Innovation to Sustainability about Lexus Electric Car - Essay Example

Introduction The automobile industry has been very active in introducing new cars into the market that suit very different tastes of their clients. This means that there is a cutthroat competition in auto-industry whereby each car manufacturer is always employing innovative strategies to stay ahead of competitors (Sako, 2004, p.291). In return, these innovations must be managed so that they achieve the intended goal. As such, there are different ways of conceptualizing and handling innovation in different car entities. One of the most prominent car manufacturers is the Lexus which is a subsidiary of the Toyota Motor Corporation and deals mainly with luxury cars. Lexus has its headquarters at Nagoya in Japan and operational centres in the US and Europe. Through its innovation management, Lexus was able to produce Lexus CT 200h series in 2011 which even surpassed Toyota Prius in terms of performance and luxury. Lexus CT 200h is a hybrid car which derives its energy from a gasoline engine and electric motors. The power of the battery is very powerful and transmits 27 Kw (kilowatts) of power the motors (Whitney, 2010, p.1). This paper will then tackle innovation management of the Lexus through its Sustainable innovative result Lexus CT 200h series. Context Innovation strategies The three main strategic innovations are; Innovation based on problem solving vs. continuous innovation, R & D department vs. firm wide innovation and Radical vs. incremental innovation. Lexus has opted to use radical innovation over incremental innovation owing to the fact that it has shifted completely to hybrid cars. According to Thomas and Christian, 2011, p. 23, incremental innovation is very good for competitiveness but in most cases it is adopted by competitors who want to catch up with leading innovators. In addition, it also uses innovation through the R & D over firm wide innovation. This is because; innovation through R & D is primarily preferred as it offers a competitive advantage (Wanasika and Conner, 2011, p.80). Technical innovations are very important for the operations of a business together with the organisational innovations which form the basis of sustainable growth in business. There are different systems of innovations which can be understood in the context of adaptation, generation and diffusion (Zhao & Calantone, 2003, p. 54). In the case of Lexus, their innovations are technology based which forms their strength in designing the Lexus CT 200h series. Technical innovation is basically the utilization of different forms of technology to come up with a product which competitive and sustainable. Technical innovations are very popular within the auto industry because consumer is always looking for a car that has an edge over other in terms of technology. Using technology, auto manufacturers are able to increase the comfort and efficiency of cars. Organization Lexus has adopted mechanistic structure which is quite elaborate in order to handle the challenges of manufacturing their Lexus CT 200h. This form of organizational structure is also good for enabling the accommodation of many lines of production which lead to high production. For ample technical innovation, mechanical structuralisation is good for allowing research and development with regards to technology. However, recent research tries to paint the idea that a combination of mechanistic structure and organic structure is best sustainable innovations. Organisation in the context of innovation management is concerned with the leadership structure and how physical plant. The leadership structure or organisational structure is conceptualised in the manner in which labour is fragmented into different tasks and their subsequent coordination (Scarbrough, 2003, p. 510). The auto industry is highly devolved whereby there are different levels of production of car parts. This is important because luxurious cars have many technical parts which require specialised fabrication. The challenging part however comes when organizing these units into one functional unit. In the Lexus is a purely mechanistic structure where its tasks are highly structured with a huge labours force. In this regards, the staff are able to concentrate on their tasks with different supervisors and coordinators manning the coordination of different units (Kessler, and Chakrabarti, 1996, p. 1164). People The third element of innovation management is people which is articulated from the perspective of management. In any company, the labour force or human resource is the most important factor or resource necessary for production of goods and services. It therefore means that the management of employees is important in determination of technological innovations within a firm. The first important aspect of people is how employees are hired and fired within a company (Cavusgil, Calantone & Zhao, 2003, p.8). It is a standard practice in the world over to hire employees based on merit and experience. In the auto industry and especially those firms that manufacture luxurious care, their employees must be technology savvy besides having relevant experience. On the part of management, it works to their advantage when they maintain a low employee turn out. This is because, technology that has been developed in a certain company will remain there and the innovator is encouraged to be more innovative. Reward Scheme For encouragement of employees to be more innovative, there has to be a reward scheme. Employees usually appreciate very much when they are recognized and especially in the industries which have to be very innovative (Roy, 1994, p. 18). Lexus is no different from other automakers but their innovation management is exemplary and