Innovation as a Key Strategy in Assisting Organizational Survival and Prosperity - Coursework Example

Name: Institution: Course: Title: Tutor: @2011 Innovation as a Key Strategy in Assisting Organizational Survival and Prosperity Introduction Globalization is viewed as the creation of new relationships and structures which result into actions and business decisions that have ripple effects; consequences in other areas. The consequences are further worsened by the changing technological environment.1 The changes result into the adoption of creative and innovative strategies that address vital issues with regard to organization growth, excellence and survival. To keep up with globalization and market changes organizations are required to upgrade their existing systems, technologies and products. The facilitation of innovation entails the creation of a relevant climate and culture that ensures that employee skills are fostered while ensuring the provision of incentives and the removal of obstacles.2 In a nutshell, innovative organizations are those which ensure that their technological and human resources are managed appropriately. It comprises recruitment, effective manpower planning, realistic performance plans, performance guidance, mechanisms that incorporate pride in final work, mentoring mechanisms, high level of organization commitment and realistic performance plans. However, the global economy is a volatile environment in which businesses are required to perform. The economy may be susceptible to difficulties such as recession, inflation, credit crunch among others. Recession is the state of an economy’s decline which is manifested by a decline in the GDP (Gross Domestic Profit), employment and trade which lasts from six months to a year. Credit crunch is the severe lack of credit or money. An example of a major global difficulty would be the global financial crisis of 2007 whose effects are still being felt to date. The crisis is thought to have originated from the Sub-prime mortgage business where US banks gave out high risk loans to people with poor credit history which was further propelled by a fall in house prices. Innovation, survival and prosperity It is thought that in-order for organizations to survive they are required to be continuously innovative especially in this day and time of global economic difficulties. It is suggested that manufacturing industries should lay emphasis on their research and development initiatives so as to ensure that they have cutting edge technologies to facilitate their survival and prosperity. Initiatives with regard to technology development are necessary for the facilitation of industrial growth, sustained competitiveness and strategic self reliance with regard to an enterprise. It therefore follows that they should be aligned to the prevailing market opportunities, strategic direction and customer needs which ultimately result to the improvement of technology and product portfolio. Special attention should also be paid to employees since they are the most vital resource in an organization and as such their empowerment should be advocated for. Employee empowerment is effected through good leadership and motivation. Innovation may be defined as the introduction of novel ideas in processes and products. Innovators and innovation have more often than not attracted attention. Companies like 3M, Google, SouthWest Airlines, Intel and Apple have been innovation champions and have been renowned for their innovative practices. The studies of the aforementioned companies have shown mix contextual, personal and organizational factors3. It is thought that innovation is mostly centered on employees and leaders. This is due to the global economy factor in which case companies do not depend entirely depend on capital, natural resources and technology. It has been deduced that what differentiates between an excellent firm and an efficient firm is the nature of its workforce and its ability to have things done in a superlative way4. The trend in which focus is shifted from the product to the workforce has also been seen to be prevalent. In the bid to keep up with the trend in which employees are acclaimed; companies are offering employees exciting roles, good working environment, attractive benefits, careful selection procedures, competitive salaries and exciting roles. The aforementioned strategies appreciate the superiority of the workforce and as such consistently innovate and give off the best to their respective organizations; competitive advantage. The measurement of work engagement has been enlisted as a technique in the measurement of the workforce superiority. Work engagement is a phenomenon is which an individual is charged with energy and as such is fully dedicated to his or her work5. It is parallel to the feeling of burnout (loss of idealism, the feeling of fatigue and the loss of job passion6). Employees can only be engaged if the following three conditions are met, viz; employees deem their work to be meaningful, employees are accorded the chance to freely express themselves and employees feel as though they have the required personal engagement resources5. It therefore follows that in order for an organization to fully maximize employee potential then they are required to create a condition in which the aforementioned conditions are met. Leadership, Employee Empowerment, Creativity & Innovation Leadership is defined as a complicated process that is made use of by a given individual to influence other people7. The leader makes use of a variety of attributes; belief, character, knowledge, ethics, skills and values to accomplish his/her mission, objective or task and as such steers the organization in