Tuesday, September 1, 2009

Innovation and Change

1. Introduction
2. Theme definition
Key Issues
3. Short Case
The organization
How does the literature fit into the organization
Problems or issues that emerge
4. Recommendation
Changes that should be made in the organization
The need for further study

1. Introduction
Creative management is a more open, dynamic and flexible approach to management than economic management and includes economic management as part of its framework. In this approach, the requirements of both the early and later stages of the creative process are balanced. The early stages may be seen as postmodern and the later stages as modern, but the focus is on the total process of change, rather than its components. It is a dualistic management approach, combining opposing tendencies to achieve a balanced outcome ( 2002). Creative management considers differentiation and dedifferentiation, continuous and discontinuous change, objective and subjective knowledge, intuition and analysis, predictability and experimentation, reducibility and holism. It may be seen as an integrated economic and psychological approach to product and company development (2002).

The early more postmodern development stages emphasize intuition and entrepreneurship, both enacting and developing visions and managing images. The later, more modernistic stages emphasize systematic analysis and planning in order to reduce cognitive uncertainty and establish order (2002).Consequently, image and innovation management may be seen as the main overall objectives of creative management and as major mechanisms for constructing strategic reflexivity. Products are the outcome of the managerial process, as the word itself implies, and producing products therefore mainly reflects the requirements of the late stages of the creative process, viewed as the way from idea to market offer. Product innovation and marketing, however, are much more concerned with the early stages of the creative process ( 2002).

There is a need to move from a traditional, modern economic management approach to a creative management approach by integrating modern and postmodern elements, rather than focusing on one to the exclusion of the other. These elements have always been intuitively balanced in practice by insightful decision-makers, but are separated in theory. A creative management approach should therefore also help to bridge the gap between academics and practitioners in describing and understanding their relevant realities ( 2002). Creative management consists of new ideas, new directions, new methods, and new modes of operation. Creative and innovative management focuses on coupling; that is, linking the creative management and innovative management constructs. The operative words are act of management. Acts of management involve linking strategy, organization, motivation and incentives, culture and environment, and institutional alliances. The means of measuring and evaluating these linkages in terms of their being better is on the cutting edge of creative and innovative management (1993).

Identification of creative and innovative management performance is a major research need. In concept, this means that successful creative and innovative management must be superior to the accepted norm of management. In the altered environment the new economic system has created an atmosphere promoting the innovations of enterprises. New companies are founded; old state companies are transformed into private firms. What is needed so badly is investigation of the innovative and creative management of companies (1993). The paper focuses on the concept of innovation and change in businesses. The paper will discuss a case study and a particular company that made use of innovation and change in the way they operate. The paper will end with a recommendation.

2. Theme Definition

Over the last few decades, innovation has become widely recognized as both a major goal of economic activity and one of the most important instruments through which organizations and countries gain and sustain competitive advantage in globally competitive marketplaces. At the organizational level, some claim that innovation is a key functional activity in organizations, in much the same way as marketing or finance are. Product innovation is then thought of as a routine operation like any other that organizations perform. Others suggest that innovation is a key survival strategy for organizations because it enables more rapid adaptation to turbulent environments. Innovation then becomes a primary indicator of an organization's ability to adapt to its environment (2002). Over the past few decades, this acclamation of innovation has become highly prominent as technological and scientific advancement, particularly in information and communication, increasingly affects every aspect of people's lives. Despite their differences, most writers seem to accept that innovation leads to new ways of doing things and to new solutions to the problem of resource scarcity. However, even this is contested by, for example, evolutionary economists who regard innovation as more an effect than a cause of self-reinforcing, cumulative patterns of economic growth. Evolutionary economists argue that technological innovation should not be reduced to the narrow perspective of technological determinism. The term innovation makes most people think first about technology. The emerging world requires more social and organizational innovation. It is a virtual truism that if technical innovation runs far ahead of complementary social and organizational innovation, its use in practice can be either dysfunctional or negligible (2002).

