Gucci and Innovation - Case Study Example

GUCCI AND INNOVATION Introduction Gucci is actually the biggest leather trading Italianbrand and has a wide coverage of the globe. The Gucci brand sells through over approximately 300 outlets across the globe, which operates through wholesale franchises as well as upscale departmental stores worldwide. The organization specializes in leather materials such as canvas, clothing, clothing and shoes. Though started like any other small business, the Gucci grew to spread all over the world and today covers the entire globe with the retail as well as wholesale outlets (Pratt et al, nd, p. 1-3). It is therefore seen as one of the most successful international organization and hence justified in our analysis of international management and employee creativity and innovation. This paper intends to analyze the employee creativity and innovation as a key focus for most international organizations especially while trying to manage global economic crises in recession. Among other ways through which the multinationals remain strategic and influential in the international, market especially in terms of competition and market segmentation is through organizational processes and products/services differentiation. A key strategy that has been adopted in this regard is through adoption and focus on creativity and innovation. Employees have been very instrumental in ensuring relevance of the international organizations through creativity and innovation. However, the level of innovation and creativity by such employees has been dependent of institutional frameworks and thus organizational leadership becomes very instrumental in empowering the employees for such assignments as designing of products and services for the companies through innovation and creativity (OECD, 2009, p. 5-6). Discussion Innovation is a phenomenon that is socially acceptable, which brings together the ideas of different people and the implementation of the same. Moreover, through innovation, products and services are designed and made through the cooperation of people working together. The success of any organization especially in innovation and creativity requires the collaboration of efforts by the leadership as well as the subordinates. The management/leadership teams within organizations are usually tasked to propel the organization forward with implementation of policies meant for realization of goals and objectives carried on by the organization. In fact, many studies reveal that to many organizations, goals are just one and the same as the performance of the organization itself. However, it is more challenging to realize set goals and there must be some frameworks through which the realization of set goals; short term as well as the long-term goals (Ordóñez et al, 2009, p.1-5). The process of driving the international organization towards realization of the set goals entails among other things proper planning and human resource management. International organizations’ management such as is the case with Gucci undertakes the planning in terms of short-term vision as well as long-term vision. Whenever an organization adopts either short-term goals or the long-range vision, continuous improvement is vital in order to realize that long-term objective. Nevertheless, changes in management practices have seen a substantial shift of the management practices from long range planning to much simplified planning structures, which concentrate with very short-term goals that are easy to achieve and evaluate. In order for any business to remain relevant and objective, the periodical evaluation and analysis of performance is critical. Innovation and creativity is such a basic tool that is currently in use in order to realize such goals especially aimed at overcoming the effect of economic recession that affects the global economy today (Sharma et al, 2010, p. 29-30). In the choice of management practice to adopt, any management team must therefore put profit consideration into perspective. Continuous improvement management initiative through innovation by employees is usually designed to realize higher profits in the short term improve the competitiveness of a firm and sustain the profitability of the firm to the long run (Aartsengel and Kurtoglu, 2013, p. 7). Most management carries out their tasks with the short, reachable and evaluative goals, which in many cases are not long term. The prevailing frameworks through which the organization is working as well as the economic frameworks within the global perspective may necessitate creativity and innovation by employees. It is one of the best-acknowledged measures in total quality management practices within the globe and has indeed been seen to lead companies to realize high performances and quality production by firms (Zangwill and Kantor, 1998, p.910). Human resource management adopts various frameworks for their operations depending in the country, prevailing factors such as government policies, and social cultural frameworks among other considerations. In particular, the human resource management within multinational corporations are the most hit by the dynamics that characterize the current world (Srivastava and Agarwa, 2012, p.46-47). There are different mechanism and practices, which have been adopted by international organizations in order to command efficiency and effectiveness in commanding influence in innovation and creativity through employees in the world today. For instance, entrepreneurship is a management strategy in