Innovation in Turbulent Times - Essay Example

Innovation in Turbulent Times “Innovation is the introduction of something new; a new idea, method or device” (Innovation - What Is Innovation?). In an ever changing business world, innovation has a significant role to play in the growth and development of organization. It is impossible for an organization to stick with their traditional products while competitors introduce advanced products. For example, it is impossible typewriter manufacturer to sell their products at present because of the introduction of more efficient computers. Same way it is difficult for a mobile phone manufacturer to sell mobile phones with the phoning option alone because of the entry of advanced mobile phones with advanced features like, audio, video recording, internet surfing options etc. “Radical innovation is crucial to the growth of firms and economies. Firms at the leading edge of innovation tend to dominate world markets and promote the international competitiveness of their home economies” (Tellis et al). For example, Microsoft has innovated new operating system windows for personal computers around two decades before. They were succeeded in monopolizing the world software market thereafter. Even though the introduction of Windows operating system brought market leadership to Microsoft, they never stayed inactive. Periodically they modified the Windows operating system based on the technological growth and the changing requirements of the customers. The recent global recession has revealed the fact that only innovative organizations may have better future in the highly competitive world. Innovation is the bread and butter of organizations. Moreover, the future of many organizations depends on their ability to innovate because of the tough competition in the market. In short, innovation is the much needed entity for the organizations to exist in the current globalized and highly competitive business world. This paper tries to answer some of the key questions like; where does the trend of innovation going; Has globalization of business influenced the need for quality management and How do innovation and entrepreneurship relate to globalisation of business and what are the trends? Where does the trend of innovation going? Nobody has any doubt about the necessity of innovation in sustaining business successfully. The leadership needs to play an active role in the innovation process. Leadership styles and functioning are undergoing drastic changes at present in order to encourage the employees to come out with innovative ideas. It is difficult to anticipate that every worker will contribute innovative ideas; however, the chances of at least few workers providing some innovative ideas are bright for all the organizations. In order to encourage the workers to come out with new ideas, most of the current organizations are giving ample freedom to the workers. Autocratic styles of management have given way for democratic styles of management in order to increase the worker involvement more in the innovation process. However, still some prominent companies are not considering the worker involvement necessary for the innovation process. Apple Company is one best example for that. Apple always develops new products secretly and they are not giving any ideas about the new product they are going to develop to their employees. Only the concerned people will know about such things. “A leader who believes in Trend Spotting and believes in capitalizing on emerging trends and technologies can set the example for staff to create an openness that new ideas and trends are brought forward” (Innovation Perspectives - Leader's Role in Trend Spotting). Trend based innovation is another major thing developed in the business world in the recent past. For example, Apple has recently introduced its touch screen phone (iphone) in the market and it became a huge success. After watching the customer trend towards this type of touch screen phones, Nokia, Sony and Samsung like big companies also immediately introduced their versions of touch screen phones in the market. Indian automobile manufacturer TATA group recently introduced world’s cheapest car NANO in the Indian market. NANO became a big hit in Indian market and many other automobile manufacturers are at present trying to develop and introduce cheaper cars in Indian market. In short, organizations are studying the trends first before they are come out with innovative products. “Innovation is what gives life to a business in a market economy. The businesses that never get going or if they do, then fail or fail later under pressure of a changing economy or marketplace have all failed to innovate appropriately” (Newham). For example, when Carl Benz invented the car, he would have never thought that a car with the present features like GPS, Airbags, Hydraulic breaks etc will be manufactured in future. But, enthusiastic engineers and technologists modified the ideas of Carl Benz time to time based on the advancements in science and technology and as a result of their efforts, we are at present enjoying numerous facilities in a passenger. In other words, even though Benz led the world towards passenger cars, many others were able to incorporate many innovative features to the originally invented car and as a result we have advanced cars now. In other words, trend based innovation is prominent at the workplaces. Earlier, people went to the groceries for purchasing goods. Now people are going to the hypermarkets even for purchasing a cigarette or sweet. In other words, the grocery culture has given way for the hypermarket culture. People like to have everything under one umbrella at present. They don’t like to go many places to purchase different things because of the less time available