despite its limited success, was universally recognised as being far ahead of the competition and it took years for some of the advanced features of its operating system to be incorporated in competitors’ operating system (Rayna and Striukova, 2009). An incremental innovation is a term used when there was a minor change to an existing technology like for e. g. in case of Apple and their iPod.

MP3 players had been present in the market before Apple introduced iPod but the company still succeed because they made better product, which was easier to use, looked more solid and more appealing compared to other MP3 players (Rayna and Striukova, 2009). Organizational change, like innovation, is hard to specify. It can be described as any alternation or modification, which occurs in the overall work environment of an organization. Moran and Brightman (2000) defined it as the process of continually renewing an organization’s direction, structure, and capabilities to serve the ever-changing needs of external and internal customers.

It tend to focus on the management of formally planned changes and it is indicating a macro- level approach, which is concerned with organisation as a whole (King and Anderson, 2002). Due its complexity, many researchers categorised organizational change in different ways, for e. g. Pettigrew (1987) separated it into strategic and non-strategic change while Goodstein and Warner (1995) divided it into incremental and radical change. However the starting point for discussing variations of change is Grundy’s (1993) three variations of change. The first, smooth incremental change changes slowly in a systematic and predicable way.

The second variety of change Grundy terms ‘bumpy incremental change’. This is characterized by periods of relative calmness disrupted by rushing in the pace of change. Grundy’s third variety of change is ‘discontinuous change’, which he defines as ‘change which is marked by rapid shifts in strategy, structure or culture, or in all three’. There are several drivers and models which clarify the need for change. Most of them are grouped into external drivers or internal drivers (Proehl, 2001). External are those forces that are outside the organization, usually it is an economic, political, socio-cultural or technological driver.

The internal drivers are those forces within the organization, which may include finance, limited skill level of employees, changes in leadership etc. Another example, presented by Anderson and Ackerman Anderson (2001) describes seven main drivers of change, which move from what is external (environment, marketplace, organization) to what is internal (culture and people). This model mainly focuses on leaders and management role as they are clearly more aware of external domains and thy play the most important part in internal domains.

This is their job to implement any changes in culture, behaviour and mind-set within their company and if they will fail in that, the change will also fail. It can be assumed then, that change is about innovation and innovation is about change. Williams (2006) stated that to successfully manage innovation, company need to be good at managing source of innovation and managing innovation during discontinuous and incremental change. Once again Apple is the perfect example of company effectively handling innovation and change at the same time. They do it for e. g. y managing leadership within organization. Tidd and Bessant (2005) noted that leadership strongly influences the success of change and innovation. For Apple the key role in the company played Steve Jobs and his visionary leadership: My passion has been to build an enduring company where people were motivated to make great products. Everything else was secondary. Sure, it was great to make a profit, because that was what allowed you to make great products. But the products, not the profits, were the motivation. Sculley flipped these priorities to where the goal was to make money.

It’s a subtle difference, but it ends up meaning everything—the people you hire, who gets promoted, what you discuss in meetings. Isaacson, 2012 According to Hughes (2006) leading change is fundamentally about influencing groups and individuals, therefore leaders of change need to understand people. And that is what Jobs could do. He understood that customers don’t know what they want until it is shown to them. He implemented among his employees the desire of perfect design as to him ‘’…nothing could be further from the meaning of design. Design is a fundamental soul’’ (Isaacson, 2012).

To conclude, the concept of innovation and change is fundamental to business success. It is viewed as being extremely important for company survival and future development. Organisations such as Apple can prove the point that companies which successfully innovate also successfully manage change. References Anderson, D. , Ackerman Anderson, L. , 2001. Beyond Change Management: Advanced Strategies for Today’s Transformational Leaders. USA: Jossey-Bass/Pfeiffer Drucker, P. F. , 1985. Innovation and entrepreneurship: practice and principles. New York: Harper ; Row Gallouj, F. , Weinstein, O. , 1997. Innovation in services.

Research Policy 26, 537–556 Goodstein, L. D. and Warner, W. , 1995. Creating Successful Organization Change. In: Managing Organizational Change. Warner (ed. ). pp. 7-9. New York: American Management Association Grundy, T. , 1993. Implementing Strategic Change. London: Kogan Page Harsh, P. , 2011. Organizational Change. India: Dorling Kindersley Hughes, M. , 2006. Change Management: A critical perspective. CIPD. King, N. , Anderson, N. , 2002. Managing Innovation and Change: A Critical Guide for Organizations. Singapore: Seng Lee Press Isaacson, W. , 2012. The Real Leadership Lessons of Steve Jobs. [online] Available from: http://www. atheeqa. com/App_Themes/watheeqa/pdf/The%20Real%20Leadership%20Lessons%20of%20Steve%20Jobs%20-%20HBR%20l%20Apr-2012. pdf [Accessed 15th October] Moran, J, W. , Brighman, B. K. , 2000. Leading organizational change. In: Journal of Workplace Learning: Employee Counselling Today Vol. 12 (2), pp. 66-74 Pettigrew, A. M. , 1987. Context and action in the transformation of the firm. In: Journal of Management Studies, Vol. 24 (6), pp. 649–70 Proehl, R. A. , 2001. Organizational Change in the Human Services. USA: Sage Publications Ltd. Rainey, D. LA. , 2005. Product Innovation: Leading Change through Integrated Product Development.

UK: Cambridge Rayna, T. , Striukova, L. , 2009. The curse of the first-mover: when incremental innovation leads to radical change. In: Int. J. Collaborative Enterprise, Vol. 1(1) The Globe and Mail. Air Canada shuffles small-plane fleet, adds wide body jets. [online] Available from: http://www. theglobeandmail. com/globe-investor/air-canada-shuffles-small-plane-fleet-adds-widebody-jets/article4580211 [Accessed 15th October 2012] Tidd, J. , Bessant, J. , 2011. Managing Innovation: Integrating Technological, Market and Organizational Change. England: John Wiley ; Sons Ltd. The Boston Consulting Group, 2010.

Innovation 2010. A Return to Prominence – and the Emergence of a New World Order. [online] Available from: http://tobiaslist. files. wordpress. com/2010/06/innovation-2010-bcg. pdf [Accessed 15th October 2012] The Business Week, 2010. The 50 Most Innovative Companies 2010. [online] Available from: http://www. businessweek. com/interactive_reports/innovative_companies_2010. html [Accesses 15th October 2012] West, M. A. and Farr, J. L. , 1990. Innovation at work. In: Innovation and Creativity at Work: Psychological and Organizational Strategies. UK: Chichster Williams, Ch. , 2006. Management. Canada: Thomson South-Western

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Case Study Product Innovation at Bank of America

BANKING STRATEGIES Case Study: Product Innovation at Bank of America By Cindy Murray What ? nancial institutions can learn from inventions and innovations in other industries. owhere is innovation more essential to survival than in the banking industry. In the payments domain, for example, nonbank competitors less constrained by bank regulations and therefore more agile are changing the banking industry’s grip on the public perception of banks as the only trusted brand for holding and moving money. However, innovation is challenging for banks. Many products, like payments, are a commodity.

A vast number of products and a complex infrastructure require continual upgrades to keep apace with technology advancements and comply with evolving regulations and security requirements. This article describes how Bank of America fosters a culture of innovation. Pivotal to an innovative culture is the direct engagement of clients in the innovation process. We highlight some of the ways that Bank of America achieves this. But ? rst we’ll look at the role of innovation process in building brand loyalty. N Build Brand Equity Through Progressive Transformation Change can occur by rede? ning a problem or rede? ing a solution. According to Robert Sternberg, a leading creativity expert,1 creativity is the ability to rede? ne a problem. Innovation can be viewed as the ability to rede? ne a solution. Successful innovation is a process over time—one that typically happens in increments rather than leaps. Rarely is a single innovation a game changer. In banking, 90 percent of innovation focuses on core competencies (that is, business-as-usual innovation), seven percent on game-changing innovation MAY–JUNE 2009 within core competencies and only three percent on leaps that signi? cantly shift the client experience.

Outside of banking, an evolutionary approach to innovation is also the rule, not the exception. Continual improvements throughout a product’s life cycle build brand equity. Take the case of Nabisco’s Oreo cookie, the bestselling cookie in the United States. In 1912, Nabisco came up with the idea of two chocolate disks with cream ? lling in between. Since then it has released Double Stuff cookies with more ? lling; fudge-covered Oreos; holiday cookies, including Halloween and Christmas cookies; bite-sized Oreos for children; and reduced-fat Oreos. Oreos illustrate two important aspects of product innovation.

First, Nabisco stayed close to its customers. It understood how needs varied among consumers and changed over time. The company developed its product to meet the needs of a continually broader set of consumers. Second, the example illustrates an incremental approach to innovation that focuses on advancing core products. The iPod was at once the next step in an evolutionary process and also a creative leap. This product integrated a number of capabilities in a portable device, but it was not the ? rst MP3 player. However, the concept of iTunes was a new business model that changed the way consumers could store and listen to music.

The iPod was transformative, too, because it aligned with changing consumer behavior re? ected in trends of mobility and customization. Technology enabled a tipping point. Consumers were ready to embrace a leap. Cindy Murray is Head of Product Innovation at Bank of America. Contact her at cindy. [email protected] com. COMMERCIAL LENDING REVIEW 35 Banking Strategies way that stays close to customers’ evolving needs. For example, through ethnographic research, we discovered a common practice among consumers of rounding up when writing checks. We took the idea of rounding up and turned it on its head—rede? ing Innovation is a process over time—an evolutionary the problem by associating payments with savings. path. An incremental approach to innovation mirrors How can we foster increased saving? With Keep the the gradual way in which people change. Consumer Change, each time a customer pays using a Bank of behavior tends to change gradually. Successful innovation is customer driven. It gets as America check card, the bank rounds the payment close as possible to the customer’s current process. to the nearest dollar and transfers the extra change A deep understanding of how customers operate to the customer’s savings account. oday—and why they do what they do—gives inNow, instead of check writers rounding up, the sight into how to improve the process; how to create bank does it for them—but in a way that builds their a step forward for the customer. savings. The solution also facilitates increased use of Further, by directly engaging customers in the indebit cards, thereby supporting retailers’ efforts to novation process, they become deeply committed discourage check payments. It was also a timely soluto, and invested in, a solution, which took advantage tion’s evolutionary path. f evolving consumer beThis makes innovation a havior toward increased primary differentiator, ancard usage. Change can occur by rede? ning a other way of creating value Ethnographic research problem or rede? ning a solution. for customers by enriching has also been key to improvtheir experience and reining our electronic banking forcing loyalty over time. platform, CashPro, over Staying close to the customer is one of the most importime. For example, we designed an enhancement based tant attributes of a successful innovation process. on a typical client work ? ow for handling exceptions.

By closely watching how 15 companies were posting their receivables, we identi? ed a common practice of Get Close to the Customer placing a sticky note on invoices when they did not match payment. Staff would then fax an invoice to At Bank of America, customers play a key role at the salesperson to inquire about the discrepancy. We every stage of the product innovation process. There incorporated an electronic sticky note with email capaare a number of ways in which we directly engage bility in CashPro, so that clients could maintain their our customers throughout product development. ork-? ow process in the online environment. We use a range of formal techniques for idea generation. Formal techniques focus on gaining deepened client insight and are important when Amplify the we have limited information about an opportunity Voice of the Customer and the related customer need. Formal idea mining typically requires expertise through our internal innovation group or external specialized vendors. CashPro is a great example both of innovating in Ethnographic research is an important tool for increments to improve a product over time and of engenerating innovation ideas.

Observation provides gaging clients in an evolutionary innovation process. insight into customer behavior and needs. ReturnWith CashPro, we established a customer advisory ing to the Oreo example, the idea for a bite-sized board, which has been closely involved in the prodcookie began to germinate when Nabisco researchers uct’s development. With CashPro, the innovation watched young children grapple with dunking the process becomes part of the client experience, thereby full-sized cookie in smaller cups. increasing customer satisfaction.

For example, with Ethnographic research helps Bank of America CashPro, clients prefer self-service for upgrades. understand how to advance our core products in a They are fully vested in the change process. Engage Clients in the Evolutionary Path 36 COMMERCIAL LENDING REVIEW MAY–JUNE 2009 Banking Strategies Our strategic client program, Treasury Exchange, At the other end of the spectrum, responsibility serves to amplify our voice of the customer research. for innovation can be centralized in a shared serClients are long-term program members in senior vice center.

At Bank of America, we have dedicated treasury and/or ? nance roles within their organizastaff focused on game-changing innovations. At tions. They meet regularly—at frequencies varying the same time, our entire organization recognizes from once per quarter to yearly. The program enables the importance of ongoing process improvement participants to share insights on best practices and and enhancements. learn from each other, while helping us to better understand their challenges and needs. A detailed executive Work with Peers summary that identi? s key discussion themes helps pinpoint areas for deepening discussion and exploraTo maintain a competitive edge, banks increasingly tion. Conference calls exploring priority topics serve will look for ways to work with clients, technolas touch points between in-person meetings. ogy companies and other ? nancial institutions We also look to Treasury Exchange members to to combine strengths. For example, in May 2008, validate and ? esh out new product ideas and to Bank of America announced a partnership with provide validation at points in the product develWells Fargo called Pariter Solutions LLC.

The opment cycle. Treasury 50-50 joint venture will Exchange members have operate the commercialsubmitted innovation ized ACH platform that ideas under the auspices will be leveraged by the An incremental approach to of the program. Customer two banks. The goal is to innovation mirrors the gradual way advisory boards and spegain economies of scale in which people change. cial client programs like and better position both Treasury Exchange augbanks to develop future ment our extensive voice products with a single of the customer research. nvestment in the underlying processing engine instead of duplicative investments. It’s a platform for growth and innovation. Cultivate a Culture of Innovation It’s important to be open to ideas from all sources. That’s part of cultivating a culture of innovation. At Bank of America, all associates are invited to collaborate in the innovation process. For example, associates can submit their ideas online via IdeasZone, an internal intranet site. These ideas are funneled into the idea stream and receive equal attention within our innovation process.

Collaborate with Technology Innovators In banking, technology is an enabler of innovation. Therefore, it’s important that banks collaborate with their technology providers. Bank of America’s collaboration with Microsoft is a great example of how we work with technology companies to develop innovative applications. Cash positioning and forecasting continue to be key client challenges. We spoke with clients to determine how they perform cash positioning and forecasting. Treasurers might use a treasury workstation, an Excel spreadsheet or a combination of tools.

However, treasurers who rely on treasury workstations typically supplement their process with an Excel spreadsheet. Our research also con? rmed that many clients have dif? culty building a historical database of information for trend analysis to support forecasting. COMMERCIAL LENDING REVIEW Foster Employees There are different options for organizational structure to foster an innovative environment. At Google, it’s part of everyone’s job to innovate. There is a decentralized approach to innovation in which all employees are engaged and given incentives.

It’s built into their objectives and re? ected in their salary increases and bonuses. MAY–JUNE 2009 37 Banking Strategies Bank of America worked with Microsoft to develop CashPro Accelerate. This tool accepts information feeds across all of a client’s bank accounts and automates the cash-positioning process. It also builds a historical database that clients can use for forecasting. Keep Moving Forward “I am not discouraged, because every wrong attempt discarded is another step forward. ”—Thomas Edison With an inventor’s mind-set, the idea of failure is a fallacy.

Some who know best have even looked at failures as a continual path forward. Besides being the still-unrivaled record holder of 1,093 U. S. patents, Thomas Edison broadened the concept of the invention to what’s known today as “innovationinvention,” R & D and commercialization. 3 Innovative companies ? nd ways to leverage new insights to keep moving forward. The creation of 3M Post-it notes is a classic story of turning failure on its head and using creativity to rede? ne a problem. Spencer Silver was working on developing a strong adhesive but invented a weak one instead.

Silver’s colleague Arthur Fry came up with a novel application for the weak adhesive, which became the basis for Post-it notes—a new vehicle for communication—which Bank of America used in its CashPro innovation. Sometimes the leap is in how we look at things. Build a Brain Trust In a September 2008 issue of H ARVARD BUSINESS REVIEW, Ed Catmull, cofounder of Pixar and the president of Pixar and Disney Animation Studios, talked about how Pixar fosters collective creativity. One of Pixar ’s core operating principles is that, “We must stay close to innovations happening in the academic community. 2 It’s part of the company’s effort to eliminate boundaries between different disciplines. Earlier this year, Bank of America and MIT’s Media Laboratory announced the creation of the Center for Future Banking. Over the next ? ve years, Bank of America will contribute $3 million to $5 million annually. The center is a prototype for how business and academia can work together to invent the future of an entire industry. It will bring together researchers with radically different perspectives, including behavioral economists, social scientists, computer scientists, psychologists, designers and others.

The goal is to trigger unexpected new ideas that lead to innovation leaps in banking. Test, Learn, Evolve This inventor mentality is at the heart of our testand-learn environment, in which we deploy an initial solution design to get ? rsthand feedback from clients on its usability and value. At this stage, the intent is to address any issues or opportunities in the next iteration of the design. The process enables us to evolve our product design before we get to the pilot stage. As an iterative process, the test-andlearn environment is a microcosm of the broader innovation process focused at a certain point in the development process.

The Intelligent Cash Manager, a new end-to-end Bank of America solution, gives a live example of the test-and-learn approach. The solution concept germinated in a series of Treasury Exchange meetings, where clients identi? ed cash handling and deposit as a major pain point. It’s an ATM-like machine that counts cash, accepts it for deposit and provides safekeeping. An issue related to jamming surfaced in the test-and-learn environment, which will inform a solution redesign. MAY–JUNE 2009 Choose Winning Concepts Vetting ideas and building a business case are key steps in the innovation process.

Bank of America uses a scoring technique as part of our process for vetting ideas. Scoring criteria include whether a concept matches to plan objectives, whether it has wide applicability, its level of innovativeness and complexity and the potential magnitude of its impact. At Bank of America, for example, out of 919 ideas received this year, 10 have been submitted for funding in 2009. Building a business case is a key step. An effective business case must describe the opportunity and its alignment with strategy and also describes the target client and market within the context of the competitive landscape.

Finally, it outlines the proposed approach, the risk and the ? nancial opportunity. 38 COMMERCIAL LENDING REVIEW Banking Strategies Storyboarding is a creative technique used in the early stage of ? lmmaking. Storyboarding can help speed time-to-market. By not building the entire product—but rather using storyboards and prototypes in a test-and-learn environment—we retain ? exibility even as we move further into the product-development process. Flexibility enables us to prioritize the most important features and integrate feedback and new insights from customers.

It helps us to make smart choices with our investment dollars as products take more tangible form. The Next Leap in the Innovation Process The ability to synthesize information into insights will be an increasingly important part of creating a valuable client experience—not only banks connecting to customers—but of customers connecting to each other for insight. Incubation and the cross-fertilization of ideas are important to the creative process. Bank of America is integrating online networking into its innovation process. For example, we are connecting participants in the Treasury Exchange program to an online forum.

