Jun 25, 2019 in Exploratory

Innovation And Technology Management

The role of innovation in business cannot be overemphasized. With rising levels of competition and slow growth prospects emanating from expanding globalization tendencies, commercial entities need to consider novelty as a way of enhancing their chances of succeeding. The significance of innovation has been attested to by Ford Motor Co. CEO, having conceded that the company has made innovation its core business strategy (Sawhney, Wolcott & Arroniz 2006). The same applies to General Electric Co. and Microsoft Corp. leaders who have also affirmed the position that innovation presents an avenue for the entities to improve their competitiveness. Organizational innovation entails re-envisioning the scope of activities and redefining workers’ incentives, roles, and responsibilities. Owing to the role of innovation and different perspectives in existence, the current paper reviews the literature on the topic, leading to the conclusion that harmonizing different dimensions is essential for attaining positive results.

Literature Review

A diverse body of literature exists on innovation and technology. According to Goldbrunner et al. (2005), intelligent innovation is integral to assuming pole position in succeeding in business. Goldbrunner et al. (2005) observe that within the last decade companies have made notable steps in refocusing their innovation engines. The authors indicated that intelligent innovation was necessary in the pursuit of leaner and faster production or service delivery. However, Goldbrunner et al. (2005) conceded that despite the presence of many opportunities businesses needed inspiration, as well as insight in overcoming challenges that posed problems to the execution of innovation plans.

Innovation must be led by highly analytical initiatives that are inward looking and are concentrated on refocusing the innovation direction. In order to succeed towards this end, Goldbrunner et al. (2005) observe that management control, cost control, and profit control ought to be addressed. Under management control, innovation is taken as a process which is subjected to traditional techniques of management. Regarding cost control, reference is made to fine-tuning or redesigning to focus on specific performance outcomes with a view to minimizing costs and cycle durations. For the profit control component, the management of innovation is done focusing on a portfolio of programs. Successive stages are built on the basis of the previous ones to ensure consistency. Although the processes are significant, they cannot yield expected results in the absence of dynamic leadership/ management. Goldbrunner et al. (2005) observe that an innovative organization must concentrate on customer insight and retain future foresight as it builds a global network. The position is similar to the one highlighted by Sawhney, Wolcott and Arroniz (2006) who also concede that the attributes are integral to innovation.

 

While focusing on the effects of innovation, von Hippel (2005) is convinced that both process and product innovation are critical in the enhancement of organizational competency. Under the former, businesses pay attention to improving techniques used in production, while under the latter the main concern is offering new items for sale. The revelation aligns with the ideas expressed by Sawhney, Wolcott, and Arroniz. In particular, Sawhney, Wolcott and Arroniz (2006) have explored the issue of improving product and service delivery by looking at consumer needs or seeking new markets as a way of enhancing an entity’s market appeal. The issue of improving production through various approaches such as using state-of-the-art technology or adopting outsourcing shows similarities with observations made by Sawhney, Wolcott and Arroniz (2006). However, von Hippel (2005) acknowledges that the two processes are dependent by elaborating that introducing new processes permits design and development of new products. Similarly, introducing new products often necessitates the alteration of production processes. From the above, it is discerned that von Hippel (2005) has underscored the nature of the connectedness of various dimensions to innovation. However, von Hippel introduces the element of market structure in influencing the innovation process and outcome. For instance, innovation has different incentives and results in monopolistic, oligopolistic, or perfect competition market conditions.

When focusing on process innovation, cost reduction emerges to be the primary aspiration. According to Amara and Landry (2005), reduced expenses translate to more revenues, which businesses can reinvest, hence leading to expansion. However, at initial stages, costs might be seen as prohibitive. In practice, entities that seek innovation are looking at cutting costs or increasing efficiency in order to increase their earnings. It is however noted that not all ventures succeed and in cases of failure losses are discouraging. Product innovation leads to changes in both rewards and costs. In case new products are difficult to imitate, an entity can gain from such a move. However, if items are easily aped, them a business risks incurring losses because it will be denied the opportunity to reap from its investment. Thus, innovation does not guarantee success. Nevertheless, with astute leadership and thorough research, an opportunity to benefit always exists.

Brassington and Pettitt (2007) are among researchers who have observed that product offerings play a crucial part in the innovation debate. The scholars further observe that product innovation involves quality, design, packaging, and branding although these characteristics depend on the category of the item offered in markets. According to Brassington & Pettitt (2007), product development must demonstrate innovativeness given the increasing levels of competition. 

Amara and Landry (2005) indicate that goods or services are distinguishable by people irrespective of the time they have been in existence. However, for Anthony et al. (2008), innovation is a practice that incorporates all methods encompassing the idea of generation, know-how, research and development, manufacturing, engineering, and marketing of new products. Based on the assertions presented by Brassington and Pettitt (2007), Amara and Landry (2005), and Thomas et al. (2006), it is conclusive to observe that product cannot be separated from innovation since innovation aids a product to be viewed differently within markets. Understood differently, innovation allows a product to obtain market patronage. Innovations vary from small to big, simple to complex, or brand new to modified items. Having reviewed the work of Peter Drucker, Wengert (2007) has concluded that innovation is a vehicle for entrepreneurship and an act that avails resources and a capacity to generate value through wealth creation.

