The Role of Innovation for Entrepreneurial Start-up - Research Paper Example

The role of innovation for entrepreneurial start-up and/or firm growth Table of Contents Introduction 3 Research Objectives 3 Literature Review 3 Innovation and Knowledge Management 4 Leadership and Workplace Management 5 Types of Innovation 6 Methodology and Data Collection 7 Sample Characteristics 9 Data Analysis and Findings 9 Conclusion 10 Implication for entrepreneurs 11 Limitations and Future Research Directions 12 References 13 Appendix: Interview Questions 16 Introduction Global business environment is becoming highly competitive as several leading organizations in this world are trying to capitalize on the potential opportunities in the business operation process that are developed due to globalization and technological advancement. However, entrepreneurs generally look for several aspects in order to get success from the business operation processes. But, it is the innovation that plays an important role in the business success. Several large MNCs or SMEs around the globe used to develop and implement innovative business strategies in order to gain competitive advantages over the competitors. Therefore, it is highly important for the entrepreneurs to develop innovative and creative strategies in order to ensure positive business growth rate. The entrepreneurs have to take huge risk in business process in order to grab the competitor’s market share. Day-by-day, government and several public agencies of a country used to develop different policies in order to maintain sustainability in business operation process. In addition to this, the entrepreneur of a start-up organization or an existing organization should analyze the internal as well as external business operation environment in order to mitigate risks and challenges. It is the innovation and creativity that helps an entrepreneur to develop effective strategy depending upon the nature of business environment and availability of resources. Research Objectives Major objective of this research is to determine the role of innovation and creativity Literature Review Entrepreneurship and innovation are significantly related to each other. An entrepreneur cannot become a successful entrepreneur until and unless he or she develop and implement innovative strategies in business operation process. A successful entrepreneur needs to have three important characteristics, such as strong personal attributes, strong managerial competencies and good technical skills (Adrian, 2000, p.16). Knowledge management can be considered as important aspects for the entrepreneurs as the successful entrepreneurs succeed to develop innovative strategies through the enhancement of knowledge management (Armstrong, 2002, p.17). Innovation and Knowledge Management Innovation and knowledge management are directly related to each other. Before going to the deep, it is important for the readers to determine what knowledge is. Knowledge is basically the power of an individual, department, group, nation and organization. On the other hand, managing knowledge can be considered as the ultimate power of an individual (Blythe, 2012, p.12). Knowledge has three aspects, such as data, information and experience (Dibb, 2012, p.32). Knowledge management can be considered as scientifically meticulous loom of shareable concepts, values and experience with a particular view of enabling organization, development, dispersal and utilization of knowledge (Augen, 2008, p.92). Knowledge management also can be defined as collaboration and understanding of human knowledge and understanding within an organization. On the other hand, people used to focus on effective knowledge management in order to develop innovative business operation strategy. Example of Steve Jobs and Apple Inc can be considered in this part of the literature review. It is true that Steve Jobs is popular and regarded as magician due to his unique and creative innovations. (Chaffey, 2008, p.9) He had developed an effective organizational workplace culture inside the organization. His demographic and visionary leadership style influenced each and every employee within the organization to share knowledge, values and experiences among each other (Collins and Shemko, 2009, p.83). Effective collaborative workplace performance is the major success mantra for Apple Inc. throughout the years. This specific culture of knowledge sharing and cultural diversity has helped the employees of the organization to enhance creativity and innovation in workplace performances (Hall, 2007, p.81). It is true that knowledge management leads to innovation. People, product, process and organizational performance are the four important dimensions of the organizational impacts of the knowledge management. In terms of people, knowledge management generally helps employees to facilitate employee learning. Effective knowledge management also helps employees to become more flexible (Ferrell and Hartline, 2010, p.109). It generally enhances the job satisfaction of employees. This aspect generally motivates employees to integrate innovation in workplace performances. Therefore, it is highly important for the entrepreneurs to consider knowledge management in organizational workplace environment in order to ensure positive business growth rate (Fyall and Garrod, 