Innovation Diffusion and New Product Growth Models - Essay Example

Innovation Diffusion and New Product Growth Models Introduction The current era can be considered as risky and unstable for organisations and industries due to greater transparency, new technologies and innovations. This situation is assisting a number of organisations to enhance their global market position while it is also causing discomfort and a sense of threat to various organisations to secure their competitive position in the current and future market (Vaccaro, et al., 2012). McFayden and Canella, (2004) have stated in the 21st century, knowledge-based economy has been prevailed which include the innovation of telecommunication, computers, microelectronics, robotics, manmade materials etc. A number of organisations consider these innovations as critical driver for economic performance. Researcher Silva, (2009) has agreed that the 21st century is totally based in information, innovation and knowledge-based economy. The success of organisations is hugely depended on the gaining of competitive advantages by effectively managing the current technologies and work processes while simultaneously creating innovations for the future. Innovation within the organisational processes can be viewed as the proper and efficient application for better solutions for the existing as well as changing and evolving marketing needs (Silva, 2009). Innovation is the most important tool to success for the organisations in the post-Fordism business era. Post-Fordism elaborates the ability of organisations to improve their flexibility and adaptability towards the changing demand and preferences of the local as well as global market by emphasising on small batch production, economies of scope and new communication procedure (Amin, 2011). On the other hand, the percentage of failing of organisations is also increasing day by day from 2% in 1960 to 14% in 2008 (Edmondson, 2011). A large number of once leading companies, such as Kodak, Nokia Xerox, Motorola and Polaroid, has experienced a huge failure due to the acquisition of wrong organisational practices and behaviours, while the market is continuously reforming and modernizing with new sets of behaviour and practices. The organisational design and stereotypical practices are hampering the desired growth for various leading organisation while small firms are making their way to secure a successful position in the market (Edmondson, 2011). The lack of expertise to suspect the future has caused for overconfidence in such organisation (Edmondson, 2011). The further discussion of the study will evaluate and analyse various unhelpful behaviour and practices of organisations in contrast to the innovative approaches of the other businesses. The discussion will also emphasize on the desired behaviour and practices of companies to secure their market position. Research on organisations unhelpful behaviour and practices In the later phase of 20th century, the Fordist pattern of businesses and production was interrupted by the post-fordist practices. The Fordist practices were focused of mass production for the large portion of the market. The post-fordist practices have enhanced the application of economies of scope that has enabled organisations to respond to the demand of niche market without incurring excessive costs. Alternatively, a number of organisations have demonstrated unhelpful practices and behaviours that have adversely affected the continuous innovation to adopt market changes which in turn pushed them towards failure. Evolution of E-commerce that has changed the concept of physical stores to establishing virtual stores is a perfect example of post-fordist business practices. In fact, the business concept has also neglected mass production and initiated the process of procuring the exact product as per customer requirement and customer order (DiMaggio, 2009). The major part of the unhelpful behaviour in organisations has been practiced by the leaders and top level management of the businesses. Over dependence to the ongoing practices and procedures of the organisation as well as the over confidence regarding the previous success of the company hinders various organisations to analyse the rapid changes in the preferences of the current market. It also hampers the predictability of future market potential. For instance, unpredictability of technological and social changes in the future market can be best seen in the inability of the management of Kodak Company. The company failed to analyse the photography market as a disruptive technology and the capability of digital photography to replace their established film based business (Mui, 2012). Utilization of old as well as narrowed metrics to measure the organisational performance and competencies in comparison to the potential competitors is one of the unhealthy practices by organisations that results in failure. Various leading organisations fail to frequently refresh the performance measuring and monitoring procedure and techniques to gauge the changing challenges in the market. This hinders the organisations to introduce new technologies. It also restricts the organisations to recognise the shift of competition from hardware to ecosystem (DiMaggio, 2009). For example, Nokia was best known for the quality and durability of their handsets as compared to Samsung, Motorola, Google and Sony Ericson; however the myth was only valid prior to the innovation of Smartphone and iPhone. Improper performance monitoring process has hampered the management of Nokia to analyse the capabilities of the emerging brands. Therefore, it has affected the market share of the organisation (Lundvall, 2010). The lack of diversification within the skills, competencies and expertise of the workforce in organisations also hampers the innovative approaches of organisations. Though the accumulation of people with similar personality and world view enhances the