a manner that makes it coherent and cohesive. The following leadership styles exist; transformational, laissez faire and transactional7. Leadership styles have a major effect on employee creativity. Numerous studies have been conducted with this respect. For instance the study performed on the top 500 industrial Enterprises of the Automative, Textile, Iron and Steel industries show that different leadership styles have an effect on employee creativity. The various leadership styles; transactional, transformational and laissez-faire have an impact on employee creativity (64%) and as such control their creative personality (54.5%). It is thought that a transformational leader is one who motivates other people to execute more than they had initially planned to. It is thought that they set numerous challenging expectations and are as such very high achievers. Transformational leadership has further been summarized into the following dimensions; individualized consideration, inspirational motivation, charisma-idealized influence and intellectual stimulation7. The leader inspires respect, loyalty and admiration through the use of charisma. They are also highly creative and as such challenge a given status quo. They are innovative iconoclasts and as such can be entrusted to execute the right thing. These leaders are thought to have a lot of strength since they triumph in the face of adversity. Their followers ultimately emulate them and become innovative over a long period of time. The leader who makes use of transformational leadership also ensures that his followers are bound by their collective sense of a similar mission. An example of a conventional transformational leader is Donald Winkler, CEO of the Ford Motor Company. Donald a dyslexic has been known to lead through unconventional ways; he made use of a red latex nose to make him remember to be less serious. He is also known for coming up with new vocabulary for use in his company for instance he has instilled in his employees not to make use of the word “but” (those who violate the rule are fined). He also requires his employees to suffix all their negative statements by the use of the phrase “up until now.” His far-reaching thinking permeated the whole organization and as such assisted in the company transformation to an industry leader8. The leader also makes use of inspirational motivation to create a distinct picture that allows for his/her followers to deem the future as attainable and optimistic. The leader ultimately inspires his followers to see beyond and above their mundane job activities. The inspiring vision serves to present a magnificent future that depicts the manner in which an individual works towards a given goal. It serves as a connection between a person’s current work and a person’s desired future which ultimately puts value into the works of an employee. It argued that once employees view their work in a big meaningful context then they become a lot more engaged in their work and as such their creativity is unleashed. The use of inspirational motivation ultimately encourages other people to raise their expectations, minimize complex vital issues and make use of simple language to pass the mission. An example of an inspirational/visionary leader was given by Naoroji P. Godrej in the manufacture, design and marketing of Godrej typewriter. Naoroji’s simplicity, concern and genuineness for his people resulted in his being a loved and respected leader. After the Indian independence there was lack of indigenous typewriter manufacturers and as a result the British companies were making a huge amount of profit on Indian sold typewriters. Naoroji assembled his engineers and workers to producing a dream typewriter so as to attain the status of a technologically reliant India9. During the period of the development of the typewriters the driving force was not the mere pursuit of profits or market share but rather a conviction of achieving a technologically self-reliant India. Through intellectual stimulation, the leaders are able to stimulate their followers’ contribution to be creative and innovative by the use of questioning assumptions, the approach of old situations in novel ways. Transformational leaders inspire their employees to think independently and as such set a field for creativity and innovation. They ensure that there is a clear distinction between indoctrination and authenticity. In light of the aforementioned, organization managers provide for challenging assignments in which individuals are compelled to develop their very own judgments and think for themselves about the necessary course of action. According to Bob Thomas the developmental experiences are termed as “crucibles” since the lessons which individuals learn from the various incidents are able to transform the very ordinary individuals to great leaders10. The leaders also make use of individualized considerations by paying special attention to specific employee needs for growth and achievement by acting as a mentor or coach. A transformational leader acts as a mentor since they are grooming the employee into a completely new tuft which is fraught of numerous uncertainties. A transformational leader deems an individual as more than employee but also a human being. The leader appreciates that individual performance transcends individual performance and is reliant on a number of contextual factors that go beyond an individual’s ability but rather it touches on an individual’s humanity. It is known that when an individual demonstrates commitment to its people then its employees reciprocate by contributing their efforts and ideas wholeheartedly to a given organization. Organizations which give employment security