Developing Innovation in Large Organizations - Literature review Example

Developing Innovation Capability in Large Organizations By (Name) The Name of the Class Professor The Name of the School Date Developing Innovation in Large Organizations Introduction Every organization desires to achieve quality results. Ways of achieving the results that meet objectives of an organization continue to be the focus of many leaders in organizations. Technological advancements have led to more innovative ideas that contribute to the overall success of various large companies. An organization with poor innovative ideas gets poor results. On the other hand, good results are achieved through well-established strategies, higher technology, and reward systems of an organization among many other ways. Today, many chief executive officers of various organizations are in harmony that one top priority of every organization is the ability put forth to develop new ideas and innovation strategies to help in the achievement of objectives of the organization. Organizational competitiveness is achieved through innovation. Innovation has steadily increased because of the continuous emergence of the intense global competition in the business market, emergence of global competition and the technological advancements in the society. Various people define innovation through different ways. Innovation can be defined as the mechanism that aids in the production of new processes, new products of an organization that is adaptive to the changing markets, competition and technological advancements (Gorman, 2007). In simple ways, innovation is the ability to establish new products to satisfy market needs. It is to develop new products through the use of new technology. It may also involve updating the existing products so as to meet market demands. Innovation is associated with newness or changes in an organization. As various organizations become focused on being innovative, the success of organizations has considerably increased. Many of them put on levels of commitment that are elevating towards the attainment of higher levels of innovation through different technological ways. The main purpose is to meet the changing demands of the market. This paper provides detailed ways through which innovation can be developed in large organizations so as to meet the new rising demands in the business industry. It indicates that innovation does not happen spontaneously in an organization. It takes processes, and it must be developed through different ways. Literature Review The increasing organizational demands have driven ideas of innovation. Various normative theories have been provided to offer or improve innovative outcomes of an organization (Gorman, 2007). This involves the number of innovations conducted in an organization. There has been inconsistent search based on the ways or the nature of innovation in a company. Many models have been established in different organizations to aid in the improvement of innovation for the purpose of enhancing the performance outcomes of an organization. The models used have emphasized on the use of various theoretical knowledge such as the institutional theories, market orientation, and socio-technical approaches to developing new innovative ways in organizations. Each theory has its unique contribution to organizational innovation. One of the renowned models used has been the Resource-based view. It describes an organization as a collection of capabilities and resources, rather than regarding a set of products. Organizations do not undergo competition based on resources, but on their capability to develop new products by establishing various innovative ideas. The establishment of new products and competencies by an organization is greatly influenced by the dynamic capabilities theory. It allows an organization to be innovative and desire to meet the increasing demands in the market (Gorman, 2007). Also, it promotes a competitive advantage of an organization. Innovation is central to the growth and development of an organization. Unlike the past, today, more innovative ways of an organization are enhanced through technological advancements. Innovation has constantly been associated with the development or creation of new products in a firm (Gorman, 2007). Organizations that possess the capability to innovate have the ability to integrate new organizational capabilities and resources that are factors which stimulate the growth of an organization. Developing Innovation Capability Innovation capabilities are developed in an organization to help in the synthesis of mainstream and new stream for the purpose of achieving organizational innovation performance that is effective. An organization may develop its levels of innovations through various ways or by considering some important elements within its organization. Successful innovative plans are very useful for the development of an organization. Developing innovation enables an organization to find the solutions to the ever-increasing problems in an organization. The model of innovation capability gives a framework of the various ways through which managers of an organization may improve the levels of innovation in the firms. The strategies that are set serve to improve the innovation capability of an organization. The development of innovation capability takes into considerations the process, elements, and practices of an organization. It is not fully clear on the exact variables that determine significant growth or development of innovation. However, there are a few organizational elements that can be manipulated to ensure that there is the development of innovation within an organization. The aim of developing innovation in an organization is to produce the desired work performance by meeting the rising demands and market competition (Gorman, 2007). Innovation is developed in an organization by considering these elements. They include vision and strategy, organizational intelligence, harnessing the competence base, organizational structure and systems, creativity and idea management, the management of technology, and culture and climate of the organization. They are the core elements of innovation capability in an organization. Organizations