Innovation and Creativity and Enterprise - Research Paper Example

Innovation and Creativity and Enterprise Table of Contents Introduction 3 2. Literature Review 3 3. Research Approach 6 3 Research Question andobjective 6 3.2. Research Methodology 7 3.3. Method of data collection 7 3.4. Data analysis 7 3.5. Data Interpretation 11 3.6. Findings and Analysis 11 4. Conclusion 13 Reference List 15 Bibliography 17 1. Introduction Entrepreneurship is just not initiating a new venture but is creating value by pulling resources together; it is the risk of undertaking a production process by hiring labour, investing and seeking capital and allocating resources optimally. Innovation is the source of competitive advantages of an enterprise. In order to sustain innovation, an enterprise must prioritize creativity as it is an integral part of innovation. An enterprise must continuously develop new and innovative products to capture the attention of its customer through creativity (Skogen and Sjovoll, 2010). In this paper, the application of innovation, creativity and enterprise in Zain Telecom, a mobile telecommunication company operating in the Gulf region will be analyzed. Zain Telecom was established in 1983 in Kuwait. It operates in 8 countries in the Middle East and North America(MENA) (Zain, 2015a). The company is the leading telecommunications provider in this region. It has always shown its inclination towards technological progress. For example, Zain Telecom selected WeDo Technologies which provides revenue solution software which identifies risks, regulate controls and performs various other tasks for its operations in Kuwait, Jordan, and Iraq in 2013 (Zain, 2015e).It also went into a partnership with Ericssion to present convergent CBIO (Charging and Billing in One) in its operations. This research paper will constitute a literature review followed by the research approach including the research question and objective, research methodology, method of data collection and analysis and finally stating the findings from the analysis. 2. Literature Review According to Drucker (1985 cited in Drucker, 2014), innovation is the path through which resources are endowed with new capability ti create wealth.. He also refers to sources of innovation as ‘windows of opportunities’ (Drucker, 2014). An innovation process is the outcome of the interaction between the generation of an idea and the recognition of the opportunity to implement the idea in the operations of a firm. After the first step, that is generation of the new idea, first the concerned firm needs to evaluate whether the technical know-how of its employees and the resources available to the firm can provide the opportunity of implementing the innovation. The enterprise should also analyze whether positive returns from the innovation process passes on to its customers or not, whether the cost of implementing it is profitable for the enterprise. The innovation process must also fit the business strategy of the enterprise (Skogen and Sjovoll, 2010). Innovation can be of various types. For example, radical innovation is the development of new technology in product, process and services whereas, incremental technology is the exploitation of existing technology. According to the 4Ps model developed by John Bessant and Joe Tidd, there are 4 types of innovation (Humanitarian Innovation Fund, 2015). 1. Product innovation: It is the most common form of innovation which improves the existing products or introduces new products in the market. Product innovation offers changes to the end users. 2. Position innovation: It involves the re-positioning of an already established product or process. 3. Process innovation: It is the changes made in the process of production of goods and services. 4. Paradigm innovation: It is the innovation that changes the dominant patterns about an organization (Humanitarian Innovation Fund, 2015). Other types of innovation include organizational innovation, strategic innovation and social innovation. Organisational innovation is the introduction of a new organizational framework in the business practices, work place and external relations of the enterprise. It is either undertaken as a necessary step to implement new technologies or to serve as a precondition for the introduction of technological development (OECD, 2015). Strategic innovation is the creation of new growth strategies and business models to add value to the enterprise and the customers. According to the Centre for Social Innovation (CSI), it is a innovative solution to a social problem that is more efficient, effective, , sustainable, than the present solutions.Thebenefirt from social innovation accrues primarily to society as a whole rather than private individuals (Centre for Social Innovation, 2015). According to Kostopoulos, Spanos and Prastacos (2004) innovation increases the competitive advantages of the enterprise and the resource based view of competitive advantage focuses on how an enterprise uses its internal physical, human and organizational assets optimally. The social capital theory says that an enterprise does not only derive competitive advantage from internal resources but also from its relationships with organizations which are equipped with technologies which are difficult to imiyate. The dynamic capabilities approach focuses on the ability of the enterprise to renew its resources with the changes in the economic environment (Teece, Pisano and Shuen, 1997). In the open innovation system, inflow and outflow of knowledge occurs across the boundaries of the firm, whereas, in