for the current busy people for shopping. The hypermarket trend is also slowly giving way for e-commerce. Now a consumer can purchase anything using ecommerce websites without; no need to visit the busy shopping malls for purchasing goods. In other words based on the advancement in science and technology, business people are innovating and introducing new business concepts and strategies and there is no limit or boundary fixed for innovation. Partnerships in business are common trend nowadays. Two persons may have different abilities and if they were able to blend their abilities, innovative ideas may come out. “The world’s most innovative companies often operate under some variations of a both-brain partnership. In technology, the creative partner might be a brilliant engineer like Bill Hewlett and the business executive a savvy manager like David Packard” (Rigby et al, p.3). Hewlett Packard is one of the major companies in the world at present. They reached such bigger heights by complementing the abilities of Hewlett and Packard each other. In other words, Hewlett Packard was able to develop properly by blending the technical skills of Hewlett and the management skills of Packard in an efficient manner. Either the creative people or the business people alone cannot implement an innovation. Both of them would be confused about when to quit and where to start. Only when these two people would be able to exchange their views effectively, an effective solution will come out for a problem which they are facing. “Any executive with half a brain knows innovation is essential to success. The problem is that it takes both the halves of brain to make it happen- the imaginative, holistic right brain and the rational analytic left brain” (Rigby et al, p.8). in the case if Hewlett Packard, the company took advantage of the right brain of Hewlett and left brain of Packard and succeeded in blending the contributions of these brains in an effective manner. In short, partnership based innovation trend is also prominent in the current world. Innovation often makes lot of changes in the life styles of the people. Innovation is a continuous process and this trend will continue till the end of human life on earth. Knowledge is bursting from all corners and it is impossible for the human kind to keep a blind eye towards this knowledge burst. Based on the new knowledge, we always innovate ideas; however, some of these new ideas may bring only short term benefits whereas it may affect the human kind in the long run. For example, the introduction of automobiles brought many revolutionary changes in the world. Many people considered the invention of automobiles as one of the greatest innovations of all time; however, currently we are aware of the environmental problems caused by the automobiles. The greenhouse gases emitted by the automobiles are destroying the environment and now we are in search of remedies to reduce the emission levels. In other words, even though innovations often change the human life it is not necessary that these changes may always affect the human life positively. The recent financial crisis has destroyed the back bone of many of the prominent organizations all over the world. America and Britain like developed countries has suffered major setbacks. India and China were some countries which escaped from the recent recession because of the innovative economic principles and reformation implemented in these countries. In the recently concluded G20 summit held at London, the leaders of the member countries were very keen in hearing from the Indian Prime Minister Dr. Man Mohan Singh about how India has escaped from the current crisis without causing many damages to Indian economy. This is because of the mixed economic principles followed in India. Mixed economy is an economic system in which both private and public participation is ensured in the economic activities. In other words, both socialism and capitalism are equally prominent in a mixed economic country. When America like highly developed capitalistic countries, opened their economies completely for private participation, India adopted a cautious approach while opening their economy to private sector. They never opened their critical sectors for private participation and the government never stayed away from the market. Whenever, policy changes were needed, the Indian government succeeded in interfering in the market. In short, the innovative ideas implemented in the economic reformation process helped India like East Asian countries to escape from the current recession. The lessons learned from India and China would help America and Britain like countries to implement more innovative principles in their market economy. Innovation is what gives life to a business in a market economy. The businesses that never get going or if they do, then fail or fail later under pressure of a changing economy or marketplace have all failed to innovate appropriately. "Necessity is the mother of invention." This is all very Darwinian. Only the fittest survive. Fit means passing the test of a changing marketplace which means learning that what had value yesterday may be, without innovation, un-competitive today (Newham) In organizational world, we can see leaders and followers. Leaders always look for new ideas and concepts in order to develop them into proper shape for the growth of their organization whereas followers always try to imitate the ideas generated by the leaders in order to reduce their expenditure on research and development. However, followers often fell in trouble when unexpected market fluctuations occur. Leaders will be able to develop new ideas or products suitable for the changing trends of the market whereas followers will always lag behind the leaders and will face severe