invest wholesomely to its employee development, its employment security and pay higher than the available market wages are duly rewarded with better quality performance12. Costco and Walmart’s Sam’s club which are both warehouse retailers are considerably different with regard to their people management endeavors. Costco has been to known to pay higher wages to its workers, but also pays considerably more for its employees’ retirement plans and health plans. In return for Costco’s concern for people and generosity, it has a workforce which is more productive and as such has less attrition compared to Sam’s club11. Transformational leaders ultimately become role models for the people who look up to them and instill a drive that enable their followers to supersede their self-interests for the good of a larger multitude. The employees under a transformational leader are as such not driven by any form of material rewards and instead aspire for greater levels of motivation (self-actualization 6). From previous reasoning numerous distinct paths are evident that show the transition from transformational leadership to innovation through employee engagement. The leadership behavior associated with inspirational motivation contributes immensely to how their followers deem their work in a context that they view as important to them. It therefore follows that the leaders’ intellectual stimulation results in freedom and self-efficacy for followers which is done through question assumptions and the freedom to work out solutions to their problems. The aforementioned psychological states of freedom, meaningfulness and self-efficacy result in employee engagement which results into innovation. On the other hand leader charisma manifested as unconventional behavior reflects a worthy role model that should be emulated and as such directly enhances the followers’ innovation. Lastly, the leaders’ individualized consideration results into reciprocity in followers and as such the provision of innovative solutions to problems. On the other hand transactional leadership lays emphasis on the exchange or transaction that takes place in the midst of leaders, followers and colleagues. The exchange dwells on the discussion held by the leader in which the leader discusses the specifics required in the performance of a job; their rewards and conditions. Transactional leadership can further be defined as a mode of leadership in which a leader disciplines or rewards his followers on the basis of their adequacy and performance. Transactional leadership is dependent on contingent reinforcement; that is a positive contingent reward (CR) or a negative passive or active form of management with the exception of (MBE-A or MBE-P). Through the use of contingent reward, the leader allows for or signs an agreement in which he outlines that he will reward his followers after they complete the task at hand. On the other hand the leaders who manage by exception have implicit trust on their followers and as such trust their workers to complete the task at hand. MBE-A and MBE-P differ from each other since the MBE-A leader looks for deviations while MBE-P leader acts on problems as soon as they take place. Transactional leadership is different from transformational leadership in that it does not individualize the followers’ needs nor lay emphasis on an individual’s personal development12. A transformational leader ultimately inspires a follower to do more than expected. Laissez faire leadership is a form of style in which the leader avoids leading and as such is an inactive form of leadership. It is the most ineffective form of leadership7. In this style of leadership the leader does not perform his supervisory duties. Transformational leadership is the leadership style that empowers employees the most13. It is also thought that employee empowerment can be achieved by motivation. Motivation can thus be divided into extrinsic and intrinsic. Intrinsic motivation is a form of situation in which an employee undertakes a task since its fascinating rather than its external rewards or outcomes14. Intrinsic motivation is the vital creativity ingredient since an employee’s interest in task triggers creativity15 . The leader behaviors are vital determinants of creativity and intrinsic motivation at work. For instance transformational leaders who put their employees’ needs and feelings into consideration ensure that their employee skills are developed. Transformational leaders ensure that the employee skills are further nurtured by showing them how to achieve their respective goals and also show confidence in them. On the other hand extrinsic motivation is a form which is thought to negate intrinsic motivation since it mainly focuses on timely output than anything else. Leadership, creativity and innovation Creativity is defined as “the production of novel and useful ideas”15.It is further defined as the utilization of novel ideas in performing procedures and processes that are made use of in the workplace. Creativity is seen as indispensable in the constantly changing business environment16. Organization survival is pegged on the utilization of employee creativity which acts as a building block for competitiveness, change and innovation17. Creativity is thought to be a culture that is instilled in the employees of a given organization. There are a large number of factors that result into a creative business culture. They transcend individual skills which include; knowledge and motivation and also include group features for instance team building and communication to organizational characteristics for instance reward, strategy and culture. It is noted that organizational culture emanates from creative