2005, p.52). Knowledge management also helps an organization to manufacture value added, high quality, differentiated and innovative products (Jennet, 2005, p.5). Knowledge sharing among employees and management of the organization generally helps the employees of an organization to share their views among each other and develop unique products (Lamb, 2010, p.89). This aspect generally helps an organization to enhance high job satisfaction. Effective knowledge management generally helps the entrepreneurs to improve several important organizational processes, such as manufacturing, accounting, marketing, public relations and engineering. These specific impacts can be identified along three important dimensions, such as efficiency, degree of innovation and effectiveness (Hill, 2009, p.77). Leadership and Workplace Management Leadership and work place performance management can be considered as two major innovative aspects that need to be considered by the entrepreneurs in start-up business or in existing business. Effective leadership strategy can help the organizational leaders or entrepreneurs to motivate employees significantly (Latour, 2008, p.71). Example of Bill Gates can be considered in this part of literature review. Bill Gates has adopted and implemented supportive leadership style in workplace culture in order to motivate employees of different culture. This leadership style has helped the Bill gates to enhance effective knowledge sharing among the sub-ordinates and followers (Krause, 2005, p.35). In addition to this, Microsoft has adopted and implemented workplace diversity in business operation process in order to gain competitive advantage. This workplace diversity has enhanced knowledge sharing and collaborative workplace performance that led to the innovative strategy development and implementation process (Law, 2001, p.99). Microsoft and Apple Inc. are two leading organizations within the global industry. Each and every employee of these organizations are known for workplace value, innovative business ideas, effective knowledge sharing, value added collaborative workplace performance and positive business output (Ledeen, 2009, p.192). Most importantly, it is the innovative strategic ideas of the entrepreneurs that have helped these organizations to maintain their leading position in competitive global business environment. (Mathis and Jackson, 2011, p.64) Types of Innovation There are several types of innovations that are considered by the entrepreneurs to gain potential competitive advantages over the competitors. Example of European SME sector can be considered in this part of the literature review. It is true that small and medium scale industries are one of the major economic growth drivers of Europe. Entrepreneurs in this industry are trying to use advanced technological resources and use skilled human resources to increase productivity (Leonard, 2012, p.88). Significant knowledge about nature of external environment and market competitiveness has helped these entrepreneurs to ensure high quality technological resources for the business operation activities (Phillips, 2009, p.31). Product, service, process and position are the significant aspects that are considered by the SMEs entrepreneurs in Europe. Several organizations are using technological resources to enhance the offering of high quality and differentiated consumer products. Application of advanced technological software is helping the entrepreneurs to enhance overall business operation process (Kotler and Armstrong, 2011, p.28). Most importantly, effective knowledge sharing, innovation, and strategy development and implementation process is helping the organizations increase market share and business productivity. It is true that business operation process is highly risk associated (Nye, 2004, p.5). Therefore, higher degree of innovation during decision making and strategy development process generally helps the entrepreneurs to mitigate several possible issues (Lukes, 2004, p.30). Service innovation also can be considered as one of the important entrepreneurial aspect. Example of Mumbai Dabbawala can be considered in this part of the literature review. These specific SMEs used to provide lunch boxes to the officers, executives, businessmen and college students. This small and medium organization is popular for its effective services (Marturano and Gosling, 2008, p.65). The organization has effectively maintained its overall turnaround timing even during the devastating Mumbai Flood. Methodology and Data Collection Research methodology can be considered as one of the important integral part of a research work. Successful research outcome generally depends upon the effectiveness of the research methodology. Research methodology can be divided into two parts, such as qualitative research methodology and quantitative research methodology. Qualitative research methodology generally focuses on the behaviour, feelings, emotion, views and motivation of people. On the other hand, quantitative research methodology generally focuses on the calculation and analysis of required numerical data. Both these methods are equally important. But, it is highly important for the researcher to determine appropriate method depending upon the nature of the research. Qualitative research methods are applied in a research work based