Our long-term vision is to link our various Treasury Exchange client groups—which are based on industry, function and geography—into a clientcentric global collaborative network. We also plan to introduce online ideation as a way to collaborate with Treasury Exchange participants on innovation. More broadly, the idea of integrating social networking into the bank’s innovation process holds tremendous promise. With our consumer base of 59 million households, social networking can be a powerful tool for engaging customers ? rsthand in product development. hen the next step integrates multiple aspects to transform the end-to-end client experience. To cite an earlier example, the iPod integrates communication speed, mobility and storage capacity. All of these come together, along with consumer readiness for change and the introduction of the iTunes business model. Within the banking realm, clients increasingly want banking solutions to integrate into their flow—whether flow constitutes, for example, a mobile consumer or the workflow related to a treasurer’s broader financial processes.

The need to integrate payments in the broader customer experience will involve mobile technology in some form and the analysis of information to provide insight. For corporate customers, banks are already delivering time-sensitive information to personal digital assistants (PDAs) and cell phones. Information analysis and synthesis could help treasurers to improve broader ? nancial processes (for example, accounts payable or receivable), help optimize working capital and minimize cost and use payment information to deepen insight into customer behavior.

We are already seeing merchants, for example, use consumer payment information to tailor coupons to a customer ’s buying preferences. Banks can deliver robust information to consumers, for example, to help them weigh product features and engage in ? nancial planning to evaluate a purchase within a desired spending budget. Perhaps, ultimately, clients will want to take their bank accounts with them, storing virtual money inside their mobile phones. Banks have an opportunity to reassert their unique role as the trusted brand in storing and moving money.

Innovation will be critical to our success. What Might Be the Next Leap in Banking? Successful innovation continuously improves aspects of the customer’s experience. Leaps occur Endnotes 1 2 3 Professor at Tufts University; research focuses on creativity. How Pixar Fosters Collective Creativity, HARVARD BUS. REV. , Sept. 2008, at 71. The Edison Papers, http://edison. rutgers. edu/biogrphy. htm. MAY–JUNE 2009 COMMERCIAL LENDING REVIEW 39 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.

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Innovation of Apple

MBA A Case Study on “Innovation on Apple” Course Code : MBA Cohort 22 Lecturer : Mr. D. L. Allen Student Name : Wong Man Pan Student ID : Submission Date : 18 July, 2012 No of words :3,092 1. Executive summary This article contains four main sections; in the first section, the characteristics of innovation Company are defined, mainly the ideas which follow Barry, John and Richard, 2011 and the overview of Apple Inc innovation would be evaluated based on the factors found. In the second section, the affecting factors in management (Amabile, 1998 ) and climate (Ekvall, 1996) based on Apple Inc would be discussed.

Hence, two innovative companies such as HP and 3M performance would also be brought out . These three companies would be identified according to the three strategies suggested by Barry, John and Richard, 2011. Moreover, four actions framework from Kim and Mauborgne, 2005 would be analyzed with respect to one application from Apple — “Siri”. Finally, recommendation would be made for future development and challenge especially since the key man [Steve Jobs] passed away in 2011. 2. Content 1. Executive summary2 2. Content2 3. Introduction3 4.

Five elements of innovative company – Apple Inc5 5. Creativity7 6. Managerial practices and organization climate for creativity7 7. “Siri” Four Actions Framework11 8. Conclusion and recommendation12 9. Reference14 3. Introduction Among the enterprises pursue innovation, Apple Inc is recognized as the most successful case. In 2011, Barry, John and Richard, 2011 conducted the survey and concluded that Apple Inc is the most innovative companies worldwide and the Exxon Mobil Corporation has been replaced by Apple as the most valuable company in the U.

S by market capitalization. Always there is a misconception for most people, as heavy investment is the fundamental requirement to be the most innovative company. However it was found that Apple spend only around 2. 7% of revenue annually on R&D, comparing with Microsoft whom spend 14% of revenue, there is a big gap. It implies that the findings from Barry, John and Richard, 2011- spending more on R&D does not necessary drive results, the most crucial factors are strategic alignment and cultural influences that support innovation.

Therefore, this article mainly focuses on managerial practices, such as organizational and environmental support, rather than how the investment was allocated. In the article of Barry, John and Richard, 2011, the innovative organization should focus on innovative strategy, effective overall business strategy, deep customer insight, great talent and the right set of capabilities to achieve successful execution, all of these factors are critical when identify the way of Apple Inc in performing innovation.

Simultaneously, creativity is the inspiration of organization and it is easily affected by management and cultures. Two more innovative companies would be analyzed based on Amabile, 1998 and Ekvall, 1996, Apple would be defined as need seekers and technology drives based on Barry, John and Richard, 2011. Innovation would be resulted as strong identification with customer experiences and passion for products; this would drive the products with superior performance and quality.

After the management and culture of Apple Inc is analyzed, one product – Siri would be taken into account to show the result of innovation based on the four actions framework suggested by Kim and Mauborgne, 2005. Although Apple Inc stands for the top innovative company, it is essential to review the strategy and make change especially when top management is altered. 4. Five elements of innovative company – Apple Inc In the article of Barry, John and Richard, 2011, it is clear that innovation is not determined by the amount on R&D spending, the most vital factors are strategic alignment and cultures which support innovation.

In this section, five elements issued by Barry, John and Richard, 2011 would be studied. Focused innovation strategy of Apple would be started from the key element in Apple’s approach to innovation (Walter, 2011), focus on where you think you can make a significant contribution recognized and it was further confirmed by Steve Jobs when he returned to Apple in 1997, Steve cut the unnecessary product line, minimized the number of developing products from 15 to 4.

At that moment, only one or two new products were limited to launch into the market annually, it attempted to obtain the team power to concentrate on specific products development. Besides Apple Inc which only heavenly focuses on design and development, all the component and product assembly are outsourced, where it needs to share the profit with the supplier and the vendor, but Apple inevitably takes the largest portion.

Effective overall business strategy is the combination of effective resources allocation and business model, Apple Inc, not like other electronic device companies, it is the pioneer to perform value chain integration. In the figure of Apple, 2011, it showed that only 40% of revenue is generated from the consumer electronic products like iphone and ipad, the large portion are generated from the Apps store and advertising agent. This means that the business model is no longer relied on buy-off product; it keeps the financial stability by ongoing sales from Apps store and advertising agent platform.

The crucial point for Apple is that they do not need to invest tremendously on platform development as they are run by users and new apps are not developed by Apple itself but it shares the profit. This overall strategy is effective and sustainable to the whole group. Deep customer insight is defined as customer relationship quality, in other words, it is determined by products and services where customer orientated. One of the innovation strategies from Apple was customer eccentric; end users can not realize the needs until the products of Apple launched.

The structure of the products chain is constructed by end users plus application, users get the electronic hardware from Apple which allows them to share and personalize their software of products through the Apps store and iTunes, and this also helps the group to diversify the income base. Moreover through the breakthrough of mp3 and Discman player, it is easy to observe that Apple products like ipod and iphone, the feature is user friendly, such as users are easily to find the particular song within a minute among 1,000 stored file.

Furthermore, looking at the environment Apple store, it successfully created a fairly comfortable atmosphere for customers, where a number of well trained staff would solve whatever problems from the products and always equipped with well manners and technical support. Great talent in Apple Inc could be said to be influenced by the company key man – Steve Jobs, it is the dedicated person who make Apple as an icon of innovation. According to Purkayastha and Syeda Qumer, 2011, most of the decisions of product development came from Steve.

Also he inspired every staff in Apple to design and develop the products by thinking differently and create an environment in which the people working in Apple would believe that they are better than the rest (Purkayastha and Syeda Qumer, 2011). In recruiting staff, Steve put a large effort and resources on selecting the most outstanding talent on hardware, software, design and management. In the mind set of Steve Jobs, he believed that hire people who want to make the best things in the world and innovation comes from passionate, dedicated people.

Indeed, there is no specific R&D team in Apple Inc, all the development is based on objective orientation, featuring the right person and forming the team. The right set of capabilities to achieve successful execution, although there is no variety product from Apple, but it provides a total package to the customer. Apple has all self owned necessaries in the execution which is included but not limited to electronic device, operation system development (iOS) and itunes platform with alliance with media company and apps developer, Apple does not need to rely on another company on the operations. . Creativity The presence of both individual and organizational creativity mechanisms led to the highest level of innovation performance (Sundar and Anil, 2000), it is essential to investigate the creativity in Apple, there are three components of creativity suggested by Amabile, 1998, they are expertise, creativity thinking skills and motivation. (i) Expertise means every professional knowledge that people acquired and perform in the duties.

Information technologies is the main core of Apple, hire people who want to make the best things in the world is one of the key elements in Apple approach mentioned at Walter, 2011, it implied that there are many experts in Apple. Apart from I. T and design area, Apple also provides corporate service to different industries; the team of consultant is required to have a variety of industries knowledge in order to offer the total consultative solution in different area to different types of customer. ii) Creativity thinking skills are defined as the flexibility and imagination of people to solve the problems, many Apple products are originated from another companies, like ipod, the idea was come from Tony Fadell (Ping and Yuan-hong, 2012), after the modification of design with creativity thinking skills, the outcomes equipped the pocket size devices would be store 1,000 songs and quick search function that is far advance than other type mp3 players. (iii) Motivation drives people to behave actively toward a desired goal and initiates, controls, and sustains certain goal.

Apple attracts and retains employees in part owing to the benefits, or expected and non-performance related incentives, it offers, such as product discounts or insurances, executives are rewarded by giving them a recognition bonus of 3 to 5 percent of their base salary. 6. Managerial practices and organization climate for creativity In Barry, John and Richard, 2011 findings – spending more on R&D won’t drive results; the most crucial factors are strategic alignment and a culture.

Inevitably, managerial practices affect creativity of whole organization, per Amabile, 1998 suggested that six general categories are challenge, freedom, resources, work-group features, supervisory encouragement and organization support. Apple Inc would be analyzed together with two more innovative companies in order to obtain a better understanding on the way management of Apple encourage and develop innovation within the organization comparing with another innovative companies. | Apple Inc| HP| 3M|

Challenge| Apple followed 10:3:1 approach, 10 entirely different mock up of the new design is required to provide by designer, only three designs would be selected, then engineer would work on the designs before the final stage. Although the process is harsh and consuming, Steve Jobs would drop all the finished concepts at very last minutes. | Researchers are not limited to work in R&D area; they can work across the different team and department on variety of projects like engineering and marketing team. Under the performance rating system, the salaries of individuals are determined by comparing with their peers performance. Salaries and promotions are tied to the product’s progress, for any new product, when the sales grow to USD5M, the product’s originator becomes a project manager, at USD20-30, a department manager, in USD75M range, division manager. 25% rules introduced: A quarter of division’s sales come from the products introduced within the past five years. | Freedom| There is no restriction in the brain storm meeting, team member of development team is free to express their creativity then pass the proposal for further investigate on the feasibility and effectiveness. The management philosophy of HP is mutual trust and respect for individuals, everyone can make decisions on almost everything idea which related to their research work. Staffs in HP lab have flexible working hours. | Staffs in 3M tend to be self-policing. There is no restriction for the staff moving from one business to another. | Resources| | Diversity network associations offer employees an opportunity to engage in professional support and networking activities. | HP invest a lot on its R&D section and put R&D as the centre of business.

The resources are come from HP Labs Bristol and their big partner like UK government. It provides advanced office building and world class facilities for research staff to perform their technological work. The researcher would grant special research funds to set up new projects | USD 50,000 would be granted for the project pass the idea stage, a panel of technical experts and scientists awards as many as 90 grants each year. | Work-group features| Apple worked on the concept of informal corporate culture flat organizational structure is established.

No matter the job post is high or low, they share the same open spaces for creativity. | HP lab consists of many small units, individuals take responsibilities and work together as a team. The lab operates a flat organizational hierarchy, only three layers of management, scientist, manager and director. | Every division are kept small, on average about USD200M in sales| Supervisory encouragement| Management in Apple especially Steve Jobs created an environment in which employees were encouraged to believe that they are better than the others.

The employee also would gain the benefits in the coaching and mentoring arrangement. | With the trust and respect philosophy, the staffs do not have much interference from management and only simple regulations in the HP lab. Senior researcher would be assigned as a mentor for the new comers. Supervisor is easily be found in HP lab as they would participate in the regular coffee meeting and spending leisure time with researcher to get more idea on the on going activities. Tolerance of mistakes and all technical staff at coporate labs dedicate about 15% of their efforts toward learning and training programs in areas outside their responsibilities. | Organization support| Developmental program in Apple Inc is included 16structured on-the-job training. | Workshops and training program is opened for everyone. Renowned experts would be invited in regular public lecture and give talks to the staff. Recognized award in form of financial rewards would be encouraged to the staff that make particular contributions to the innovation, even the output is not suitable for commercialization would still be patented. 15% rule allows anyone in 3M to spend up to 15% of work week on anything they wants, as long as it is product related. Small meeting rooms allows a small group of staff from different divisions even customer to exchange ideas. | These six elements are similar to what Ekvall, 1996 suggested organization climate for creativity and innovation, and it plays an impact variable which interferes the results of organization operations.

Based on the three strategies suggested by Barry, John and Richard, 2011, need seekers, market readers and technology drivers and then comparing with three innovative companies analyzed, it is induced that Apple Inc strategy is belonged to need seekers, with respect to the pioneer concept and ideas like itunes, apps store and siri, it satisfy the characteristic of shaping new products/services and being a leader to the market. At the same time, the technological capabilities allows them to have the whole product integration, range from operating system iOS to hardware, it would be also defined as technology driver.

In reviewing 3M innovation and new concept is come from customer and market needs with incremental change to the products and being the fast followers in the market place, so 3M takes the market readers strategy. Finally with the advanced laboratory support and customer orientated, HP would be recognized as market readers and technology drivers. 7. “Siri” Four Actions Framework Creativity is easily found on every Apple’s product, the innovation involvement on one of the latest products “Siri” would be investigated based on the Kim and Mauborgne, 2005.

Four actions framework suggested by Kim and Mauborgne, 2005 included (i) reducing factors which below the industry’s standard; by applying voice recognized analysis technology in Siri, it simplifies the end user key in process and reduce the hardware and software application. (ii) Creating the products that the industry has never offered; Siri offers accurate result through “Voice to result” to end users which is the pioneer to the market. (iii) Raising the factors above the industry’s standard; Siri allows users do not have any knowledge on computing which enhance the number of users from any background. iv) Eliminating the items that industry takes for granted, by applying “Siri”, keyboard, mouse and even touch screen would be eliminated. 8. Conclusion and recommendation According to the analytical result of the five elements on innovative company, managerial practices and four action framework on both Apple Inc and its product, it is identified that strategies of Apple Inc are need seekers and technology drivers, the products including but not limited to “Siri” totally reflect the result from individual and organizational creativity.

There are many people worried about Apple future as the matter of fact that the key person [Steve Jobs] has resigned and pass away in 2010, although there is no immediately impact as innovation plan is normally lasted for 5-10 years, it is difficult to replace [Steve] who acted as spiritual leader and final decision makers in short period of time. It would be a golden chance for the company to readjust the policy especially on the decision making; the decision power would be distributed to different project leader by absorbing more idea from the staff and redefining the standpoint.

It would enhance the freedom in the whole organization and it is easily recognized the importance of freedom to the effect of creativity from the analysis of HP and 3M. No doubt, [Steve] is a symbol of Apple Inc, he was not only CEO, and he was also a new product pitchman. Now when Steve was passed away, people included investor and consumer would unilaterally associate the innovation and advanced technologies are all gone simultaneously, the confidential level of Apple’s products would be dropped.

To put a stop, it would be grateful that the message of team spirit and performance be demonstrated to the public by putting focus on how individual and team affecting the result. The new product presentation should be introduced in form of team which allows the public forget the past image of Apple but it is important that keeping the spirit of [Steve] eternally in form of brand image in order to consolidate the cohesion internally and externally.

It is truly believed that Apple Inc is the most successful innovation company throughout the investigation base on theories suggested by Barry, John and Richard, 2011, Amabile, 1998, Ekvall, 1996, Kim and Mauborgne, 2005 and Sundar and Anil, 2000. Inevitably Apple Inc would face a great challenge as the change is necessary with the top management movement, with the best wishes on smooth passing the transitional period and sustaining the long established innovative image. 9. Reference 1. Barry, John and Richard, 2011: Barry,J, John,L and Richard,H. 2011, The global innovation 1000 why culture is key.

New York: Booz & Company Inc. 2. Amabile, 1998: Amabile, TM. 1998, How to kill creativity, Harvard business review. 76(5), pp. 77 – 87 3. Ekvall, 1996: Ekvall, J. 1996, Organization climate for creativity and innovation. European journal of work and organizational psychology. 5(1), pp. 105-123 4. Kim and Mauborgne, 2005: Kim, W. C and Mauborgne,R. 2005, Blue ocean strategy. Boston, Massachusetts: Harvard business school press. 5. Walter, 2011: Walter, I. 2011, Steve Jobs. New York: Simon & Schuster. 6. Ping and Yuan-hong, 2012: Ping,C and Yuan-Hong,L. 012, Comparison on innovation of high-tech corporation, Technoeconomics & management research. 292(5), pp50-54 7. Purkayastha and Syeda Qumer, 2011: Purkayastha,D and Syeda Qumer, M. 2011, Innovation at Apple, India: IBS Center for management research. 8. Apple, 2011: Annual report 2010-2011. California: Apple Inc. 9. Sundar and Anil, 2000: Sundar, B and Anil, M. 2000, Making Innovation Happen in Organizations: Individual Creativity Mechanisms, Organizational Creativity Mechanisms or Both? , Journal of product innovation management. 17(6), pp424-434

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Emr Innovations

Case 3 EMR Innovations Table of Contents Executive summary3 Introduction& problem /issues identification4 EMR’s product and how is attempting to market4 External Analysis6 Opportunities6 RV industry6 RV culture6 Threats7 Competitors7 Analysis and recode current situation8 Internal analysis8 RVs internal weakness and strength8 EMR Innovations internal weakness and strength9 Marketing Audit10 RV’s Current Marketing Strategy10 Main objective10 Main targets10 RV’s Problems11 Alternative Strategies12 Marketing and distribution of the lock- awn12

Recommended Strategy13 Executive summary Reynolds are a young couple that transferred their interest over RV’s (recreational vehicles) into a profitable business. Their main objective was to be the “ the supplier of innovative RV products”. Eric Reynolds came up with innovative product called “Lock-Awn Anti-Billowing Device” , he thought that this product would achieve their goal and repaired RV deficiencies. They wanted to market their product through their own company ”EMR Innovations” , so that they believed that they need to pecify various fields with different point ;product , customer, money , competitor and “Lock-Awn Anti-Billowing Device” marketing strategies . The report analysis involve the main external and internal factors that would influence their marketing strategy ( SWOT analysis ) . Then analysis the current RV’s strategies and how their plans detail with the marketing variables of product, price, place and promotion ( four Ps of marketing) which are used to attain the marketing plan’s objectives and overall strategies. There are three variables distribution channels ( direct and in direct ) according to their alternative strategy.

Than recommended strategies. Introduction& problem /issues identification EMR’s product and how is attempting to market Eric Reynolds and Mary Reynolds are a young couple that transferred their interest over RV’s (recreational vehicles) into a profitable business. In 1995, the Reynolds started an RV repair business , and by 1999 they open their own shop in Amana, Iowa , since the business became large. On 2002, their business had steadily grown . However, they aspired to be “ the supplier of innovative RV products” . For that reason Eric Reynolds innovate an innovative products that helped or repaired RV deficiencies.