People in organizations often talk about innovation as if there was some ultimate novelty, one that would finally deliver them from the pressures of competition, if only they could make the right rational choice. Innovation as the potential for transformation emerges in conversations between people that are characterized by redundant diversity, which is experienced as mis/understanding. Thinking about the process of innovation in mainstream literature seems to fall into two streams. First, some think of innovation as a rational, intentional, sequential managerial process. Thinking here reflects the rational behavior assumption of classical and neoclassical economics and falls within the paradigm of strategic choice and planning (2002). Firms innovate in direct, purposeful and intentional responses to objective changes in their environment, so that they can achieve a new equilibrium. The future competitive positioning is a matter of forecasting and of detecting shifts in consumer preferences or in detecting latent unsatisfied demands. Acquiring this information involves an effort that is similar to the application of the scientific method. Second, there are those who understand innovation to be a social, political and behavioral process, reflecting the position of evolutionary economics. This stream, while rejecting the rational paradigm and embracing a human-centered view, does not reject the importance of equilibrium. It only denies the ability of rational ways of achieving it. As an alternative, it proposes shared visions and culture as organizational binders and control devices to attain desired behaviors ( 2002). Innovation is an important part of creative management for businesses. Without innovation businesses would remain stale and it cannot create changes.

Over the last two decades of the twentieth century, theories of organizational change have had a tremendous impact on business and not-for-profit companies. The extent of the influence of popular theories of change including Culture Change, Total Quality Management (TQM), Business Process Re-engineering (BPR), Organizational Learning, and, more recently Six Sigma is evidenced throughout the business world as application and outcomes are reported and debated in the business presses, consulting reports, management journals and best-selling business trade books. Many of the top corporations, have implemented one or other change program over the last twenty years, often at the cost of millions of dollars, and involving large-scale restructuring and extensive job losses (2003).

At the end of the day, while it is generally agreed that certain change programs have become widely popular, there is considerable debate about the success or failure of the subsequent changes themselves. Business critics blame suggested failure on incorrect implementation. Other business critics are less convinced, questioning the lack of evidence of a clear link between the implementation of selected change program and subsequent business success. It is argued that, within management thought and practice, the notion of organizational change has changed in significance over the last two decades, from one of many potential strategies of managing to a key influence on organizational effectiveness and survival. The focus has shifted from the strategic choice of the actor to one of incontrovertible external forces that managers need to anticipate, react to and manage. It is contended that organizational change as imperative has become an important management discourse that can be witnessed in the discursive practices of companies (2003).

Explaining the popularity of organizational change in sense making terms it can be argued that change has become a conventional management practice, developed and sustained through a powerful management discourse, whose on-going character influences the decision-making of large and small companies, profit and not-for-profit companies alike. Whether or not the adoption of a particular program of change is the right course of action for some companies doesn't seem to matter. Decisions to implement change programs are based on plausibility rather than accuracy. Prior to 1980, within business texts, organizational change as a management technique was either not mentioned at all or was limited to discussion of group dynamics and employee resistance to change (2003).

The notion of organizational change in the late 1970s and early 1980s, developed from learning theories and an action research approach to organizational problems. Various models focusing on quality of working life, socio-technical theory, autonomy and job enrichment were employed to improve working conditions, where typically the emphasis was on rewarding and reinforcing particular behaviors. Over time, the emphasis on change programs has switched focus from ways to improve employee satisfaction to a goal today of customer-driven corporate effectiveness. But something more than a change in focus has occurred. The notion of organizational change has taken on new meaning. Since the early 1980s, it has become an imperative rather than a technique to be considered at appropriate times, a holistic rather than a piecemeal approach to organizational effectiveness (2003). Organizational change is done by a company when it believes that the company is not adjusting to the new trends in its environment.

