Management Concepts For Organizational Innovation

Discussion

Discuss about the Management Concepts for Organizational Innovation.

Corporations are devising ways, means and methods in order to gain significant competitive advantage in the market (Basoglu 2007). In order to conduct the organization, corporates forms various plans and strategies. Corporation’s strategies are largely made by their team of managers or upper management, who aims to establish the company’s core competencies in the market in order to gain significant competitive advantage. Competitive advantage is largely now ruled by innovative tactics and methods deployed that capitalizes on market opportunities. The case study highlights several popular example companies as Uber, which does not own taxis but is currently world’s largest taxi provider (Gumusluoglu 2009). Similarly Alibaba, who has no inventories of itself but happens to be the world’s largest retailer. Airbnb is the world’s largest accommodation provider but does not own any real estate. These companies earn significant revenue by the way they have been able to recognize customer needs and connect them to their potential provider. The report deals with the case study of companies that are largely driven by innovation and opportunity as tactics. But the primary challenge is faced by managers of companies in identifying the ideal resources, organizing them and building a plan for transforming such opportunities to yield significant advantages (Hamel 2006). The above example companies highlight that competition in business today is purely led by innovative strategies and planning on unutilized resources. Thus the report discusses the challenges manager’s face in diagnosing such opportunities and thereby organizing and planning on them subsequently, then decision making on which opportunity to capitalize.

Business have significantly transformed themselves from the traditional method that earlier gave them the competitive edge. The two most essential issues that has been highlight through the case study are; innovation is driving businesses and its competitive edge, hence managers of businesses needs to identify the opportunity areas and capitalize on them (Walker 2010). Secondly, managers in businesses need to utilize resources by organizing them, in such a way that significant advantages of scale can be reaped from it.

Traditionally organizations used to engage in long term planning that involves significant utilization of efficient resources and time frame. Drawing on these plans, used to provide organizations with various policies and strategies for its various departments like human resources, financial, production, facility and marketing departments. But modern organizations often lack these extensive departmentalization concept and makes use of the qualitative and quantitative forecasting techniques in order to form a strategy. The most important part of managerial effectiveness lies in its decision making which helps in understanding which decisions to adopt and which to discard from the quantitative and qualitative analysis (Damanpour 2006). Business primary challenge has been to be creative and innovative in every aspect of organizational activity such that newer processes, techniques, methods and products can be designed. These new and innovative processes are aimed at either reducing costs or in creating a unique branding for the company, in terms of innovation. In order to attract customers, expand into newer markets and generate greater revenues companies are striving hard to develop new and innovative products and processes (Guan 2007). Innovative strategies and processes requires tremendous efforts from organizing capabilities of the company, by diverting them to the innovative process. This innovative process or product creates a unique brand identity for the company which in turn renders it competitive edge. Rapid change of technology has altered the ways companies previously used to market its products, hence greater amounts of organizational resources for marketing now goes into social media advertising (Sampson 2007). Marketing managers while planning needs to make necessary budgetary allocation accordingly and organize resources. Hence, now a major part of the budgetary expenses in planning process of organization goes into research and developmental activities of the company.

Conclusion

The second challenge of businesses is organizing resources available such that maximum advantage can be reaped from it (Armbruster 2008). The planning stage in managing of organization allocates significant amount of resources to each departments of organizations, which in turn puts them into effective and efficient use. Budgetary allocation made for each department is usually referred to while allocating resources, which is again, is prepared from qualitative and quantitative research. The budgetary allocation for financial and other resources lies with the planning department, each department develops their individual budget and submits it to the central planning department for approval. Those businesses are able to utilize resources efficiently who are able to allocate them according to their needs. Resources need to be diverted to most productive activities that is able to generate maximum revenue for organization. The major focus of today’s businesses is to utilize resources in manufacturing or producing that produces minimum impact on the environment (Melville 2010). Organizations liability has been now extended beyond their capacities to understand the effect they have on entire society and the environment. Hence, resources allocation needs to ensure minimum use of scarce natural resources, maximum amount of recycling, packaging using environmental friendly material, thus overall reducing wastes disposal to the environment in soil, water or air. Activities of business are aimed at reducing usage of scarce natural resources and to impact the environment positively. Planning and organizing departments that are actively involved in allocating of such resources needs to design strategies and set prerogatives accordingly. Managers in organizations often faces dilemma as to what quantity of resource to allocate to which department, though the analysis of data and industry position reflects valuable information regarding the same. The primary challenge is in diagnosing the requisite amount of needs for each department and then allocating them without any resistance from other departments (Tushman 2012). Management functions are highly interrelated and inter connected hence managers need to effectively balance out resources factor and have a concrete basis for such decisions.