comfortless within the organisations, it also reduces the competitive attitude with the workforces. The practices of management in larger organisation to look for employees of similar nature adversely affect their competitive advantages in the ever growing market (Kaplinsky, et al., 2009). As per example, the top executives of Nokia are all of similar age and background. The organisational practices prohibit the participation of young employees and management to impart their ideas for the development of organisational practices. This situation has hindered their ability to assess the changing business environment (Lundvall, 2010). The failure to incorporate innovation in the strategic decision and vision of organisation provoke organisations to experience early failure. Various organisations spend a huge amount of time and money on various innovation programs which lacks strategic integration and compelling vision of the management (Lundvall, 2010). For instance, the lack of innovation in the marketing strategies has affected the market position of Motorola. The scarcity of innovation in the vision and marketing strategy has decreased the market position of Motorola, Blackberry and Nokia in comparison to iPhone (Lundvall, 2010). Another important unhelpful practices and behaviour of organisations is the disagreement of management to provide proper time and space to the employees to indulge in creative and innovative programs. The improper leadership procedure and over indulgence towards the regular jobs restrict employees to evaluate the innovative approaches of the workforce. The improper communication and structural as well as cultural inactivity of organisation also restricts the participation of the employees in the important decision of organisations. The authoritarian management restrict the collaboration and communication of information and ideas within organisation. The information flow within the different hierarchical levels is also very restricted in this kind of organisations. For instance, Apple Inc. experienced business turmoil due to non-compliance with employee well-being and imposition of excessive authoritative pressure in the China factories of the company (Kaplinsky, et al., 2009). The practices of organisations to stress on maintaining the over utilization of time, workforce and resources restricts the management to spare very little to no time in thinking, learning and improving skills and competence as per the changing pattern of the external business environment. The rewards and merit practices of various organisations is focused on encouraging employees to make less mistakes. It also provokes them to blindly follow organisational rules and regulations and practices. This situation restricts the workforce to take risks. It also hinders their tendency to exploit innovative approaches (Kaplinsky, et al., 2009). Analysis of unhelpful behaviour and practices Various theoretical approaches have evaluated the effects of the unhelpful practices and behaviours in the innovativeness of organisations. The proper analysis of researches and theories of organisational innovation has provided a wider view regarding the drawbacks of various organisations which causes the loss of competitive advantages. Most of the recent researches on innovation emphasizes on organisations as a unit of analysis (Kitson, 2009). Innovation generally takes place in two different processes such as innovative adoption and innovative diffusion. The innovative adoption is the initial phase of organisational innovative approach while the diffusion explains the wide spread implementation of innovation throughout the organisational practices. Small and medium sized organisation demonstrates longer adaptability towards the innovative approaches while the larger organisations tend to display lesser adoption to innovation within the different stages of its lifecycle (Kitson, 2009). The improper collaboration of innovative approaches as per the rapid changes in organisational lifecycle can be considered as one of the major reasons behind the unhelpful behaviour and practices of organisations (Bonn and Pettigrew, 2009). The changes in organisational life cycle provide various impacts on the organisational structure and work and communication procedure. The inception stage of organisation can be also termed as the entrepreneurial stage. During this stage, the innovative attitude of organisation is high due to flexible structure and undifferentiated role. During this stage, organisation provides adequate focus on development and innovativeness of the offered products or services. In this stage, organisations possess limited amount of employees who generally possess high freedom to communicate their ideas and indulge in innovation. Though organisations lack proper leadership structure in this stage, the creative and innovative approach assists them to achieve rapid growth (Bonn and Pettigrew, 2009). The development of leadership and increase in the employee strength introduces the collectively stage of organisation. During this stage, organisations divide their workforce within different departments and classes due to the increased pressure of work and responsibilities. This stage also possesses the creativity and innovativeness within the organisational workforce. The increase in the division in work influences employees to perform a specific job (Dibrell, et al., 2011). The proper execution of this stage also influences the formalization stage. During this stage, organisation moves from informal to more formal business environment and the structure tends to become more mechanistic rather than organic. This stage of organisation generate multiple level of management which subsequently reduces the power of middle and lower level management in the decision making process. The mechanistic structure reduces the lateral communication within the organisational structure while increasing the vertical communication