Issues in Innovation and Change
Innovation and change may bring good things for a company but there are certain issues regarding these two concepts. For innovation one issue in it is the boundaries it can occupy. Innovation can only be done on a specific part of the business. It cannot easily extend to other parts of the business because the other parts of the business may have problems when innovation is done into it. Another issue on innovation is the limit of the budget and time allotted for its implementation. When innovation is to be implemented there is a limit on the budget and time for its implementation. It may or may not be enough depending on the degree of innovation used. On the other hand an issue on change is its acceptance by the people in the firm. Some people in the firm are willing to accept change while some have difficulty in letting change take place. Change can sometimes cause conflict in an organization. Another issue on change is its effects on the organization. Changes can make good effects to an organization but with the good effects are some negative effects.

3. Short Case
The company E bay
Pierre Omidyar was born in Paris in 1968, and moved with his parents to Washington, D.C., while still a young boy. By the time he reached high school, the Apple II the first practical personal computer was being snapped up by technologists and hobbyists, and the IBM PC was just coming onto the market. Like lots of kids, Omidyar developed a passion for computer programming and applied that passion to a most mundane task computerizing the card catalog of his school library. He was paid $6 an hour for that little job, which must be less than what his current net worth earns in the blink of an eye. He pursued his interest at Tufts University, just outside Boston, where he earned an undergraduate degree in computer science, then joined Claris, a software subsidiary of Apple Computer, where he developed the popular MacDraw application (2000). E-commerce was a new idea back in 1991 when Omidyar co founded Ink Development Corporation one of the pioneers of online retailing. When Ink was bought out by Microsoft, he went on to work for General Magic, a mobile communication platform company, and was working there when the idea of online auctions cropped up. Business in the Valley was at an important turning point back then. Pundits, analysts, and venture capitalists were turning their attention away from electronics manufacturers like Hewlett-Packard, the company that put the Valley on the map, and getting excited about the new companies on the block, the Internet-based start-ups (2000).

The new company was formed as a sole proprietorship in September 1995 and operated from Omidyar's small apartment, using a Web site provided by his Internet service provider (ISP). A filing cabinet, an old school desk, and a laptop computer were the tools of its makeshift trade. In order to develop a critical mass of transactions, users were charged no fees whatsoever, but within six months, the two entrepreneurs began charging token fees with no larger goal than to cover their rising Internet service costs. Before long, however, traffic on this site was so intense that the ISP told Omidyar to take a hike. He had to buy his own server and install it in his apartment (2000). The company incorporated in May 1996, but until July 1996 had no employees other than its founders, who paid themselves annual salaries of $25,000. Even so, business had grown to the point where Omidyar had to move the operation from his apartment to a one-room office in Sunnyvale and hire a part-time employee to handle the checks and billings. Employee number one was Chris Agarpao, whom Omidyar had met at a wedding, and who soon thereafter was interviewed at a picnic table on the grounds of Omidyar's apartment complex. The odds against the success of this new venture would have seemed substantial back in 1995 and 1996 (2000).

The market for the sale of goods over the Internet, particularly through person-to-person trading, was new, and did not enjoy widespread acceptance. Buying something of substantial value, often sight unseen, from a total stranger hundreds or thousands of miles away did not fall into the category of natural acts. Further, the growth of Internet use would have to continue if the auction market hoped to gain real size. And there was no assurance that it would. Public enthusiasm for Web surfing might stall out (2000). Even if public acceptance was high, the network infrastructure needed to accommodate rapidly growing usage might not be forthcoming. More than a few pundits predicted that the network would collapse under the weight of growing consumer and business use. Higher levels of Internet usage might require new standard and protocols and broadband delivery. Insufficient infrastructure and high demand might slow the Internet and turn off users. Those were the logical macro concerns. At the company level, people had to wonder what would happen if the company's servers crashed or if lots of auction participants started complaining of being ripped off. There were also questions about the popularity of the items offered in eBay auctions. Future revenues depended on continuing demand for the types of goods listed by users of the service ( 2000).

