Innovation Is the Key to Effective Organizational Development - Book Report/Review Example

ITM Table of Contents Introduction 2 Task One 3 Potential and Barrier of Innovation for different Organisations 3 Critical Analysis of Possible Shortcomings Faced by Firms 5 Task Two 7 Barriers to Innovation 7 Measures to Overcome Barriers to Innovation 10 Conclusion and Recommendations 11 References 13 13 Introduction In the present scenario, innovation has become the key success factor for multiple organizations. Through the effective implementation of innovation, multiple organizations have reinforced their feet with the present competitive market conditions. Innovation in terms of technological advancement has gradually helped in making the functionality of organizations much more effective in terms of both time and profit. Multiple organizations believe that communication has become a major factor for their sustainability and growth (Hao and Yu, 2011; Claver & et. al., n.d.). This is due to the fact that without effective communication with clients, business organizations cannot carry out their operations. In this context, innovation within online technology has opened a new dimension for organizations to carry out their operation throughout the globe and in a 24*7 manner. One interesting fact that needs to be observed at this point of time is that at one end, implementation of innovation concept has added up to the success and survival factor of the present day organizations. On the other end, the lack of innovation implementation within the functionality of multiple other organizations has resulted to loss making and disastrous business functionality (Claver & et. al., n.d.). The concept of innovation finds special applicability in the manufacturing sector. Manufacturing organizations will have to keep in mind that customers often visualize innovation as criteria for prioritizing companies in terms of superiority. Thus, companies can utilize this factor, in terms of showing their competitive advantage over others. One specific example in this context is the mobile manufacturing industry where, the level of technological superiority of one organization determines its rate of survival within the market (Carroll, 2014). Thus, taking into consideration of the statement, the report will gradually focus towards identifying those firms that have attained appreciable level of success due to the appropriate implementation of technological innovation. Focus will also be provided on those organizations that have failed and attained high level of criticism due to their incapability of integrating the innovation concept within their functionality. Specific amount of light will also be laid on the factors that can be considered as barriers to innovation along with the steps through which the organizations can overcome them. Task One Potential and Barrier of Innovation for different Organisations Technological innovation brings about multiple other factors that might positively influence an organization. These factors include variations, options, quality, prefer-ability and multiple more. Innovation grants organizations an option of proving its superiority over its competitors. It also enhances their capability of attracting customers from a broader perspective. The concept can be explained taking the instance of Nokia and Samsung. As known, Nokia remained a major competitor within the cell phone market for more than a decade (Samsung, 2012; Nokia, 2009). Moreover, it completely relied on the Symbian operating system, which truly was a big hit until the period android operating system entered the market. The new operating system appeared to be much more effective and robust in comparison to that of the Symbian OS. Regardless of these advancements, Nokia being a market leader during that time came up with a clouded judgement of continuing with the Symbian OS whereas all other market leaders in cell phone segment switched to android (Samsung, 2012; Nokia, 2009). The poor perception of Nokia completely ignored the necessity of bringing about innovation within their functionality. As a consequence, the Android OS due to its additive features and user friendliness interface, grabbed huge amount of customers’ attention and with time a major percentage of market share as well. Customers started purchasing Samsung phones equipped with Android OS. This further resulted in drop of sales percentage and subsequently, the market share of Nokia fell down by drastic levels. Hence, it can be clearly understood that the lack of innovation might turn out to be disastrous for a business organization (Samsung, 2012; Nokia, 2009). It can be comprehended from the annual reports of Nokia that during the period of 2009, the organization has sustained a drastic drop in sales and service by 21%. In addition, the gross marginal figures of the company also came down as a gradual effect of the losses (Nokia, 2009). On the contrary, Samsung’s market continued to gain advancement during the period of 2009. The company’s sales figures within its mobile phone business remained strong and eventually contributed towards attaining an appreciable share of the mobile phone market (Samsung, 2012; Nokia, 2009). According to Mobbs (2010), technological innovation within a business process is the key to survival in the current competitive market scenario. It adds up to the growth factor of an organization and helps in attaining shareholders interest. Large scale organization such as Samsung and Apple keeps on innovating in order to maintain their superiority over one another along with fulfilling the growing needs of the customers. Mobbs (2010) also linked up the concept of technological innovation with the national requirement. As per the observations of Mobbs (2010), nations take reference of the level of innovation within their industrial sector for presenting the superiority of their economy over the economic development rates of other nations. In this context, it can be stated that governments within multiple nations holds the concept of technological innovation as a high priority aspect as compared to other factors. Likewise, Kemp & et. al. (2003), has commented regarding the increase in the performance level of a firm due to continuous technological innovation. As per Kemp & et. al. (2003), large organizations keep investing on ‘Research and Development’ (R&D) programs for coming up with new and innovative product designs. In this manner, an organization improves uniqueness and competency over other market competitors. Business processes subsequently increases their performance along with the level of technological advancement by introducing new products. Critical Analysis