Revision Questions Jul2011 Perspective on Innovation, Innovation Process & Organizational Resources 1.

Explain the limitations of the academic researchers views of innovation process models that must be reconciled.

Roberts and Frohman good at top-down organization, but innovation cannot be determined Quinns controlled chaos not the physical process but the mental process of innovation Van de Ven stops innovation at manufacturing Coopers stage-gate approach provides a restrictive process

2. Quinn suggested a four-stage systems approach to the innovation process to overcome the limitations of the academic researchers views. Name and explain these four stages.

Idea-concept-invention (ICI) stage The innovation stage - managing the unknown, the uncontrollable, and the unpredictable Pre-project stage Validating design, parameters and preparing project plan - requesting funds many times Project stage Innovation ends - follow project management principles - business plans Product launch/follow-up stage A systems approach - depends on industry and firms business practices

3. Name and explain the types of innovation.

Product innovation changes in products/services Process innovation changes in the ways in which they are created/delivered Position innovation changes in the context (repositioning) Paradigm innovation changes in the underlying mental models, e.g. low cost airline

4. List down the organizational resources that are critical to innovation in an organization. Discuss how these resources are considered critical to innovation.

Intellectual property - (details on your own) Access to information - (details on your own) Technology - (details on your own) Marketing and sales - (details on your own) Time - (details on your own) Distribution - (details on your own) Customers and suppliers - (details on your own) Production capability - (details on your own) Operational facilities - (details on your own) Finance - (details on your own)

5. Explain the difference between close-innovation and open-innovation.

Close-innovation is a means of enhancing the value of the innovation intellectual property, or defending own operation, maintaining its power in existing market. Open-innovation is a means of saving money and time by outsourcing, (e.g. license-in, join-research), recovering the investment by licensing through getting royalty (e.g. license-out), or making de facto standard by expanding its users through offering cheap or free lincenses.

Organisational Culture 1. Why do some companies once known to be market leader, now seem to be losing ground? Explain this reason using 2 examples of market-leading companies. IBM represents a strong culture: loyalty, high motivation, respect for dignity, general consensus tagline THINK. Why IBM losing ground? Complacent, become comfortable, put on blinders and went into mental hibernation. 3M a culture focus on its people freedom to propose new initiatives, intrapreneur, innovation. Why 3M losing ground? Not many people are willing to work on new technologies and new markets. [Or other company and explanation.] 2. According to Kotter & Hesskett classification of culture, Theory I says that firms operating in uninhabited markets where they have almost monopolistic power can become inwardly focused, arrogant and bureaucratic and have strong culture. However, having strong culture does not guarantee the firm will have excellent performance. Briefly discuss this. The firms are characterized as having strong culture, giving impression that strong cultures create excellent performance. It is misleading because measurement of performance: annual net income, ROI, average increase in stock market. E.g. IBM vs ACER; GM vs Toyota and Kodak vs Fuji Films. 3. According to culture triad, innovative organization must focus on three areas, which of equal importance. Name and explain these three areas. People - optimising people's involvement. Management - guiding management practices. Attitude - encouraging professional attitudes. 4. Organizations that at one time developed cultures that fostered innovation have changed in terms of cultural stagnation. What are the reasons behind the cultural stagnation? The reasons behind the cultural stagnation are: Managers began to accept excuses for non-performance because of the demise of the social contract. Managing by indirection develops subordinates who are less autonomous, dependent and avoid identity- threatening episode. Managers substitute ritual for thought, and not thinking before taking actions.

Organizational Infrastructure 1. What are the 12 most important organizational infrastructures that every organization always depends on in order to move forward? 2. Based on the above statement, list six organizational infrastructures that you think are very important, and explain the functions and roles for each of them. (First line of each point below to answer question number 1, and the details for each to answer question number 2) Purposes The purpose statement must go beyond stating that it will meet the needs of the stakeholders, optimize stakeholders return or make profit. Organizational vision Organizations need to define what they want to be and communicate the message. Organizational objectives Objectives define what the organization hopes to achieve in the short and long term and by what means in relation to growth, products, technologies and markets. Strategic planning or strategy It is important that organization knows what it wants in order to develop a strategy. Strategy looks at the past but focuses on the future opportunities. Organizational structure Structure depends on people-different disciplines, geographical areas, experience and orientation, physical, emotional, purposes and characteristics. But their performance depends on how the organizational power structure functions. Structures need to be designed taking into account the available people with all of their talents. Structures require change periodically at all levels. Management attributes Attributes are the glue that keeps the organization together and moves forward. It is the desire to pursue excellence in all activities. Management attributes include management astuteness, management attitude, acceptance of risk, living with uncertainties, support for innovation and attitude toward policies and practices. 2 types that is most important - (1) management astuteness, and (2) management attitude. Uncertainties and risks Uncertainties include the entire list of the unknown and unpredictable issues and events at the time that decisions are made. The level of these uncertainties determines the risk. The risk must be evaluated in relation to the organizations capability to accept the risk. 2 types-(1) managing the uncertainties, and (2) accepting risks. Support for innovation Support for innovation involves providing not only the physical resources but also emotional support. Managers who do not understand the issues face by the innovators may find it difficult to support innovation. Managers need to know what it takes to be an innovator. Role of policies, procedures and practices How the policies, procedures and practices are interpreted and employed in the management has a significant impact on the amount of innovation. Organizations need to be flexible in applying rules and regulations that inhibit innovations. Innovators need to be given some slacks and their own judgment determines how far they can go without creating unnecessary problem. Essential partnerships 3 external sources-customers, suppliers and regulatory bodies. Organization has some social responsibility towards the community.

