Managing Innovation Assignment (WEEK 4)
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ch06_managing_organizational_knowledge.pptxBUTM 404 – Innovation Management
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Innovation Management
Prepared by
Milan Frankl
for
University Canada West
Chapter 6
Managing Organizational Knowledge
Chapter 6 is the start of the second part of the book and examines how strategy affects the management of innovation.
Business strategy is concerned with an organization’s basic direction for the future. This will involve careful consideration of its purpose, its resources and how it interacts with the environment in which it operates. When it comes to managing innovation the strategy of a business has an enormous impact.
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Managing Organizational Knowledge
Learning objectives
Explain the significance of technology trajectories for firms investing in technology
Recognize the importance of firm-specific competencies in generating long-term profits
Provide an understanding of the role of an organization’s knowledge base in determining innovative capability
Provide an understanding of the concept of the ‘learning organization’
Recognize the importance of technical and commercial capabilities in innovation management
Recognize a variety of different innovation strategies.
Learning objectives
Explain the significance of technology trajectories for firms investing in technology
Recognize the importance of firm-specific competencies in generating long-term profits
Provide an understanding of the role of an organization’s knowledge base in determining innovative capability
Provide an understanding of the concept of the ‘learning organization’
Recognize the importance of technical and commercial capabilities in innovation management
Recognize a variety of different innovation strategies.
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Strategy Key Point
The key point here is to emphasize the influence of strategy on the management of innovation, not to explore the intricacies of different strategies.
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The discussion on business strategy per se is kept relatively short. There are several very good textbooks that focus exclusively on corporate and business strategy.
The key point here is to emphasize the influence of strategy on the management of innovation, not to explore the intricacies of different strategies.
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Business strategy
Business strategy concerns the actions and the approaches crafted by management to produce successful performance in one specific line of business; the central business strategy issue is how to build a stronger long-term competitive position
Business strategy is concerned with an organization’s basic direction for the future.
This involves careful consideration of its purpose, its resources and how it interacts with the environment in which it operates.
Ref: http://highered.mcgraw-hill.com/sites/0072443715/student_view0/glossary.html
Business strategy concerns the actions and the approaches crafted by management to produce successful performance in one specific line of business; the central business strategy issue is how to build a stronger long-term competitive position.
Business strategy is concerned with an organization’s basic direction for the future. This involves careful consideration of its purpose, its resources and how it interacts with the environment in which it operates.
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Operating strategy
Operating strategy concerns how to manage front-line organizational units within a business (plants, sales districts, distribution centers) and how to perform strategically significant operating tasks (materials purchasing, inventory control, maintenance, shipping, advertising campaigns).
Operating strategy concerns how to manage front-line organizational units within a business (plants, sales districts, distribution centers) and how to perform strategically significant operating tasks (materials purchasing, inventory control, maintenance, shipping, advertising campaigns).
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Organizational strategy
An organization's strategy deals with how to make management's strategic vision for the company a reality-it represents the game plan for moving the company into an attractive business position and building a sustainable competitive advantage
An organization's strategy deals with how to make management's strategic vision for the company a reality-it represents the game plan for moving the company into an attractive business position and building a sustainable competitive advantage
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Competitive strategy
Competitive strategy consists in the adoption of a unique position in the marketplace through targeting a specific market and marketing mix.
The traditional ‘competitive strategy’ view (Porter)
Focus on product and market positioning,
Provides little insight into the process of innovation management and knowledge acquisition
Competitive strategy consists in the adoption of a unique position in the marketplace through targeting a specific market and marketing mix.
The traditional ‘competitive strategy’ view (Porter) focus is on product and market positioning, and provides little insight into the process of innovation management and knowledge acquisition.
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Content Theory
Content theory explains why human needs change with time http://en.wikipedia.org/wiki/Content_theory
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Dynamic Competence Based Theory
Dynamic Competence Based Theory attempts to address the limitations of both content theory and process theory.
Sees both the external and internal environments as dynamic, where the external environment is constantly changing as different players maneuver themselves, and where a company's internal environment is also evolving.
The dynamic competence based theory of the firm, attempts to address the limitations of both content theory and process theory. This new theory sees both the external and internal environments as dynamic, where the external environment is constantly changing as different players maneuver themselves, and where a company's internal environment is also evolving.
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Content Theory
Content theory explains why human needs change with time
Content theory includes the work of David McClelland, Abraham Maslow and other psychologists since they attempted to explain why human needs change, but not how they change.
(see Maslow’s triangle of hierarchy of needs)
Maslow's primary contribution to psychology is his Hierarchy of Needs. Maslow contended that humans have a number of needs that are innate.
Maslow postulated that needs are arranged in a hierarchy in terms of their potency. Although all needs are instinctive, some are more powerful than others. The lower the need is in the pyramid, the more powerful it is. The higher the need is in the pyramid, the weaker and more distinctly human it is. The lower, or basic, needs on the pyramid are similar to those possessed by non-human animals, but only humans possess the higher needs.
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Process Theory
Process theory is a commonly used form of scientific research study in which events or occurrences are said to be the result of certain input states leading to a certain outcome (output) state, following a set process.