They though that this innovative products, which called “Lock-Awn Anti-Billowing Device” for RV patio Awnings, may provide great potential for future investments. “Lock-Awn Anti-Billowing Device” would protect the internal lock awning mechanism from tear, and prevent it from billow in the wind, in order to reduce accident and increase the efficiency rate. Lock-Awn Anti-Billowing Device became so effective idea to the Reynolds that they invested $10,000 of their own money to develop a prototype, and they had assistance and support from an industry research center.

Since they wanted to market this product through a new company” EMR Innovations” , they need to analysis different filed with different point . The main five point in the case ( According to Reynolds view point ) are : 1. Product Eric and Mary were confident about their prototype product , they had a sure winner in the Lock-Awn, however they were unsure about it . 2. Customer They had potential customers who had seen the product as positive product, however they were unsure about other customers satisfaction. 3.

Money They had no enough budget and financial analyses to entry market. 4. Competitors They afraid of a potential competitor selling same product, which decrease the product successful chance. 5. How they would market “Lock-Awn Anti-Billowing Device” They had no market analyses ( marketing strategy ) to verify their belief. To address this need, Reynolds need to become with key decisions that related to picking the main target markets, the position, pricing, promotion, and distribution channels, and then they need to analyze the financial implications of their decisions.

The end result of decision , will be a marketing strategy which will effectively launch the Lock-Awn product and EMR Innovations. External Analysis This analysis consists of analyzing the external environment of the company (competitors, social, technological, regulations, etc. ). The purpose is to identify the key opportunities and threats in the environment. Opportunities RV industry RV vehicles (RVs) are recreational vehicles combining transportation and temporary living quarter for recreation, camping and travel. RVs started early 1900s when nature enthusiasts customized their vehicles.

The RV industry flourished after the World War II. In 2000, RV industry consisted of 135 manufacturers and more than 200 suppliers of parts and services. RVs are divided into two categories (motorhomes and towables) and five classes ranging from affordable vehicle to normal people up to luxury one ($ 500,000). In 2002, about 7. 5 million households owned an RV in US and projected to reach 8. 5 million in 2010. This offers great opportunity for EMR innovations to succeed since the RVs exist in considerable number and will grow in the future. RV culture As noticed, RVs are popular and used a lot in US.

There is almost one RV in every 12 households according to study conducted by University of Michigan in 2001. The study estimated that there are 30 million RV enthusiasts including households and renters. The retired couples represent the greatest segment of RV enthusiasts since they are free and want to see the rest of the country. They used RVs for traveling since it offers convenience, comfort and freedom to go anywhere and anytime without plan in advance. Some of them are full-time on the road roaming around the country and live in RV. Thus, they want their accommodations to be as comfortable as possible.

Most of them are willing to spend their money on accessories like auxiliary fuel tank, power booster and etc. In fact, Richard Dahl, RV owner, manufactured a water filter for RV plumping systems and sold it for $30. Later, he sold 300 more items and established new business for himself. This shows RV owners are willing to accept new ideas which eventually help EMR innovation to succeed. Threats Competitors People created so many types of awning lock to overcome billowing problems. However, most of them are homemade and people reported that they easily damaged.

There is one commercial product called “Awning Saver”. Eric and Merry examined the product and found that it would not be a threat to their product since the awning saver is difficult to operate and looks similar to the homemade one. Therefore, there is no obstacle for the EMR innovation to enter the market. To sum up, the external factors show no threat for EMR innovation to enter the market. Analysis and recode current situation Internal analysis RVs internal weakness and strength Weakness : * Design flaws May decrease RV deficiencies Most RVs suffered from design Flaws on patio awnings, which consider as one of the basic equipment on virtually all RV’s . * The fundamental problem is awning billowing problem in manually operated awnings. Strength * Have flourishing business encourage investment safely * RV consisted of 135 RV manufactures and more than 200 suppliers of component parts and services . * RV had positive economic forecast , although they faced breakdown of RV ownership on 2001. * There was large motivation on their industry and had high rate of enthusiasts customized . In United State , there was a big interest in domestic ground travel * RVers were an adventuresome group have deep experience about what people want at traveling . * Their price was suitable for consumer from all standard of living. * Their prices are more affordable prices compared to competitors . EMR Innovations internal weakness and strength Weakness : * Inactive side of the product : * High costs to produce, promote and distribute, their product. * EMR prototype is just an idea and not formulated into any type of industry organization. Most of RV’s people solve the patio awning problem by themselves. * Did not have a well marketing plan * No develop marketing or promotion strategies . * Reynolds Lack of knowledge to develop, sell , and manufacture a new product , since they did not attend college . * No enough money resources . * Have multitasks ( ex: Mary have to care about her 3 children and make bookkeeping for RV repair shop ) . strength : * Have an effective prototype products and ideas * Their products are good in appearance and design . * Easy to install . * Convenient in use and store. ease of operation compared with competitors. * Targets all segment. * Had support and consulting from an industry research center . * Were acquainted with RVs industry . * Had personal experience through their repair business. * Their work was flourished and their business had steadily grown . Marketing Audit RV’s Current Marketing Strategy Main objective The main objective of RV’s marketing strategy is to a attract the largest number of people of all ages, by providing their needs ,and satisfy all parties ( company and customer ), in order to achieve the customer values ( benefits and costs ) .

As result they try to combined between transportation and temporary living quarters for camping , traveling ,and recreation . Main targets RV’s strategies are clearly directed to the main target , who is well defined , by providing different types of vehicles with different design and suitable prices according to the target level . * Main targets are : * Nature enthusiasts customized * Who have interest in domestic ground travel * Who tend to keep their vehicles for long time RV’s Problems •RV’s problems Symptoms problem According to 2001 survey data, the RV’s face breakdown of RV ownership, illustrated in Exhibit 2. it would be because of the design flaw ) . Current problem Most of RV’s owners focused on “awning billowing problem “, where the company filed to come out with solution that fix the problem Potential problem May “awning billowing problem” will affect the economic forecast for the RV industry. This problem may be as opportunity to Reynolds or can be ignore it, since most of RV’s people solve the patio awning problem by themselves. •Marketing mix (Four P’s). * Product Vehicles that combined transportation and temporary living quarters for camping , recreation , and travel. It can be used by people of all ages and levels. * Enhance flexibility , convenience and freedom * Characterized by comfort, amenities and enjoyment during travel . * Place its available across United State ( for who have interest in domestic ground travel) * Promotion * Price Prices vary between types of vehicles, related to the options that product provide . Towables| Price | Include folding camping trailers| $5,000 – $10,000 | Truck campers, affixed to the bed or chassis of the truck | $10,500| Conventional travel trailers | $13,000| Fifth wheel trailers | $25,000 – $ 80,000|

Motorhomes| Price| Class C | $ 35,000| Most luxurious Class A| Over $500,000| Alternative Strategies Marketing and distribution of the lock- awn Three viable distribution channels: * Mail order product: direct internet traffic to a Lock- Awn Web site. This will cost $ – 2000- $3000. * Workampers Group: indirect because dealers had option to sell the product. A one-time Ad cost $100 and 25% discount off the retail price * Distribution method: indirect because very difficult to get camping world to sell the Lock- Awn since it required strong sale record Advertisement to support selling effort

Here are some ways of advertisement suggested by Mary: 1. Advertise in Popular RV magazines; Motor Home & Trailer Life. Their circulation was 1. 5 million. A 1/3 page black & white 4 times would cost $ 25000. 2. Advertise in RV- related Web sites for minimal or no cost. 3. Develop Promotional brochures detailing for high quality- 4 color the printing cost about $1500 for $10000. 4. Promote and demonstrate the Lock – Awn at RV shows and rallies. Travels cost approximately $ 1800. 5. Ask RV trade publications to evaluate and feature the product in their column. 6. Generate discussion about the product in RV chat rooms. . Use the networking systems like RV clubs and forums to spread the information of the product. Recommended Strategy 1- It’s recommended to adopt the free advertisement like RV- related Web sites, Ask RV trade publications by light column, RV clubs and RV chat rooms. 2- After one year they can advertise in costly because they have cash flow and can choose Promote and demonstrate the travels cost approximately $ 1800, Promotional brochures detailing for high quality- 4 color the printing cost about $1500 for $10000 and Their circulation was 1. 5 million. A 1/3 page black ; white 4 times would cost $ 25000.

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Ancient Chinese Innovations

Ancient Chinese Innovations Jennifer E Strayer University Humanities 111 Ancient Chinese Innovations The ancient Chinese culture has probably contributed more to the advancement of humans than any other. In China’s long history they have shown us many extremely important inventions. In the modern world we take a lot of these innovations for granted even though we use many of them on a daily basis. I have often wondered who invented many items I use and it surprised me to find out that most things I use and quite possibly cannot live without were invented in ancient China.

What would we do if paper had not been invented we may still be etching on stone and bones? Cai Lun successfully invented the very first batch of paper using fish nets and tree bark around 105 BCE. The invention of toilet paper would not have been possible without making paper first. Navigation was made easier with the invention of the compass. Would marinara sauce taste as good if it were not covering pasta or ravioli? Pasta was invented around 300 BCE, nearly 2000 years before the Italian or the Arabs. Would the wars of the world ended the way they did without gunpowder?

Around 850 CE, Chinese alchemist discovered gunpowder while searching for immortality. Many historical records and books might not have been made if it were not for the ease of moveable-type printing, which allowed for mass production of written material. Earthquake detection is another invention that many might not have lived without it. The early seismograph created during the Han dynasty around 132 CE used a pendulum to alert for a coming earthquake. While it is not known who first invented the sundial, the first mechanical clock was an important innovation by the ancient Chinese. Clark, 2009; Laudan, 2000; University C. , n. d; Unknown, Top 10 greatest inventions of ancient China, 2007) I think the four most innovative inventions given to us by China are the compass, toilet paper, moveable-type printing and the sundial. The magnetic compass was first made somewhere between 221-206 BCE during the Qin dynasty. The original use was in fortune telling until it was discovered that it was better used at pointing out real directions. Originally used as padding or packing material n the second century BCE, the early Chinese writers mention using toilet paper as we do today as early as 589 BCE. The Chinese invented Woodblock printing over 2,000 years ago. Bi Sheng invented moveable clay type printing from which all later printing methods were developed from. The world’s first clock was invented by Yi Xing, a Buddhist monk and mathematician, his clock operated by having water drip onto a wheel that made a revolution every 24 hours. Hundreds of years later Su Song, an astronomer and mechanist, created what we know as the ancestor of the modern clock. Bellis, n. d; University C. , n. d; Unknown, Top 10 greatest inventions of ancient China, 2007) Our modern world was created on the foundation of these innovations, they have been improved upon and upgraded over the centuries but the basic ideas remain the same. If there were one of these inventions that I simply would not want to live without it would have to be toilet paper. While water was the common way to cleanse after each trip to the bathroom, the convenience and ease of using toilet paper had travelers to China commenting about people’s cleanliness as early as 851 CE.

In any natural disaster one key thing is sanitation; toilet paper is much more sanitary than using your hand and some water. A few months ago I saw a documentary called No Impact Man, where Colin Beaven, his wife and daughter, took part in a yearlong experiment to see if they could go that long and not impact the environment. One of the experiments was if they could go a year without using toilet paper. They did it, using cloth instead, just like cloth diapers, wash and reuse. While I know now that I could survive without toilet paper, I simply would not want to. Rowles, 2010) Works Cited Barsoum, D. M. (2006, December 18). Solving the Mysteries of the Pyramids. Retrieved January 23, 2012, from Department of Materials Science & Engineering: http://www. materials. drexel. edu/News/Item/? i=948 Bellis, M. (n. d). The Compass and other Magnetic Innovations. Retrieved February 25, 2012, from inventors. About. com: http://inventors. about. com/od/cstartinventions/a/Compass. htm Clark, J. (2009, March 9). Top 10 Ancient Chinese Inventions. Retrieved February 17, 2012, from HowStuffWorks. com:

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Relationship of Entrepreneurship, Innovation and Creativity

With the rapid development of dynamic global economy, increasingly countries are seeking breakthroughs of their economy development. Stimulated by these ever-increasing competition pressures, exploitation of new ideas and businesses which are of great potential to thrive economies, accordingly, is gainning widespread attention (Mansfield, 1972; Wong et al. , 2005).

In consequence, on a global scale, not only some developed countries with strong capability to absorb and implement new ideas, but also some emerging developing countries, are taking measures to inspire entrepreneurship and innovation with purposes of benefiting economic development from these competitive advantages (Stoneman, 1995; Zhao, 2001). It is universally held that entrepreneurship and innovation are complementary and their combination can efficiently contribute to economy performance (Grupp, 2001; Stoneman, 1995).

During the transfer from idea creation to eventually economy development, innovation is supposed to be a necessary condition, but it also demonstrates great insufficiency which can be completed by entrepreneurship’s mediating effects (Audretsch, 1995; Camp, 2005). This essay will primarily conduct a brief definition of entrepreneurship and innovation while introduce the role of problem solving and creativity, and thereby observe the synergy between entrepreneurship and innovation. Then theoretical and practical analysis will be made in their repective relationship with economy development.

Ultimately, the holistic realtionship between entrepreneurship, in conjunction with innovation, and economy development will be discussed. Entrepreneurship and innovation are inclined to be misinterpreted identical since they both indicate creation and new development, but meanings they rootly represent are distinctive. Innovation is an instrument that intergrates, disperses and upgrades extant techniques and knowledge, then acts as a “conduit” for achieveing knowledge spillovers and technique invention, and consequently endows existing materials with a new capacity (Drucker, 1985; Drucker, 1994).

Creativity, which represents generating new ideas, is the foundation of innovation, since innovation originates from creaticity (Amabile, 1996; Lumsdaine and Binks, 2007). In the initial stage of development, creativity is implemented to generate a wide range of ideas, and in a later period, innovation will rest on these creative ideas and further develop their potential. Entrepreneurship, however, is a type of organizational behavior focusing on opportunities rather than materials (Miller, 1983; Stevenson and Gumpert, 1991).

It primarily consists of exploiting opportunities from various innovations, converting them into service or products, thereby commercializing it into market (Johnson, 2001). Problem solving spreads through their relationship and is connected with entrepreneurship in even every situation. It is the basis of generating ideas and then choosing the best for initiating and operating a prosperous business (Lumsdaine and Binks, 2007). In its definition stage, time is spent on searching for root causes and how the problem is inside correlated.

Then in the discovery stage, energy will be concentrated on seeking plenty of ideas. In the following determination phrase, possible consequences will be considered by using criteria for success, and convert possibilities into practical application (Kirkham, Mosey and Binks, 2009). Arising from studies dealing with relationship between entrepreneurship and innovation, the synerty between them is generally accepted (Zhao, 2005). Firstly, entrepreneurship and innovation complement with each other (Zhao, 2001; Michael, 2005).

On one hand, as Legge and Hindle (1997) have observed, innovation is the special-purpose tool of entrepreneurship. Entrepreneurs exploit opportunities and seek commercial success resting on creative ideas selected and provided by innovation (Zhao, 2001). Herbig and his colleagues (1994) take similar view and hold that entrepreneurship is one of three primary components of innovation, and presence of entrepreneurship can to some extent guarantee successful manipulation of another two.

Entrepreneurship, on the other hand, enables innovation to flourish (Zhao, 2001; Michael, 2005). Schumpeter (1934) originally endeavors to associate innovation with entrepreneurship by identifying innovators as entrepreneurs. Entrepreneurship enables innovation to realise further value by marketing them as products or services. Second, the development of entrepreneurship and innovation, and mutual effect between them for the successful practicality of innovation, demand support of innovative culture and management (Drucker, 1985; Zhao, 2001).

The success of McDonald’s can be taken to confirm this point. Products sold in McDonald’s are not originally invented, virtually, they are just what had been produced in respectable restaurants many years ago. Nevertheless, by adopting a set of innovative management techniques and concepts, McDonald’s has standalized its products and designed specific working process based on which production can be analysed (Drucker, 1985). In consequence, McDonalds opened up a new area and substantially raised revenues.

Before considering the relationship between entrepreneurship together with innovation and economy development, it is essential to respectively observe their relationship with economy development. Firstly, innovation is a vital contributor to economic development albeit with its insufficient nature (Grupp, 2001; Stoneman, 1995; Camp, 2005). In the perspective of necessity, Lichtenberg (1993) and Engelbrecht (1997) recognise this by pointing out that inovation can be regarded as a vital source of economy development.

Another scholar, Porter (1979), confirms the view in terms of promoting the concept of value-based competitiveness, where innovation initially results in improved productivity, then the enhanced productivity creats higher competitiveness which eventually leads to better economy. For instance, 3M Company is famous for its characteristic of gaining growth through innovation. The company stimulates innovation by setting up the 15% rule-employers are encouraged to utilize 15% of working time to research their own ideas which may convert into new products in the future.

As a consequence, a quarter of incomes of the Company are generated by products no more than six years old (Burns, 2005). In addition to the study supporting the necessity of innovation to foster economy development, there are some investigations demonstrating that innovation is not sufficient for continuously economy development (Grupp, 2001; Stoneman, 1995; Camp, 2005). Some scholars criticise that the role of innovation is overlooked and state that staying only in the sphere of innovation can not bring qualitative leap to economy (Allen, 1988; Audretsch, 1995).

Camp (2005) approves of the view and he maintains that many organisations are learning this lesson by experience. Their copious investment paid for innovation does not convert into property and can not continuously sustain economic development. Secondly, entrepreneurship is broadly accepted as a prominent driver of economy development (Schumpeter, 1912; Camp, 2005). As United Kindom Her Majesty’s Treasury (2005) declared, entrepreneurship and its profound impact on entreprises have been one of five driving forces of the Nation’s remarkable strategy to promote economy development for the last ten years.

Drucker (1985) also accepts the major role of entrepreneurship and he even indicated that present businesses could hardly survive if they do not secure entrepreneurial capacity. In addition, a positive relationship between economic development and entrepreneurship is captured by Braunerhjelm et al. (2009). They examed 20 countries in Organisation for Economic Co-operation and Development for 21 years and eventually came to the conclusion that entrepreneurship could positively affect economic development, with remarkable improvement in the perspective of competitiveness and new firms establishment.

Wennekers and Thurik (1999) are in the same line with Braunerhjelm and state that entrepreneurship makes contribution to economy development by some process such as enhancing competitiveness, creating new firms and new jobs, and improving productivity. Besides, with increasingly practice, Schumpeter’s notion (1912), where economic growth and employment are provided and motivated by new businesses and existing firms which result from entrepreneurship, is widely accepted (Reynolds, 1999; Fritsch and Muller, 2004).

In addition, statistical research of manufacturing sector by United Kindom Her Majesty’s Treasury (2005) demonstrated the essential role of innovation for British economy. As their research result shows, 1. 2 million employments were provided by newly established businesses from 1997 to 2005. However, according to Hoffmann and Junge’s research (2006), UK has still approximately 18 percent less businesses than America, and he maintains that much higher entrepreneurial activity rates in America may interpret this to some extent.

