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Managing innovation

within the firm


Theories about organisation &
innovation

Classical/scient Human
ific relations
Mangt approach
perspective
Activities within the
organisation

Contingency System
approach theory
perspective
Classical/scientific Management
perspective
• I t took hold at the beginning of the 20th century.
• It built around traditional management concept,
bureaucratic theory and scientific management.
• The view of school of thought-
• Org. should be designed to ensure a predictable flow
of work.
• Specialisation of tasks is employed to maximised
efficiency .
• According to this innovation is a series of rational
decisions leading to a clearly defined outcomes.
• It contributed to the dominance of the ‘technology-
push’ model of innovation.
Human relations approach
• This new approach identified informal
and non-legitimised group processes
within the organization.
Contingency approach
• There is not necessarily a single best
organisational structure, but the structure
should be adapted to the activities being
performed.
• Different activities individual do in a group
for achieving organisational goal.
• It emphasis on activities rather than
structure with regard to innovation
• Means the process of innovation is made up
of a series of linked activities within an
organisation
Contingency approach
• Contingency approach argues that tasks
are defined, certain, stable, uniform,
have few exception, many repetitive
activities, stress formalities are
compatible with bureaucratic
organisation.
• At the other end of the task continuum,
uncertain, unstable, non-uniform, have
many exception, few repetitive activities
are compatible with flexible organisation
Contingency approach
• Certainty Vs. uncertainty
• Stability Vs. unstability
• Uniform Vs. non-uniform
• Few exceptions Vs. many exception
• Many repetitive events Vs. few repetitive
event
System theory
• A system is defined as any set of elements
linked in a pattern which carries information
ordered according to some pre-determined
rule
• So organisation is a goal directed system.
• All the system have both structure and
processes.
• Structures are relatively stable.
• Processes are the dynamic relationship among
system element over time.
System theory
• There are certain issues arises within system
that has to be managed rather than problems
that can be solves
• Issues identified by systems theory that need to
issue characteristics
be managed
adaption The abilities to alter ways of working to meet
the changing environment
Coordinatio Enabling the different parts of the org. to
n function as one
integration The ability to harmonise a diverse range of
activities and people
strain Coping with friction between org. parts
output Achieving purposes and goals
maintenancKeeping elements in the system active
System theory
• System theory highlights the importance
of the organisationa’s interaction with
the external world.
• This interaction is an important element
of the innovation process.
• In this way org. manages and captures
the benefits from knowledge flows.
• It increases its ability to innovate.
Dilemma of innovation
managemnt
• Managing tension bet the need for
creativity and eficiency
E C
F R
F The E
The efficient day development of
I A
C to day operations new products
and services T
within an org.
I and room to requires
require stable try out I
E routine. This creativity and V
N usually achieved room to tryout I
C in stable and new ideas. This T
controlled is usually
y y
environment achieved in a
Managing uncertainty
• Person’s uncertainty map
High
3 1
Applications Explorator
Uncertainty about

engineering y research

4
Combining 2
output

market Development
opportunities engineering
low with technical
capabilities
low Uncertainty about High
process
Quadrant 1
• High uncertainty about ends and means.
• How to achieved the target is also not
clear.
• It is like ‘exploratory research’/ ‘blue sky’
• This activities often involve working with
technology which is not fully understood
and where potential products and market
have also non identified.
• Domain of university and research
laboratory.
Quadrant 2
• Target is clear. Commercial opportunity is
identified, means to be established.
• They initiate about different technologies or
different approaches to try to achieve desire
outputs.
• Here the uncertainty about how to achieve
the target.
• It follows market-pull model.
• It is referred as development engineering.
• It increases efficiency and way to reduce
costs
Quadrant 3
• Here uncertainty regarding ends/output.
• It is associated with attempting to discover
how the technology can be most effectively
used.
• It follows technology-push model.
• Many of these may prove to be ineffective
due to costs of performance but some new
and improved product will emerge from this
effort.
Quadrant 4
• It covers innovative activities which
are more certain.
• It follows interactive
model/simultaneous coupling model
• Here market opportunities and
technology capabilities are known.
Both the information either improve
existing products or create new
product.
Organisational Characteristics that
facilitate the innovation process
• Growth Orientation
• Vigilance
• Commitment to technology
• Acceptance of risks
• Cross-functional co operation
• Receptivity
• ‘Slack’
• Adaptability
• Diverse range of skills
Growth Orientation
• A commitment to long term growth
rather than short-term profit
• Example: family business
Vigilance
• The ability of the organisation to be
aware of its threats and opportunities
• Open communication system is
required among different
departments
Commitment to technology
• The willingness to invest in the long-
term development of technology
• Long term approach
• Investment in technology
• Foster creativity
• More emphasis on R&D
Acceptance of risks
• Willingness to consider risk
opportunity
• Not gamble but risk assessment
decision
• Balance portfolio of projects
Cross-functional co-operation
• Mutual respect among individuals and willingness
to work together across function
• Inter department conflict Vs Innovation
• Inter-departmental conflict is barrier to innovation
• Ability to confront and resolve frustration and
conflict essential requirement for Innovation
Receptivity
• The ability to be aware of, to identify and take
effective advantage of externally developed
technology
• Most favored technology is the combination of
several other technology in terms of joint
venture and alliances
• Ex. IBM and apple formed joint venture to
work on mutually beneficial technology in PC
market
‘Slack’
• An ability to manage the innovation
dilemma and provide room for
creativity
• ‘Slack’ allow individuals room to
think, experiment, discuss ideas and
be creative
Adaptability