Process theory holds that if an outcome is to be duplicated, so too must the process which originally created it, and that there are certain constant necessary conditions for the outcome to be reached. When the phrase is used in connection with human motivation, process theory attempts to explain the mechanism by which human needs changes. Some of the theories that fall in this category are expectancy theory, equity theory, and goal setting.
In management research, process theory provides an explanation for 'how' something happens and a variance theory explains 'why'.
Process theory is a commonly used form of scientific research study in which events or occurrences are said to be the result of certain input states leading to a certain outcome (output) state, following a set process.
Process theory holds that if an outcome is to be duplicated, so too must the process which originally created it, and that there are certain constant necessary conditions for the outcome to be reached. When the phrase is used in connection with human motivation, process theory attempts to explain the mechanism by which human needs changes. Some of the theories that fall in this category are expectancy theory, equity theory, and goal setting.
In management research, process theory provides an explanation for 'how' something happens and a variance theory explains 'why'.
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Management Challenge
The management of this internal process of change, together with an understanding of the changes in the external environment, offers a more realistic explanation of the challenges facing senior management.
The management of this internal process of change, together with an understanding of the changes in the external environment, offers a more realistic explanation of the challenges facing senior management.
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Technology life cycles and S-curves
Fig.6.4.
This chapter highlights the importance of an organization’s knowledge base and the concept of organizational knowledge (Figure 6.4).
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Organizational knowledge
Indeed, an important concept is the idea of organizational knowledge and how the whole can be more than the sum of the parts
How the whole can be viewed as more than the sum of the parts
Indeed, an important concept is the idea of organizational knowledge and how the whole can be more than the sum of the parts (see Figure 6.5).
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Knowledge Base of an organization
Knowledge embedded in relationships (Fig. 6.6)
Organizational knowledge represents internal systems, routines, shared understanding and practices. See fig. 6.6.
In the past it was loosely described as part of an organization's culture, along with anything else that could not6 be fully explained. It is however a distinct part of the much broader concept of organizational culture – including tangible and intangible representations, such as minutes of meetings, research notes, customer profile databases, operating procedures, and TQM on one hand, and tried and tested systems on the other.
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Innovation Strategy,
Innovation strategy is a comprehensive, systematic process to integrate the financial, behavioral and technological aspects of the firm.
Innovation policy, in particular, orients the degree of innovativeness of companies.
For example:
a company will attempt to look ahead and try to ensure that it is prepared for possible forthcoming changes.
In some instances a firm can modify world science and technology, but mostly the future is unknown – some firms will prosper others will not.
Innovation strategy is a comprehensive, systematic process to integrate the financial, behavioral and technological aspects of the firm.
Innovation policy, in particular, orients the degree of innovativeness of companies.
For example:
a company will attempt to look ahead and try to ensure that it is prepared for possible forthcoming changes.
In some instances a firm can modify world science and technology, but mostly the future is unknown – some firms will prosper others will not.
In virtually all areas of business it is not always clear who are the players in the innovation race.
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innovation strategy – an example
Innovation strategies in the personal computer industry
| Strategy | Characteristics | Example |
| Offensive (Leader) | Technology intensive Risky | Intel – the Microchip Apple – the Macintosh GUI |
| Defensive (Follower) | Technology intensive Competitive | IBM – Personal computer HP - Printers |
| Imitative (Low-cost producer) | Licensed Technology Economy of scale | Dell, Gateway - PCs |
| Traditional (Market segmentation) | Long established technology | Scottish whisky |
In virtually all areas of business it is not always clear who are the players in the innovation race.
For example, a company will attempt to look ahead and try to ensure that it is prepared for possible forthcoming changes. In some instances a firm can modify world science and technology, but mostly the future is unknown – some firms will prosper others will not.
In virtually all areas of business it is not always clear who are the players in the innovation race. Very often contenders will emerge from the most unexpected places.
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Pause for though
If technology trajectories are determined by a firm’s past, how can it change trajectories and get on another one?
The simple answer is to acquire another firm with the necessary skills, competencies and knowledge. This is a well known strategic route, also firms may wish to link up with the necessary skills. E.g. Ericsson and Sony - see case study in Chapter 10. Finally, a firm may buy in R&D resources in the form of experts and/or start up R&D research programs. Indeed, much of the current pharmaceutical industry has grown out of the chemical industry that existed from the 19th century.
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Pause for though
Other than through the use of patents and copyright how can a firm prevent its competencies from being imitated?
There are examples such as Honda and Tesco where competitors know what these firms are doing but cannot replicate it. The literature suggests that firmly embedded competencies into the routines of the organization make them more difficult to transfer, hence the movement of people alone will not transfer competencies. Similarly technology that is embedded in the firm in the form of skills and know-how make technology difficult to transfer. There have been examples of licenses bought and exchanged and yet the license is still not able to get the technology to work. Ensuring that competencies are wrapped up into organizational routines is the best way of ensuring competencies are not imitated.
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END
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Dynamic
Capabilities
New Entries
Substitutes
Customers
Competitors
Suppliers