Having considered entrepreneurship and innovation’s separate relationship with economy development, it comes to conceive entrepreneurship and innovation as a whole and discuss their holistic relationship with economy development. As have been discussed, innovation and entrepreneurship are complementary. This can also apply to economy development. With the insuffiency of innovation, entrepreneurship plays a mediate role between innovation and ecocnomic development, which will more fully realize the commercial value of innovation and enhance the overall impact (Camp, 2005).

Some scholars such as Allen (1988) approve that entrepreneurship should be reagrded as the pricinpal mechanism to convert preliminary-phase innovation into economic development. For example, in the 1980s, in the printing industry, a potential market gap existed between conventional printing and office photocopiers. A famous German company, Bayer, responsed to the problem with the development of an innovative technology which can provide quality, price-efficient and small-quantities colour printing for office uses.

Nevertheless, the traditional chemical company did not plan to expand into printing area, so no material measures were taken to fill in the gap. But a few years later, the market gap expanded to a large scale which finally attracted Bayer’s attention. In 1988, based on the innovation mentioned above, Bayer established a new enterprise, Xeikon, to produce printers especially for office. Consenquently, by the end of 1998, 160 jobs had been created and the company had captured profits of 45 million pounds (Burns, 2005). Entrepreneurship’s mediating role is apparent in this case.

If Xeikon were not founded, the innovative technology might stay in the innovation stage for much longer time and the printing industry might not be able to experience the revolution in that age (Burns, 2005). With the necessary yet insufficient nature of innovation and postitive impact of entrepreneurship on economic development, many regions which have invested a large amount of money in innovation begin to learn the indispensable role of entrepreneurship and find that they need entrepreneurship to further thrive economies and these investments’ ecomoic return (Camp, 2005).

Innovation alone can only yield limited economic influence (Camp, 2005). Through the generative process of entrepreneurship, however, more significant economic gains can be captured. For instance, in an investigation by Camp (2005), a rise of approximately 60 percent in average wages was acturalized in the most innovative regions among 382 regions they researched, by enhancing innovation capability through entrepreneurship. The Table 1 below, extracted from Camp’s (2005) another research, also indicates entrepreneurship’s mediating effects on innovation.

Table 1: Tesing the Mediating Effiects of Entrepreneurship on Innovation and Regional Employment (Camp, 2005). Regression Models| Correlation| Coefficient| t-stat| R2| Model1:Total Employment| 0. 723| 512. 8| 4. 67| 81. 1%| Innovation| | | | | Entrepreneurship| 0. 716| 121. 1| 26. 03| | Model2: Entrepreneurship| 0. 611| 16. 4| 18. 95| 48. 0%| Innovation| | | | | Model3:Total Employment| 0. 723| 2,494. 6| 19. 02| 48. 2%| Innovation| | | | |

The difference between Model 1 and Model 2, especially the value of R2 which represents impact on employment, indicates that the direct effect of innovation alone (48%) is much lower than the combined effect with the mediating process of entrepreneurship (81. 1%). In other words, the mediating effect of entrepreneurship can provide extra profits for businesses as well as covering the investment on innovation capability (Camp, 2005). In conclusion, this essay has disscussed the relationship between entrepreneurship, in conjunction with innovation, and economy development, utilizing theories and examples in business.

Attention is devoted to the positive relationship between the three issues. Innovation originates from creativity and endows materials with new capacity. Entrepreneurship utilizes innovation as a special tool, and it explores innovation’s potential economic value by selecting and commercialising innovation into market. Entrepreneurship and innovation are thus complementary and the synergy between them significantly benefits each other. Problem solving exists throughout the process from ideas generation to business estabilishment converting possibilities into practical application.

In addition, innovation and entrepreneurship are respectively vital contributors to economy development, whereas the insufficient nature of innovation calls for mediating effect of entrepreneurship. Many theories and examples have illustrated this mediating effect which will more comprehensively realize the commercial value of innovation. With good combination of entrepreneurship and innovation, in consequence, economy can be effectively thrived and overall economy development will be achieved. Word Count: 1904

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Consumer Resistance to Innovations

Consumer resistance to innovations: the marketing problem and its solutions This article describes the major barriers which create customer resistance to innovations. This understanding is important because of the high rate of new product failure. A major cause for this is consumer resistance, although consumers are pro-innovation. It’s a normal, instinctive response of customers. This article suggests marketing strategies to overcome these barriers. Innovation resistance can appear in customers because it disrupts their established routines and they can be happy with the current status quo.

The higher the discontinuity of an innovation, the higher the resistance is likely to be. Also, consumers have their own belief structure. An innovation can conflict with this which can results in resistance. There are various characteristics of innovation resistance. First, there are different groups regarding to the timing of adoption of an innovation (Innovators, Early Adopters, Early Majority, Late Majority and Laggards). Second, resistance varies in degree; (1) inertia (they may feel disinclined to adopt the innovation), (2) active resistance, (3) very active resistance.

Third, resistance is influenced by the degree of change/discontinuity and/ or the extent to which it conflicts with consumer’s belief structure. There are two kinds of barriers which create consumer resistance. The article gives some explanation how to undo these barriers: 1. Functional barriers Usage barrier: the most common reason for customer resistance to an innovation is that it’s not compatible with existing workflows, practices or habits. The more existing habits have to change, the more the resistance will be. UNDO: develop a systems perspective to market the innovation.

The innovating firm has to estimate how its new product will fit into the existing system, by looking at the whole operation. A second strategy is to integrate the innovation into the preceding activity or product. Finally, overcome usage barriers by making the innovation mandatory through government legislation: lawmakers have to say they are convinced that customers will benefit from the innovation. Value barrier: there has to be a good performance-to-price value compared with product substitutes, otherwise there is no incentive for customers to change.

UNDO: provide significant performance value over existing alternatives. Second, reduce the manufacturing costs of the innovation and decrease the price of the product. Third, add value to the innovation by successful positioning the product. Risk barrier: every innovation can have potential side effects that cannot be anticipated. Customers will try to postpone the innovation until they can learn more about is. There are 4 main types of risk inherent in an innovation. (1) physical risk: harm to person or property (2) economic risk: the higher the cost, the higher the perceived economic risk. 3) functional risk: customers can worry that the innovation may not work properly because it’s not been fully tested. (4) social risk: customers can feel scared to face peer ridicule when they adopt the innovation. UNDO: Offer the innovation on a trial basis to potential customers. Second, show testimonials from experts who objectively evaluate the innovation. Third, package the innovation under a well-known name. 2. Psychological barriers Traditional barrier: innovations can create a cultural change for the customer. The more the customer deviate from traditions, the more resistance there can be.

UNDO: understand and respect cultural traditions. Second, educate customers/market education. Third, use change agents. Once industry leaders adopt the innovation, the rest will do the same. Image barrier: this is a perceptual problem that arises out of stereotyped thinking. If associations the product class or where its manufactured is unfavorable, there can be created a barrier to adoption. UNDO: Suggest to people that its silly to carry such stereotypes and make fun of the image. Second, create a unique image for the product of service (for example using a cowboy theme).

Third, associate the innovation with someone/something with a positive public image. Each of these strategies for countering the barrier for innovation may be classified into one of the five types: product strategy, communication strategy, pricing strategy, market strategy and coping strategy. The answer to successful innovation lies in understanding the causes of resistance and cope with these causes. S. Ram & Jagdish N. Sheth (1989) “Consumer resistance to innovations: the marketing problem and its solutions”, The Journal of Consumer Marketing, Vol. 6 Iss: 2; pp. 5-14

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Creativity and Innovation

Introduction The nature of today’s business is highly competitive. So the success of every organization highly depends on the novel creative and innovative ideas. Creativity simply means thinking up new things. Innovation means applying those thoughts in to work. It is the conversion of new ideas into products and services. In a rapidly changing global world, managers must use all their abilities to forecast the future opportunities and threats. All these are for achieving and maintaining strategic advantage over the competitor. 2. Produce an appropriate rationale to persuade stakeholders of Aravind eye clinic of the benefits of creative and innovative management idea No business can win without make the stakeholders participating in their business. Stakeholders can motivate a business at a higher level by giving their support to the business. But the business men should take that advantage in a productive and efficient manner. Thereby their creative and innovative ideas can be converted into reality and thus the business can also be developed to a great extent. When we consider the case study, we can see that Dr.

V, as the founder of Aravind eye clinic hospital struggled a lot to get his vision and mission fruitful. After analysing all risks associated with the vision and the future consequences they conducted a risks-benefit analysis and came up with new ventures that minimize all the risks and which provides more benefits to their future. Because of their creativity and innovations they have become the only hospital which provides Catarat surgery in India. For getting this kind of achievement stakeholders like owners,employees,customers,Government,communities,suppliers,investors… etc, played an eminent role.

Most of the people may resist changing. The success of a business man is lying in convincing these people about what will be the future benefits of changes that the company is going to test. The stakeholders are the key participants of any organization. The important justifications to persuade stakeholders of Aravind eye clinic of the benefits of innovation are: * We can go for the valuable opinions from the stakeholders whenever we need. They are more powerful resource to help in the difficult situations such as during inflation, technological advancement, employee attrition, strikes… etc. Maintaining a healthy relationship with the stakeholders will help both the stakeholders and the organization to get the new information about the environment and the ways to improve their functions to a large extent. * Through communicating with the stakeholders frequently will help us to know what will be their reactions to our novel ideas, and we can change those ideas in to new one which can win their maximum support. * We need to know how best we can make them engage in our project. 2. bAs CEO how will you communicate creative and innovative management idea to stakeholders of an organization

Stakeholders are the persons who have interest in knowing the financial position and performance of the organization. As CEO we need to know how best to hold them in our project and how best to communicate with them. We should know about what information they would like from us, their financial as well as emotional interest and what motivates them most… etc,. The most suitable way to know this is directly talk to them. People are often quite open about their views and asking people’s opinions often is the first step in forming a successful relationship with them.

For the effective communication with the stakeholders we need to keep in mind the following stuff: * We must understand first that who are the most valuable stakeholders of our organization. A stakeholder may be an investor, Government, supplier, employee, customer, owner… etc. , We should keep a healthy conversation with all the stakeholders and should keep in touch with them often according to their importance or level of influence in our organization. * There may be some very interested people among the stakeholders, others may not car what we are doing and going to do.

We should treat them according to their interest in our organization. * The products or services with good quality are itself a good communicator to the stakeholders. Thereby we can earn maximum support and benefits from them. * We should manage our stakeholders depends on the size and complexities of our creative and innovative management ideas and allocate the required time to communicate with them. * Think about what we actually need from each category of stakeholders and their level of influence in our organization. By analysing it we can communicate with the stakeholders in an effective manner. The matter or the messages that are going to convey must include what will be the future benefits of creative and innovative management ideas and try to convince the stakeholders to involve in the new project and persuade them to get maximum advantage from it. * We should work on to get the stakeholders to boost their level of interest. We should ensure that what we are doing is always affecting stakeholders because if there are any problems we can discuss as early as possible thus reduce the problem by making discussions with stakeholders. . cEstablish key goals and priorities for implementation of a creative and innovative management idea using feedback from stakeholders. It is necessary to get feedback from stakeholders to establish key goals and priorities for implementing creative and innovative management ideas. In the case of Aravind the key goals and priorities for implementing creative and innovative management ideas are the following: * Setting fascinating goals : When we set goals it should be ensured that it motivates us.

If we don’t have much interest in what we are doing the outcome will also like that without having any progress. So motivation is the first key to achieve goals. To achieve the goal we should have a commitment like I can or I must do. So setting goals which motivate us is very important and it should be the first footstep in implementing creative ideas. * Setting SMART objectives : The term SMART stands for Specific, Measurable, Attainable, Realistic and Time bound. Specific means it should be well defined and clear.

Measurable means it should be measurable, so that we can measure the degree of success. Attainable means we should set the goals which can be achievable as anticipated. By setting realistic goals these are goals that require us to implement our ideas and it will bring personal satisfaction also. Time bound means the goal should be achieved within the prescribed time. When we are working on our dead line our sense of requirement increases and our achievement will also come faster. * Put goals in characters

The physical act of writing our creative ideas makes it real and touchable. When we write ‘we will ‘instead of ‘we would like to’ in a sentence ‘we will’ get the power and the second lacks the passion and gives us an excuse if we get unfocused. * Make an action plan We get so focused on the outcome so we will forget to plan all of the steps that are needed along the way. By writing the individual ideas and when we cross each one off as we complete it we will realise our making progress towards our ultimate goal. This is important especially when our goals are very big. Fix on it Goal setting is a continuous process. We should build our reminders to keep ourselves in track and should make a time table for reviewing our goals. The action plan we set for ourselves can change but we should make sure that our importance, value and need remain high. 2. dAssess the barriers to the implementation of a creative and innovative management idea at Aravind Eye Clinic Innovation barriers can be considered as organizational screening devices to filter worthy innovation projects from unworthy ones.

Some of the obstacles and barriers to the implementation of creative and innovative management idea are given below: * Structural Barriers: Main barriers in this category include stratification, formalization, centralization and specialization. Stratification has been described in terms of allotment of rewards throughout an organization and degree of status, equivalence and ease of intra organizational mobility. Formalization means the degree to which an organization emphasizes following rules and procedures in the role performance of its members.

If organizational members are expected to behave in predefined manner and innovation is not prescribed, fewer idea proposals will be generated. However, the singleness of purpose that accompanies formalization can make it easier to accept and execute new ideas. Centralization may be negatively related to idea proposals and positively related to adoption. When Specialization is high, initiation of idea proposals and idea adoption will be facilitated. * Social/political Barriers: These barriers pertain mainly to norms and power-related influences within organizations.

Although accepted standards of behaviour and power may influence many organizational processes positively, some norms and power can have an influence up on innovative ideas. * Procedural Barriers: These barriers normally refer to policies, procedures, and rules that often restrain innovation. Certain procedures or managerial philosophies are also included in this category that although not officially codified, nevertheless can wield a powerful negative influence. * Resource Barriers: Resources like people, time, money, supplies and information may be affected.

Innovation needs certain amount of resources beyond those needed for routine functioning. Implementing an innovation frequently requires that resources be shifted from one area to another. It will result in internal conflicts that can be very troublesome to the innovation process. * Individual Barriers: There are some individual barriers may arise while implementing the innovation. Fear of risk and failure of intolerance of hesitation and ambiguity are the most commonly cited barriers from individuals. Perceptions to innovation may be varied from person to person.

We can find some barriers in Aravind Eye Clinic. Individual barriers and resource barriers are the most affecting barriers to them. 1. To implement innovations in their hospitals they have to co-ordinate the opinions of different people. Lack of such co-ordination is a main problem. 2. They have several branches all over India, so utilization of all the resources in an optimum manner will be a problem. 3. Because having wide spread locations they don’t have adequate staff in all their branches. 4. Lack of proper communication to all the branches is another barrier. 2. Plan a strategy to overcome identified barriers to the implementation of a creative and innovative management idea at Aravind Eye Clinics. The need to improve competitiveness of companies through their innovation performance demands continued execution of the broad-based innovation strategy. Every idea management process starts with idea generation. In our work we observe many barriers to innovation. Strategies to overcome barriers to innovations are: 1. Reason If logic is undeniable then your case will also be irrefutable. If information or logic is suspect strategy is weakened. 2. Friendliness

It helps others enjoy supporting you. Overuse may lead people to suspect your motives and competence. 3. Coalition It may seem overwhelming to others. It may be interpreted as conspiracy. 4. Assertiveness It is very effective when instant action is necessary. It may create bitterness with overuse. 5. Higher Authority It is effective when dealing with those who are unwilling to change. It may weaken relationships or be interpreted as a threat. The higher authority may view it as weakness. 6. Bargaining It may provide a quick result when you have something valuable/desirable to negotiate

When we take the case study, by giving proper training and development to the staffs and other people may help to overcome some kind of barriers to innovation. Communicating with the stakeholders in a healthy way will help to reduce those obstacles. Communicate very open what will be the future changes that are going to conduct in the organization. 2. f Explain how a strategy plan for overcoming barriers will ensure innovative change is achieved. Now the AEC has become one of the most successful organizations all over India. The main barriers to innovations they have are: . To implement innovations in their hospitals they have to co-ordinate the opinions of different people. Lack of such co-ordination is a main problem. 2. They have several branches all over India, so utilization of all the resources in an optimum manner will be a problem. 3. Because having wide spread locations they don’t have adequate staff in all their branches. 4. Lack of proper communication to all the branches is another barrier to innovation. 5. Lack of proper training is also a barrier to innovation. They are now providing more than one surgery in their hospitals.

So utilization of their available resources in a productive manner is achieved by them. They have limited number of staffs to treat all the patients in a good manner, but now they are providing services to a great extent by starting new branches in remote areas also and appointed large amount of employees to meet all the requirements of all the patients. The wide spread locations of their hospitals make them difficult to co-ordinate all the activities, but through identifying and taking proper remedies to this problem they have reduced this barrier to a large extent.

Providing good quality services are itself a good communicator to the society. AEC has achieved this kind of proper communication to the stakeholders and thereby they have attained their vision and mission fertile. 2. g Communicate a strategy plan for overcoming barriers to relevant stakeholders in an organization Stakeholders of an organization refer to those people who have a great interest to know about the organization such as their financial positions, performance… etc. Key stakeholders of an organization includes employees, owners, investors, government, customers, communities, trade unions, creditors… tc,. There are lot of communication barriers faced by an organization. The message intended by the sender is not understood by the receiver in the same terms and sense and thus communication breakdown occurs. It is essential to deal and cope up with these communication barriers so as to ensure smooth and effective communication. Overcoming the barriers to innovation is much important matter in an organization. To achieve this there should be a proper communication with the stakeholders frequently. There are some points given to communicate with the stakeholders in an effective manner. . Use of Simple Language: Use of simple and clear words should be emphasized. Use of confusing words and jargons should be avoided. 2. Active Listening: Listen attentively and carefully to all the stakeholders while they are giving their feedback. There is a difference between “listening” and “hearing”. Active listening means hearing with proper understanding of the message. 3. Simple Organizational Structure: The organizational structure should not be complex. The number of hierarchical levels should be optimum.

There should be an ideal span of control within the organization. Simpler the organizational structure, more effective will be the communication. 4. Give Constructive Feedback: Avoid giving negative feedback. The contents of the feedback might be negative, but it should be delivered constructively. Productive feedback will lead to effective communication with the stakeholders. The authority of the organization should take care of the communication with different stakeholders according to their importance or level of influence in the organization.

All the strategies or plans which are formulated to overcome the barriers to innovations should be carefully communicated with all the stakeholders in an effective manner in order to get the maximum advantage from them. Conclusion By doing this assignment we can understand who the stakeholders are and how effectively an organization can win their support through maintaining a healthy relationship and by frequently communicating with them. An organization has different types of barriers to innovation and its success is lying on how well it can identify and overcome those barriers and make the business very successful.

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Health Care Innovations

Health Care in growing within their technological field every day. They are continuously coming out with new things that can help improve the world of health care as we know it. One of those things that they have come up with is online health care clinics. Online health care clinics are clinics that you can go to from anywhere where you have internet access, most people use it from home or by phone, but you can also use it while you are traveling as well. You can use these services day or night, and you just pick the state that you will be traveling through when the prescription is available.