within the hierarchical levels (Bonn and Pettigrew, 2009). The increasing layer of management hampers the communication and idea distribution within the organisational workforce. Therefore, it restricts the possibilities of innovation within organisations. The increase of unhelpful behaviour within the organisation during this stage provokes the generation of Elaboration Stage. Lack of creativity and innovativeness causes maturity and saturation of organisational products or services in the local as well as global market. This situation forces the management to flatten the business or shift the decision making power to different section of the organisations (Dibrell, et al., 2011). The technology life cycle also describes the adaptability and assessment power of organisation towards the technological advancement of the external environment. The curve of technology life cycle describes the commercial gain of organisation through their spending on the innovation and research and development procedure (Mohr, et al., 2009). The proper understanding of the changing technologies and market preference is very essential for organisation to invest in the right kind of technological innovation. The over-dependence on the ongoing practices and lack of analysis and monitoring towards the external market trends pushes organisations to the fast decline of the technology curve. The improper and lack of assessment of the external organisational environment and challenges also causes early and fast decline of their technological lifecycle curve (Mohr, et al., 2009). The decline in the technology lifecycle also causes sharp decrease in the profit gained by organisations through its technological product and innovation. Therefore, the improper monitoring of innovation and creativity within organisation, lack of idea generation and communication as inadequate analysis of external environment causes sharp decline in the technological expertise and the technological competitive advantages of organisation (Mohr, et al., 2009). (Source: Mohr, et al., 2009) The diffusion curve of innovation provides illustrated view about the impact and changes in innovative approaches in terms of products and processes of organisations (Peres, et al., 2010). Rogers, (2010), has evaluated the changing market preference and external environment adoptability capability of different organisations as per their innovativeness. The author has offered five different categories of adopter such as innovators, early majority, early adopter and laggards. Innovator organisations tend to be very less risk averse. These organisations prefer to take risk by indulging in various innovative approaches. They tend to follow the radical innovation pattern which allows them to create demands of new products and processes within the market (Rogers, 2010). Though these organisational practices can be entitled as helpful, they can cause financial loss to the organisation as well. The diversification of product, process and resources assists these businesses to neutralize the potential risks. Early adopter organisation maintains central communication process within organisation which assists the management to communicate ideas across the organisational culture. This kind of organisations welcomes new innovation after proper judgement. Early majority organisations generally take longer time to adopt innovations. The early adaptor and early majority companies generally follow the incremental innovation process to reduce the risk for the organisations (Kaminski, 2011). On the other hand, the late majority and laggards are the high risk-averse organisations which tend to hold or refuse the adaption of latest innovative approaches to avoid any kind of risks. This practices and organisational behaviour may save these organisations from the adverse effects of risks and failure but it also reduces their market strength and market share due to the increase competition of other less risk-averse organisations (Kaminski, 2011). The risk-averse behaviour also pushes organisations to the declining stage of the technological life cycle. Therefore, this can cause financial loss to the organisation in the long-run (Rogers, 2010). (Source: Rogers, 2010) Discussion regarding helpful behaviour and practices The evaluation of the different innovation theories has assisted organisations to explore various helpful behaviour and practices that can allow the management to improve the core competence as well as market competitiveness of the organisation. The analysis has indicated the adverse sides of different practices and behaviours of organisations that are adopted unintentionally due to the different stages of organisational life cycle, technological lifecycle and adoption capabilities of innovations (Chittoor, et al., 2015). The proper understanding and exploration of different types of innovation can enable an organisation to enhance the creativity of the business process and products in regards to organisational life stage and standard. The different types of innovation include product innovation, process innovation, position innovation and paradigm innovation (Chittoor, et al., 2015). The helpful behaviour and innovative practices of organisation not only emphasise on the organic organisational structure, it also evaluates the innovative approaches of mature and mechanistic organisations (Baker, 2004). Mechanistic organisation can also demonstrate creative and innovative approaches which can assist the organisation to improve their helpful organisational behaviour and practices to secure a strong competitive position in the market. Various mechanistic large organisations such as Tesco, McDonald’s and Ford have displayed their innovative capabilities to achieve leading position within different segments of the global market (Baker, 2004). The most effective and commonly understood innovative organisational practice is the improvisation or innovation of new product