behavior. Creative behavior is thought to be a composite of a variety of characteristics for instance organizational, group and individual characteristics. Another vital factor is also pegged on leadership styles18. It is thought that leaders could influence their followers by changing their style to that of transformational and as such expose employee creativity. It is thought that the leadership styles made use of directly affects employee creativity via its influence on the employee perception and hence support creativity. Leadership styles can also influence the employee working environment (climate) which might or might not support creativity. Leadership especially the transformational leadership style could serve to provide employees with intellectual stimulation which in turn enables an employee to be creative and innovative through reframing problems, questioning assumptions, the articulation of compelling visions in a number of ways and different methods in the approach of old situations in novel ways. An example of climate which supports creativity is that one which provides the right amount of equipment, time and the necessary facilities that allow for creativity. Conclusion Innovation and creativity are indispensable to the survival of companies in a global economy. This is because in a global economy, companies do not only rely on their access to natural resources, capital and technology due to the fact that the aforementioned competitive advantage bases loose relevance with time and changes in the global economy. It therefore follows that in the site of lost relevance the differentiation between excellent firms are based on the efficiency of the firm’s workforce and its ability to execute things superlatively. The relationship between employee creativity and leadership has been continuously validated in a study of several employees (290) and also of supervisors sampled from 46 Korean companies which showed that leadership behavior of supervisors lead to higher levels of creativity in employees. Through the behavior of leaders, the respective follower’s intrinsic motivation resulted into greater follower creativity14. References Kanter, R.M. (1982). The Middle Manager as Innovator. Harvard Business Review, July-August, 95-105. Hallberg, U.E., & Schaufelli, W.B. (2006). Same same but different? Can work engagement be discriminated from job involvement and organizational commitment? European Psychologist, 11(2): 119-127. Maslach, C., Schaufeli, W.B., & Leiter, M.P. (2001). Job burnout. Annual Review of Psychology, 52, 397- 422. Kahn, W.A. (1990). Psychological conditions of Personal Engagement and Disengagement at Work. Academy of Management Journal, 33, 692-724. Conger, J.A. & Kanungo, R.N. (1987). Toward a Behavioral Theory of Charismatic Leadership in Organizational Settings. Academy of Management Review, 12, 637-647 and Bennis, W. (1998). Managing people is like herding cats. London: Kogan Page. Hammond, K.H. (2000). How do we Break Out of the Box We’re Stuck in? Fast Company, 40, 260-268 More Details about Mr. Naoroji Godrej and his Leadership can be Found in two Books: (a) Karanjia, B.K. (1997). Godrej: A hundred Years 1897-1997. New Delhi: Viking Tomas, R.J. (2008). Crucibles of Leadership: How to Learn from Experience to Become a Great Leader. Boston: Harvard Business School Press. Pfeffer, J. (1995). Producing Sustainable Competitive Advantage through the Effective Management of People. Academy of Management Executive, 9(1): 55-72. Cascio, W.F. (2007). Decency Means More than “Always Low Prices”: A Comparison of Costco and Wal-Mart’s Sam’s Club. Academy of Management Perspectives, Aug, 26-31. Maslow, A.H. (1943). A Theory of Human Motivation. Psychological Review. 50, 370-396. Muhammad, M.Z.,Char, A.K., Yasoa, M.R., Hassan, Z. (2010), “Small & Medium Enterprises (SMEs) Competing in the Global Business Environment. A case of Malaysia; International Business Research, Vol.3, No.1, pp 66-75. Aderemi, H.O., Hassan, O.M., Siyanbola, W.O., Taino, K. (2009). “Managing Science and Technology Occupations of Women in Nigeria,” Journal of Technology Management & Innovation, Vol. 4, No.3 pp. 34-45 Amabile, T.M., Conti, R., Coon, H., Lazenby, J. and Herron, M. (1996). “Assessing the Work Environment for Creativity; Academy of Management Journal, Vol. 39, No.5, pp. 1154-1184. Amabile, T.M (1988), A Model of Creativity and Innovation in Organizations, Research in Organizational Behavior, 10.123-168. Amabile, T.M (1998). How to Kill Creativity, Harvard Business Review, Vol. 76(5), 77-87. Bass, Bernard M. & Avolio, Bruce J. (1994), Improving Organizational Effectiveness through Transformational Leadership, Thousand Oaks, CA: Sage Publications, Inc. Deci, E.L & Ryan, R.M. (1985). Intrinsic Motivation & Self-Determination in Human Behavior, New York: Plenum. Ford, C.M. & Gioia, D.A. (1995). Multiple Visions & Multiple Voices: Academic and Practitioner Conceptions of Creativity in Organizations. In C.M. Ford & O.A. Gioia (Eds) Creative Action in Organizations: Ivory Tower Visions and Real World Voices (pp. 3-11). Thousand Oaks, CA: Sage Publications. Mumford, M.D., Scott, G.M., Gaddis, B. & Strange, J.M. (2002), Leading Creative People: Orchestrating Expertise & Relationships, Leadership Quarterly, 13 (6), 705-750 Northouse, Peter G. (2001), Leadership Theory & Practice, 2nd Edition, U.S.A.: Sage Publications Inc. Scott, S.G & Bruce, R.A., (1994), Determinants of Innovative Behavior; A Path Model of Individual Innovation in the Workplace, Academy of Management Journal. Vol. 37(3), 580-607 Zhou, J., & George, J.M. (2003), Awakening Employee Creativity: The Role of Leader Emotional Intelligence, The Leadership Quarterly, 14 (4-5), 545-568 Read More