Negative effects of lacking innovation - Assignment Example

At the individual employee level, innovation is influenced by motivation, cognitive capabilities, personality and creativity of the individual while at the team level innovation will be determined by the team processes, the leadership style, team structure and team climate (Brown and Ulijn 2004). At the entire organizational level, the size, resources, culture, strategy and structure of the organization determines the capability of the organization to implement innovative solutions to emerging problems (Shavinina 2003).

Firms that are not innovative lack the capacity to deal with the nature and intensity of competition within the market thus leading to loss in market share and profitability. Innovative firms are capable of monitoring and understanding changes in industry competitive capabilities such as new processes and new technologies thus implementing research and development activities that will enable the firm to acquire those competencies (Shavinina 2003). In this case, the firms will be using the wrong or inefficient technologies that waste raw materials and lead to high costs of production.

A case example is Sony, the technology giant that lost market share and profitability due to lack of innovative technologies. Sony pioneered the Walkman and Trinitron TV and acquired Columbian pictures thus shocking Hollywood (Tabuchi, p 4). However, the rise of other Japanese rivalries made Sony lose market share and report losses since 2008 since other players like Samsung Electronics and Apple took advantage of technological revolution and produced digital electronic devices (Tabuchi, p 6).

Although Sony had the capabilities to create the iPod before Apple, the management resisted innovation and creativity thus limiting the capability of the company to develop tablets and iPods that would enhance its music business segment (Tabuchi, p 12). It is evident that Sony did