problems while unexpected things happen in the market. Thus innovation keeps an organization alive irrespective of the market fluctuations. Innovation has no boundaries and the scope for new products and services are increasing day by day because of the advancement in technology and the changing life styles of the people. Some people will make entirely new products or services where as some others try to incorporate new ideas and features to the existing ones. “Innovation is a vaccine against market slow down and elixir that rejuvenate growth” (Rigby et al, p.2). In 1990’s Apple company struggled to survive in the market because of the severe competition they faced from Microsoft. However, during later part of 1990 and at the beginning of 2000, Apple came out with some innovative products such as ipod, iphones, itunes etc. These products helped Apple immensely to regain its lost market all over the world. Moreover they were able to defeat even Microsoft as far as market capitalization is concerned. According to Kim (2010) Apple Inc has pushed Microsoft behind them and attained second spot in the list of most valuable companies in United States after Exxon Mobil, as far as market capitalization is concerned (Kim). Moreover, Apple is currently the most valued technological company in the world, again pushing Microsoft behind. The story of facebook is another example which shows how innovation can bring success to business people even at recession times. Even though facebook was launched in February 2004, it gained significant growth in a period 2007 – 2010, even though recession hit the entire world drastically. At the time of invention of the mobile phones, it was designed only to talk with others using wireless technologies. But at present, cell phones are used to surfing the internet, video chats, video recording and photography purposes. A mobile phone with only the talking facility may not move in the current market. The products must be filled with new features periodically and the updating process is important in the business world. How do innovation and entrepreneurship relate to globalisation of business and what are the trends? “Any time you change the world, you create risks” (FREUDENHEIM). Globalization brought innovative business concepts like outsourcing to the business world. America and Britain like capitalist countries are struggling at present because of the shortage of manpower. Moreover, the wages in these countries are comparatively on the higher side and hence the unit prices of the products produced in these countries are also on the higher side. Because of this higher prices of products, American and British products failed to compete effectively with the products of other countries in international market. Even in America and Britain, people went after cheaper products from other countries. When outsourcing appeared in the global business arena, American companies considered it as a blessing. America companies reaped profits in billions by outsourcing their jobs to countries like India and China etc. However, America has realized only in recent times that a huge outflow of capital is taking place as a result of outsourcing of jobs. President Obama is trying hard to prevent American companies from outsourcing their jobs. Obama has realized that outsourcing is causing major problems to the American economy. In short, outsourcing, the bi-product of globalization is creating too much problems to capitalist countries. Globalization has brought many changes in cross cultural business. In fact many of the traditional business theories and principles were given way for new scientific business principles because of the entry of globalization and increasing international businesses. For example, outsourcing is a popular business strategy at present. It is the brain child of globalization. It helps the organizations to exploit the cheap labour markets in other countries. Moreover, it helps an organization to reduce its overhead expenses and also to exploit the resources of other countries. Innovation is needed even in formulating business strategies. Same marketing strategy may not work everywhere even if the product is the same. For example, when globalization appeared on the horizon, Parker Pen Company has tried to implement same marketing strategies to market their writing equipments all over the world and failed miserably. They thought same product needs same marketing strategies everywhere in the world. Product may be the same, but may be different”, Parker Pen Company failed to recognize the above fact. “The idea of selling pens the same way everywhere did not sit well with many parker subsidiaries and distributors. Pens were indeed the same, but markets, were different. France and Italy fancied expensive fountain pen while Scandinavia was a ball point market” (Marketing across cultures, p.195) On the other hand, many international companies making immense profit by doing cross cultural businesses. For example, American companies PepsiCo and Coca Cola are operating successfully in most of the countries. This is because of their ability in implementing the right strategies needed for each country of their operations. They used the images and value of local celebrities effectively to build their brands in overseas countries. For example, in India, some of the prominent film celebrities and sports personalities are the brand ambassadors of these companies instead of any American celebrity. Moreover, in order to reduce the competition in overseas countries, these business giants are playing the merger and acquisition strategies well. For example, Coke has recently acquired the Indian soft drink Thumps Up after watching the polarity of this drink in India. Thus innovation is not confined to the development of new products or