These clinics have all the same staff that a normal clinic that you would visit would have, accept you can do everything online right at from your fingertips. Virtual clinics treat common conditions such as acne, bladder infections, breast infections, burn and sunburns, some STI’s (chlamydia, Gonorrhea, Trichomoniasis) Cold, Cough and Allergy’s, Deer tick bites, ear pain, Flu, lice, pinkeye and styes, skin and nails issues and yeast infections. (“Virtuwell”, 2013). What happens is when you first log on to the clinic you create a username and password for future reference if you need to come back all your information can be saved.

You provide all your information to a nurse practitioner, they review your information and within 30 minutes or so they get you a prescription or whatever treatment that is needed. You do not have to have insurance; if you do, the cost may be reduced if you do not have insurance its $40, plus the cost of the prescription. This is a quick and easy way to get those common conditions evaluated and treated by trained health care workers from the convenience of your home.

Online health care can benefit patients because they do not have to leave their homes or offices in order to speak with a doctor about a condition and can get advice right there online or over the phone without having to wait in line and pay the costly office visit. Although this program is not available for more in depth conditions, common conditions that are easily treatable can be addressed in these online clinics. Online health care clinics can improve quality of life because of the convenience of seeing a physician online.

However, for someone who does not have access to the internet or does not really know how to use the internet it may not be as useful for them. By having these services available to speak with a doctor online and having common conditions diagnosed it will decrease health care spending because not as many patients are going into the clinics or hospitals for common conditions which allows lower cost in health care. It is also more cost effective for the patients because if they do not have insurance it’s a small fee versus getting a higher medical bill by going into an actual clinic that they would not be able to pay later.

Patients can decrease the amount of money they are spending on health care by utilizing these online health care clinics. They will not be paying for expensive office visits and if a prescription is required for their condition, they can ask for a generic drug that will also reduce health care spending. These virtual clinics are also nice for health care providers because it allows them to see and diagnose more patients in a shorter time. In addition, everything is online so you are avoiding the cost of paper being used because it is all stored online.

You even have the option of keeping your records online for you to come back and access at anytime that need to see them. This is not only cost effective for the patient but also for the health care provider as well because they are reducing the amount of money it cost to store those records. I believe that online health care clinics will become a big trend into the future as our technology continues to advance. I know there isnt a lot of states right now that offer this program.

Virtuwell is only offered in Minnesota, Michigan and Wisconsin, but as the word gets out about this program, I think that more and more states will develop online health care clinics because it avoids people coming into the clinics and passing germs around, with the option of going online you can stay at home and the sicknesses can be more controlled. ————————————————- References Virtuwell. (2013). Retrieved from http://www. virtuwell. com

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Innovation and Leading Change

Module name: Leading Innovation and Change Assignment title: A mid-term draft of the final essay Effective word count (words used): 4,000 word Outline 1-About the assignment : Leading Innovation and change being part of managing human and organization behaviors is kind of a complex processes that include several factors, stages, models, perceptions and definitely outcomes.

In this paper I will get a deep dive and close up view stating the various definitions, different related models, how they work in practical life and what kind of failures such models face in real life implementation; along with a self reflection to the applied experiences of such study and what will be the development plan leading to more successful practices in future. 2-Introduction 3-Innovation -What is innovation? -Types of innovation -Managing innovation 4-Change -What is change? -Kotter stages of change -Lewins 3 stages model Types of chnage 5-Leadership -Leading innovation & change -Process of bringing out innovation and change -Stakeholder issues 6-Successful experience -Introducing Recognition program. -Less successful experience (Values and cultural change program) 7-Reflections & Development plan : 8-Bibliography About the assignment: In this assignment, I will state several theories, definitions and models of innovation, change, and leadership of innovation and change. I will describe, analyze and criticize such theories and models.

Moreover, I will apply such models on a successful project I launched in my company which is the “recognition program “and a less successful one which is “values cultural change program”. Finally will set the lessons learned from such study and future development plan concluding the research done on the “leading innovation & change “topic. •Introduction: Innovation is perceived now as a trendy slogan for a variety of fields, the notion of innovation has in recent years also become attractive in matters of business, economies, technologies, social sciences, political reform, institutions and governance (Berlin, 2012).

Generally, when we say the term innovation attention goes directly to technology, products’ and services’ development, however according to third Berlin forum outline in “innovation in governance” : Attention shifts from novel procedures in science and technology, or economic products and processes, towards the creation and spreading of new instruments for public policy, new modes of governance and new political institutions.

Innovation matters, not only at the level of the individual enterprise but also increasingly as the wellspring for national economic growth (Tidd, J. & Bessant,J, 2009, p5). And Baumol pointed out that ‘virtually all of the economic growth that has occurred since the eighteenth century is ultimately attributable to innovation’ (2002, p13). Moreover, Tidd, J. Bessant,J (2009) stated that: Innovation is becoming a central plank in national economic policy -for example, the UK Office of Science and Innovation sees it as the motor of the modern economy, turning ideas and knowledge into products and services. Additionally, an Australian government website puts the case equally strongly: ‘Companies that do not invest in innovation put their future at risk their business is unlikely to prosper, and they are unlikely to be able to compete if they do not seek innovative solutions to emerging problems’ (2009, p5).

Since innovation have such clear impact on economies it definitely has higher and more direct impact on smaller organizations and entities reflecting that dynamic environment that lead such changing patterns in side each organization. Actually, the type of innovation, guide the response for needed change, its related types and models inside each organization’s context, this leads us to the term change management that is basically the process of keeping these changes under control.

Not only innovation lead to change inside organizations, but also some changes in side organizations can lead to innovation. Moreover, managing innovation and change is not an absolute easy process as it seems, as it requires lots of human interaction with different backgrounds, contexts, cultures that require aligning all your human resources to respond to new innovations, and related changes and this will only be done via good and efficient leadership.

Generally, innovations and related changes may include change in organization structure workforce planning, marketing strategy, geographical distribution , culture, …ect which directly impact human resources in any organization , therefore the role of the leader is so crucial to manage tensions, conflicts, resistances, uneasiness and development areas that usually appear with new changes and innovations.

Leading Innovation and change being part of managing human and organization behaviors is kind of a complex processes that include several factors, stages, models, perceptions and definitely outcomes. In this paper I will get a deep dive and close up view stating the various definitions, different related models, how they work in practical life and what kind of failures such models face in real life implementation; along with a self reflection to the applied experiences of such study and what will be the development plan leading to more successful practices in future. Innovation: Innovation is multi dimensional term that can be viewed from different perspectives. Actually, defining innovation and agreeing on its meaning to an organization is part of managing the innovation process. Defining innovation is the key of setting the strategy for it, which will imply the needed changes accompanied with it.

For instance, an innovation project that I monitored in one of the telecommunication companies in Middle East targeted was launched to change the company culture to be more innovative and lots of investments, incentives and trainings were set for this and 30 million dollars as revenue generation/cost reduction was the target in its first year, the shock came when innovators started presenting their ideas that was really below the top management expectations in terms of ideas’ quality or in other words ideas’ novelty and although the project achieved its target company’s management decided not to invest in such project again due that fact that it didn’t bring something really new or what we call a breakthrough or radical innovation as they expected; so not agreeing on the exact definition and expectation of innovation from beginning setting that clear strategy about it lead to the un-sustainability of the project. In the past, according to Howard Smith innovation was defined largely by creativity and the development of new ideas.

Today the term encompasses coordinated projects directed toward honing these ideas and converting them into developments that boost the bottom line (Tidd, J. & Bessant,J, 2009, p20) This complexity can be seen and evident when displaying the several Innovation definitions, applications where researchers have seen same innovation aspect in different contexts. Mohanbir Sawhney, Robert Wolcott and Inigo Arroniz -from the Center for Research in Technology and Innovation at the Kellogg School of Management at Northwestern University, USA- definition of ‘business innovation’ does not focus on new things, but rather anything that creates new value for customers.

Therefore creating new things is neither necessary nor sufficient for such value creation (Tidd, J. & Bessant,J, 2009, p48). Additionally, Richard Branson quoted by Tidd (2009. P16) said: An innovative business is one which lives and breathes “outside the box”. It is not just good ideas, it is a combination of good ideas, motivated staff and an instinctive understanding of what your customer wants’. Often, in common parlance, the words creativity and innovation are used interchangeably. They shouldn’t be, because while creativity implies coming up with ideas, ‘it’s the bringing ideas to life’ . . . that makes innovation the distinct undertaking it is(Tony Davila, Marc J. Epstein and Robert Shelton, 2006).

Generally, creativity and innovation are not synonymous; there is a clear and important distinction between them. Although these two main tracks of definitions put creativity and developing new ideas absolutely on a side and value creation on the other side yet the issue should be viewed differently; creativity and innovation are not an isolated terms actually creativity and innovation interchangeably goes together; hence Creativity is linked to innovation, which is the process of taking a new idea and turning it into a market offering. According to the Innovation Pentathlon Framework; the first step in innovation that leads to creating value is creativity and generating ideas.

However, such liner model of innovation does not pay attention and consider the various feedbacks and loops that occur between the different “stages” of the process, shortcomings and failures that occur at different stages may lead to a reconsideration, reassessments, and re-examinations of earlier steps and this may result in new and more solid mature innovation. The question is why the distinction between creativity and innovation important? A significant reason is because it is impractical to develop a truly innovative organization if creativity is ignored or stifled. Similarly, without effective processes set to convert and transform creative ideas into practical, real world, value added application, creativity will be of no real value whatsoever.

Another direction explained by Goffin (2010, p13) when dealing with innovation in terms of classifying innovation in to two types which are radical and incremental. Innovation can be dramatic like breakthroughs, totally novel and new to the market products such as Ipods, mobile telecommunication at its time, walkmans by sony, and lamps invented by Edison that illustrate pure example of radical innovation where products not there in the market has been invented ,commercialized and accepted by customers. On the other hand, there are several degrees of innovation where some incremental innovations that imply small changes to existing products, services or processes. Although radical innovations often capture the attention of the masses, yet incremental innovation is much more common.

Research investigating over 100 companies showed that 84 per cent of product innovations were ‘line extensions’ -incremental innovation- and that on average 62 per cent of revenues came from such products. 19 As might be expected, though, 38 per cent of revenues and 61 per cent of profits came from the radical product innovations. Actually the classification to radical and incremental is not absolute as the term innovation seems to refer to fundamentally different matters sometimes Goffin (2010, p13). A critic on the categorizing the concept of the newness and novelty is a bit relative as the concept of newness not only refers not only to time, but also to the object dimension (new compared to what? ) and the social dimension (new for whom? ) Roth, S. (2009).

For illustration, a change in the simple process adopting performance balance scorecard system in a company that never used it can be an innovation to it, although the system is already known long time ago and adopted by many other companies; changes accompanied with applying such system may be very hard to a limit that may appear to the employees and management of that organization that such innovation to the company is radical in terms of its newness. The important part about innovation is how to manage it insde an organization; as mentioned by Goffin (2010, p13) managing innovation starts by setting Innovation strategy and its related goals assessing opportunities, marketing trends and related technology taking into consideration all external and internal factors. The second step is pooling Ideas and creating the innovative environments supporting creativity based in research and development and market needs.

Then Prioritization and selection for the ideas generated based on customer and market need analysis. Finally Implementation with efficient go to market approach and managing completion. Most importantly while managing innovation is innovators themselves; without people there is not innovation that’s why when we manage innovation it’s not managing a process so its start with hiring, training, development, incentive schemes, corporate culture performance management systems and even the office set up. Change: In today’s world change has become a constant truth of life. Leading Change is rather different than managing change; similarly leadership rather than management alone is needed to guide organizations through times of change.

Change is the process of moving from the existing state to a vision of the future. Innovation and change are interrelated and linked. According to the 4 Ps of innovation space model definition and categorizing innovation: ‘Product innovation’, ‘Process innovation’, ‘Position innovation’, ‘Paradigm innovation’ (Tidd, J. & Bessant,J, 2009, p21). These multi-dimensional changes that are clearly and directly linked to innovation are not a haphazard process that came as a surprise to organizations. Such changes directly affect and set the destinies of the organizations’ performance as previously stated in the innovation impact on the micro and macro levels.

Hence, researchers gave a strapping attention to such topic specially in the latest decades where vast innovations took place and markets faced vigorous competitions actually Linda Ackerman Anderson, co-author of Beyond Change Management, described how in the late 1980s and early 1990s top leaders were growing dissatisfied with the failures of creating and implementing changes in a top-down fashion. They created the role of the change leader to take responsibility for the people side of the change. Getting closer to the change management concept where kotter defined Change management, as the term most everyone uses, refers to a set of basic tools or structures intended to keep any change effort under control. The goal is often to minimize the distractions and impacts of the change.

While In some project management contexts, change management refers to a project management process where changes to a project are formally introduced and approved (Filicetti, John, 2007). John P. Kotter introduced the eight steps model of transforming an organization as a breakthrough in the field of change management literature; creating an eight stages model as follows: 1. Establishing a Sense of Urgency 2. Forming a Powerful Guiding Coalition 3. Creating a Vision 4. Communicating the Vision 5. Empowering Others to Act on the Vision 6. Planning for and Creating Short-Term Wins 7. Consolidating Improvements and Producing Still More Change 8. Institutionalizing New Approaches otter model is widely spread and one of the most famous theories in change as it draws clear steps that is easy to grasp, yet in implementation things may be a but different as change processes are ‘in reality messy and untidy, and… unfold in an iterative fashion with much backtracking and omission’ (Buchanan and Storey, 1997:127). Additionally, a stage-based model may be applicable to simpler innovations, but in fact innovations ‘rarely progress in a clear and predictable sequence of clear stages’ (King and Anderson 2002: 161). Another remark on Kotter‘s liner model I that it give you the impression that change is a one-time event, a process that must be meticulously managed and promises sustainability at its end; the point her that ignores the loops of feedback as change on real ground goes though very high level of uncertainty and messy environment as earlier mentioned which lead to constant review and feedback on the process should take place along the process.

Another point on the sequence of the change stages is that a clear vision and its related communication should be there before creating the sense of urgency; actually urgency should be based on a real speculated need or ground based analysis spotting a certain state the organization need to move to so gap analysis study, or a clear directed strategy should be a prerequisite for this stage or change dealing with an urgent situation such as a down turn in economy, acquiring new company or experiencing merger with another company is definitely a good reason that can be a spark urging change that need to take place and spread in the organization. it is imperative for all aspiring leaders to determine answers to the critical questions of, What change? , Why change? , and How change?. Change for the sake of change is the abdication of leadership. (Luke, 2009).

Kotter put emphasis on the need to properly select the team of change agents. Generally, people tend to name these agents as senior management, yet a good point kotter emphasized on is that this coalition it normally includes senior management some other supports from outside the actual hierarchy that sometimes becomes awkward. However, kotter did not highlight well the needed competencies that should be there in the change agents additionally didn’t draw the clear roles for and different levels of commitment and responsibilities required as mentioned by Aitken ( 2010,p42) such as change sponsors, change targets, change agents, change advocates.

Additionally, this stage puts massive stress on leaders and managers, and doesn’t include or give much attention to employees. And this top bottom approcach is supported by Theory E introduced by Beer, M. and Nohria, N( 2000, p3) where purpose of change induce the creation of economic value, often expressed as shareholder value. Its approach is planned, programmatic change, based on formal structure and systems; driven from the top with the help of external consultants and financial incentives. A different model introduced by lewin for managing a successful change requires a three-step procedure that involves the sequence of unfreezing, moving and refreezing, known as his three-step model of change (Hayes, 2010, p44).

The model explained by London management center where the first “Unfreeze” stage – this involves creating suitable environment for change, melting the resistance, obstacles, boundaries, discomfort and un-easiness accompanies by any change process and making people ready for change. And second stage “transition/movement” as a period of uncertainty making people start question their old ways of doing things and introducing new ways and processes to be adopted. The third stage “refreeze “stage setting up a new phase to enhance stability levels on the new norms and change paradigms. Although Hendry (1996) testified to Lewin’s lasting contribution to change management that: Scratch any account of creating and managing change and the idea that change is a three stage process which necessarily begins with a process of unfreezing will not be far below the surface. Hayes 2010, p44 ), yet Lewins model of change needed some more elaborations on its three stages as didn’t cover different aspects during the change process to be more controllable and anticipated. Several researches was done by on Lewins model such as done by Lippitt et al. (1958), Egan (1996), Beckhard and Harris (1987) coming out with some more add-ons and enhancements tackled in three core issues; first is diagnosis – as stated earlier a prior diagnosis to the current situation and future state knowing that gap analysis will be the seed for the second concern setting clear strategies and plans with clear direction to the wanted state of change and finally the transformation of the strategies and plans into real on ground actions.

Implementation also involves managing the interpersonal and political issues associated with change. (Hayes, 2010, p46-47). Further arguments done by Dawson (2003) and Kantor et al. (1992) recognized that the “ refreezing” concept is a bit not relevant; as during this dynamic environment organization should be flexible enough to respond well to such uncertain nowadays business environment (Hayes, 2010, p44 ). Additionally the model didn’t tackle well the several internal and external forces that affect the three change stages such as managing politics and getting the buy in of stake holders, it also didn’t tackle well people related issues whom are the main source and core of change.

After all, they type of change and its related magnitude is a key detriment on the way it should be lead, managed and handled. Actually, they type of change is highly dependent on the type of innovation, internal external factors that will trigger it. Since innovation is classified in to incremental and radical innovation, similarly change has same respondent classification of bigbang change and incremental change. Incremental change as stated by business dictionary adjustments made toward an end result in a business environment, making an incremental change to the way that things are done typically does not significantly threaten existing power structures or alter current methods.

On the other hand, Big bang change is a transformational shift in the business culture of an organization resulting from a change in the underlying strategy and processes that the organization has used in the past. A transformational change is designed to be organization-wide and is enacted over a period of time. •Leadership: Innovation and Change always involves leadership in one form or another (Balogun, J. & Hope Hailey, V. 2008). When leadership is exercised effectively the organization’s change initiatives will be effective and there will be ‘good change. ‘ When leadership is exercised ineffectively, change initiatives will be mediocre, ineffective or will fail miserably (Beerel, 2009,p17). The attribute and competency of leadership is vital in organization’ and teams performance.

The capability the leader to digest the organization’s objectives, mission, vision and strategy and communicate this well to his teams is a key attribute for the success of such organization. The integration of leadership with innovation and change to form the organizational environment that will allow the space of innovation and hence related changes. Leadership that promotes innovation and creativity or implements a change program effectively and with the minimum disruption to performance is a real skill and managers need all the available support to equip them for these roles. Again depending on the type of innovation, related change, and their magnitude, timing, context external and internal factors will determine the type of leadership need to need to manage such innovation and change.

For example a company going through a certain new changes in crisis time where there is little or no time to involve groups in decision making may need an authoritarian or what is called autocratic leader who declare clear solid direction, take decisions with minimum feedback. Lewin also found that it is more difficult to move from an authoritarian style to a democratic style than vice versa. Lewin’s study found that participative leadership, also known as democratic leadership, is generally the most effective leadership style. Democratic leaders coach and guide teams inside an organization and they add their inputs and participate actively in decision making.