Innovation has a symbolic element given it accords organizations an avenue to fulfill emotional needs of consumers as Dobre, Dragomir and Preda (2009) observe. Similarly, the outlook of an item influences customers’ decisions to buy or not to buy products. These factors have led Dobre, Dragomir and Preda (2009) to conclude that possession, involvement, and pristine are major aspects in the innovation process given that they have altered perceptions of a consumer. Involvement concentrates on emotions, pristine products are those that look different from the previous ones, while possession centers on the duration of items that are bought based on emotional/ rational considerations.

Critical Analysis

Based on the literature, diverse dimensions exist with respect to innovation. However, product and process innovations seem to be main dimensions from which others sprout. Sawhney, Wolcott, and Arroniz (2006) highlight twelve dimensions that they deem integral for a successful adoption of an innovative approach across organizations. One of them is offerings, which are products and services. Along the dimension, innovation focuses on the creation of fresh products and extension of up-to-date services to customers. The position is valid given that another researcher, von Hippel (2005), has observed that process and product innovations are crucial in improving organizational competency by focusing on products presented to markets. The quality of goods and services offered influence their reception, thus playing a big role in affecting the course of development taken by a business. 

Regarding the issue of platform, Sawhney, Wolcott, and Arroniz (2006) make reference to sets of components, assembling technologies, and methods used in the production of goods, as well as the extension of services. Innovators using a platform should exploit the power of commonality to produce items efficiently and cheaply. Although often overlooked, the opportunity to create value through the approach remains critical. In order to gain from the approach, the key remains in using commonality to alter slight aspects such as style and approach to delivery. An entity can change design of an item or customize to gain from this form of innovation. The above position is supported by revelations of Dobre, Dragomir, and Preda (2009) who observe that slight changes to products would influence customers’ perceptions about products.

The third component of innovation, according to Sawhney, Wolcott, and Arroniz (2006), consists in solutions, which are customized and integrated collections of products and services aimed at addressing consumer needs. Improvement targeting solutions focuses on generating value for customers by assorting and integrating many elements. The production of mobile phones that serve many functions is an indicator of the solution-led innovation approach. Given that customers are the primary target, ensuring that they receive value is critical towards enhancing performance. Thus, innovative organizations are those that explore avenues for creating quality by understanding consumers’ needs/ expectations. Salge and Vera (2009) acknowledge that customers are the primary focus of companies given that in their absence no business would take place. Owing to the saturation of markets, organizations need to search for the new ones or work to retain the existing ones. Thus, exploring customers might also unearth unsatisfied segments, leading to adjustments intended to cater for their needs. Innovative approaches such as price discrimination can be used to meet differing consumer expectations.

Closely aligned to the above dimension is customer experience. Based on the latter attribute, experiences of product and service users come into perspective. For an entity to innovate, the need to rethink the point of intersection between an organization and its customers takes precedence (Sawhney, Wolcott & Arroniz 2006). In the present times, organizations have created customer care centers whose purpose is to ensure that customers are satisfied. The goal is attainable through guiding customers on choice-making and understanding product use. Without a doubt, customer experience is a critical success factor. The position is supported by Anthony et al. (2008) who concede that a positive experience with an organization and its products is central towards increasing product demand as well as sales. As a result, innovative entities strive to create a lasting impression on their customers in order to be competitive.

Value capture and processes are other elements of the innovation method (Sawhney, Wolcott & Arroniz 2006). The mechanism that an organization employs to regain its value refers to value capture while business activities’ configurations applied in conducting internal operations are related to processes (Sawhney, Wolcott & Arroniz 2006). According to these authors, businesses innovate through value capture by seeking untapped revenue streams and altering pricing systems to capture new opportunities by interacting more with customers as well as partners. The researchers cite the case of online sellers adding advertising to their business portfolios as the way of increasing revenue. In turn, innovating under the processes dimension requires redesigning processes to enhance efficiency and delivery (Sawhney, Wolcott & Arroniz 2006). Changes of this nature might necessitate relocation or decoupling of processes. Eliminating underperforming units and outsourcing them would also be a critical approach towards improving the usability of the dimension (Siltala 2010). Despite advantages associated with the method, problems with coordination and quality must be addressed stringently. Any effort that improves efficiency is positive given that it leads to lower costs and reduced delivery times. As a result, companies that consider such avenues rank highly on the scales of innovation.

Organization and supply chain are other dimensions of innovation. Whereas an organization revolves on structures, partnerships, and employee responsibilities, supply chains border on the sequence of events and agents charged with the task of moving goods and services from the source to the end-user (Sawhney, Wolcott & Arroniz 2006). Thus, organizational innovation is about rethinking a firm’s scope and activities in addition to redefining incentives, responsibilities, and roles across various business units. One of the approaches involves structuring services around customer segments to facilitate alignment of operational capabilities and sales organization with consumer needs. In case of supply chains, innovation takes the form of streamlining the flow of information across the chains. In this regard, altering the structure to enhance participant collaboration remains critical. Making changes to sourcing, manufacturing, designing, and logistics are some of the areas that are targeted. Overall, increasing efficiency is central to the attainment of predetermined efficiency goals. Given that updated supply chains and organizational structures are targeted at enhancing responsiveness to changing business dynamics, it is deducible that such approaches are among innovative ways to enhance firms’ competitiveness.