and services as per the changing social, cultural and technological structure of the market. This kind of organisational practice will influence businesses to offer a change in their earlier offerings to the consumers. Therefore, it can assist the organisation to strengthen their market position (Drucker, 2014). The innovation of LifeStraw by Vestergaard-Frandsen can be considered as one of the product innovation approach which assisted the consumers to avail clean and germ free water from any sources. The CEO of the organisation Mikkel Vestergaard Frandsen believes in challenging stereotypical work atmosphere. He also encourages the risk taking attitude of the workforce to introduce innovative solutions. Therefore, this process assisted the company to secure a competitive position in the market (Vestergaard, 2014). Process innovation assists organisations to improve their practices in terms of overall organisational performance. The process innovation allows companies to introduce helpful behaviour and practices to increase the efficiency and effectiveness of different operation within the organisation (Drucker, 2014). Ford’s first usage of the production line can be utilized as a powerful example for the process innovation. This process focuses on bringing product to the person during fabrication. This lithography method, which has been used to fabricate microchips, was a successful process innovation. This process allows the organisation to touch the lives of most people on the planet (Drucker, 2014). The organisational behaviour and business practices of McDonalds have also demonstrated process innovation. The process innovation of McDonald’s assists the marketers to quickly introduce new products to new as well as existing market. The organisation utilizes more centralized innovative approach that allows the organisation to improve their market and performance monitoring matrices. This process enables the marketers to assess the current and future competition and act accordingly (Drucker, 2014). The position innovation practice can be very helpful for organisations to reposition their products and services in the mind of potential consumers of the market. This helpful practice of organisation assists the management to welcome innovative ideas of the workforce. It also enables them to gather market data and environmental effectiveness regarding the product performance and current position. Therefore, this organisational practice allows marketers to enhance brand image and brand value of their product as well as the organisation (Drucker, 2014). As per instance, Strauss jeans of Levis, which was developed as manual workers clothing, has repositioned itself as the fashion statement for a huge part of the society. The proper collaboration of innovation in the marketing strategy of the organisation has assisted the management of Levis to create a unique position within the competitive market (Drucker, 2014). The paradigm based innovation assist marketers to shape the mental model of the market in terms of the image of the organisation. Paradigm innovative approach allows organisations to attract and foster the employees with innovative and exceptional skills and capabilities. This practice encourages organisation in influencing employees to nurture the innovative and creative ideas. It also assists organisations to provide rewards and recognition to promote the innovative approaches of organisation (Drucker, 2014). As per example, the innovation of the ipad and iPhone by Apple inc. has assisted the organisation to capture a huge market which earlier only preferred the normal laptops and desktops (Drucker, 2014). Low hierarchical model can also increase the efficient and effective approach of organisational behaviour and practices towards the innovation and creativity (Drucker, 2014). A digital game publishing organisation, Valve, is well-known for possessing a management free work atmosphere. These kind of organisational practices allow the employees to enhance their capabilities through brainstorming and sharing of information and ideas. The organisation has also provided the employees the power to ‘green light’ any new and effective idea. The organisational behaviour and work culture allow the employees to choose their own projects as per their expertise and interest. These helpful practices within the organisation have assisted the company to achieve competitive advantage in their operating market. The company demonstrate an extremely successful elaborating stage of an organisational lifecycle (Drucker, 2014). Conclusion The overall discussion of this study has evaluated various unintentional wrong practices and behaviour of organisations. These practices generally neglect and eliminate the innovative approaches of businesses in terms of adapting new technologies, monitoring and analysing changing market challenges and utilizing the creative approaches of employees. The gradual complexity of organisational life cycle and low risk tolerance are the main reasons behind these kinds of organisational behaviours. Further discussion has suggested various solutions to introducing innovative approach and helpful behaviour to the organisations. The proper understanding of 4P’s of innovation has been suggested to businesses to improve their market position and competitive advantages while avoiding the risk of failure. Reference List Amin, A. (ed.)., 2011. Post-Fordism: a reader. New York: John Wiley & Sons. Baker, S., 2004. New Consumer Marketing: managing a living demand system. New York: John Wiley & Sons. Bonn, I. and Pettigrew, A., 2009. Towards a dynamic theory of boards: An organisational life cycle approach. Journal of management and organization, 15(1), p. 2. Chittoor, R., Aulakh, P. S. and Ray, S., 2015. Accumulative and assimilative learning, institutional infrastructure, and innovation orientation of developing economy firms. 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