• A readiness to accept change


• The organisation must be ready to
disruptions to established organisational
activities
• Because major innovations may result
from significant changes in existing one
Diverse range of skills
• A combination of specialisation and diversity of knowledge
and skill
• A combination of specialist skill that facilitate cross-
fertilisation of the special knowledge science, marketing,
accountancy etc
• Hybrid managers who have technical and commercial
knowledge are useful in area of product development
Organic Vs. Mechanistic Organisational
Structure And Innovation
characteristics organics mechanistic
Channel of Open with free Highly structured,
communication information flow restricted
information flow
Operating style Allowed to vary Must be uniform
freely and restricted

Authority for Based on expertise Based on formal


decision position

Adaption To changing With instance on


circumstances holding fast to tried
& true mangt
Organic Vs. Mechanistic Organisational
Structure And Innovation
Emphasis on Unconstrained Reliance on tried
getting things and true mangt
done principles

control Loose, informal Tight control


control, Emphasis through
on norms of sophisticated
cooperation control system
On-job behaviour Flexible, permit to Constrained,
share requirement require to conform
and personality to job descriptions
Decision making Participation & Superiors make
group consensus decisions with
Formalisation
• There is inverse relationship between
innovation and formalisation
• An increase in formlisation of procedures
will result in decreased in process of
innovation
Complexity
• Complexity in terms of large no
professionals groups or diversity of
specialists
Centralisation
• There is inverse relationship between
innovation and Centralisation
• Centralisation refers decision making activities and
location of power
• The more decentralised an organisation the fewer
level of hierarchy usually required.
Organisational Size
• There is positive relationship
between innovation and Organisation
size
• Resources
• No of employees
• Scale of operation
Role of individual in
innovation
1. Technical innovator
2. Technical/commercial scanner
3. Gatekeeper
4. Product champion
5. Project leader
6. Sponsor
Technical innovator
• He /she is expert in one or two fields.
• Generate new ideas and sees new
and different ways of doing things.
• Also referred to as the ‘mad scientist’
Technical/commercial scanner
• Acquires vast amounts of information
from outside the organisation
• Often through networking
• This may include market and technical
information
Gatekeeper
• Keeps information of related
developments that occurs outside the
organisation through journals,
conference, colleagues and other
companies
• Passes these information on to others,
finds it easy to talk to colleagues
• Serves as an information resource for
other in the organisation
Product champion
• Sells new ideas to others in the
organisation
• Acquires resources
• Aggressive in championing in his/her
cause
• Takes risk
Project leader
• Provides the team with leadership and motivation.
• Plans and organises the project
• Ensures that administrative requirements are met.
• Provides necessary co-ordination among team
members.
• Sees that the project moves forward effectively
• Balances project goals with organisational needs
Sponsor
• A senior person; provides access to a power
base within the organisation
• Buffers the project team from unnecessary
organisational constraints
• Helps the project team to get what it needs
from other parts of the organisation
• Provides legitimacy and organisational
confidence in the project
Establishing an innovative
environment
the organisation’s reputation for innovation
The organisation’s
reputation for
innovation
High morale and Attraction of
retention of creative
creative people people

Motivates people Organisational


within the organisation encouragement of
and reduce frustration creativity & innovation

A willingness within
the organisation to Development of
accept new idea innovative products
Organisation’s reputation for
innovation
• Development of reputation of organisation
takes many years and its linked with the
performance.
• It includes recent product launches, recent
successful programme of research, high
expenditure in R&D.
• Depending on topical media events at the
time, co is able to achieve wide explore of
new product or research.
• This exposure depends on effective
publicity and also serendipity.
Attraction of creative people
• Creative people will be attracted to those
Cos. Which viewed as creative
• The fresh graduates apply for the
employment in those Cos. Which is
successful.
• The top scientist will seek employment
from those Cos. Which have a reputation
for innovation and scientific excellence.
Organisation encourages
creativity & innovation
• Many organisation support creativity with
actions and resources.
• The organisation should try to build an
environment that tolerates errors and
mistakes. It will encourage people to try
new ideas and put forward suggestion
• Creative ideas need to be rewarded in
terms of publicity & recognition and
monetary incentives.
Development of innovative
products
• The ability to develop product with
the help of latest technology.
• Means developing new products that
are genuine improvement in existing
one.
• The success in marketplace that very
often leads to further success.
A willingness to accept new
idea
• Many organisations suffer from an
inability to implement changes and
new ideas even after rewarding the
people involve in developing the new
idea.
• Once a new product idea has been
accepted it is important that is
carried through to completion.
Increased motivation and
reduce frustration
• If individuals within the organisation
can see their ideas and efforts
contributing to performance of the
business, they will encourage.
• If good ideas are overlooked, it will
increased frustration.
High morale and retention of
creative people
• Innovation activity will help to increased
morale within the organisation.
• A rewarding and enjoyable working
environment will help to retain creative
people
• It will reinforce Co.s innovative capabilities.

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