Sawhney, Wolcott, and Arroniz (2006) also cite presence as a major attribute in the pursuit of innovativeness. The dimension focuses on channels of distribution that organizations employ when taking offerings to the marketplace. Creating a new presence or employing exiting avenues creatively suffices. In case a company is entering a dominated market, using stylish designs can be critical towards creating an impression. One of the hallmarks of high performing companies lie in the ability to penetrate saturated markets. Frankelius (2009) has conceded that accessing such marketplaces is among the most difficult endeavors in the world of business given that replacing existing players requires extreme novelty. Sawhney, Wolcott and Arroniz (2006) also identify networking as an important dimension in innovating. In practice, an entity’s items or services are connected to consumers by a web. If taken keenly, the network can turn out to be an innovative cornerstone. Companies seeking to use the aspect must consider ways to upstage traditional operations. For instance, when an entity encounters tracking problems, making use of technology to increase monitoring is integral to resolving such concerns. The final dimension, which is brand, focuses on symbols, marks, or words through which entities communicate with customers. Leveraging or extending a company’s way innovatively requires creativity to convey a brand’s simplicity and value. The author acknowledges that putting the above dimensions into work collectively is central towards the enhancement of the chances of succeeding. In particular, the dimensions put together can prompt generation of strategies used to respond to the changing market dynamics. 

Findings

It is acknowledged that a rich body of literature on innovation exists. All the reviewed works demonstrate that adopting innovative approaches is critical to business success owing to heightened levels of competition that characterize the commercial environment. Citing current trends, Goldbrunner et al. (2005) observe that during the previous ten years companies were involved in refocusing of their innovation engines with a view to staking a claim in their various industries of operation. However, as Goldbrunner et al. (2005) concede, the presence of many opportunities does not guarantee success. On the contrary, businesses need insight and inspiration to overcome challenges associated with novelty. 

Although many dimensions exist to explain innovation, product and process innovations are the roots of the phenomenon. The position is held in reference to the finding that all other aspects are attached to the two concepts. However, both are intended to enhance productivity and attractiveness of goods and services. By improving processes, it is possible to produce new or adjusted items. Similarly, altering products might occasion changes in processes. 

Leadership and management also emerge as major elements in the innovation process. Both Goldbrunner et al. (2005) and Sawhney, Wolcott and Arroniz (2006) underscore the role of the two functions in the business environment with reference to innovative initiatives. However, no matter how novel ideas or plans are, in the absence of astute leadership/ management the chances of success become minimal. The functions are necessary to identify customer insight and retain foresight in building a global network that takes a business forward.  Both von Hippel (2005) and Sawhney, Wolcott and Arroniz (2006) support the position given that the former has observed that improving processing techniques ultimately influences the final product, while the latter has indicated that altering processes or products to suit customers’ needs is crucial for increasing effectiveness of entities.

Overall, the aim of innovation in business is to reduce costs and re-adjust products to meet customers’ needs with a view to generating new sales or retaining existing markets. From the paper, it emerges that when concentrating on process innovation, cost reduction is the primary motivation given that reduced expenses translate into increased revenues. Nevertheless, the literature demonstrates that at the preliminary stages costs might be prohibitive as businesses have to sink huge investments. A possibility also exists that such ventures might fail or be replicated by competitors, thus eroding potential gains. However, in instances when product innovation is difficult to imitate, it changes rewards and costs. Despite the pitfalls, the foresighted leadership can initiate research to identify lasting opportunities to innovate.

All the twelve dimensions play a role in the success of a business. Although it makes sense to assess them individually, amalgamating them to take a wider perspective remains a major factor in the attainment of success, which is an aspect that Sawhney, Wolcott, and Arroniz (2006) acknowledge.  Similarly, it is advisable to engage in extensive and continuous research and development for businesses to stay ahead in their respective industries. Organizational dynamism increases unpredictability within the commercial environment such that no entity can rest after making a given breakthrough by introducing either process or product innovation.  

Conclusion

Both product and process innovations have emerged to alter the conduct of business entities significantly. With the globalization of business based on technological developments, commercial enterprises now find themselves under intense pressure in virtually all spheres. In addition, shifting customer needs heighten the vulgarity of business. As a result, only innovative organizations have a chance to survive or improve. It is evident that Sawhney, Wolcott, and Arroniz (2006) make significant contributions to the literature on innovation and technology by highlighting twelve critical dimensions. By elaborating how each of the attributes influences novelty in business, Sawhney, Wolcott, and Arroniz (2006) make a strong case for businesses to pay attention to various innovation aspects. However, the writers acknowledge that such dimensions do not operate in isolation. In other words, the twelve attributes are interconnected and the ability of entities to intertwine them determines how effective or successful they are in scaling a higher level of productivity.

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