which the corporate integrates individual innovation; involving the design and production of new brands by an employee acting as an entrepreneur within the firm (Souder, nd, 9 of 21). The M-Pesa money transfer services by the Vodafone corporation is such an example (Spitzeck,nd, 5 of 9). It is a high-risk venture since mostly the firm funds the projects but it diversifies the firm’s focus and increases innovation approaches and motivational techniques. This allows an entrepreneur to create profitable ventures from simple but creative ideas while still under the organization. It is also a shield for the company from risks of failure and a pilot for proposed management and entrepreneurial styles. However, intrapreneurship is dependent on the level of empowerment of the employees by the human resource and management teams to such organizations. Intraprenuership has been adopted by many major firms (Rebelo, nd,p. 5) and has led to creation of major brands and diversification of market. It acts as an incentive to success hungry workers who have skills of creativity and innovation. Therefore, this is a face of management that ought to be taken more seriously and tried widely as the companies will benefit from the concepts of their employees and have them drive the exercise as per the paradigms of their managerial plans. It allows the adoption of design, creativity and innovation as a strategy for competitiveness, diversification and income generation. Companies like IBM, 3M and Proctor and Gamble have used intraprenuership increasing reputation and value for themselves. Gucci Corporation has valued corporate responsibility over years and innovations that are notable in the company have been environmentally friendly products. The organization has a special focus to the affluent middle class consumer groups across the globe. However, a SWOT analysis for the organization reveals that the innovation levels within the organization is relatively low while compared with the players in the industry. In the SWOT analysis, the organization enjoy such strengths as strong brand identity, stores which are directly operated, good supplier/retailers relationships as well as effective control to distribution channels. Nevertheless, the organization suffers the weaknesses, which include that it is not viewed as sustainable and that it is seen to be tacky. It also faces the threats of low innovation and having major competitors in the industry targeting the more conscious consumers across the globe. Nonetheless, it enjoys opportunities in exploiting emerging luxury markets, higher opportunities for innovations in the industry as well as a potential of being a pioneer in sustainable luxury in the industry (Gydé et al, nd, p. 2-3). Over years, the organization has been instrumental in facilitating innovation and creativity through the employees such as the legendary Ford in 1990s, a time when the organization suffered branding challenges. With extensive exposure through the studies in architectural field, Ford brought about notable and commendable change in innovation as well as creativity within the organization, which is remarkably celebrated to date (“Gucci biography” nd, para 1-7). Research studies in the recent past postulate an additional responsibility to organizational leadership within the modern day business environment. Besides the management workload that management and entire leadership to these organizations are responsible for, there is an extra bit of responsibility that is easily taking shape, which is the nurture of talents in creativity and innovation. Employees have therefore turned to be an easy mechanism through which the organizations are realizing innovation and creativity and as such require support from the management. A special attention to the evolution of leadership responsibilities within organizations in the current environment especially after the global economic recession has been in matters of encouraging innovation. This has been necessitated by the need to approach and carry out management practices in a different manner from the previously adopted mechanisms. According to a research by Orr and Sack (2009, p. 2-3), many organizations’ leaderships are easily acknowledging the strategic role that they have in leading the organization together with the rest of the personnel for effectiveness. Inspiration to innovation especially through the employees is a growing trend by leaders within these organizations. The creativity and inn ovation by employees are becoming increasingly important in organizational management and success. Smith and Hall affirm the strategic responsibility that leaders to such international organizations have in creating a sustainable culture of innovation especially in the aftermath of the economic crisis, which destabilized merely all operations of such organizations. Cultural orientation of any organization plays a fundamental role in encouraging or supporting creativity or otherwise (Smith and Hall, 2013, para 1-4). Organizations with strong innovation cultures has the capacity to question existing frameworks, think differently, experiment and implement ideas and find solutions to existing challenges. However, there are some common challenges to multinationals concerning innovation and creativity, which include lack of understanding stakeholders, risk taking aversion, lackluster ideas as well as poor execution. Organizations serve the desires and needs of the stakeholders and as such, it is a critical aspect to consider wherever embracing