the closed innovation system everything happens inside the firm (Marques, 2014). According to Drucker (1985 cited in Drucker, 2014), innovation is the tool of entrepreneurship. Both entrepreneurship and innovation requires creativity. Creativity is the production of something which is novel and useful. No enterprise can hold its position in the market unless it recognizes the need to constantly adopt operations to cope up with the changes in the market. Innovation is the process of implementing new ideas and all innovations start with creativity. A person can think creatively only when he is motivated by the interest, satisfaction of the situation and the challenge before him or her. Creativity does not flourish under external pressures; it is the result of expertise, creative thinking and motivation. Innovation and Sustainable Development: According to World Bank (2015), sustainable development identifies the fact that growth should be environmentally and inclusive sound in order to “reduce poverty and build shared prosperity for today’s population and to continue to meet the needs of future generations. It is efficient with resources and carefully planned to deliver both immediate and long-term benefits for people, planet, and prosperity” (World Bank Group, 2015). According to Adams et al (2012), enterprises can pursue more sustainable practices, processes and products that enhance the welfare of the consumers through innovation. John Elkington tried to measure sustainability during the mid-1990s by introducing a new framework to measure corporate performance in America (Slaper and Hall, 2011). The accounting framework developed by Elkington is called the Triple Bottom Line (TBL). This framework involves three dimensions of performance: social, environmental and economical. The TBL dimensions are also sometimes called the 3Ps: people, profits and planet. Enterprises, nonprofit organizations and governments are increasingly adopting the TBL sustainability framework to measure their performance. There is no specific method for calculating the TBL measure for all organizations. Hence, different organizations consider variables under the 3Ps, suitable for their enterprises to calculate TBL measurement (Slaper and Hall, 2011). 3. Research Approach 3.1. Research Question and objective The research will be conducted to find how and in what extent Zain Telecom has incorporated innovation and creativity in their business. The company operates in the Gulf region and applies the TBL to evaluate their performance (Zain, 2015c). The objective of this paper is to find how the enterprise integrates the TBL in their operations. 3.2. Research Methodology Qualitative research is undertaken to find the dimensions the company undertakes under the social, economic and environmental aspects of the triple bottom line. The research finds how the variables have been performing for the last three years (2012- 2013). 3.3. Method of data collection In this paper, the secondary data collection method has been applied to obtain the desired results. All the relevant data is taken from the Sustainability Reports published by Zain Telecom and various reports available in the company’s official website. 3.4. Data analysis In the TBL framework, the different variables under economic, environmental and social dimensions have been considered. Economic aspect includes variables such as net profit, job creation etc. Environmental aspect involves variables such as reduction in carbon dioxide emission, fuel emission, electricity consumption etc. Social variables refer to social dimensions of a region or community. Social dimension includes measurements of education, health and safety, poverty alleviation, youth empowerment etc (Slaper and Hall, 2011). From the sustainability reports of the company, it is found that Zain Telecom includes net profits under the economic dimension of TBL (Zain, 2015c).The data for net profits of the company for the last four years is presented in the following table: Year Net Profit (USD millon) 2011 1856 2012 902 2013 764 2014 685 The data in the above table is represented in the following diagram. Figure 1: Graph showing the net profits from 2011-2014 (Source: Author’ creation) According to Sustainability Report 2014 (Facing Challenges with Innovation), Zain engages in the improvement of environmental performance and energy efficiency as part of its sustainability program. The company aims at reducing harmful emissions and developing efficient operating systems, which reduces future operating cost and helps the enterprise to hold its position as a major telecommunication company in the MENA. (Zain, 2015c). The company operates in the countries, which tops in the list of countries with high carbon dioxide emissions. Since the main environmental impacts of the company results from the operation, maintenance and installation of the base stations, the company takes steps to increase the efficiency of operations, engage in tower sharing, and increase the renewable energy driven power stations. Zain Telecom engages in installing greener technologies such as providing hybrid solutions to its base stations and upgrading technologies. The growth in Diesel Generator (DG) Battery Hybrid and Solar Hybrid solutions has increased by 80%, from 212 in 2013 to 381 in 2014 ( Zain, 2015c). Zain Telecom follows the guidelines provided by its Environment and Social Management Plan to reduce its environmental impact optimally. It also does not set up towers in areas where is operational impact will have harmful effects on heritage sites or destroys