Chapter 1Innovation

Management: An Introduction

Fatih ARSLANZeynep ÖNCÜŞeyma YILMAZÇağatay YILMAZLAR

Very compatitive business market

“The ability to change and adapt is essential to survive”

Being innovative

What should we do to adapt this changes?

Innovation is necessary to survive

“…not to innovate is to die.” Christopher Freeman (1982)

Innovation is not a single action but a total process of interrelated sub processes.

It is not just the conception of a new idea, nor the invention of a new device, nor the development of a new market.

What is innovation?

Table 1: Market leaders in 2011

Table 2: Nineteenth-century economic development fuelled by technological innovations

selecting and successfully implementing the best ideas

Innovation: yes, but how?

Innovation is not a one-step activity, rather than affecting entire organization.

the most important issue is to manage the associated exchanges.

Can we manage innovation?

Acceleration in economic growth was the result of technological progress.

According to the Schumpeter ; competition posed by new products was far more important than marginal changes in the prices of existing products.

Effect of innovation in the economic growth

Figure 1: Overview of the innovation process

The expansion in manufacturing activities was simultaneously matched by an expansion in administrative activities. This represented the beginnings of the development of the diversified functional enterprise.

 Unfortunately, many of the studies of innovation have treated it as an artefact that is somehow detached from knowledge and skills and not embedded in know-how

The need to view innovation in anorganisational context

This inevitably leads to a simplified understanding, if not a misunderstanding, of what constitutes innovation.

This section shows why innovation needs to be viewed in the context of organisations and as a process within organisations

Individuals in the innovation process Entrepreneurship Design Innovation and invention Successful and unsuccessful innovations Different types of innovations Technology and science

 

The need to view innovation in an organisational context 

Identifies individuals as a key component of the innovation process.

Creative individuals

Firm operating functions and activities

Firms architecture and external linkages

Individuals in the innovation process

The quality of being an entrepreneur.

starting new businesses.

describing activities within a firm or large organization.

In a study of past and future research on the subject of entrepreneurship, Low and MacMillan, define it as ‘the process of planning, organising, operating, and assuming the risk of a business venture.

 

Entrepreneurship

The definition of design with regard to business seems to be widening ever further and encompassing almost all aspects of business.

A key question however, is how design relates to research and development?

Design is the main component in product development.

Design

Today the process is dominated by computer software programmes that facilitate all aspects of the activity; hence the product development activities and the environments in which design occurs have changed considerably.

innovation is the first cousin of invention, but they are not identical twins that can be interchanged.

Innovation is not a single action

Invention is the conception of the idea, whereas innovation is the subsequent translation of the invention into the economy.

Innovation and invention

innovation depends on inventions but inventions need to be harnessed to commercial activities before they can contribute to the growth of an organisation.

Creativity: the thinking of novel and appropriate ideas. Innovation: the successful implementation of those ideas within an organisation.

 

There is often a great deal of confusion surrounding innovations that are not commercially successful.

Kodak disk camera Sinclair C5

Successful and unsuccessful innovations

Commercial failure, however, does not relegate an innovation to an invention.

The fact that the product progressed from the drawing board into the marketplace makes it an innovation – albeit an unsuccessful one.

Industrial innovation not only includes major (radical) innovations but also minor(incremental) technological advances.

Indeed, successful commercialisation of the innovation may involve considerably wider organisational changes.

Technological innovation can be accompanied by additional managerial and organisational changes, often referred to as innovations.

Different types of innovations

Product innovation Process innovation Organizational innovation Management innovation Production innovation Commercial/marketing Service innovation

Type of innovations

We need to consider the role played by science and technology in innovation. 

Science can be defined as systematic and formulated knowledge.

Technology and Science

Technology is knowledge applied to products or production processes.

  Science provides us with information which

was previously Unknown by unlike engineers, scientists.

Engineers and not scientists who make technology.

Popular views of innovation

Humorous and popular view of inventions and innovations has been reinforced over the years and continues to occur in the popular press. Many industrialists and academics have argued that this simple view of a complex phenomenon has caused immense harm to the understanding of science and technology.

The literature on what ‘drives’ innovation has tended to divide into two schools of thought: the market-based view the resource-based view.

Models of innovation

The chronological development of models of innovation;

Linear Models

Simultaneous Coupling Model

Interactive Model

Innovation as a Management Process

Innovation may be described as a process and involves: a response to either a need or an

opportunity that is context dependent; a creative effort that if successful

results in the introduction of novelty; the need for further changes.

A framework for the management of innovation;

Network Models

The framework emphasises the importance placed on interaction (both formal and informal) within the innovation process. Indeed, innovation has been described as an information–creation process that arises out of social interaction.

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