on the exploratory nature of the research, where the thoughts, expressions and views of people are considered. The topic i.e. “the role of innovation ion the entrepreneurial start-up or firm growth” requires the views of industry executives and relevant literatures. Therefore, it can be stated that the study is exploratory in nature. Looking into this aspect, it can be stated that the adoption and implementation of qualitative research work will be effective for the researcher (Pareto, 2006, p.61). Data collection can be divided into two aspects, such as primary data collection and secondary data collection. Primary data collection can be considered as the collection of raw and live data and information through field work, survey, questionnaires and interviews. On the other hand, secondary data collection process can be considered as sourcing and gathering of relevant data from an existing data base. These two data collection processes are equally important. Primary data collection process helps researchers to get fresh data and information. On the other hand, secondary data collection process helps a researcher to gain huge amount of relevant data within limited time period. Considering the significance of these two data collection processes, it has been decided that both the primary and secondary data collection process have been implemented in this research in order to gain positive research outcome. In terms of data collection, academic books have been selected as the major sources of secondary data that are used in the literature review. In terms of primary data collection process, semi-structured questionnaire process has been selected. Sample Characteristics 5 SME entrepreneurs have been selected for the questionnaire interview process. All of these entrepreneurs are the owners of hi-tech SME firms. Their response and answer to the questions will be considered and analyzed while determining the role of innovation in the successful entrepreneurial activities. Each and every response of these respondents have been significantly recorded, evaluated and analyzed in order to gain positive research outcome. Data Analysis and Findings Four open ended questions have been asked by the researcher. All the respondents or the entrepreneurs have responded to the questions effectively and significantly. All the respondents accepted that innovation has an important role in the strategy development process which is the base of effective entrepreneurial skills. According to the respondents, innovation and creativity helps an entrepreneur to develop unique strategies considering several business challenges and possible opportunities. In terms of second question, each and every respondent has replied that knowledge management and innovation are significantly related to each other. Knowledge management enhances knowledge sharing, sharing of views, experiences and strategies and effective collaborative work performance that enhances innovative strategy development and decision making process. In terms of third question, all the respondents have replied that innovation can be done through effective leadership and managerial processes as it helps the entrepreneurs to motivate each and every employee. This aspect influences all the employees to maintain innovative work performance within the workplace. As a result, it enhances effective business performance. In terms of last question, all the respondents have replied that each and every entrepreneur should consider internal as well as external business environment to become a successful entrepreneur. External environment includes, market competitiveness and general external environmental factors, and internal environment includes organizational resources and business performance indicators. Consideration of both the business environment generally helps to develop innovative strategies that increase the competitive edge of the organization. In terms of findings, it is clear the innovation generally plays an important role in the development of effective entrepreneurial skills. In this present era of competitive business environment, it is highly important for the organization to consider effective knowledge management, leadership skills and managerial skills to develop innovative business operation strategies (Mullins, 2009, p.15). It is quite difficult for an entrepreneur to gain success without the integration of innovation in strategy development and implementation process. Conclusion It is clear from the above analysis and findings that entrepreneurs need to consider innovation in each and every business operation process to gain success. Recent financial crisis and economic recession affected the economic environment of the world. Therefore, it is quite challenging for new or existing entrepreneurs to maintain their competitive edge in global market places. It is highly important for the entrepreneurs to consider important dimensions of innovation, such as product, people, process, service and strategy. All these dimensions need to be innovative to gain huge success in contemporary business environment. Effective knowledge management, leadership skills and managerial skills are required for the entrepreneurs in order to maintain effective business performance across the globe. Several organizations are trying to develop and implement innovative