Conclusion

The above intensive discussion on planning and on organization reveals that organizational manager needs to focus on planning and organizing according to modern tactics. Sustainability of organizations will be only rendered by organizational capacities to recognize resources utilization in such a way that can lead innovation and significant change in the value of goods produced. Organizations make use of its various resources while planning and organizing which is led by organizational objectives. Hence, though planning can be short-term or long-term in nature organization which involves division of labor for various objectives needs to be innovative in nature. In order to inculcate innovation management has to take decision regarding which to take and follow. When a company adopts innovation as it process in today’s world, it is not only able to compete with the technological companies that lead the markets today but also develop sustainability for the business.

Recommendations

Businesses needs to instill a spirit of innovation and innovative techniques in order to compete in the new business scenario. The following recommendations will help businesses cope with the modern day challenges of businesses and establish as a leader in the market;

Every and each processes within organization need to orient towards innovative processes in planning, organizing, control, leading, decision making and so on. As all departments and functions within a particular organization are interconnected hence greater focus should be on innovative drive. Management needs to accommodate innovate processes and encourage all members of organization to contribute towards the process.

Due to rapid changes in technology managers and other stakeholders of the organization needs to be updated every time. The business needs adapt to these technological changes, hence processes needs to be innovative in nature. Organizations and its members are traditionally adversaries to the idea of change but current market scenario requires companies to change quickly to the rapid changing circumstances. Organizations need to effectively utilize its transformational leaders in order to sail through several change processes.

Businesses need to be dynamic in nature such that they are able to adapt to any changes that are taking place in the industry environment. Dynamism of businesses helps create their sustainable advantages. Rapid invention of technology coupled with environmental norms have forced organization to change and design processes to the new environment. A business that is able to transform according to process is able to establish competitive advantage in the market.

Most importantly business leaders need to be visionaries such that they are able to forecast changes and make alterations accordingly. Great and leading businesses are made due to their leaders, hence it is the most important parameter in organizations.

References

Armbruster, H., Bikfalvi, A., Kinkel, S. and Lay, G., 2008. Organizational innovation: The challenge of measuring non-technical innovation in large-scale surveys. Technovation, 28(10), pp.644-657.

Basoglu, N., Daim, T. and Kerimoglu, O., 2007. Organizational adoption of enterprise resource planning systems: A conceptual framework. The Journal of High Technology Management Research, 18(1), pp.73-97.

Damanpour, F. and Schneider, M., 2006. Phases of the adoption of innovation in organizations: Effects of environment, organization and top Managers1. British journal of Management, 17(3), pp.215-236.

Guan, J. and Liu, J., 2007. Integrated innovation between technology and organization. International Journal of Innovation and Technology Management, 4(04), pp.415-432.

Gumusluoglu, L. and Ilsev, A., 2009. Transformational leadership, creativity, and organizational innovation. Journal of business research, 62(4), pp.461-473.

Hamel, G., 2006. The why, what, and how of management innovation.Harvard business review, 84(2), p.72.

Melville, N.P., 2010. Information systems innovation for environmental sustainability. Mis Quarterly, 34(1), pp.1-21.

Sampson, R.C., 2007. R&D alliances and firm performance: The impact of technological diversity and alliance organization on innovation. Academy of Management Journal, 50(2), pp.364-386.

Tushman, M., Lakhani, K. and Lifshitz-Assaf, H., 2012. Open innovation and organization design. Journal of Organization Design, 1(1).

Walker, R.M., Damanpour, F. and Devece, C.A., 2010. Management innovation and organizational performance: The mediating effect of performance management. Journal of Public Administration Research and Theory, p.muq043.