Innovation and Strategic Management - Annotated Bibliography Example

Innovation and Strategic Management Annotated Bibliography Introduction Innovation is important in today’s business environment, especially concerning strategic business management practices. Since it is concerned with development of new ideas and products, business managers are concerned with hoe to maximize the benefits of innovation and position their businesses in order to be unique on the competitive market. This paper looks at how innovation is driving strategic management practices in the conduct of business. Annotated Bibliography Sánchez, A., Lago, A., Ferràs, X., & Ribera, J. (2013). Innovation Management Practices, Strategic Adaptation, and Business Results: Evidence from the Electronics Industry. Journal of Technology Management & Innovation, 6(2), 14-39. In this article, the researchers present their findings on how innovation is shaping general business management practices. They took an in-depth analysis of the impacts of embracing innovation and adapting it to business management practices. They also establish how governments, businesses and other development organizations incorporate innovation in their budget decisions and analyze the impact of innovation on long term performance of businesses and government departments. The authors argue that firm’s profitability and market competitiveness is dependent on how well they make use of innovation in their strategic planning and management. They propose a model that can be used to not only audit but also classify different types of strategic management practices that use innovation as the driving force. Sánchez et al studied a relatively broad sample of firms in the electronics industry in Spain to arrive at empirical results. They established that those firms that embraced innovation in their strategic management generally witnessed significant growth in their revenues. On the contrary, firms that did not incorporate innovation in their management practices witnessed reduced revenues and made perpetual losses. Sánchez et al proposed a comprehensive model that links companies’ performance to innovation-directed strategic management. In this model, businesses make management decisions that are informed by innovations that aim at cutting costs of production, improve resource competence and create new portfolios in the market. The innovation based strategic management in this model links environmental changes, strategic innovation and business results. Volberda, H. W., Van Den Bosch, F. J., & Heij, C. V. (2013). Management Innovation: Management as Fertile Ground for Innovation. European Management Review, 10(1), 1-15. In this article, the authors argue that the kind of innovation that has led to improved business performance is not necessarily that which is based on the technological changes. They contend that paradigm shift within the organizational context. Volberda et al call this paradigm shift “management innovation” and according to them, it involves a change of the company’s organizational structure, procedures as well as practices in such a way that the resulting form is not only new to the firm but also to the market as well as the industry. They argue that this action is important in leveraging the organization’s knowledge base in terms in the technology sector. Volberda et al have discussed a number of multidirectional causal relationships between management innovation and technological innovation. Most importantly, they agree with Sánchez et al that innovation is inevitably linked to the company’s profitability and general competitive advantage. In this article, they argue that innovation as a strategic management tool involves a radical shift from the traditional management practices and behavior to a new way of doing business. This, they argue, is aimed at removing inefficient and/or redundant procedures and practices thereby leading to improved efficiency and effectiveness. However, management innovation is improved by incorporating technological innovation. Nicholas, J., Ledwith, A., & Bessant, J. (2013). Reframing the Search Space for Radical Innovation. Research Technology Management, 56(2), 27-44 This paper takes a critical look at various strategies that business entities use in order to identify potential ideas for innovation. Firms that do search for innovative ideas do so out of the need to expand the range of their goods and services far beyond their traditional markets. The authors have identified twelve search strategies that most business managers use to discover opportunities that call for radical innovation. Through survey methodology, they identified the extent that the search strategies were deployed to innovation and strategic management. According this article, the search strategies for innovation include scouting, exploration of multiple futures, use of the Web, collaboration with active users, deep exploitation, probing, corporate venture, intrapreneuring, use brokers and bridges, intentional diversity and idea generators. Nicholas and Bessant (2013) conclude that today’s competitive business landscape call for constant improvement in business practices. Business growth, they argue, occurs through technology-driven strategic management that encourages production of new products on the market. New products, in turn, curve out a niche for companies and as a result make them stand out of the rest. Nicholas & Bessant therefore encourage business firms to explore and exploit their environments and the industry to discover opportunities for innovation. In order for the firms to do this, it is argued that management must develop a deep vision that enables the company personnel to focus beyond their comfort zones. The search for innovative opportunities must be a continuous process because, according to Nicholas & Bessant, each innovation has a definite lifecycle. Aspects of Innovation Influencing Strategic Management Various aspects of innovation are most influential in shaping strategic management. First, innovation is linked to improvement in performance since it leads to efficiency and effectiveness. Secondly, it also leads to the creation of new products with superior qualities than that of the rival products on the market. Because of this, firms with innovative products cut special niches in the market thereby standing out above their competitors. In the end, innovative products increase sales revenue and profitability of business organizations. Thirdly, innovation is driven by the need to meet the ever-increasing expectations of consumers. Consumers are forever looking for more unique products that improve their lifestyles. This makes innovation most influential to strategic management because firms need to satisfy customer needs. Trends Shaping Innovation From the literature review above, a few strategic management trends, being shaped by innovation can be identified. First, there is a tendency to link business profitability and general performance to innovation. It is recognized that business organizations are increasingly embracing innovation in order to make profits and remain relevant on the ever-changing and competitive market. In order for firms to have a competitive advantage, there is a general agreement that innovation is indispensable. Second, there is also a tendency for firms to focus on managerial innovation i.e. non technological innovation. In this regard, focus is on the organizational form, procedures and processes that businesses are using in their day-to-day conduct of business. Innovation in this respect, the kind of innovation that businesses are embracing is what Volberda et al (2013) called management innovation. Business managers are increasingly focusing on their internal business environment in order to identify new organizational structure and business practices in order to promote efficiency and effectiveness. Another important trend in strategic management that is being shaped by innovation is the constant search for potential ideas for innovation. Firms are increasingly searching for new ideas that can lead to innovation. Because of this, many strategic management techniques have been devised to direct the search for new ideas. This is because of the immense market opportunities that new innovative ideas offer to firms. References Nicholas, J., Ledwith, A., & Bessant, J. (2013). Reframing the Search Space for Radical Innovation. Research Technology Management, 56(2), 27-44. Sánchez, A., Lago, A., Ferràs, X., & Ribera, J. (2013). Innovation Management Practices, Strategic Adaptation, and Business Results: Evidence from the Electronics Industry. Journal Of Technology Management & Innovation, 6(2), 14-39. Volberda, H. W., Van Den Bosch, F. J., & Heij, C. V. (2013). Management Innovation: Management as Fertile Ground for Innovation. European Management Review, 10(1), 1-15. Read More