Advantages and Disadvantages of Innovation in Dell Organization - Dissertation Example

Hence, the definition makes it clear that innovation is a vital component of the business. Moreover, this is the fundamental basis of value creation in organizations and is a vital enabler of competitive advantage. The importance of innovation increases to a large extent when the market is saturated. Similarly, for Dell Computers, innovation can act as a key factor driving the business.

The Computer Hardware industry is being led by Hewlett Packard and Lenovo, but companies such as Dell have fallen behind due to the lack of innovation in the system. This study, therefore, tried to analyze the impact of organizational innovation on organizational effectiveness, identify the business strategy of Dell and simultaneously recommend the most fitting or appropriate strategy by which Dell can overtake Hewlett Packard as the global leader in personal computers. The study revealed that innovation is a critical element of business and companies around the world are trying to integrate it with their products, services and process delivery. It has been also identified that Dell is pursuing a “broad differentiation strategy”. Although this is allowing the company to cater to various market segments, they were recommended to pursue the best cost provider strategy.

In today’s market-driven economy, innovation is being increasingly considered as one of the crucial drivers of long term success for a company (Vuuren, 2013). The increasing level of competition is another reason, which is fostering innovation in organizations to a large extent (Baker and Sinkula, 2002; Balkin et al., 2000; Darroch and McNaugton, 2002; Lyon and Ferrier, 2002; Utterback, 2001; Vrakking, 1990; Wolfe, 1994). Companies having the ability to bring innovation in their business operation will be able to cope up with the prevailing internal organizational challenges and respond efficiently to the external environmental challenges at a much faster pace. On the contrary, there are doubts over the ability of the companies to respond efficiently to the challenges of the external and internal environment, which are non-innovative (Brown and Eisenhard, 1995; Miles and Snow, 1978). Therefore, undoubtedly the impact of organizational innovation on organizational effectiveness has always been and will always remain a classical subject of investigation.

With the known importance of innovation pertaining to the competitive position of firms in the marketplace, most of the studies tried to discover the principal determinants of the capacity of a firm to innovate (Damanpour, 1991; Ravichandran, 1999; Wolfe, 1994). In addition, there have been plenty of studies related to the importance of organizational design, organizational culture, organizational learning (Stata, 1989; Nonaka and Takeuchi, 1995; Slater and Narver, 1995) and recently market orientation.