Again, it is depending on the context the leadership style is assessed, sometimes the change context and type of innovation need an authoritarian style rather than a democratic. The last type of leadership in according g to Lewin classification what is called laissez fair or delegative leaders who offer minimum or no guidance to their team passing on decision making to team members. And this is supported by their by theory o iby Beer, M. and Nohria, N( 2000, p3) where it has the purpose development of the organization’s human capability to implement strategy and learn from experience. It depends on a high commitment culture in which change is continuous & emergent. Change is enabled through participative process which relies less on consultants and incentives.

Although this way of leadership seem to be attractive from some people how usually show high level of competency and expertise it is a discomfort and risky for other less in capability and aptitude. Bringing innovation and change to a company require leadership that is primarily about dealing with people’s capacity for adapting to new realities, i. e. their ability to transform and change (Beerel, 2009. p22). Although models like hays seems to be systematic and concentrating on a linear stage transitions however if we take a close look to the process you will find the role of leadership is primarily about dealing with people’s capacity for adapting to new realities, i. e. their ability to transform and change.

According to hayes, (2010,p55), to reach a certain state of change one must follow eight steps covering many gaps that lacked kotter: such as Recognizing the need for change, diagnosing the current situation and desired future state, sustaining change and post importantly and that what I want to emphasize on is people management issues. As Hayes mentioned “Any strategy for change must address a number of people issues that are ongoing throughout the change process, including: power, leadership and stakeholder management communication motivating others to change support for others to help them manage their personal transitions, training and development. Leadership is the process of influencing others to understand and agree what needs to be done and how it can be done effectively, and the process of facilitating individual and collective efforts to accomplish the shared objectives (Yukl 2007).

While managing change process and dealing with people resistance and uneasiness are always accompanied; stakeholder engagement and buy in is the most common reason for success of change projects. No matter how effective all other aspects of the change are managed, if you don’t have the commitment of your stakeholders, the change process will always have a defect and will be subject for failure and any changes achieved will not sustain. Therefore gaining stakeholder commitment is therefore critical to change project success. Even for soft and small changes engaging your stakeholders is the one of the most effective tools in change management success.

Kotter , lewins, hayes depended heavily in their change models on top management and stake holder buy in as a part of the change process. Hence, a leader who is willing to drive sustainable change need to take a tactical view of stakeholder support via analyzing stakeholder needs and tendencies. Successful experience: Recognition Program: One of my employer’s success stories is the “Recognition Program” which I managed personally. The motto we used is “Discover the Stars“. It is in fact considered one of the most successful programs introduced in one of the leading Telecommunications operators in the Middle East that won several international awards.

The program simply is d=introducing to a very dull operational culture a innovative type of consistent rewarding and appreciation tools and spreading the culture of recognition and appreciation amongst employees and specially middle management layers. Inadvertently, this program embodies “Kotter” eight stages. Through applying Kotter’s stages for successful transformation and renewal process, the program started off with sensible urgency for advocating such a program in the company. The main reason lied behind the annual engagement survey scores conducted by the HR department, where employees scored remarkably low scores in recognition culture which reached around 46%.

We went deeper for further analysis of the case through studying the survey questions related to appreciation and recognition, focus groups were formed, and the main issue was a cultural problem within the middle management in recognizing their subordinates. At that point of time, the company was in a start up phase being in market for four years; hence all managers were focusing on the core operations rather than the motivational issues and employees were really stressed stretching their limits put the company foot print in the market. In addition, there were no available tools or enablement granted to the management to recognize employees. After conducting the study with in-depth analysis, it was found out that this was due to the lack of trust in middle management from top management due to the freshness of the operations in the country.

The initial urgency alarm was created luckily, as it was the first year the engagement score was set as KPI on the CEO and CHRO. Our next step was to involve the other senior management and get their buy in, in order to proceed with institutionalizing the recognition program and its constituents. The concept was presented to the CHRO & CEO and it gained great support from the top management. It was very crucial to attain a clear buy in from CEO and CHRO where this helped out in the gaining the consensus from all Senior Management consequently. I asked tremendous budget amount was allocated for this sole aim of recognition to create this shock and show the significance of the program.

Following to that, the subsequent attempt was to form coalitions and change agents from each department. We formed a committee where a Senior Manager or an effective change agent from each department represents it for the recognition program, where each and everyone was fully aware with the exact employee needs that need to be addressed and fulfilled through the potential recognition program and also act as mentors for their department for recognition issues. The committee members were finely selected where they previously participated in successful cross departmental projects and proved to be true agents of change. At that moment, we started crafting the recognition program’s vision encompassing the main goals.

We were so eager to set a clear plan and tangible objectives, where all the recognition programs were vigilantly tailored to serve the program’s main objectives which include the employee engagement and satisfaction as a top priority which shall guarantee the company’s top performance in the future. Top management hand in hand with the Senior & Middle Management started to diffuse and cascade the recognition culture amongst the employees. We were keen on publicizing the recognition programs across the whole company and all employee levels, for them to get acquainted, engaged and join the programs we also allowed a room for focus groups and feedback from employees about the program before launch. Here came the 4th step which is disseminating the recognition strategy and vision showing its urgency and vital importance through the proper communication channels.

In alignment with the Internal Communication Department, we successfully managed to outline and implement a state of the art internal campaign through conducting recognition program riddles which were sent out to all staff members in order to get to know the programs more ad urge them to discover the program. Choosing the motto “Discover the Stars” was a motive for all staff to go the extra mile. A broadcast e-mail announcement branded with a special logo for the program was sent to all staff; posters and roll ups were used to publicize and announce the launch of the recognition program. The team handling the recognition program was very devoted along with the committee members to spread such culture, and the effect was obvious in the coming year’s engagement surveys where the engagement level increased by 20%.

Training sessions were held for all staff in order to get to know the program details, learn how to use them thoroughly, and to instill the appreciation behavior and related of motivation and recognition leadership skills. Another factor which instilled the recognition culture is institutionalizing the program and making it part of the routine and here we proposed and got approval to include the recognition and appreciation notions as KPIs on all staff and Senior Management. Another hit we worked on is creating on the spot recognition, so that employees can have not only the look and feel of the program through advertisement such as posters, flags, announcements, etc, but also through initiating a monthly recognition for all department specially dedicated to high performers who manage to excel in their day-to-day job related activities.

The reward was “Excellent Job Voucher” which was worth a good sum of money, where employees had the chance to win a dinner for two vouchers in high-end restaurants. This was considered one of the instant recognitions where people sensed the recognition program’s effect instantaneously. We, being agents of change, and leaders who managed to communicate the recognition program to the company’s staff, were so enthusiastic about getting feedback from the employees, knowing the effect the program caused, whether positively or negatively. We didn’t rush into things and jump to conclusions, rather we gave the program a chance to sink in deeply and mingle within the organization’s culture, in order to be able to get valid results.

After one and half year time, we managed to get feedback throughout this period and accordingly new programs were added to the already existing ones that match the employees’ needs and raise their level of satisfaction and engagement. We tackled bigger problems such as rewarding employees working on technical projects, which is surely important in a Telecommunications company. Then we revamped the whole recognition programs and included variety of prizes, comprising 4 more programs adding to the already existing four. Last but not least, and coming to the last stage of Kotter’s theory of change, there was a remarkable distinction in the company’s performance due to the recognition program’s effect on the staff.

The employees along with the management (Middle & Senior Management) are instilling the sense of appreciation, which definitely affected the whole company’s performance in terms of targets over achievement. The innovation in this project as mentioned is kind of relative in terms of its newness to the company; recognition programs have been always there, but to this company at this time of operation and amongst their competitors in market it was totally new to them. Additionally, previous to such program company management was using inconsistent monetary recognitions so the program introduced to them some additional tangible and intangible forms of recognition including untraditional way to the company culture such family dinner vouchers that were considered to them as totally big innovation accompanied with lots of changes in the company.

Surprisingly, this program triggered the management to plan for launching an “innovation program” two years later to recognize such innovative and change initiatives. I have experienced a less successful story than compared to the recognition program. I believe it was less successful and would have been a great success if it gained support from the top management. Agents of change play a vital role in any change process and together they manage to destabilize the status quo and emerge into new favorable behaviors. The story is about the Company’s “Values”. We as a star up company that commenced operations in 2007 comprised of many employees, all of which come from diverse cultures.

It was comprehensible that each department has its own values and distinct culture, consequently a different way of running business and processes. This surely affected the company’s performance. There was a deep need for a change and a call for unity amongst all employees. The culture was full of blame even on the top management level. I was one of the agents of change and advocates for a root cause transformation from the current culture to a united one. I have worked along with the internal communication team through crafting set of values, and we actually got some aid from external consultants, in order to start the formulation of our values.

I shall refer to this exemplary change to Lewin’s three-phase model. To start off, there was a need for unfreezing the current status through destabilizing it, and the sense of urgency was high, due to the number of employee turnover started to increase year after year. We started the change from top to down, it wouldn’t have happened unless we got the management’s buy in. The departmental Chief Officers were encouraged at the beginning to contribute in formulating the company’s values and reinforce it amongst employees and this what appeared to the project leader, however and the most important buy in factor from chief of human resources was not there.

Anyway, feedback from the top management and the employees on the most common problems that they think affect our culture was gathered. The culture dilemmas we sorted out were the blaming culture, the inconsistent and rigid systems and processes and improving the communication between the senior management and the employees, mainly transparency. Afterwards, the next step was involving the top management in setting action plans for the dilemmas in hand. We started designing an action plan along with the Chief Officers in order to start the second phase which is “Movement”. I believe that this phase was the most difficult one as it required great efforts from our side as agents of change and also necessitated the Top Management & CEO support and belief in change.

Working hand in hand with the coalition including the top management, CEO & the aid of a consultant, we managed to set an action plan however it was not clear to all stakeholders. The next step selection for change agents started and Candidates from each department were chosen to act as ambassadors for the values to walk the talk and spread the new culture. And this was the tipping down point I believe it fell short due to the un-clarity of ambassadors change role. A clear problem in communication of the program vision and roles was there that affected the unfreezing stage. The ambassadors initiative proved to be a grand crash, to the extent that the monthly ambassadors meeting was not attended by the selected ambassadors, and later on the meeting was cancelled.

By time, no one fulfilled their commitments to this committee, and the initiative started falling apart. By now, we have almost didn’t reach the second step of Lewin’s model “Movement”, where I believe it didn’t even continue in order to proceed with the third and last step “Re-freezing”, which leads to stabilizing the new behaviors and attitudes. I strongly believe that this values story didn’t succeed due to the problem in not having a clear vision and then communicating that vision properly and belief from the top management to enforce it in addition to not getting the right change agent such as CHRO on board. Also the urgency for the change was not there and most of stake holder treated the project as a fancy nice to have one.

Being introduced to such models of innovation, change and leadership, I noted that it’s not about ideas, design and structure, it is all about the on ground implementation. Additionally, innovation, change and leadership are not absolute terms. For illustration, the first competency I want to tackle is adaptability : I had the perception that being democratic is best way all times yet I found my that leadership style should respond adaptively to the type of change and change perception is determined according to its context in the organization; an action plan for this point is start assessing each project or change factor I am working on evaluating the context, the team members involved, political powers taking place and afterwards to adapt my style to the situation.

Secondly, defining my change roles; where I had to I like a lot to participating in big bang projects and changes yet sometimes simple enhancements on a process are considered by the organization big innovations and valuable changes as well that my add to the achievements more than big bangs that may come once a year if any, an action plan for this is reviewing my current core processes and start adding up some lifts and enhancements on each of it that I believe will add a lot to the business. Additionally, a core competency while working in change management and leadership is managing politics and acquiring feedback: I thought that change is a clear staged process that can be easily followed and I got to be nervous when things when out of the stages track, yet I found out that it is a messy process full of surprises as mentioned by otter and it is not only about managing the process but also managing the politics and internal mechanics is very important in the change process, an action item on this is assessing the stake holders powers and prepare myself for and calmly set contingency plans when things get messy and always acquire feedback to keep track about the changes taking place while processing the change process . Networking is very powerful competency in leadership ; actually I found myself locked in regular work assignments trying to do it very efficiently with low levels of network inside my organization that impacted sometimes my projects flow that sometimes some internal politics and strategic relation to get work done faster than normal tracks, and action item that I started in is that I enrolled myself in a long term training program including many leaders in the company and participated in company social activities to get the expand my network.

Finally, I lead many successful projects in my organization where I had a very good leadership competency which is motivating and managing teams; actually managing people is one of the important traits for a leader and getting things done through them efficiently and happily. Actually this starts from recruiting the team its, communication , creating synergies, and boosting team spirit culture. And action item I had on this is to expand my skills in that field so I will enrolled my self in coaching and mentorship certificate to Bibliography http://www. innovationtools. com/Quotes/Quotes. asp? page=2 Read more: http://www. businessdictionary. com/definition/incremental-change. html#ixzz26vV0DVrm http://cecinsider. exbdblogs. om/2011/08/17/where-kotter%E2%80%99s-8-steps-gets-it-wrong/ Anderson, D. & Anderson, L. A. (2001). Beyond Change Management: Advanced Strategies for Today’s Transformational Leaders. San Francisco: Jossey-Bass/Pfeiffer. Baumol W (2002) The Free Market Innovation Machine: Analyzing the Growth Miracle of Capitalism. Princeton University Press. Princeton Buchanan and R Badham 2008 Power, politics and organisational change, Sage: London Change management, 2012, http://en. wikipedia. org/wiki/Change_management Filicetti, John (, 2007). “Project Management Dictionary”, http://www. pmhut. com/pmo-and-project-management-dictionary Gary Yukl, 2007 Leadership in Organizations, Prentice Hall Goffin, K. and Mitchell, R. 2010) Innovation Management: Key aspects of innovation management, Palgrave Macmillan. John Hayes, 2010 “The theory and practice of change management”, Palgrave Macmillan John Kotter 1996 Leading Change, Harvard Business School Press Kotter, J. & Cohen. D. , 2002, the Heart of Change, Harvard Business School Linda, H. (2006),“Understanding change: theory, implementation and success” Elsevier Butterworth-Heinemann London management center, management tools: Lewin’s 3 Stage Model , http://www. lmcuk. com/management-tool/lewins-3-stage-model Nigel King and Neil Anderson 2002 Managing Innovation and Change, Thomson Phillips, J. R. (1983). Enhancing the Effectiveness of Organizational Change Management. Human Resource Management.

Paul Aitken and Malcolm Higgs, 2010, developing change leaders, Butterworth-Heinemann Roth, S. (2009) “New for whom? Initial images from the social dimension of innovation” , International Journal of Innovation and Sustainable Development. Tidd, J. & Bessant, J 2009 “managing innovation: innovation –what it is and why it matters”, Wiley Senge, Poo Kleiner. A. , Roberts, C, Ross, R. , Roth, G. , & Smith, B. (2002). The dance of change, Nicholas Brealey Publishing. Whelehan, S. (1995). Capturing a Moving Target: Change Management. Consultants News Shaping innovation in governance conference, 2012, Berlin, http://rc32. ipsa. org/post/2011/12/27/Shaping-innovation-in-governance-Conference-Berlin-31-May-1-June-2012-CALL-FOR-PAPERS

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Innovation of Toyota in Hybrid

Toyota Innovation Lecturer: Dr. Barbara Igel Group members: Mr. Nguyen Hoang Hai Ms. Pham Thi Thu Hoai Ms. Kieu Phuong Ly 1 Toyota Introduction • • • • Established: 28 August 1937 Entrepreneur: Mr. Kiichiro Toyoda Total unit sold (up to July 2012): 200mil cars Company achievement: ?Product development motivation ?Extraordinary capability to manage large & global product development portfolio ?Launch more new vehicles than competitors ?Consistently deliver winners ?Continuous innovation and development 2 Prius XW10 the first Toyota’s hybrid was given to the market in December 1997 3 Prius XW10 he first Toyota’s hybrid was given to the market in December 1997 The car can run by both the gasoline and electricity 4 Differences Regular Car Hybrid Car Gasoline Gasoline & electricity CO2 emissions Less CO2 emissions Noise Silence powering High fuel consumption Low fuel consumption 5 Green Prius Make your gas last longer, Make your save last longer and Make your dream comes true 6 The first generation An Architecture Innovation Product Prius XW10 7 What kind of innovation in nth Generations of Toyota Prius? Prius V Prius C Prius Plug -in Incremental innovation products 8 Competitive Advantage

Product Development Strategy Process Goals 9 Product development strategy ? Conceiving & designing news cars ? Durability & Reliability ? Increase capital investment & shorter R&D cycles ? Reduce market risk 10 Product Development Process ? Fine balance between “shusa” program leader & “bucho” functional leader ? Parallel-path development, manage design and engineering trade-offs, and ensure flexibility (Apollo 11) ? Good relationship with suppliers 11 Product Development Process (…cont) ? Focus on collaboration and process ? Capturing and sharing the knowledge experience ? Monozukuri (“making products”) coming irectly from hitozukuri (“making people”) 12 Product Development Goals Focus on product value which perceived by customers Product Value GAP Product Cost 13 PRIUS – THE LEADER OF HYBRID CARS PRIUS Toyota Time of Sales Models Sold units (at the end of september 2012) INSIGHT Honda 1997 1999 5 (with three generation) 2 (with two generation) 2,804,900 1,000,000 14 Solution adopted by the company Source: (Dehoff K. & Loehr J. , 2007, Innovation Ability) 15 Innovation Framework (Igel B. , 2012, Innovation & Techno entrepreneurship course) 16 Source: (Dehoff K. & Loehr J. , 2007, Innovation Ability) 17

Reasons ? Thick history development culture ? Toyota Way: “people is the heart and soul” & “is the determinant of “ best practice” approach” 18 Reasons ? “Shusa” : program manager ? “bucho”: functional manger ? Balancing authority ? Culture: the program success goal sharing broadly through the company 19 Reasons ? Forward & back up solution are developed simultaneously ? Ensure timeline schedule ? Culture: better product by making innovation everyday 20 Reasons ? Investing the innovative capacities to longterm suppliers ? Culture: collectivism, long-term thinking, uncertain avoidance – HIGH 21 Reasons Capturing & sharing knowledge and experience, making it available ? Management by means not by results ? Culture: better product by making innovation everyday 22 Reasons ? “making product” emanate from “making people” ? Culture: People is the heart & soul of Toyota; the life of employees together with the life of the company. 23 Reasons ? Strong ? Core values: ? Personal accountability ? Continuous improvement ? Collaboration ? Elimination of waste 24 Source: (Dehoff K. & Loehr J. , 2007, Innovation Ability) 25 Apply in Vietnam? ?No 26 Source: (Dehoff K. & Loehr J. , 2007, Innovation Ability) 27 28

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Social Network, Knowledge Management and Innovation at Unilever

SOCIAL NETWORKING AND EXPLOITATION OF INNOVATION THROUGH THE SOCIAL DYNAMICS MODEL Company in Focus: Unilever 1 . INTRODUCTION Unilever is an Anglo–Dutch multinational consumer goods company. Its products include foods, beverages, cleaning agents and personal care products. With over 400 brands sold in more than 190 countries, it is one of the world’s leading suppliers of fast-moving consumer goods (Unilever, 2013). Such a global organisation needs to remain innovative so as to maintain its competitive advantage.