innovation and creativity (Filippetti and Archibugi, 2010, p. 1-2). Research has shown that the failure to regard such desires as well as needs of the stakeholders leads to errors in effective innovation. Leaders’ role in such a situation has been pointed out to inspire curiosity towards such creativity and innovation. Moreover, the leadership should create opportunities for the people they lead such as the employees to bring up creative ideas for the organization. On the other hand, disruptive ideas from the employees form a challenge to innovation and creativity to such international organizations as the Gucci. In the event that the proper framework to analyze and evaluate the suitability of ideas brought on board, the creativity can be disastrous in instances. Leaders are therefore expected to challenge the existing perspectives through which they would be able to realize beneficial creativity and innovation by the employees. Fear of failure describes the risk aversion where as seen in the effect of the past recession, organizations changed to be more conservative and risk averse. Fear is seen as a great threat to progress in innovation, which explains why some organizations would stick to old production avenues (Kuyatt, 2011, p. 31-33). Our analysis revealed one of the weaknesses of the Gucci organization is low innovation, which would be explained by the fear as shown above. The employees lack motivation to engage in expensive experiments, which is the only way towards realization of better mechanisms to be used in production of goods and services. The leadership of such organizations is responsible for creating this freedom. The freedom in analysis in this situation is the one that enables the employees overcome fear of failure, as this would inhibit innovation. Leaders, through sound policy framework would aid the realization of such a freedom that would enable the employees to such organizations design better mechanisms of working through innovation and creativity. Identifying opportunities for acceptable risks by leaders is instrumental in boosting innovative attitude in the employees of an organization. However, this approach often proves challenging to many leaderships because majority of leaders are perfectionists and thus would not like the association of failure to their work. It is often said that great ideas that are not executed are failed opportunities and thus calls for all efforts to encourage development of ideas by persons and then creation of enabling environment for the execution of the same. Failure to execute ideas and innovations by employees by an organization may be costly than even the cost that would be incurred in the event that the idea is not viable. This is because great revenues and competitive advantage that would be realized through such ideas would be forgone. Discipline in structure and accountability framework of leadership within the organization is the sole responsibility of the leadership of such an international organization as the Gucci. The leaders are also responsible of breaking down barriers that exists between idea generators and the implementers and as such uphold innovation and creativity, which is beneficial. Therefore, according to the report by Smith and Hall, leaders have a critical role to play in encouraging and enhancing innovation within the international organizations such as the Gucci (Smith and Hall, 2013, para 1-9). Conclusion In sum, international organization face challenges in leadership especially due to the reason of cultural difference. The management department of human resource faces some critical challenges in managing people of different cultural orientation, races, language, different educational backgrounds and system of believes (Kozenkow and Media, 2013, para 1-4). Moreover, the human resource department deals with intergenerational people with varying competencies as well as orientations. Our analysis on the role of leadership in encouraging creativity and innovation within international organization took a special attention on the Gucci textile company. Leaders have been shown to play a very fundamental role in encouraging creativity, which is a critical tool to assist international organizations to overcome challenges in business operations especially in the aftermath of the global recession (Agbor, 2008, p. 1-3; Hunter, Steinberg and Taylor, 2012, p. 1-2). The role of leadership is to instill innovation discipline, create innovation freedom, inspiring creativity as well as challenging the existing perspectives and frameworks which otherwise would inhibit innovation. However, the Gucci Corporation has been shown to suffer limitations in operations especially in low level of innovation as compared to other competitors in the industry. Recession as a modern day problem within the global economy has necessitated constant innovation and creativity in order for organizations to command influence and efficiency in the profitability and competitiveness (Almas, 2013, para 1-5). The best mechanism that organizations are adopting to foster innovation is through encouraging innovation by employees. Such an example to innovation from employees is explained through intrapreneurship as a mechanism through which creativity is encouraging from within an organization. Bibliography Aartsengel A. V. and Kurtoglu S. 2013. Defining ‘continuous improvement’. 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Toward a Theory of Continuous Improvement and the Learning Curve. management science, 44(7) 910-920 Read More