BUS 6320 IV

BUS 6320, Global Strategic Management 1

Course Learning Outcomes for Unit IV At the end of this unit, you should be able to:

3. Summarize the role of innovation in strategic business planning. 3.3 Explore the importance of the internal and external environment within which firms operate. 3.4 Contrast the models of innovation. 3.5 Explain the role of leadership in innovation.

Required Unit Resources Chapter 7: Business Strategy: Innovation, Entrepreneurship, and Platforms (ULOs 3.3, 3.4, and 3.5) This chapter examines the innovation process and the industry life cycle. The various types of innovation are explored. Unit Lesson Lesson: Innovation and Entrepreneurship (ULOs 3.3, 3.4, and 3.5) This unit focuses on the important role of innovation and entrepreneurship as it relates to business strategy and driving competitive advantage. This unit also examines four industrial revolutions to provide the historical perspective of the evolution of firms. Rothaermel (2024) discusses the concept of disruption as an important concept in innovation, and he describes innovation as “the successful introduction of a new product, process, or business model—is a powerful driver in the competitive process” (p. 246).

Innovation The innovation process includes an idea, invention, innovation, and limitation. Innovation is “the commercialization of an invention” (Rothaermel, 2024, p. 249). The authors, de Jong et. al. (2015), developed an eight-step innovation model based on a survey of more than 2,500 global CEOs. The eight steps include aspire, choose, discover, evolve, accelerate, scale, extend, and mobilize. The authors note that innovation is a complex organization-wide effort and attention to these eight steps in a systematic manner is necessary for success. In that regard, innovation is about a continuous improvement process designed to sustain competitive advantage.

The Four Industrial Revolutions Rothaermel (2024) identifies four industrial revolutions: 1780s:—steam power and mechanization; 1870s:electricity, mass production, and assembly lines; 1970s:computers, electronics, and automation; and 2020s:artificial intelligence and cyber-physical systems including the Internet of Things.

UNIT IV STUDY GUIDE Innovation and Entrepreneurship

BUS 6320, Global Strategic Management 2

UNIT x STUDY GUIDE Title

Figure 1: Four Industrial Revolutions from the 1780s to 2020s (Rothaermel, 2024, p. 252) Clearly, today's world of business is significantly impacted by technological advances. This blurring of boundaries between the physical, digital, and biological world is referred to as the fourth industrial revolution (IR). Advances in artificial intelligence (AI), robotics, the Internet of Things (IoT), 3D printing, genetic engineering, quantum computing, and other technologies impact the way work gets done, how products are produced, and how companies achieve their objectives. Regardless of the company’s size, age, or industry, advances in technology such as AI are making their way into the daily practices of companies, and companies must consider the implications of the fourth IR when developing strategic plans. Clay Christensen (as cited in Larsen, 2016) from Harvard University identified the increased role of innovation driven by technology as disruptive innovation—it is quicker and fundamentally can change the business model of a firm. As we consider the four industrial revolution eras how does the fourth IR impact the firm that you have selected for the course project? What skills do you see as important for employees in an increasingly technology-reliant world?

Entrepreneurship and Leadership Entrepreneurs are the change agents who take the risks associated with the commercialization of an innovation (Rothaermel, 2024). To incorporate a successful innovation system in any firm requires leadership. Leaders should support the concept of innovation by first recognizing that the skills required in the organization are dynamic. Leaders must be aware of and react to change, including possible skill gaps in the work force. The proper recruitment, upskilling, and retention are all important for the success of a firm in turbulent times. Having the employees in the organization develop and maintain the required skills is important for innovation. Also, for innovation to be successful, leaders should encourage an entrepreneurial mindset within the organization in which all stakeholders look to add value to their firm for innovation to be successful. Innovation is often considered a part of the industry life cycle concept because it often generates new industries. For example, technology has enabled an entirely new service delivery that caters to home delivery of groceries. Essentially, the life cycle of a product includes introduction, growth, shakeout, maturity, and decline. Product innovation usually occurs in the early stages of the life cycle of the firm; whereas process innovation is more likely to occur in the latter stages of the life cycle as shown in Chapter 7, Exhibit 7.11: Features and Strategic Implications of the Industry Life Cycle chart. For example, note that innovation of a product that is so important to a firm in the introductory part of the life cycle gradually reduces in importance through the latter stages of the life cycle model. To support innovation, Rothaermel (2024) suggests that leaders must support moving from controlling resources to a more open resource orchestration model; moving from an internal focus to a more external focus for interactions; and changing focus from customer value to ecosystem value.

BUS 6320, Global Strategic Management 3

UNIT x STUDY GUIDE Title

Summary In summary, innovation in today’s hypercompetitive environment is a key part of our strategic planning processes. It is about continuous improvement and meeting—or exceeding—customer expectations. Increasingly, innovation to build competitive advantage is driven by technological advances requiring, in many cases, new employee skills. As discussed, the fourth IR will continue to create challenges and opportunities for firms. Firms and employees must recognize that the reality of the fourth IR will require new skills to adapt to the new technological era.

References de Jong, M., Marston, N., & Roth, E. (2015, April 1). The eight essentials of innovation. McKinsey Quarterly.

https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/the-eight- essentials-of-innovation

Larson, C. (2016, November 15). Disruptive innovation theory: What it is & 4 key concepts. Harvard Business

School Online’s Business Insights. https://online.hbs.edu/blog/post/4-keys-to-understanding-clayton- christensens-theory-of-disruptive-innovation

Rawpixel (n.d.). Character illustration of people with global network concept [Image]. Freepik.

https://www.freepik.com/free-vector/character-illustration-people-with-global-network- concept_3585190.htm#query=strategy%20global%20business%20planning&position=2&from_view= search&track=ais&uuid=eab5dd3f-267d-4ae8-9a3a-5381e987b5ac

Rothaermel, F. T. (2024). Strategic management (6th ed.). McGraw Hill.

https://online.vitalsource.com/#/books/9781265954574 Vector4stock. (n.d.). Business process illustration infographic of business structure from idea to successful

business [Image]. Freepik. https://www.freepik.com/free-vector/business-process-illustration-infographic-business-structure-from- idea-successful-business- project_26195295.htm#query=strategy%20global%20business%20planning&position=34&from_view =search&track=ais&uuid=eab5dd3f-267d-4ae8-9a3a-5381e987b5ac

Learning Activities (Nongraded) Nongraded Learning Activities are provided to aid you in your course of study. You do not have to submit them. If you have questions, contact your instructor for further guidance and information. Activity: Case Study (Optional) In Chapter 7, read Chapter Case 7 Part II. This case study illustrates the importance of technology and disruptive innovation as it relates to Netflix. In a personal journal, answer the five questions at the end of the case study.