The social dynamics model (which analyses four steps- capacity building, pilot mode, integration mode and leverage mode) would be used would be used in this report to show how social media can be developed and integrated into Unilever and ultimately how innovation can be utilised. 2 . USE OF SOCIAL MEDIA IN UNILEVER Social media is defined as “a group of Internet-based applications that build on the ideological and technological foundations of Web 2. 0, and that allow the creation and exchange of User Generated Content” (Kaplan and Haenlein, 2010, p. 61).

Social media has been asserted to be a source of new profits though access to new markets, a more engaged workforce and improved customer relations (Mangold and Faulds, 2009; Waters et al. 2009). The implementation of social media within the organization is viewed as a way to leverage organizational knowledge and improve knowledge management initiatives (Barbagallo, 2011). Unilever utilises the social network platforms of Facebook, Twitter and LinkedIn and YouTube. Their Facebook page is used to share recipes, run adverts, and get feedback on products and other relevant information from customers.

With their Twitter account, they are able to share news about programmes in different countries and engage on topics about business, marketing and sustainability. There are several LinkedIn profiles to suit the needs of their stakeholders such as alumni and management trainees. The YouTube account is for careers purposes only and there are no much subscribers. YouTube is a platform that Unilever still needs to exploit as they can post videos and use it for mass campaigns and adverts as well as receiving comments from customers which can be a source of useful information.

Havas EHS also connected Unilever brands with consumers using social media by developing a global consumer data strategy (Unilever, 2012). Social media enables companies to talk to their customers, it enables customers to talk to one another and it also enables customers to talk to companies (Mangold and Faulds, 2009). Social networks like Twitter and LinkedIn could help the company to maintain their awareness of current business trends and innovative ideas (Jarahi and Sawyer, 2013). There is the need for Unilever to integrate social media with other traditional media like television.

Furthermore, to effectively exploit social media, the company needs interactive technology and marketing skills (Penny Power, n. d. ). 3 . ORGANISATIONAL LEARNING AND KNOWLEDGE MANAGEMENT Organisational learning is “the process of change in individual and shared thought and action, which is affected by and embedded in the institutions of the organisation (Vera and Crossan, 2005, p. 123). Organisational learning system is rooted in human resources, structure, process, policy and culture. The process of organisation learning takes place through nine steps (Lytras et al, 2008).

The first and second are discovery and innovation which involves building up a system enabling it to make the right choices among innovative ideas. The third step is selecting process and activities so a better decision can be made. These three steps of learning involve changing one’s perception and thinking but learning also includes changing behaviour which leads to the fourth step which is executing ideas which were discovered. The fifth step is transferring the experience and ideas achieved by the team/departments to the rest of the organisation.

In reflecting, which is the sixth step, the organisation learns from past experience both good and bad. There is the need for the organisation to acquire knowledge from outside environment and build its knowledge base and also contribute by sharing knowledge with its business partners; these constitute the seventh and eight step. Finally, as the organisation continues in its learning process, there is the need to build an organisational memory so that learning can be constantly upgraded and to avoid loss.

This is also consistent with the seminal work by Huber (1991) who elaborates four constructs linked to organisational learning-knowledge acquisition (the process by which knowledge is obtained), information distribution (process by which information from different sources is shared and thereby leads to new information or understanding), information interpretation (process by which information that has been distributed is commonly understood) and organisation memory (means by which knowledge is stored for future use). Knowledge can be considered as information which has been acted upon; it adds understanding and retention to knowledge.

Our perceptions of knowledge are based on our ontological and epistemological beliefs about reality (Jashapara, 2010). There are two types of knowledge -descriptive knowledge which is the knowledge of things and productive knowledge which is the knowledge of changes in things. Knowledge is the application of expertise, it can be manipulated i. e. it can be stored and replenished and it can also influence action (Hemsley and Mason, 2013). It is therefore imperative to understand how this knowledge can be used in achieving the goals of the organisation. This therefore leads us to the concept of knowledge management.

Knowledge management is the process of generating, acquiring and using knowledge to improve the performance of organisations; thus it is to understood to be ‘managed learning’ (Vera and Crossan, 2005). Knowledge management is not a technology but a consolidation of strategy, technology and people (Mullins, 1999). The business strategy of an organisation must reflect the requirement to capture knowledge. Knowledge exists in people, not technology; technology helps to retain knowledge but it cannot create it. Transforming information into knowledge requires classification, analysis and synthesis of the information.

The knowledge which has been captured should then be effectively communicated. In reality, knowledge cannot actually be captured; it is the information which has been captured that is easily transformed into the knowledge (Mullins, 1999). Managing knowledge effectively involves the protection, leverage and accumulation of new knowledge. The resource based view of the firm attributes the competitive advantage of the firm to the unique knowledge it has over its competitors (Barney, 1991). According to Chakravarthy et al (2012), two broad types of knowledge often trigger a firm’s competitive advantage-resource conversion and market positioning.

Resource conversion knowledge refers to the capability of a firm to use common resources to create unique products through innovation. The patents, copyrights and trade secrets that a firm owns are the most conveyed aspects of its resource conversion knowledge (Friedman et al, 1991). Market positioning knowledge is the ability of a firm to see opportunities in its environment and avoid threats. An organisation like Unilever may not have access to any special information over its competitors but may be able to see patterns in information that others are unable to.

Social media can be of great value to Unilever as it would enable them capture new knowledge from internal and external sources such as employees and customers on the platform of social networks. This knowledge can then be applied to solving problems. Knowledge may be valued in groups based on its usefulness in achieving the group goals. Unique knowledge gained from social media is useful in the attainment of the groups or departments’ goals. This ultimately leads to a learning organisation which imitable knowledge which then becomes a source of competitive advantage (see figure 1). pic] Figure 1 Link between social media and knowledge management. (Source: Value tensions, 2012). Unilever has a knowledge management group which promotes it as a learning organisation in which activities are integrated. The company focuses on contributions towards its strategic goals and objectives through the creation, sharing, acquisition, capturing and transfer of knowledge (Unilever, 2013). Their knowledge management database is provided by Astute Solutions RealDialog. It has proved effective in their customer centre nsuring that end users receive current, high quality information; it also maintains and updates information for multiple touch points and end users (Astute Solutions, 2010). 4 . EXPLOITATION OF INNOVATION AT UNILEVER The social dynamics model can provide an understanding of how innovation can be utilised in Unilever. The first phase is the Capacity building which involves setting up extensive internal and external audit. In carrying out this audit, an environment scan would have to be conducted to know what is being said about the company and its brands, how employees use social media to promote the interests of the organisation.

Organising training programs to enlighten staff on social media, also creating a platform where employees can share knowledge. Employees should be provided with access to social networks so they can communicate effectively with customers. As part of adapting the overall HR strategy, there is the need to hire people based on the social capital they possess as a result of their influence level and network. It is important to recruit people who are open to change and are customer-friendly. Unilever can do utilise LinkedIn as it supports expert locating practices though its communities and profile search (Jarahi and Sawyer, 2013).

Pilot mode-The purpose of this phase is to have projects that can implement social media in a structural way. This would involve setting up a centre of excellence which would gather knowledge, guide pilot projects and provide internal consultancy and support local and regional teams. They have to determine the strategy for incorporating social media within the organisation. For a global company like Unilever, this centre would be implemented on three levels. The first is on a global level where the centre supports the regional and local teams as well as reports to the board.

On a regional level, each region would have a mediator between the global strategy and local implementations. On a local level, the teams would be responsible for the translation of the approach to the languages. They would in turn report to the regional representatives. Integration mode- In this phase the knowledge acquired and any new beliefs are integrated into the heart of the organisation. In order to make use of all the opportunities that social media brings, there is the need to ensure the employees and customers are happy.

There is the need to co-create using social media and online communities as it is crucial to the development of new products and services. Unilever currently does this particularly in their use of open innovation. However, it is advisable that they opt for an incremental co-creation which implies that they have to start in closed community to enable the organisation to see how things work, sharing insights about certain products or experiences and ask collaborators to search for solutions and ideas based on that and co-create with their biggest fans.

Unilever did this by publishing a list of ‘wants’-areas in which they need solutions. These are opened up to the global audience through social media (Unilever, 2013). To excel in social media, there is the need for the right content strategy to be developed. This should be done on four levels –content around the different products and brands, content about the different categories the company is in, content about the company in the form of compelling stories worth sharing and content about the advancements and future of the industry.

Unilever has the right content strategy on their website but there is the need to have the right content particularly as it relates to content about the company and their future outlook. Leverage Mode- In this phase, the company is ready to take full advantage of the new philosophy. It is vital to leverage on marketing as information is spread quickly and new target groups can be reached. It is useful for Unilever to assign someone to be an internal trend watcher who is able to spot changes in the field of social media. This ensures that the company moves faster than its competitors.

Substantial gains could arise from additional applications, particularly in marketing and sales, where a company like Unilever spends an average of 15 to 20 per cent of their revenues. They can do this by substituting insights from extensive online communities for more traditional marketing panels and focus groups. Interactive product campaigns that deploy social technologies can increase the productivity of advertising expenditures by as much as 30 to 60 per cent. New, collaborative forms of engagement with customers too can improve product development, both in speed and level of understanding (Bughin, Chui and Manyika, 2012).

Unilever partnered with an agency called ‘We are social’ to create a society for lovers of their products, enabling the company to organise product launch mainly through effective social media marketing and communications. Through a campaign program, bloggers were able to vote on the design of a Unilever brand-‘Marmite’ (Moseley, 2012). Unilever Vietnam also partnered with Jana to create social media focus groups to generate brand awareness of its Clear shampoo line. They were thus able to leverage on the knowledge gained from social media (Jana, 2012).

Unilever’s innovation is becoming a competitive strength and is critical to their growth. They try to understand what their customers want, relating with them to understand their diverse tastes, needs and market trends and ultimately developing new products and improving tried and tested brand, enabling customer-led innovation. They also have partnerships with suppliers and investors, thus encouraging open innovation which is a system where people can come up with ways to improve existing products and create new ones through designs and technologies.

Social media hastens the open innovation process and offers the foundation for engagement, enabling effective co-creation with the partners (Unilever, 2013). Unilever also has a new business unit (NBU) which exploits innovation around its core competencies. There is also a Unilever Corporate Ventures (UCV) group which explores opportunities outside the core categories. It identifies technology assets inside and outside the company that inspires new businesses (Decter, Mathe and Garner, n. d. ). Unilever invests around 2. 5% of its annual turnover in R &D, continuous product innovations and filing of patents each year.

It takes learning and knowledge seriously and believes that transferring this knowledge into its products and services is a key source of competitive advantage (Unilever, 2013). Unilever partnered with Siemens to create a global specification management system that serves as the first major component of its Product Life Cycle Management (PLM) technology. Innovation is therefore not limited to its products, they extend to design processes and package design (Siemens, 2011). 5 . CONCLUSION Innovations require a communication/learning channel that facilitates easy sharing of knowledge which can be transferred using social media.

Applying the social dynamics model to Unilever should have a positive impact on their customer, suppliers, employees and eventually the shareholders. As long as organisations continue to tap into the information which is continuously diffused though the social media, they would become learning organisations and can leverage on the acquired knowledge to be innovative. References: Astute Solutions (2010) Unilever provides agents through rapid access to the exact information. May [Online]. Available at: http://blog. astutesolutions. com/leverage/leverage–may-2010/unilevers-knowledge-management-system/ [Accessed: 13 March 2013].

Barbagallo, M. (2011) Is social media changing knowledge management? International Customer Management Institute. Available at http://www. icmi. com/Resources/Articles/2011/October/Is-Social-Media-Changing-Knowledge-Management [Accessed: 21 March 2013]. Barney, J. (1991) “Firm Resources and Sustained Competitive Advantage”, Journal of Management, vol. 17, no. 1, pp. 99. Bughin, J. , Chui, M. and Manyika, J. (2012) “Capturing business value with social technologies”, McKinsey Quarterly, , no. 4, pp. 72-80. Chakravarthy, B. , McEvily, S. , Doz, Y. and Ran, D. (2005) Knowledge Management and Competitive Advantage.

In: Easterby-Smith, M. and Lyles, M. A. eds Handbook of Organizational Learning and Knowledge Management. Victoria: Blackwell Publishing, pp. 305-323. Decter, M. , Mathe, A. and Garner, C. (n. d. ) Access is the new ownership: a case study of Unilever’s approach to open innovation. Institute of Entrepreneurship and enterprise development, Lancaster University. Ford, D. P. and Mason, R. M. (2013) “A Multilevel Perspective of Tensions Between Knowledge Management and Social Media” :Value Tensions, Journal of Organizational Computing & Electronic Commerce, vol. 23, no. 1, pp. -33. Friedman, D. A. and Landes, W. M. (1991) “Some Economics of Trade Secret Law”, Journal of Economic Perspectives, vol. 5, no. 1, pp. 61-72. Hemsley, J. and Mason, R. M. (2013) “Knowledge and Knowledge Management in the Social Media Age”, Journal of Organizational Computing & Electronic Commerce, vol. 23, no. 1, pp. 138-167. Huber, G. P. (1991) “Organizational Learning: the Contributing Processes and the Literatures”, Organization Science, vol. 2, no. 1, pp. 88-115. Jana (2012) Unilever and Jana use Facebook in Vietnam to drive consumer engagement. Available at: http://www. ana. com/blog/unilever-and-jana-use-facebook-in-vietnam-to-drive-consumer-engagement/ [Accessed: 14 March 2013]. Jarrahi, M. H. and Sawyer, S. (2013) “Social Technologies, Informal Knowledge Practices, and the Enterprise”, Journal of Organizational Computing & Electronic Commerce, vol. 23, no. 1, pp. 110-137. Jashapara, A. (2010) Knowledge Management e-book, Pearson Education UK. Kaplan, A. M. and Haenlein, M. (2010) “Users of the world, unite! The challenges and opportunities of Social Media”, Business horizons, vol. 53, no. 1, pp. 59-68. Lytras, M. , Russ, M. Maier, R. , and Naeve, A. (2008) Knowledge Management Strategies: A Handbook of Applied Technologies. New York: IGI Publishing. Mangold, W. G. and Faulds, D. J. (2009) “Social media: The new hybrid element of the promotion mix”, Business horizons, vol. 52, no. 4, pp. 357-365. Moseley, D. (2012) The return of the Marmarati. 28 June [Online]. Available at: wearesocial. net/blog/2012/06/return-marmarati/ [Accessed: 15 March 2013]. Mullins, C. (1999) ‘What is knowledge and how can it be managed’, The Data Administration Newsletter (1 March) [Online]. Available at: www. tdan. om/view-articles/S108/ [Accessed: 21 March 2013]. Penny Power (n. d. ) Exploiting Future Potential of Social Media within UK Small to Medium Enterprises. Available at: www. digitalyouthacademy. com/sites/dya/files/Penny Power-White Paper-SME Sector Social Media and Youths. pdf Siemens (2011) Customer Case Studies and Videos –Inside Siemens PLM Software. 8 August [Online]. Available at: http://www. plm. automation. siemens. com/en_gb/about_us/success/case_study. cfm? Component=649080&ComponentTemplate=1481 Unilever (2012) Unilever Appoints Havas EHS to develop global consumer data strategy.

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Free Essays

Innovation Report for Bajaj

1. A critical review of its overall business strategy. (15%) Introduction of the company The group was founded in 1926, from the height of the British independent movement in India has a glorious history. Bajaj Group is one of the top 10 commercial establishments in India. Its footprint across a wide range of industry sectors, including automobiles (two-wheelers and three-wheelers). The Group’s flagship company, Bajaj Auto, is listed as the world’s fourth largest two-and three-wheeled motorcycle manufacturer Bajaj brand is well-known in several countries of Latin America, Africa, Middle East, South Asia and Southeast Asia. ttp://www. bajajauto. com/bajaj_corporate. asp * Company profile, (vision ,mission, brief history) Vision and Mission Statement Bajaj line of, vision and mission statement they defined its brand essence and brand value. The corporate brand is the visual expression of their own thoughts and actions convey their intent to continue to inspire confidence. The essence of their brand, the brand is the soul of the enterprise. They are doing their own brand value, its value learning, innovation, perfection, speed and transparency. Value

Learning Learning is to how Bajaj ensure positive. This is a value; it contains a knowledge platform for building a moderately prosperous notice, reasonable and decisive action. Innovation Innovation is how Bajaj creating the future. This is a value, triggering significant beyond the pursuit of more than ordinary. Perfect Perfection Perfect is how Bajaj Jishu Li new standard. This is a value to show our determination, Excel, and efforts to establish a new benchmark, all the time. Speed Speed ?? how Bajaj convey the clear conviction.

This is a value; significant response reflects our commitment to our goals and process. Transparency Transparency is how Bajaj characteristics. It is a value worth through the credibility of integrity, trust sensitivity and loyalty through interdependence. http://corporatemissions. blogspot. sg/2007/10/bajaj-auto. html A Brief History – Integrity, dedication, resourcefulness and determination to succeed, today is the characteristics of the group, often be traced back to its birth in those days the tireless dedication to a common cause.

Jamnalal Bajaj, founder of the Group, is a close friend and disciple of Mahatma Gandhi. In fact, Gandhi had by him and his son. This close relationship, deeply involved in his independence movement did not leave Jamnalal Bajaj too much time is spent in his new commercial enterprise. In 1942, his son, Kamalnayan Bajaj, then 27, took over the business rule. He is too close to Gandhi’s independence in 1947, his business is able to give his full attention. Kamalnayan Bajaj not only consolidated the Group, but also extended to a variety of production activities.

The Rahul Erbaguji, Chairman of the Group, is responsible for the business in 1965. Under his leadership, the turnover of the Bajaj Auto’s flagship company from INR. 72 million INR. 120 billion, its expanding product portfolio and brand to find a global market. He is one of India’s most distinguished business leaders, his business acumen and entrepreneurial spirit to be respected and internationally. * Company current business situation of the company. as per the above chart company financial position is mush stable and in a strong shoes of profitability. ompany is growing and developing back to back year by year. that’s the reason behind it; it started recognizing as India’s top two wheeler company and even company started globalizing very fast, it started creating footprints all over the world. before these last three years company face few number of looses that’s the reason because of international crises. one of the another reason for these good business is its most challenging innovative products and its products demand in the market, today customers wait for the innovative product of the company. Current product/technology/process/patent that the company is having. Product- Currently Bajaj auto deals in both two wheelers and three wheelers vehicles. Technology Take a long time, use DTSI technology; Bajaj introduced the three Terry Poole SPRAK plug technology spark plug in the part-load conditions for better fuel efficiency, provide unprecedented performance and efficiency – and best combustion, and to ensure low emissions. Process Technology, this new status symbol Change a new, vibrant Bajaj Auto Is in close contact with customers, and believe in Speed ?? nd innovation, to create excitement Through its products, focus on transparency. It is an identity, is to inspire confidence. It represents a new India Company. Patent Patent is in the two-wheeler sector product quality, technology up-gradation, customer service, changing environment http://www. universityessays. com/example-essays/english-language/the-bajaj-auto. php http://www. universityessays. com/example-essays/english-language/the-bajaj-auto. php#ixzz2Dn3XEfa3 * Current industry (what is happening that can affect the business.