of Possible Shortcomings Faced by Firms Lack of technological innovation might slow down the functionality pace of an organization and as a result, it might lose its competitive advantage as well. This in turn also shifts the opportunity to competitive organizations having the capability and the innovation technology of developing new products and/or with better added features in the market. In this context, businesses offering innovative products and/or services are facilitated with the opportunity of conducting businesses in a sustainable and competitive manner. Kodak can be considered as a specific example in this context (LinkedIn Corporation, 2014; Forbes.com LLC., 2012). Kodak is identified to discontinue with its technological innovation and gradually started facing high level of competition from the other organizations engaged in the sale of digital cameras. Eventually, the focus of the customers started shifting from the traditional film role cameras to digital cameras and Kodak lost its hold over the markets (LinkedIn Corporation, 2014; Forbes.com LLC., 2012). Through this example, it can be identified that the one possible shortcoming regarding lack of innovation might increase the risk for the overall survival of an organization. On the contrary, Apple Corporation has visualised its future state and based on which it has implemented multiple innovation within its organizational functionality. It is due to the continuous efforts of Apple Corporation that has helped it in attaining a global position within the technology market. The positivity of Apple towards accepting the changing technological trend has subsequently added up to the continued development of new technological equipments that has further enhanced the level of competition within the specialised market spaces (LinkedIn Corporation, 2014). Taking reference of the facts mentioned above, a positive sign could be recognised based on the statement regarding the effective evaluation of a firm’s innovative potentiality and its capability of tackling with innovation barriers. Both of these aspects can be considered crucial for structuring innovative strategies through which the integrity and the interest of a firm can be safeguarded in an exceptive way. The necessity of developing effective strategies can be explained both in terms of attaining a better competitive stance along with higher level of customer preference (Forbes.com LLC., 2012). Contextually, organizations are required to develop products depending on factors such as customer needs and preferences in order to meet the changing demand of customers. As a result, if one organization fails to keep up with the changing trend, its competitor will eventually occupy its space and thus, the chances of losing the market space will eventually go up. Moreover, organizations should also ensure that technological innovation should be implemented from the grass root level, failure to which might create huge conflicts between existing functional model and perceived innovative model in an organization (Forbes.com LLC., 2012). Task Two Barriers to Innovation Various factors such as financial crisis, poor economic conditions, lack of customer demand, and difficulty in resource attainment can be held liable for hindering innovation and transformation within an organization. The growth and innovation process within an organization starts stagnating and the risk factor regarding market instability increases accordingly. Thus in such situations, it becomes the prime intention of organizations to effectively evaluate the barriers and come up with appropriate strategies for mitigating the adverse effect of inefficient business performances and losses. By taking into consideration, the increasing level of market competition, it can be suggested that business organizations should look forward towards diversifying and expanding their functional areas instead of remaining confined to a specific function. The example of power generation organizations such as ‘Waigaoqiao Power Station’ can be taken as an appropriate reference for the provided context. The power station majorly depends on renewable resource such as coal for generating electricity (Kable, a trading division of Kable Intelligence Limited, 2014). However, with the continued reliability on coal, multiple situations may arise where they might run of raw material supply as a result of which the entire production process might come to a halt. On contrary, power generating organizations such as ‘Cattenom Nuclear Power Station’ majorly depends on the utilization of nuclear energy for manufacturing power, which in turn can be considered as a highly sophisticated and innovative in comparison to ‘Waigaoqiao Power Station’ that basically relies on the availability of coal (Kable, a trading division of Kable Intelligence Limited, 2014; Rediff.com, 2011). Thus, if ‘Waigaoqiao Power Station’ does not come up with a technological innovation for continuing their functionality, then the raw material depletion factor can emerge as a major barrier for them in the future. As a corrective measure, ‘Waigaoqiao Power Station’ will have to look out for other forms of resources that are available in abundance and can be used as a substitute of coal. It can also establish business mergers with other power generating organizations through technological innovation would be exchanged with the aim of performing operations innovatively (Katz and Shelanski, 2007). Insufficient financial support can also be considered as a significant barrier for attaining technological innovation. One aspect that needs to be understood is that, bringing about large scale innovation within the structure and functionality of an organization requires huge amount of financial investment (IBM, 2006). The problem is highly reflected in case of small scale firms, due to the fact that annual turnovers are insufficient for funding large scale technological innovation. As a result, a considerable time gap is developed between functionality and competitors’ pace. Subsequently with time and increasing competency of competitors, the lagged out organizations are pushed out of the market (IBM, 2006). Under such situations, organizations need to understand the changing trend of the market demands effectively. Organisations will also have to estimate their positioning within specific markets. Through this analysis, the business processes will be able to possess ideas regarding the minimum level of innovation transformation that they will have to undertake for ensuring their survival in the markets. The data obtained from the analysis will also guide them towards investing their financial resources in an effective manner