 Leadership Needs to exist at all levels (individual, functional, business unit and organizational). Leaders are often classified as visionary, strategic or managerial. Leadership in the proactive and innovative sense seldom exists at the top of the hierarchy. Both level of hierarchy and credentials do not necessarily relate to leadership.

Communicating Involves both sides-sender and receiver. The difficulty lies in choosing what should be communicated. Communicating involves some form of feedback or acknowledgement. Communicating where innovation takes place involves exchange thoughts (constructive critique). Feedback needs to be relevant to the issue under discussion.

3. Organizations do not exist without the support from many other entities. Each of these entities affects the organizations performance and in turn is affected by the organization. List down these entities and explain how each of the entities affects the organizations performance. 1. Customers (details on your own) 2. Suppliers - (details on your own)

2. Regulatory bodies (details on your own) 3. Social responsibility (details on your own)

4. List down the entities of essential partnership, and explain how each of the entities affects the organizations performance. Q3 and Q4 are same 5. Why organizational infrastructure is vital in innovation management? In the organizational context, innovation may be linked to performance and growth through improvements in efficiency, productivity, quality, market share and others. Some minimum level of infrastructure support is absolutely essential for them to move forward. Thus, organizations need to carefully assess where they invest their limited resources in new technologies, new market, in products, services or processes.

Genesis of Innovation 1. Innovation process is about people process, where innovation begins with one person and eventually requires a team. From the peoples perspective, innovation creates mental and emotional tensions, or in other words dynamic tensions. Name three examples of dynamic tensions that need to be managed in innovation. [Any 3 of the following items] Change and stability Creativity and routine Leading and following Freedom and constraints Short-term and long-term focus The status quo and the change makers 2. The cause of dynamic tensions could be from the goals of innovation the people are trying to achieve. Name three examples of goals of innovation. [Any 3 of the examples] Improved quality Creation of new markets

Extension of the product range Reduced labour cost Improved production processes Conformance of regulations Reduced materials Reduced environmental damage Replacement of products/services Reduced energy consumption

3. Lack of determination and commitment from the people could cause failure in innovation, in both organization and innovation process. Name five examples of failures in organization, and the failure in innovation process that are affected by these organizational failures. (The first part of each point below is the example of failure, whereas the last part of each point is the innovation process that are affected by these failures.) o o o o o Poor leadership Poor goal definition Poor organization Poor alignment of actions to goals Poor communication Poor participation in teams Poor empowerment Poor monitoring of results Poor knowledge management Poor communication and access to information

Innovation and Marketing 1. Marketing mix is part of a marketing plan that describes the key methods of differentiating the innovation, containing action steps for the marketing program for the products. Name and explain in detail the four elements of marketing mix.

The 4 elements of marketing mix are as follows:

Product The item or service that serves the needs of the customer.

Price

The amount or item the customer pays to get the product.

Promotion Includes public relations, advertising, and sales methods.

Place Selecting the channels for distribution of product and, when appropriate, the physical location of stores.

2.

Choose two of the elements in the marketing mix and explain how these elements are used to distinguish a firms offering.

[Any 2 of the following details, or any other appropriate explanation based on the chosen elements from above]

Product: Companies use the perceived value of their innovation to distinguish their product. Kodaks EasyShare digital camera is distinguished by the products ease of use, whereas Price: Based on the pricing methods, Apple and Sony targeted customers who would be willing to pay the high price for high quality of innovation, and differentiate their products as premium/upscale. Compared to eBay, the target customers are those who are looking for the best quality for what they spend (i.e. low price), where differentiation is seen in terms of value. Intels Pentium chip is distinguished by its high-speed performance.

Promotion: The initial product message is used to attract customers to the new venture, and this can be done through advertising across marketing media. Microsoft and Intel sell reliable performance, thus their promotion is about reliable performance. Place: Intel has used this element to redirect some of its advertising efforts away from computer manufacturers to actual computer buyers, and divert the consumers thoughts to their place where their components are inside computers. By differentiating the place of their innovation, Intel was successful at branding a component and became a leader in the personal computer boom of the 1990s.