Innovation and Entrepreneurial Strategies - Essay Example

strategic management al Affiliation) Innovation and Entrepreneurial Strategies Introduction Innovation involves the process of creating and developing new products from new processes and ideas. This process creates commercial products, possibly adding more value to an existent brand to come up with a new product in terms of packaging or presentation. Innovative ideas are not only applicable to a single firm, but different firms as well. Three types of creativity relate to innovation. Invention in itself is the formulation of new knowledge, and consequent conversion of the knowledge into the creation of a new product, or into the process of product creation. The product or service is then put into active use. Imitation on the other hand is the adoption of an idea that is already in existence into the process of production. Innovation is the improvisation of the current product or service, through creative thinking. Several dilemmas relate to the process of innovation. The dilemma between the market pull and the technology push poses a problem between the market supply and technological input. The market pull assumes that the market users’ pull is responsible for the innovation. On the other hand, the technology push assumes that the new knowledge that arises from the technologists and scientists enhances the process of innovation. In addition to the technology-market dilemma, the product and process innovation dilemma exists. The product innovation connects the final product to the features of its innovation. Contrary to the product innovation, the process innovation involves the manner in which the product is distributed after its production. The latter focuses on the improvements on such factors as reliability and cost effectiveness, against the futuristic focus of the former. The second dilemma, however defines the nature of the industries and the firms in these industries. The third dilemma, the closed versus open innovation, pities the internal resources against the use of both internal and external resources to formulate ideas that enhance innovation. The fourth dilemma states the difference between the business model innovation and the technological innovation. Whereas the business model restructures and reorganizes the business elements, the technological innovation roots for the application of technology to come up with innovative ideas. Entrepreneurial strategies are important in the success of a firm’s strategy. The entrepreneurial strategies enable the firm to manage their resources despite the financial constraints and the inability to hire competitive managers. An entrepreneurial strategy manages the firm’s resources as they are, using the necessary opportunities to take advantage of the market. Nevertheless, the entrepreneurial strategy enables small firms to formulate plans that enable it to compete with other big firms in the industry. Through adopting strategies that concern more of consumer satisfaction, smaller firms create customer loyalty, hence managing to grow amidst competition from larger firms. A good entrepreneurial strategy has four pillars, the imagination, ideas, invention, and innovation. Imagination in the firm allows employees to brainstorm, and in the process come up with ideas that may be of benefit to the company. A company that encourages the spirit of imagination is capable of blending the ideas of each imaginative idea to come up with a solid idea that competes in the industry. Through imagination, ideas are conceived. The incubation of these ideas needs investment and constant monitoring. Besides, the management should encourage the employees to come up with ideas by rewarding the most brilliant ideas and giving room for correction of mistakes. Invention is a strategy that enables a firm to formulate a product, process and service that revolutionizes the entire industry. Through invention, the brand achieves the distinctive feature of uniqueness that is rare in most big companies due to bureaucratic management. Through invention, innovation can take up current products and mould them into new products. An entrepreneurial strategy is controlled by the desire to actively search for new opportunities. The power of any entrepreneurial organization is vested on the chief executive. The flexibility of decision making in such firms is rapid and time saving, though the process of drawing an effective strategic plan is characterized by continuous difficulty due to uncertainty. All the same, the main goal of such firms is growth. Innovation plays an important role in the creation of a firm’s strategy. Innovation takes into consideration the existent methods of production, comparing them to the modern processes. Through innovation, the firm adopts a strategy that is not only cost effective, but also efficient. Besides, through innovation, the firm establishes various ways to satisfy the consumer tastes and preferences based on the valuation of different consumers in the market. The innovative process then combines the features of leading products to formulate a single product, which suits the tastes and preferences of various consumers. Conclusion Innovation is important in defining the future of a business entity. Firms should strive to encourage the innovation process in the workplace. Besides, Human Resource managers should look out for more creative-thinking people to encourage the firm to formulate innovative ideas. Despite the challenges that the entrepreneurial approach faces in the implementation of a strategy, the practice of entrepreneurship itself represents a healthy learning curve for the risk taker, and represents the innovativeness of the entrepreneur. Decision-making Introduction In the creation of a strategic plan, the firm needs to do both internal and external analysis. While internal analysis focuses on the weaknesses and strengths of the organization, the external analysis expounds on the opportunities and threats that the operating environment carries. After doing this evaluation, the firm formulates a strategy that takes into consideration the findings of the internal and external analysis. Normally, many strategies come out of the discussions involving the creation a viable strategy. The panel then sits to evaluate the pros and cons of each strategy before settling on a strategy that has fewer disadvantages and more advantages. Failure to find such a strategy will require the combination of various excerpts from the different strategies to formulate a strategy of such kind, only after choosing the strategy that the implementation process begins. Decision-making, therefore, is integral in the process of strategy formulation. An activity is cognitive in nature; decision-making is either chaotic or diffuse. The determinants of decision-making include the nature of the problem, and the factors that surround the decision-making entity. This process requires utmost commitment and action. That is to say, the fundamentals strategic elements have their building blocks in the strategic decision-making. Certain factors determine the process of decision-making. The nature of the decision making process affects the outcome of the decision. Diffuse decision-making follows the normative decision-making model that describes the manner in which decisions are made. Such decisions are often organized, inclusive and universally acceptable. On the other hand, chaotic decision-making is done in unclear circumstances. Such decisions are made hastily, implemented hastily and have no apparent sequence or structure. The nature of the problem at hand also affects the decision-making process. Certain factors such as the levels of risk, ambiguity, uncertainty, and complexity all hinder the process of effective decision-making. Other problems are either wicked or tamed. Wicked problems are complex and complicated as well. Such problems are intractable, and have no stopping points. These problems require continuous solution, as the problems keep recurring. A tame problem on the other hand is complicated, but has a definite solution. Such problems are not new in an organization’s history, and require previous decisions to solve. Besides, other social factors affect the decision making process, hence hindering strategic outcomes. The peer or group pressure persuades members to conform to the majority decision. In strategic planning, the ideas of each contributor play a role in determining the decision a firm takes. Apart from the group pressure, the individual dignity and pride hinders people from supporting or disputing certain opinions, in the hope of retaining dignity and pride. As groups become more cohesive, the erosion of diversity limits the ability of the group to have dissenting opinion, hence making the line of thinking similar and jeopardizing the decision making process. The confines of strategic management go beyond the intentions and aspirations of plans, instead focuses on the implementation of strategic plans. The commitment of a firm to implementing a plan explains the preference of a firm to take certain action. Therefore, decisions play a critical role in the initiation of action. The commitment of a collective organization is complex, unobservable and gradual, hence explaining the elusiveness of the concept. Conclusion Decision-making relies on a number of factors. However, the effectiveness of a decision is dependent on the environmental factors that surround the entity making the decision. For there to be effectiveness in decision-making, firms should cultivate an environment that gives room for expansion of ideas through constant group reshuffling and continuous studying on the current trends available in the market. In conclusion, the success of a company is dependent on the decisions that the company makes in the times of economic turbulence; therefore, companies should cultivate the process of effective decision-making as they await the uncertainty that comes with the business environment. Reference Lecture Notes, Strategic Management. Decision Making. University of Lincoln Read More