the biodiversity of the region. It also looks into the aspect that the local people do not get displaced due to its operations. In 2014, the company reduced emissions by 14% in Jordan and by 4% in Sudan from the previous year. It also continued its tree-Planting campaigns in these two countries (Zain, 2015c). Under the social responsibilities of the company, it provided more than 100,000 hours of training to its employees, kept more 60% of local employees in the management and empowered women all through its organization (Zain, 2015b). The region where the company operates, Middle East and North Africa is one of the regions where women workforce participation is the lowest (Zain, 2015c). Thus, the company introduces a merit based performance system and with the help of it recognized five women most notable in the telecommunication sector in the region. In 2014, it was found that only around one-third of the graduates entering the workforce are sufficiently prepared for the market (Zain, 2015c). Zain Telecom introduced a training and development program to increase the employability of the youths. The Zain Mobile Clinic for Children is a mobile health facility which provides necessary health care facilities to unprivileged children. In 2014, it treated more than 165,000 children (Zain, 2015b). From the Annual Report, 2014, (Towards a Wonderful Digital World) of Zain Telecom, the data for the number of customers is found for the last 5 years (Zain, 2015b). The following table highlights the data: Year Consumers (;000) 2010 37,239 2011 40,263 2012 42,714 2013 46,102 2014 44,288 The above data is diagrammatically represented in the following diagram: Figure 2: Graph showing the number of consumers from 2010-214 (Source: Author’s creation) 3.5. Data Interpretation From Figure 1, it is found that the net profits of the company have decreased continuously from 2011 to 2014 despite of its innovation oriented strategy. Due to vigorous competition, frequent currency fluctuations in the countries of its operation and some operational difficulties, the net profits of the company has fallen over the years. From figure 2, it can be observed that the number of customers of the enterprise has increased continuously over the years, reaching the highest figure in 2013. The various innovative approaches of the company have contributed in retaining its customers and also attracting new customers consistently. 3.6. Findings and Analysis From the above analysis, it can be observed that though the net profits of Zain Telecom has decreased over the years, the enterprise is successful in securing its consumer base and also increasing the number of consumers during the same period. The explanation of the above phenomenon can be obtained after analyzing the company strategies. From the Annual Reports and the Sustainability Reports released by the enterprise, it is found that the company follows the TBL to measure its success considering the economic, environmental and social impacts on its stake holders. The company considers its customers, shareholders and investors, employees, general public and community institutions, business partners and government and regulators as its main stakeholders. In order to satisfy its customers, the enterprise provides innovative, accessible, affordable, reliable and customized services by investing in networks, providing them with the latest technology, operating high quality customer care, transparency of billing, information security and fast complaint resolution. The enterprise engages the shareholders and investors by issuing reports quarterly, conducting analysis, attending conferences and maintaining transparency (Zain, 2015c). The enterprise conducts Employee Engagement Surveys (ESS) and performance appraisals regularly and protects them through health, safety and security guidelines. Zain Telecom motivates its employees by offering them ample scope to develop their skills through training programs. It provides job satisfaction by distributing responsibilities among them and motivating to think creatively. The enterprise also offers a competitive salary and various employee benefits which give them job satisfaction (Zain, 2015c). The category of general public and community institutions includes NGOs, charities, neighborhood surrounding the base stations, universities, foundations, schools and others. The company performs relevant Corporate Sustainability and Social Responsibility (CSSR) surveys, introduce generators with silencer in the base stations, provide information regarding safety in network base stations. It also focuses on the basic needs of the local communities such as education economic development and health; aims at recycling e-waste and introduce reuse techniques. Zain Telecom also sets long term goals for reduction in carbon dioxide emission (Zain, 2015c). In order to ensure adherence to government and regulators, it holds meetings, participates in advisory committees, conferences and publishes reports annually (Zain, 2015f). Innovation at Zain Telecom: The company has partnered with Vodafone in 2012 and in 2013, the company signed two agreements- one with SLA mobile, to provide its customers Direct Operator billing facilities and another with eServGlobal to facilitate mobile money and EVD (electronic voucher distribution for prepaid recharge) solutions in its operations. Thus, the enterprise supports open innovation through alliance (Zain, 2015d). Zain Telecom established its Joint Innovation Centre in collaboration with Huawei. Huawei is major and international ICT (Information