and unique strategies in business process to gain potential competitive advantages over competitors. Hence, it is proved that innovation and creativity plays an important role in the development of effective and significant entrepreneurial skills. Implication for entrepreneurs It is clear from the above analysis and evaluation that innovation generally plays a significant role in the development of effective entrepreneurial skills. Knowing the market competitiveness, the entrepreneurs of the contemporary world should try to focus on effective collaborative work performance (Pierce, 2011, p.8). The entrepreneurs of the small and medium enterprises should try to make effective business operation strategies integrating workplace diversity in organizations. It is true that, several organizations are adopting workplace diversity in business process to develop innovative strategies as it enhances effective knowledge sharing and knowledge management process (Northouse, 2007, p.59). The market competition among the SMEs is also increasing. Therefore, it will be effective for the entrepreneurs to develop and implement cultural diversity process in workplaces in order to gain potential competitive advantages. Last but not the least; the entrepreneurs should try to integrate decentralization in business operation process. This strategy will help the organization to apply stakeholder engagement process quite effectively. As a result, the organization can develop several innovative business operation strategies to gain potential competitive advantages over the competitors. In addition to this, the entrepreneurs should also try to develop innovative pricing strategies considering the recent financial crisis (Proctor and Mueller, 2000, p.129). Adoption and implementation of cost leadership strategy will help to support affected purchasing power of consumers. It will also help the organization to give potential competitive advantages. Limitations and Future Research Directions Limited time frame and lack of sufficient number of respondents are the major limitations of this study. There are several innovative dimensions that can be considered by the entrepreneurs to become successful. But, lack of time and limited number of respondent has made it difficult to focus on broad dimensions. However, this research work has provided useful direction for the future research work. The analysis of the responses and literature review part will help the researcher to find out more aspects that can help the entrepreneurs to develop innovative strategies. References Adrian, T., 2000. Managing Change, New Jersey, Pearson. Armstrong, G., 2002. Global Marketing Management, New Jersey, Pearson. Augen, J., 2008. The Volatility Edge in Options Trading, New Jersey, John Wiley & Sons. Blythe, J.., 2012. Strategic Marketing, London, Kogan page. Chaffey, D., 2008. Internet marketing, New Jersey, Pearson. Collins, K., and Shemko, J., 2009. Exploring Business, New York, McGraw-Hill. Dibb, S., 2012. Marketing briefs, New Jersey, Pearson. Ferrell, O., and Hartline, M., 2010. Marketing strategy, New Jersey, John Wiley & Sons. Fyall, A., and Garrod, B., 2005. Marketing: A Collaborative Approach, New Jersey: John Wiley & Sons. Hall, D., 2007. Business Studies, New York, Springer. Hill, C., 2009. Strategic management theory, London, Routledge. Humby, C., 2007. Scoring Points: How Tesco Continues to win Customer Loyalty, London, Kogan Page. Jeannet, J., 2005. Global marketing strategies, Stamford, Cengage Learning. Kotler, P., and Armstrong, G., 2011. Principles of Marketing, New Jersey, Pearson. Krause, D. G., 2005. Sun Tzu, The Art of War for Executives London: Nicholas Brealey. Lamb, C., 2010. Marketing, Stamford, Cengage Learning. Latour, B., 2008. The prince for machines as well as machinations’ in Elliott, Technology and Social Process. Edinburgh: EUP. Law, J., 2001. A Sociology of Monsters: Essays on Power, Technology and Domination. London: Routledge. Ledeen, M. A., 2009. Machiavelli on Modern Leadership. New York: Truman Talley. Leonard, E., 2012. Supervision: Concepts and Practices of Management. Stamford: Cengage Learning. Lukes, S., 2004. Power: A Radical View. London: Macmillan. Marturano, A., and Gosling, J., 2008. Leadership: The Key Concepts. London: Routledge. Mathis, R., and Jackson, J., 2011. Human Resource Management: Essential Perspectives. Stamford: Cengage Learning. Mullins, L., 2009. Management and Organizational Behaviour. New Jersey: Pearson. Northouse, P.G., 2007. Leadership: Theory and Practice. London: Sage. Nye, J. S., 2004. Power in the Global Information Age. London: Routledge. Pareto, V., 2006. Sociological Writings. London: Pall Mall Press. Phillips, J., 2009. Strategic Staffing. New Jersey: Pearson. Pierce, J., 2011. Leaders & Leadership Process. New York: McGraw-Hill. Proctor, S., and Mueller, F., 2000. Team working. London: Macmillan Appendix: Interview Questions 1. Does innovative strategy development process help an individual to become successful entrepreneur? 2. What is the relationship between innovation and knowledge management? 3. Does effective leadership style and managerial process enhance innovation and entrepreneurial skills? 4. What internal and external aspects need to be considered by the entrepreneurs to drive innovation and creativity in strategy development process? Read More