services alone. It is necessary in all the aspects of business in order to survive in the heavily competitive market. The relationship between government and organization is important in the current globalized business world. Governments are primarily operating for safeguarding the interests of the people whereas business always works on making profits. This is more true when we consider the cross cultural business concepts; the bi-product of globalization. In other words, two contrasting philosophies are driving the government and the organization. Business always tries to exploit the public resources injudiciously to increase their profits. On the other hand, Governments are fixing the boundaries or the norms in order to reach a compromise between the interests of the people and the interests of business. Government need to protect the interests of both. In order to grow economically, business activities should be increased and for that purpose, more liberalized rules are essential. At the same time, these liberalized rules should never affect the public interest negatively. Thus governments are acting as a bridge between the people and business in the current globalized business world. According to the renowned economist John Maynard Keynes, a purely free market system would tend to undermine itself in the long run, and lead to an unstable social situation due to inequalities and contradictions. It was the role of the government to push the private sector into socially desired outcomes, but to leave it alone in terms of how those outcomes should be accomplished. For example, using monetary policy the government can increase the supply of credit in the market, creating incentive for investment over savings and thus "stimulating" the economy. Today's relationship between government and business is thus neither lassez faire nor socialist, but rather a combination of both, essentially what is called a "mixed economy (The Relationship Between Government & Business) Has globalization of business influenced the need for quality management? The increase of cross cultural business succeeded in rewriting some of the established business principles, especially that related to quality management. For example, earlier consumers gave the first priority to the quality of the product while taking any purchasing decisions. However, at present consumers is giving priority to cheaper prices rather than quality while making any purchasing decisions. China is one country which was able to read this changing consumer psychology well and they introduced numerous consumer products in the global market with cheaper prices. At present, cheap Chinese products have monopolized the entire global market even though the quality of these products is not much good. In other words, China was able to innovate products suitable for the changing consumer tastes and they correctly calculated that in a recession period, people will give more importance to cheaper price rather than quality. When most of the companies tried to improve their competitive power with the help of increasing the quality of their products, Chinese companies did the entirely opposite thing. They tried to capture the market with the help of cheaply priced products. When other companies tried to produce products based on the market demands, Chinese companies succeeded in creating demands in the market by reducing the prices of their product. China was able to reduce the prices of their products because of bulk production. They succeeded in rewriting many of the radical or traditional economic principles with respect to market demand and dominating in the consumer market at present. In short, the economic innovations implemented by China have changed many of the traditional economic concepts. Thus, globalization has brought revolutionary changes in the visualizations of quality management. To conclude, innovation is the basic necessity for the organizations to survive in turbulent conditions. The advancement in technology has brought many changes in the life styles of the people. The needs of the current generation are entirely different from the needs of the generation a couple of decades before. Under such circumstances, it is impossible for an organization to rely on traditional business principles while facing new challenges. Innovation is necessary at all the aspects of business management. It is necessary in developing new products, implementing new business principles and ideas, devising new marketing strategies, improving the communication channels, motivating the workforce etc. Innovation often brings challenges also. Before introducing a new product or new business idea, the long term impacts should be evaluated carefully. Those who are successful in forecasting future challenges will emerge as winners in a turbulent market economy. Works Cited 1. “Corporate Communication”. 2006. Web. 08 February 2011. 2. FREUDENHEIM, MILT. “Panel Set to Study Safety of Electronic Patient Data”. The New York Times. December 13, 2010. Web. 08 February 2011. 3. “Innovation Perspectives - Leader's Role in Trend Spotting”. 2010. Web. 08 February 2011. 4. “Innovation - What Is Innovation?”. 2006. Web. 08 February 2011. 5. Kim, Ryan. “Apple Passes Microsoft As Top Tech Company”. 2010. Web. 08 February 2011. 6. “Marketing Across Cultures”. Web. 08 February 2011. 7. Newham ,Chris. “Leadership Questions and Answers”. 2007. Web. 08 February 2011. 8. Rigby, Darrell K., Gruver, Kara and Allen James. “Innovation in Turbulent Times”. 2009. Harvard Business Review. www.hbr.org 9. Tellis Gerard J., Prabhu Jaideep C. & Chandy Rajesh K., “Radical Innovation Across Nations: The Preeminence of Corporate Culture”. 2009. Web. 08 February 2011. 10. “The Relationship Between Government & Business”. Web. 08 February 2011. Read More