communications technology) solution providers which will help Zain gain a competitive advantage acting as research hub to increase its customer base and offering innovative ways to improve the customer experience in this era of intense competition (Zain, 2015b). The enterprise’s main strategy is to enlarge customer service which enables it to maintain and at the same time expand its customer base in spite of fierce competition in the sector. Thus it has formed a committee constituting its executives from each market to meet each other biannually and discuss market trends, future initiatives and take part in skill –enhancing workshops (Zain, 2015b). Zain telecom focuses on the social and environmental dimensions of the TBL as much as it focuses on the economic dimension. Zain Kuwait has introduced a Future University Network (FUN) program which facilitates students with training offers them an opportunity to gain experience within the company directly. Its success is shown in the rising number of students participating in the program ( Zain, 2015c). In 2014, the Corporate Entrepreneurship Responsibility (CER) division of Zain launched a platform called Zain Innovation Campaign for aspiring pathfinders to connect with each other and nurture their innovative ideas (Zain, 2015b). 4. Conclusion Creativity is the basis of both innovation and entrepreneurship. It has been observed that an enterprise must incorporate creativity through innovation in order to expand its customer base and reach out to international customers. It must follow a sustainable growth path to hold its position in the world market with help of constant innovation. In this paper, the focus has been given on the measurement of sustainable growth through the TBL approach which incorporates the social, environmental and economic dimensions. The question of the research was whether a company operating in the Gulf region such as Zain Telecom can incorporate these dimensions in its operation despite the political volatility of the region of operation. Through the findings and analysis it has been observed that Zain Telecom, earlier known as Mobile Telecommunication Company (MTC), headquartered in Kuwait has successfully incorporated all the three dimensions of the TBL. The company is a leading mobile service provider in the Middle East and North Africa. It has retained its customer base in spite of falling profits over the years by prioritizing each of its stake holders and catering their specific needs as the company offered customized, accessible, and innovative services. Moreover, it is observed that the company has concentrated on operating with full transparency that helped to collaborate with international organizations and innovate by sharing technology. Reference List Adams, R., Jeanrenaud, S., Bessant, J. and Overy. P., 2012. Innovating for sustainability. [pdf] Available at: < http://nbs.net/wp-content/uploads/NBS-Systematic-Review-Innovation.pdf > [Accessed 2 May 2015]. Centre for Social Innovation, 2015. Social Innovation. [online] Available at: < http://csi.gsb.stanford.edu/social-innovation > [Accessed 2 May2015] Drucker, P., 2014. Innovation and Entrepreneurship. London: Routledge. Humanitarian Innovation Fund, 2015. Types of Innovation. [online] Available at: < http://www.elrha.org/hif/innovation-resource-hub/innovation-explained/types-innovation/ >[ Accessed 2 May 2015]. Kostopoulos, K.C., Spanos, Y.E. and Prastacos, G.P., 2004. The Resource – Based View of the Firm and Innovation: Identification of Critical Linkages. [pdf] Available at: < http://ecsocman.hse.ru/data/165/663/1219/rb_view.pdf > [Accessed 2May 2015] Marques, J., 2014. Closed versus open innovation: evolution or combination? International Journal of Business and Management, 9(3). OECD, 2015. Organisational Innovation. [online] Available at: < https://stats.oecd.org/glossary/detail.asp?ID=6873 > [Accessed 2 may 2015]. Skogen, K. and Sjovoll, J., 2010. Creativity and innovation: Preconditions for entrepreneurial education. Oslo: Tapir Academic Press. Slaper, T. and Hall, T., 2011. The Triple Bottom Line: What Is It and How Does It Work? [online] Available at: < http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html > [Accessed 2 May 2015]. Teece, D., Pisano, G. and Shuen, A., 1997. Dynamic capabilities and strategic The World Bank Group, 2015. Sustainable Development. [online] available at: < http://www.worldbank.org/en/topic/sustainabledevelopment > [Accessed 2 May 2015]. Zain, 2015a. Overview. [online] Available at: < http://www.zain.com/en/about-us/overview/ > [Accessed 2 May 2015]. Zain, 2015b. Annual Reports. [online] Available at: < http://www.zain.com/en/investor-relations/financial-reports/ > [Accessed 2 May 2015] Zain, 2015c. Sustainability Reports. [online] Available at: < http://www.zain.com/en/social-responsibility/sustainability-reports/ > [Accessed 2 May 2015] Zain, 2015d. Partners. [online] Available at: < http://www.zain.com/en/partners/ > [Accessed 2 May 2015] Zain, 2015e. The World of Zain. [online] Available at: < http://www.zain.com/en/about-us/ > [Accessed 2 May 2015] Zain, 2015f. Corporate governance. [online] Available at: < http://www.zain.com/en/about-us/governance/ > [Accessed 2 May 2015]. Bibliography Dawson, P. and Andriopoulos, C, 2014. Managing change, creativity and innovation. London: Sage. Sawyer, R.K. , 2012. Explaining creativity: the science of human innovation. Oxford: Oxford University Press West, M. A. and Farr, J.L., 1992. Innovation and creativity at work: psychological and organizational strategies. New Jersey: John Wiley & Sons. Read More