perform leverage on the above elements so as to integrate and manage the mainstream and downstream activities in through effective means. The innovative capability of an organization serves to influence the configuration of the activities. This leads to a continuous development of organizational innovations. With stronger innovation capability of an organization, the organization undergoes an effective innovation performance. Thus, organizations must put forth new ways of developing their ideas of innovation through the mentioned elements. Vision and strategy The relationship between vision, strategy, and innovation is influential in developing innovation of an organization. An innovation strategy should be constructed in a way that it meets the vision and strategy of an organization. A successful establishment of innovation practices requires a vision that is well articulated and an organization's expression of having a strategic expression. A good strategy determines how products, processes, and resources of an organization are configured. Organizations improve their innovations based on the business functions they should be doing and in what markets. Innovative capabilities are developed based on the vision and organizational strategies because of their influential critical roles in the organization. Without a strategy and vision, effective innovations cannot be attained in an organization (Bastic & Leskovar-Spacapan, 2007). Large organizations seek to offer the best innovative ideas. The employees have clarity of the purpose and strategies of the organization. Their success is not achieved by matching that of other companies. They develop innovation capabilities by setting their organizational market strategies in a manner that they gain a higher competitive advantage over others within a short duration. Strategies of innovation are critical in providing direction in an organization. For example, innovative organizations tend to adopt offensive strategies in trying to create the future of an organization as opposed to its past. Based on strategy and vision, large organizations are able to expand the existing markets, stimulate the demands of its services and create new ones that meet the market demands (Bastic & Leskovar-Spacapan, 2007). The innovation capability developed can integrate both the mainstream and new stream of the organization. Newstream results in the creation of new products and services in the organization. On the other hand, downstream lowers the cost while improving the quality of products and services of the organization (Gorman, 2007). Therefore, strategy and vision aid in the development of innovations that meet the market demands, making organizations highly competitive. Harnessing the competence base The competencies influence development of innovation capabilities in an organization within an organization. Harnessing the competence base involves the ability of an organization to direct its resources to the correct and effective way. This will enhance more innovations in an organization. The significant variables of an organization that is considered are resource management, adoption of the principles of e-business, availability of funding channels, and innovation champions (Bastic & Leskovar-Spacapan, 2007). Resource management is significant in creating ways of developing innovation in the large organizations. Through this, innovation is enhanced when organizations organize their resources into products, technologies, and markets so as to meet the rising demands. Only a few companies have been able to achieve capable innovations through considerations of resource management (Bastic & Leskovar-Spacapan, 2007). Large organizations can develop innovations through carrying out a critical integration of its products and services. The use of effective resource management is helpful in enhancing the number of innovation initiatives. Also, it increases the probability through which innovations are stimulated. As large organization manages innovation, their experience and learning accumulate and this support further innovative developments. Secondly, innovation can be developed by a large organization by considering a variety of funding channels. Innovative organizations use a variety of funding ways to undertake in entrepreneurship and risk-taking activities of the organization (Gorman, 2007). Considerations of various funding channels provide ways or strategies through which large organizations can meet the financial obligations of the innovations to be established. Thirdly, large organizations can develop innovation by incorporating the efforts of innovative champions. The support of every resourceful person is incorporated at various stages in the innovative process. This will ensure that the innovations will be all inclusive. Lastly, the development of innovations can be achieved through e-business strategies. Large organizations can enhance their innovations by adopting e-business. E-business provides a wider scope for enhanced innovations. Through e-business, large organizations can discard old innovations and acquire new ones that will foster more organizational developments (Sheldrake, 2010). For example, if an organization had innovations that were not cost-effective, it can develop new ones that will meet the market and customer demands. E-business helps large organizations to establish innovations that will promote the development of products and services. Organizational Intelligence This is a key factor that can be considered by large organizations in developing innovations. Organizational intelligence involves the capability of an organization to process, interpret, manipulate and access information for the purpose of achieving the set objectives. An organization increases its environmental adaptability through organizational intelligence. The innovation process requires the use of knowledge and ideas. The information obtained through organizational intelligence is used in the reduction of ambiguity and inherent uncertainty of innovation. Through it, organizations acquire the new avenues that are available to help them enhance new innovative ideas and to eliminate the options that are profitable in an organization. It relies on