The literature and the organization
The first generation of e-business has passed into history, and a second generation is now being born. The first generation was marked by high hopes, a land grab for market opportunities, an infatuation with technology for its own sake, and a disregard for traditional performance metrics. Speed was the generation's defining characteristic, and traditional firms slower by nature than startups found themselves at a comparative disadvantage (2002). As excitement about the possibilities promised by the Internet's disruptive technology mounted, dot-com stock prices rose to unsustainable levels. A crash inevitably followed, and the Internet economy was confronted with the need to deliver real value to customers and profits to investors ( 2002). Most executives have a vision of where they want their companies to be with e-business. They can imagine the benefits of successfully integrating the Internet throughout their entire value chain. They can see the advantages of e-business transformation: reduced costs, increased productivity, accelerated business processes. But the myriad changes in business practices that they need to make are blurry and out of focus, and so they can't make their vision a reality (2002). Many executives suffer from the all too common ailment of technological presbyopia or the belief that having a clear view of something means it is only a short distance away. They become impatient when success doesn't arrive overnight, and they are tempted to skip certain steps that are necessary to create a stable and profitable business (2002).

One of the businesses that created a huge innovation and change to the industry is E bay. The said company as seen in the literature created a new trend in the way business is transacted. People who transacted with a company had to go to a store to buy the products they need or acquire the services they desire. E bay was one of the companies that changed such practice. The company gave people convenience and easier time in buying the products they need. People who have computers and internet access can just order or bid for products they want without leaving the sanctity of their homes. The company also allowed people to sell their products on its website. The innovation and change introduced by the company proves to have positive effects for clients but with it are its negative effects. One problem with such innovation and change by the company is the assurance that the product will not have defects or problems. Since there was no transaction done personally, clients cannot be 100% sure that the products they purchase will have no defects or problems. Another problem with such innovation and change is the security of records and information being transferred by clients to the company. In engaging in E business clients has to provide financial account numbers to the company as a form of payment. There are less assurance that these kinds of information will not be available to online hackers and cyber criminals. Lastly a problem with such innovation and change is the longevity of such trend. This trend of business may or may not stay for a long time. Change in businesses is a constant thing and this kind of trend may or may not be a long lasting trend.

4. Recommendations
Changes that should be made
The organization can improve itself by making sure that all the products that it intends to sell and put up for bidding would be checked for defects. The organization should have a checking and testing procedure so that the products will be in a tip top condition. It can also call into attention people who sell stuff that have problems and are not in working condition. The interest of the client is an important concern for the organization and the organization should show its concern for its clients by making them receive the most able products. The organization can improve itself by having a complete and detailed knowledge about the people who sells their products to the company. As mentioned earlier the company allows people to sell their things to through the company’s website, the company should check and know the people who sells the products so that the company will know whether or not the products have defects or are illegally sold. Moreover the organization can improve itself through having added security measures to counter threats from hackers and cyber criminals. The company can find out about new programs and applications that can stop these kinds of people from knowing the financial accounts and other important records shared between the company and its clients.

Lastly the company can improve itself through engaging in other business endeavor. There is no assurance that the way the company is conducting its business will last for a long time. The company should engage in other endeavors that can help them survive the end of the e-business trend. The company can try to have a personal buying and selling business wherein a company has a visible branch that buys and sells different products and services. Clients who have known the company for a long time will be the first customers of the company in this endeavor. These clients will be telling people they know about the company thus it will improve after some time. The financial risk they must be concerned with is the cost of the new business venture. But given some time the expenses will be replaced with profits for the company.

The need for further study

Further study will have to be attempted on topics regarding how long the trend of e –business will last. This kind of study will be important to determine the gravity of impact of the innovation and change done by e bay and e business. Further study should also be done with regards to what are the trends that might bring a new innovation and change to the way business is done. Future studies should be done particularly on the next possible business trends that will create changes and innovation in the way businesses are operated and transacted. These kinds of studies can widen the knowledge about the future possibilities in business and such kind of studies can give more proofs and a better understanding of the importance of change and innovation in business.


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