Bajaj Auto introduced a new graphics engine as promised Bajaj India has launched the new 2012 models pulsars in January 2012. It was named “pulsar 200ns of. It is cooled by the liquid 200cc engine of 23. 17 horsepower at 8000 rpm at 9500rpm for a maximum torque of 18. 3 nm. However, it is expected that Bajaj pulsar line to rise. The face-lift is very necessary, because the pulsar was launched nearly a decade ago. Anyway, 200ns pulsar is a new product; new exhaust layout is now below 200 Duke Engine. The pulsar 200ns new styling and technology.

It has a new design alloy wheels, instrument panel, fuel tank and the side of the spoon. http://autos. maxabout. com/bikes/bajaj/pulsar-2008/pulsar-200 2. Why is it necessary for them to employ innovation into the company (20%) (Application of theory from your lectures is required. ) Your analysis on innovation will focus on any of the following within the MNC(select min 2 theories) You are expected to link /incorporate theories into the focus areas that you write. You are required to identify what is the issue that drives them to innovation.

Thus you need to write on drivers to innovation. * Materials technology DTSI technology DTS-Fi wireless network connection and DTS-SI engine technology mother is very fuel-efficient. Engine technology also helps to reduce emissions and keep the environment clean and green. Technical innovations include new products and processes, product and process technology changes. If it has been on the market an innovation (product innovation) has been implemented. For example: – Bajaj Pulsar 200 NS bike next technological innovation known as pulsars, it is found these days in Mumbai.

Reveal of technology innovation Bajaj car in the pulsar 2001 season and release pulsar in the last edition of the 2009 season. The organization also proposed that all release occurred in the pulsar motorcycle. The pulsar 200 NS is a 4-valve pressure stage of technological innovation curiosity multiple technical innovation, providing better gas range and efficiency of the results. NS bare game. DTSI technology- Patented technologies pulsar follow road, the R & D lab bike competition.

In the Automotive industry, driven technology innovation in different parts of the vehicle, and this trend will continue to be observed in all the major areas such as chassis, powertrain, electronics and security, among others. Such technical developments will occur not just in these areas, the arrival of new modular assembly techniques will transform the court systems and methods together. http://www. anticiv. info/tag/technological-innovation/ http://stats. oecd. org/glossary/detail. asp? ID=2688 http://www. efytimes. com/e1/fullnews. asp? edid=16466 * Factory process control

Process innovation is the implementation of a new or significantly improved production or delivery method (including significant changes in technology, equipment and / or software) small changes or improvements to increase the capacity of production or service through increased production or logistics systemis very similar to those already in use, stop using it not be seen as a process, simple capital replacement or extension, change purely from changes in the prices of the factors of production, customization, regular seasonal and cyclical nature of the change, the new trading or significantly improved product innovation. http://www. innoviscop. com/en/definitions/process-innovation For example: – Bajaj Auto “Total Productive Maintenance” as a means to create a safe and participative work environment, the goal is to eliminate the loss of all employees, to continue to enhance the capacity, flexibility, reliability and ability to process, resulting higher staff morale to improve the profitability of the organization. The re-design of the processes, manufacturing approach was changed towards Lean Manufacturing (in lines of Toyota Production System). Moving Towards lean production Changes in the results and focus – * Retain professional and critical process of internal and outsource the rest. * Multi-model assembly line and off-line settings. * Flexible machining centers – quick-change modules and tools. * One-way flow of plant layout. Lean production plants in the chakan plant * Process quality assurance (testing). * Quality Assurance SPC error proofing. * Rationalization of suppliers – to consolidate in the first-tier suppliers. * Direct line supply on the basis of pull systems (kanban). * Non-store materials and products promising. Multi-skilled labor, self-monitoring and self-certification. TPM (Total Productivity Management), a Japanese methodology a SPC (Statistical process Control), manufacturing operation. http://www. scribd. com/doc/22572622/Bajaj-Auto * MarketingDesign A closer look shows that about 40% of the R & D expenditures original equipment manufacturers and suppliers of all investments into innovation, never let the bike or never produced in sufficient quantities, due to the lack of market acceptance. Remaining 60% to 20% of necessary serial development.

Another 20% is to fulfill the law of innovation, but does not add to the unique nature of the product. Under normal circumstances, these innovations do not pay off. This makes 20% of the profitable innovation investment, leaving only a small. More and more technology intense fighting in the sweet spot. Moment only about 10% of the development of automotive technology has the potential to become a blockbuster innovation. These technologies combine the two most relevant categories: the first category, the market potential is huge, including the purpose of the function, customer recognition, compliance and price level.

Other classes, the high degree of innovation, the establishment of the technical differences in the market, better protection of intellectual property rights, high profits and long-term harvest. http://www. oliverwyman. com/pdf_files/CarInnovation2015_engl. pdf http://www. oliverwyman. com/pdf_files/CarInnovation2015_engl. pdf 3. What are the challenges when deployment of this innovation? (20%) Define the type of innovation use and how have they been deployed. Product innovation and challenges Write on the challenges encountered by the company when they introduced innovation. How are they overcome.

What is the success todate? Compare with the previous before innovation. Support with evidence. Occupy wheeler market in India three years later, at the end of 1999, BAL consumer preferences change from the four-stroke motorcycles, motorcycle engines and forecast that this trend will continue in a higher scale. Motorcycle Sales in 2001 decreased by 41%, which is a real threat to the existence of BAL. A new set of emission standards (equivalent to Euro II emission standards) into force in 2000 two-stroke gasoline engine. Therefore, the scooters out of favor with the two-stroke engine.

Applying the modified model proposed above, Bajaj Auto was losing market share due to change in consumer preferences, development of new market segments, and the availability of better products and scooters manufactured by their competitors. In the first step, the President of company Rahul Bajaj which is a change agent also identified the need for change suggested by Kurt Lewin, the current situation of making AIR hired conscious problems, a performance gap and the need for change. At the same time, he was commissioned and provided new leadership roles to the younger generation such as Rajiv Bajaj (Managing Director).

In an attempt to regain market share, the company increased its production by 67. 6% in 2001 as a production motorcycle GEARED scooters fell by 44%. By 2001, the company was making as many as motorcycle gear Couple of Challenges Bajaj auto faces in between the ongoing process of innovation like lake of finance, public demand etc. The biggest challenge Bajaj auto faces is to introduce new face product in the market for which Bajaj auto is not recognized in the market, problem was hesitating will customer like the innovation or not.

The second thing making barriers in doing innovation is searching for knowledge employees. Bajaj find very difficult in searching for well skilled labor and even in molding the resident employees in the changing and innovating procedure in introducing new product. Because the stage was very crucialfor company when they started applying innovation even competitors was very aggregative in doing the same so company was left with no other option then creating successful innovation. Played an important role in the success of this phase of the leadership qualities change agent change.

Change agent in the chair, the current market environment analysis and to identify the importance of change, in order to maintain market share and bring success on the road to pull Hu Erbaguji, who is our mission. He figured out in different areas, such as the implementation of paragraph cruise segment, the high-end market, the best, etc. He also introduced into the company of young people, to give them more power to create customer surveys and general production requirements the idea is very important in a highly competitive market.

Time and again, the 500 R and huge after the siege. Bajaj Auto Limited’s portfolio, this change, these changes in a very short time after launched a new version of the motorcycle in every aspect, as part of the implementation of the “Boxer” and “character”, “the destroyer cruise segment ‘push’, ‘the Avengers’ and’ found in the high-end market, the motorcycle industry in India, which is a huge success. This shift public by Bajaj scooter motorcycle thinking stereotype, especially the new generation, who are looking for more performance and stylish bike caused a huge impact.

The turning point in this process of change is the introduction of the product, ‘Knock’ and ‘DTSI technology, to help them capture their names under the two-wheeler market, and victory over their rivals Hero Honda. ‘ In June 2006, the company announced its plans to increase the production capacity from 3. 5 million units in 2009 to 5. 1 million units a year, of which two-wheelers is 4. 6 million units of capacity. According to their plan, they recently launched 220cc variant of its popular pulsar motorcycle. 004 Bajaj Auto to change their old identity and create a new logo and brand line, in order to update its new brand identity. This proved something of a visual help to clarify the organization needs to move in the direction (Cote, 2007). These visions and their achievements, the stability of the organization in a new state of equilibrium. http://www. ukessays. com/essays/india/bajaj-auto-limited. php 4. Evaluate Business Success (40%) Compare the before implementation ( market share/position/revenue/process/structure/strategies… etc) to today’s outcome.

Contrast them in terms of your writing ( theories you apply). Product innovation DTSi technology DTS-I A patented technology, achieved the pulsar follow road, the R & D lab bike competition. In the heart of each pulsar is one of the country’s most advanced engine technology. DTS-i system. A technological marvel to ensure the highest performance, lowest consumption and emission levels possible. We will be happy to let a Pulsar maniac like you to know this breakthrough technology behind the secret of the pulsar. DTS-i engine Dual-spark ignition Normal ignition system has a single spark plug.

Spark-generated flame front will take some time to reach the entire combustion chamber. Therefore, the combustion of the air – fuel mixture is slow and incomplete. The case of two spark plugs, both spark plugs fire simultaneously. This simultaneous firing and eddy current, in the complete combustion of the air – fuel mixture results. This action is the DTS-i digital control system (dual spark plug Smart CDI, TRICS III) Interests -Complete combustion of the air – fuel mixture without sacrificing mileage output case, gives the maximum power. To ensure that the emissions of environmentally friendly

DTS-i engine TRICS III Power and torque requirements constantly change, depending on the rider cruising, acceleration or high speed / maximum speed. The throttle response ignition control system – III is an intelligent system that can quickly adapt to the ignition time, in order to adapt to different riding characteristics. Interests: TRICS III will help to achieve a good balance between the low-to mid-range torque and top-end power. This helps to easily ride in different conditions, such as flyovers, hilly terrain, dense traffic and highway cruising The TRICS III patent Bajaj Motors Limited

DTS-i engine Intelligent C. D. I. Intelligent capacitor discharge ignition contains a microprocessor, which continuously sensing a different speed and the engine load, and by changing the ignition timing in response. The memory of the microprocessor together work with TRICSIII system, provide optimum ignition timing for any given engine speed, thereby obtaining the best combustion performance. Interests: Improve fuel efficiency and reduce engine noise and vibration, smoother power delivery. Bajaj Auto’s patent Smart CDI DTS-i engine EXHAUSTEC

Exhaust is a device that is registered in the exhaust system. TEC representative of torque expansion chamber. It is fitted into a tuning box (resonators) of the exhaust manifold The low speed area, ExhaustTEC helps to create a negative pressure pulse (vacuum) of the exhaust valve to suck the air – fuel mixture into the more the intake valve opening the cylinder. Interests: ExhaustTEC produce high torque. Does not require frequent shifting of flow, as the vehicle, even in the lower speed higher gear pull capability. ExhaustTEC patented by Bajaj Auto Ltd. 4 VALVES

The combustion chamber has 1/3 of the area covered by the valve head of a typical 2-valve engine, but an increase of more than 50% 4-valve head region. Also improved due to the flow passage area of the intake port and an exhaust valve port / channel. This is conducive to the induction of more the amount of charge (air – fuel mixture), and all the combustion gas of the combustion chamber is evacuated to ensure faster, cleaner and more efficient combustion. This engine has two intake and 2 1, 2-valve engine into a gas and the exhaust valve of the exhaust valve.

These valves are small compared to the 2-valve engine, light weight. 4 valves (two intake and two exhaust valves), to improve the breathing method – the engine’s intake and exhaust process… PULSAR CLASSIC 2000 – 2001 October 2001 The nineties witnessed ‘and’ generation was born. Work hard and party hard, Western and Indian values??. The calm young Indians, masculine, stylish, well-deserved different. But they get a 100cc commuter bike. Changedforever in 2001. The first generation of pulsar is a huge success. It is not only the introduction of a new motorcycle, but also to create a new dimension – performance.

When the family to discuss mileage, pulsar riders start talking about torque, rebound power – weight ratio. With pulsars, the bike no longer just a means of transport, rather than the person with the machine between the relationships began to be forged. Pulsar launch two variants, 150 ml and 180 ml, is indeed the man” PULSAR UG1 2002 – 2003 October 2003 Since the time of its launch pulsar ruled the heart of this country has been the rule of the road, and its first upgrade. Sold more than three times higher than competitive cycling, the pulsar is a rapidly bad boy on the block.

Revolutionary DTS-i technology, introduced in the the excessive competition pulsar bike, it still has a clear competitive advantage. DTS-I’s advertising campaign, along with the launch of this generation pulsar also redefined the Indian motorcycle ad – This is the first bike ads show one wheel off the ground bike – irreverent image pulsar was born. Increase power to 16 and 13 PS 180 and 150, respectively. PULSAR UG2 2004 – 2005 November 2004 Each pulsar upgrade two aspects – styling and technology. Significant change at the same time, each time re-defined section.

The game continuously toes try to keep at least just to keep behind the pulsar pulsarpulsar madman ahead. The UG2 many technology upgrades, launched during this period until the date of the pulsar, and a standard in the industry – 17 “alloy wheels, allowing greater suspension travel, nitrogen oxide suspension and the legendary ExhausTEC. In shape on the wider rear tire, tire environmentalists and all black cast Pulsar180. Improve the power of the 180 and 150, respectively, in 16. 5 and 13. 5 PS… PULSAR UG3 2006 October 2006 Pulsar road in 2006, crossed the one million mark, many pulsar madman.

Pulsar is no longer just a bike, which is a youth brand, and market leader in the field of sports, with a 50% market share, and that is to keep to the date. Our leadership, through hard work and toil Bajaj Auto Team – UG3 number of the largest total upgrade, ushered in the digital age. This is the first time, digital odometer, backlight switch, self-cancel indicators, and LED taillights introduced. Multiple sensors and digital mixer bike rider’s overall performance, a lot of information, and promote additional power, to pulsars thrown confidence. The increased power of 14 PS 150 PULSAR200 DTS-I PULSAR220 DTS-FI 2007 – 2008

February 2007 India’s first bike to break 200 ml obstacles on the road – Pulsar 200 and 220. Change and Pulsar bike in India once again lead this revolution. Although 200CC is equipped with a carburettor, 220cc fuel injected! These babies might throw downs power of 18 and 20 ps, ?? and blatantly oil cooler. 220 also have front and rear disc brake. PULSAR UG4 2009 May 2009 On Road 2,000,000 pulsar delivered in three years, more than 3 million of the total number of pulsars India. This time to the sports field is also extended to the more than 15 brands from all the major manufacturers, such as Honda, Yamaha, Hero Honda, TVS.

The segment accounted for about 17% of the total motorcycle sales, pulsar, its 50% market share, it still maintained a half contribution. 150 the clip-handle and 15Ps of power in February 2010. January 2010 Looking for the legendary 200 customers and the general public needs Pulsar220 also launched a deep-rooted in the minds of a Street Fighter avatar. The fastest growing segment in the motorcycle industry, 50% of the market share, more than 4 million of the pulsar is sold. Exports to over 30 countries, the pulsar is by far the biggest brands in the Indian motorcycle and eyes hegemony in the world soon. ttp://mypulsar. com/technology. aspx http://mypulsar. com/history. aspx Process Innovation Model in the late 1990s, the early 2000s – will lean production * economic situation, development through liberalization * Fierce competition. * Improve the customer’s wishes – More models and upgrades. Third level * 110% of the to do the project in the late 1990s, Bajaj Auto Lean Manufacturing at Chakan Plant * Re-design process, manufacturing methods, and change to * lean production (Toyota Production System) line. * TPM (Total Productive Management), Japan’s methods and SPC (statistical process control) manufacturing operations. Moving towards Lean Manufacturing * The result of the change and focus – * Retention of professional and critical process of internal and outsource the rest. * Set more model assembly line and off line. * Flexible machining centres – quick-change modules and tools. * The plant layout * The single one-way flow. Lean Manufacturing at Chakan Plant * The process of quality assurance (testing). * By SPC error proofing quality assurance. * Rationalization of suppliers – to consolidate in a supplier. * Directly online supply based on pull systems (kanban). Of shops promising material and products. * Multi-skilledlabor force, self-monitoring and self-certification. Towards lean manufacturing – a huge change * This is a huge change. * Bajaj car driving through the railway’s new factory. * (About 20 km away from Pune plant) * A small number of major suppliers of railway factory. * Improve our near these plants, which gives a good advantage. Lean Manufacturing at Chakan Plant * The project 110% was supported by Project 110% IT. * Bajaj Auto implemented SAP ERP. * Towards lean manufacturing – IT support * supply chain processes MRP planning schedule * Schedule SAP portal vendors visibility. * that is based on daily necessities supply lines consumption. * The introduction of the E-Kanban. ” * supplies sequencing the paint shop, assembly line production schedule synchronization. * JIT supply (our request) the major suppliers – * Components and sub-assemblies in accordance with JIT requirements * Supply, in 2-4 hours’ time interval. Towards Lean Manufacturing – Electronic Kanban * material supply and service revenue * Create on the the electronic billboards line the consumption in the system. Suppliers establish open E-Kanban quantity invoice. * verify invoice after upload to our SAP system * The use of Internet-based EDI. * Unique ASN (advanced shipping notice), each power supply. * EDI numbers is what we call * Then printed on the invoice number of bar code EDI. * Forwarded by scanning EDI No. materials in plants * The creation of genetic resources without the need for manual data entry. Towards lean manufacturing – * Hair this lean supply process results. * productivity per employee – Vehicles – increase10 ten * Component inventory – reducing the stock of the week and a half shift. finished goods inventory – to reduce the stock of one to three days * Quality improvements – Improved 20000 PPM <2000 PPM. * Truck turnaround time – reduced four hours to half an hour. * The thethe Material United Nations load rate / – class size increased to 150-350 load. * Improved the accuracy of the invoice data – faster payment processing. * deployment portal vendors – * Evaluation of the quality of power supply and PPM data visibility. * Invoice wise refused payment. * supplier of quality tracking supplier responsibility 5. Conclusion / Reflection (5%)

Conclusion – should innovation be only once? Write and reflect your opinion. Studies have confirmed that all businesses are more innovative. The survey found that nearly 90% of companies believe that innovation is their priority. Concluded that the increasing importance of innovation, and increased significantly. In today’s economic circumstances, innovation has become an important factor in the impact of strategic planning. It has been recognized, innovation and the creation of wealth. , Even if efficiency is crucial to the success of the enterprise, in the long run, it cannot sustain business growth.

Today, more than ever, we need to innovate. Every organization and business is feeling the impact of globalization, migration, technological and knowledge revolutions, and climate change issuesInnovation will bring added value and to expand the employment base. Innovation is necessary in these difficult circumstances, improved quality of life. Innovation will make the world a better younger generation. http://www. paggu. com/getting-into-roots/what-is-innovation-why-innovation-is-important/ Proper citation is required. Assignment in report format. Words = 4,000.