and maintaining their competitiveness as well (IBM, 2006). Likewise, inappropriate marketing strategy and poor market information processing can also be considered as major barrier against attaining technological innovation. Multiple instances when an organization fails to perceive the ways through which they can attain their estimated goals in an effective manner (Forbes.com LLC., 2014). Such mistakes results in huge amount of financial loss for firms and hamper smooth functionality as well. Thus as a corrective measure, it is a must for organizations to implement risk assessment and management tools for identifying the possible alternatives through which such barriers to innovation transformation can be tackled successfully (Forbes.com LLC., 2014). Regardless of the above fact, the conflicts between existing organizational models and new required organisational models can be considered as another barrier towards implementation of innovation within an organization. This can be explained in terms of technology and adaptive nature of the employees rewards innovation. A simple example in this context is regarding the introduction of new technological advancement within the work structure of an organization (Chesbrough, 2010). This might appear conflictive to a majority portion of employees accustomed to the previous technological setup. They might also raise multiple obligations regarding their inconvenience relating to adapting new technological setup gradation. In such cases, it becomes the prime responsibility of an organization to explain the employees regarding the necessity as to why they should accept the new change rather than remain stuck to the existing system. The employees should be aware about the level of development that can be accomplished with the assistance of innovation (Chesbrough, 2010). Measures to Overcome Barriers to Innovation Market competition is a major factor that contributes to the process of undertaking continuous levels of innovation by organizations. Organizations take into consideration the fact that they can attain higher level of customer preferences by introducing new and unique product and/or types in the market segments. One advantage of continuous introduction of new product type is that a very small or almost no substitute products are available with similar value and features for a considerable period of time. As a result, organizations can easily implement the skimming marketing concept and attain greater share of profit. Through this way, the business process can attain a better competitive advantage (Business Case Studies LLP., 2014). In Addition, competitive advantage is not just about introduction of new and innovative product types. From an organizational point of view, competitive advantage can also be elaborated as a technique of utilizing available resources effectively for minimizing the overall resource wastage levels. Correspondingly, organisations with better competitive advantages are able to build an effective business reputation in the worldwide market segments. Moreover, multiple business processes such as power generating industries also implement technological innovation in order to reduce the level of environmental emission to appreciable extent and promote sustainability. For this reason, the governments of multiple nations consider the concept of technological innovation as a beneficiary aspect towards their economic development. Continued implementation of innovation gradually increases the rate of competitiveness within the market spaces and thus, eventually results in uplifting the rate of technological advancement and business improvement (Business Case Studies LLP., 2014). In addition, every business organization should be effective in evaluating the barriers that restricts the necessary implementation of technological innovation and strategize accordingly. The risk management and the risk assessment tool might prove to be highly beneficial in the hostile business environments. Through the appropriate utilization of these tools, business firms can easily predict the possible risk factors that might remain associated with every specific decision undertaken by firms. With the assistance of these tools, organizations can also understand the types of technological innovation, which they should implement within themselves with the help of which they can prove their superiority over other competitors and attain appreciable level of customer preference (LinkedIn Corporation, 2014; Forbes.com LLC., 2012; Pipada, 2010). Conclusion and Recommendations By taking into consideration, the above discussed facts, it can be stated that innovation is the key to effective organizational development. Throughout the discussion, multiple debating facts ascertain the necessity of bringing about technological innovation within the functionality of organizations. As can be understood from the discussion that continued innovation eventually raises the level of market competition as a result of which firms are facilitated with the opportunity of providing quality as well as unique products and/or services in an efficient manner. Additionally, different organisations implementing innovation will be facilitated with the opportunity of ascertaining that business operations are conducted in a competitive as well as sustainable manner. However, various barriers has been identified which include financial crisis, inadequate consumer demands and poor economic conditions among others might affect in the implementation of innovation. Organizations will also have to strategize regarding measures based on which available resources must be used efficiently with the intention of minimising barriers to innovation. The organisational structure and business processes of an organisation are required to flexible towards innovation and changes, so that business operations are conducted in an effective manner. In this respect, it can be comprehended that the statement is factual, as organisations adopting and mitigating barriers to innovations are facilitated in performing business operations sustainably, profitably and competitively (Chesbrough, 2010; IBM, 2006). References Business Case Studies LLP., 2014. Using Innovation to Create Competitive Advantage. Competitive Advantage. [Online] Available at: http://businesscasestudies.co.uk/intel/using-innovation-to-create-competitive-advantage/competitive-advantage.html#axzz3AiOMDqnN [Accessed August 18, 2014]. Chesbrough, H., 2010. Business Model Innovation: Opportunities and Barriers. Long Range Planning 43, pp. 354- 363. Carroll, J., 2014. The Importance of Innovation in the Era of New Normal. Home. 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