is involved in rewarding their employees in terms of their contribution to the company. However, they usually hire the best the market can offer in order to stay ahead of their competitors. Process The innovation process is quite important in a firm for sustainable survival and eventual growth. Innovation is conceptualised as process which has three main parts. These parts are search, select and capture. Search This aspect is concerned with scanning the environment from both within and without for the purpose of identifying threats and opportunities. Both threats and opportunities are very important in determining the long term outcome of a firm since they act as important stimulants of change. In the case of auto industry, many opportunities abound within the internal environment whereas threats are to be found within the external environment. Due to the high competitive nature of the auto industry, Lexus is involved in constant scanning of its environment in order to stay ahead of their competitors. Its line of cars are main luxurious and in the world it has many competitors which are equally good. There are many ways of scanning the environment such as the Porter five forces model and SWOT (strength weakness, opportunities and threats) analysis (Abou-Zeid & Cheng, 2004, p. 265). For big firms like Lexus, sophisticated methods such Porter five forces model are highly advantageous because there are many factors to scan their sphere of business operation. Select This is simply the process of choosing the best signals to implement. The signals are usually selected from the results of searching the environment. The selection is done on the basis of merit because despite the presence of many threats or opportunities in the environment, some will be more important to consider than others. Strategic direction that a firm or organisation wishes to take is another factor which is important for consideration during the selection process. In this regards, different predictors will be used for the external and external environments. For instance, for a highly specialized industry, a lot of emphasis will be laid in the internal environment to assess for opportunities which can propel a firm to a competitive advantage. On the other hand, a company that operates in a liberalised market with no particular emphasis on a product, the external environment will be important in assessing for threats in order to counter them (Marnix, 2006, p. 230). In the case of Lexus which is has specialised in the manufacture of luxurious cars, its main area of concern is the internal environment. The internal environment is largely the employees and its technology which offer the best means to propel it forward. Capture/Routine This involves implementing the best signal into the external and internal environment so that the best results can be realised. Sometimes this implementation is driven by knowledge of research and development and market forces so that the signals adopted will not only act as stop gap measures but be useful in the long term. In the implementing phase, there is usually the launching phase execution and dispensation of resources to make the signal sustainable. Implementation Lexus challenge of implementation was very prominent especially in designing their hybrid car Lexus CT 200h which uses both internally generated power and gasoline. In fact this car is the first fully automated hybrid car with optimised performance and efficiency. It is indeed modelled around the Toyota Prius model with better technological innovations which allows the Lexus CT 200h to be more spacious and better performer. A firm is able to undergo learning whereby it will acquire new knowledge, learn ways of entrenching innovation in a firm and its subsequent management (Ruff, 2006, p. 281). However, it is critical to point out that there are many challenges involved in the innovation process which revolve around identification and selection of signals. Moreover, these challenges are also different for both product and service industries because of difference in the operation factors in those spheres. Lexus was not exempted from the challenges that are experienced with implementing the innovation process (Dhanarag & Parkhe, 2006, p. 660). Conclusion The automobile industry has been very active in introducing new cars into the market that suit very different tastes of their clients. This means that there is a cutthroat competition in auto-industry whereby each car manufacturer is always employing innovative strategies to stay ahead of competitors. In such environments, it is important to have innovation management practices whereby a set of tools is developed which allows for the cooperation of different subunits in a firm in terms of understanding goals as well as processes. Lexus firm had to undergo through the innovation process when it was developing its hybrid car Lexus CT 200h. Its innovation process was technical based and had some challenges although in the end it was able to come up with the first fully automated hybrid car. References Abou-Zeid, E. & Cheng, Q. 2004, ‘The Effectiveness of Innovation: A Knowledge Management Approach’, International Journal of Innovation Management, Vol. 8, no. 3, pp. 261-274 Cavusgil, S. T., Calantone, R. J., & Zhao, Y. 2003, ‘Tacit knowledge transfer and firm innovation capability’, Journal of Business & Industrial Marketing, Vol. 18, no.1, pp. 6-21. Dhanarag, C., & Parkhe, A. 2006, ‘Orchestrating Innovation Networks’, Academy of Management Review, Vol. 31, no. 3, 659-669. 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J. 2003, ‘The Trend toward Outsourcing in new Product Development: Case Studies in Six Firms’, International Journal Of Innovation Management, Vol. 7, no. 1, pp. 51-66. Read More