the organization's ability to communicate, generate, and to act in a relevant manner and with information that is up-to-date. It is evident that organizations that have a high degree of innovations have attained enhanced environmental scanning, higher competitive analysis, and increased technological forecasting. Thus, a large organization can develop their innovative measures by understanding the environmental surrounding and understanding their competitors. Organizational intelligence involves two main aspects, that is, learning from customers and learning about competitors (Sheldrake, 2010). Innovative companies do establish both internal and external awareness of their customers (Bastic & Leskovar-Spacapan, 2007). Through this, they receive feedback from the customers about their overall performance. Large companies can develop innovation through a close established relationship with customers. They will learn from demanding customers and be able to develop innovations that meet the needs of the customers. Secondly, competitive intelligence is equally significant when a large organization is enhancing its innovations. Through learning about competitors, an organization can determine its strengths and weaknesses and then make innovative adjustments where applicable. Creativity and idea management Large organizations can develop innovations through being creative and through good management of ideas. Creativity can come from the various employees and employers of the organization. Creativity is crucial in developing innovations. Therefore, large organizations can encourage the development of innovations by mobilizing members to be creative. Creativity involves deeper thinking of an idea that has never been realized, tested or proved. It is a process used to generate the innovative ideas. It can be goal-driven or knowledge-driven. Through creativity and management of ideas, large organizations can develop innovative ideas that are of great significance and meet the demands of the economic markets. Structures and systems An overall formal business structure is a necessity for successful innovation in an organization. The success of organization's innovations is dependent on structures being environmentally conducive. The structures and systems include organizational structure, reward systems and ‘stretch' goals for innovation (Al-Hakim & Jin, 2014). Large companies can develop innovation by making their organizational structures to be permeable or flexible. Through this, they will receive many innovative ideas that will enhance the growth of an organization. The more permeable an organization becomes, the higher the potential of having innovative ideas. Secondly, organizations should develop reward systems to enhance the development of innovations. Managers should be aware of various types of reward systems that can enhance the development of innovation. For example, the use of individual rewards increases the chances of development of ideas and increases radical innovations. On the other hand, group rewards enhance the implementation of innovations (Al-Hakim & Jin, 2014). Lastly, the large organizations can develop innovation through the adoption of the ‘stretch' goals innovation. This involves stretching goals for their employees so as to drive them towards being more innovative. Culture and Climate The culture and climate of organizations are contributing factors towards the success of its innovation. The components of climate and culture are tolerance of ambiguity, creative time, empowered employees, and communication. Large organizations should develop the ability to tolerate ambiguity while avoiding many risks when developing innovations. Secondly, they can achieve innovation developments through empowering employees. To develop innovations requires respect in people. Management of the organizations should empower employees to develop new ideas by establishing good visions for the organizations (Bastic & Leskovar-Spacapan, 2007). Also, innovation requires the time of thinking of what to develop. Therefore, organizations can achieve it by creating adequate time required for innovations to be successful. The organizations should focus on enhancing communication. Communication is necessary for the organizations to achieve successful innovations. Through communication, knowledge and information can b shared within the organization on how to develop good innovations. Management of technology Almost every organization uses technology in the development of its innovative ideas. Organizations should develop innovations by linking them carefully with their strategies of technology. The link of technology and innovations enhances competitive advantage between various firms. Therefore, big organizations should develop innovations that are enhanced by the technological advancements (Bastic & Leskovar-Spacapan, 2007). Conclusion Every organization is focused towards achieving a higher degree of growth and development. Being innovative is one of the various ways that enables an organization to achieve competitive advantage. Innovation involves the creation or development of new ideas of transformation. Innovations play a transformational role in organizations. Large organizations can develop innovation capability through various ways. The innovation capability is enhanced through different aspects. They are vision and strategy, organizational intelligence, harnessing the competence base, creativity and idea management, culture and climate, organizational structure and system, and the management of technology. Considerations of the above aspects are influential in the development of innovation by large organizations References AL-HAKIM, L., & JIN, C. (2014). Quality innovation: knowledge, theory, and practices. Hershey, Pennsylvania (701 E. Chocolate Avenue, Hershey, Pa., USA. BASTIČ, M., & LESKOVAR-ŠPACAPAN, G. (2007). Analysis of factors influencing the innovation capability of organizations. Quantitative Modelling of Human Market Interactions. 25-29. GORMAN, T. (2007). Innovation. Avon, MA, Adams Media. SHELDRAKE, P. (2010). The Ronin age: creating innovation and radical change in organisations. Singapore, Times Editions. http://www.books24x7.com/marc.asp?bookid=30573. Read More