Innovative Culture and Innovative Competencies - Assignment Example

Alliances are, thus, useful avenues of not only gaining access to the skills and capabilities of partners, but also serve to strengthen the core competencies within organizations. Indeed with the globalized competition, it is no longer possible to compete in the traditional sense of self-sufficiency, which, in a sense, is untenable as markets increasingly become highly volatile, rapidly rendering techniques and products obsolete almost as fast as they are invented. Though innovation has been pushed to the center of production dynamics, the hurdles to its realization have more than doubled, complicating its management and making it even more elusive.

As such, firms committed to breaking new grounds begin from the very foundation of harnessing the requisite competencies, with speed given precedence both in terms of resources and organizational support (Prahalad & Hamel, 1990). It is more of a common knowledge that entrepreneurship is but an adventure that carries with it several unknowns that demands creativity to achieve the preset objectives. Noteworthy, the link between innovation and growth has long been a subject of theoretical research right from the days of Adam Smith (1776).

In his “Inquiry into the Nature and Causes of the Wealth of Nations,” Smith (1776) articulates gains in productivity as a factor of specialization, division of labor as well as the technological advances in capital equipments and processes employed. Besides the role of Research and Development being a key determinant of competitive advantage, Smith also recognizes Technological Transfer via a web of network that incorporates suppliers and product end-users in that very analysis: “All the improvements in machinery, however, have by no means been the inventions of those who had occasion to use the machines.

Many improvements have been made by the ingenuity of the makers of the machines, when to make them became the business of a peculiar trade; and some by that of those who are called philosophers or men of speculation, whose trade it is not to do anything, but to observe everything; and who, upon that account, are often capable of combining together the powers of the most distant and dissimilar objects. In the progress of society, philosophy or speculation becomes, like every other employment, the principal or sole trade and occupation of a particular class of citizens… and the quantity of science is considerably increased by it ” (Smith, 1776).

Buoyed by the assumption that there is no heterogeneous formula of acquiring innovation capability, structured theories have been proposed to explain the differences between the nearly excellent and the poor innovators. The Resource-Based Approach (RBA), for instance, explains the differences as a reflection of the capacity [resources and capabilities] within a given organization to confront challenges; resources and capabilities which are somehow unique and very difficult to reproduce and/or substitute by other players in the market (Hamel & Prahalad, 1994).

Teece & Pisano’s (1994) dynamic capabilities theory deviates from the RBA, explaining