Course Overview

Seminar in Management is a subject that designed to give you tons of usable

content on a variety of topics that focuses on a Contemporary problems, philosophies,
and techniques in the field. It will also provide you an opportunity to study in – depth
issues and developments of particular concern to students, faculty and the business
Community.
Typically, it involves cooperative discussion, multiple speakers and opportunities to
share perspectives and issues related to the topic. Attending Seminar in Management
has numerous benefits, including improving communication skills, gaining expert
knowledge, networking with others and renewing motivation and confidence.

Oral Communication
It can be a comfortable, open environment for practicing professional
communication techniques. It also help you becoming a better listener, present your
arguments and ideas clearly and be open to others’ point of view. Group discussions
and activities can also let you practice interpersonal skills, such as dealing with
conflicting opinions among group members and working together to accomplish
assignments or tasks.

Expert Knowledge
Seminars give you intensive exposure to a topic through presentations and
discussions led by multiple experts. It is also an ideal opportunity for people who
want to study a topic in depth, but do not enjoy reading or have the time to take
classes. By asking questions, taking detailed notes and being prepared for each lesson,
you can leave a seminar with a wide range of knowledge in a specific field.

Networking
Along with having access to experts, It will also give you the opportunity to
meet other people who share your interests. Seminar discussions offer chances to
debate issues related to the field, share experiences and exchange perspectives.
Meeting new people can offer encouragement, solutions to common problems and
advice for how to handle challenges. These relationships can continue into
professional connections even after the seminar is over.

Renewed Motivation
It is easy to get caught up in the daily grind that you lose motivation or excitement for
your job or interests. Intensive study of a Seminar provides a chance to get away and
dedicate yourself to the topic for a few days. As a result, you may return from the
seminar with renewed motivation to pursue your goals and find your enthusiasm
rekindled. This can lead to higher productivity and fulfilment to professional and
academic goals.
New Competitive Landscape

Technology is rapidly altering the nature of competition in the late twentieth century,
causing what some refer to as a ‘technologicalrevolution.’ As a result, managers and
government policy makers face major strategic discontinuities that are changing the
nature of competition. Approaches and tools that were effective in the past are found
wanting. New tools and approaches are being hurriedly developed. This new
competitive landscape is becoming dimly visible. For example , new manufacturing
technologies are enabling mass customization in many industries and altering the
economics of product variety. The integration of microprocessor and computer
technology into many products and services allows differentiation based on software.
Software is supplanting hardware in many applications and dramatically altering the
pattern of developmental vs. production costs. Telecommunications and computer
networks are altering the way managers work and interact, more effectively
integrating overseas subsidiaries and alliances with headquarters executives, and
permitting technology to be more easily shared throughout the corporation and its
associated organizational networks. Furthermore, rapid developments of product and
process innovations are becoming increasingly important in many global industries to
achieve or sustain a competitive advantage. Speed – based organizational processes
increase the pace of technological change. In short, technological changes with
strategic implications are occurring at a dizzying pace.

Complex technological developments such as these are altering the nature of strategy
in many strategies. Executives in technology – intensive firms ( e.g., electrons,
pharmaceuticals, telecommunications, and computers) and in firms that intensively
use technology ( e.g., airlines, broker age houses, banks, and electric utilities ) must
develop a better understanding of the relationship of strategy to technological change
and achieve a close integration of the two. Furthermore, the developments in
telecommunications and computer technology have far – reaching consequences for
the management of all organizations.
The New Competitive Landscape

Building Strategic Flexibility and Competitive Advantage

 Exercise Strategic Leadership

 Develop and communicate a long – term vision

 Encourage and gain commitment to continuous change
 Build non – linear thinking among the management teams and, indeed ,
all employees

 Build Dynamic Core Competences

 Create and support a corporate culture that emphasizes continuous

learning
 Provide effective skill development programs with regular updating to
include the latest technology
 Produce incentives for continuous skill development and for
acceptance of change

 Focus and Develop Human Capital

 Make limited contingency workers and outsourcing

- Identify the least valuable units ( those that cannot provide a
competitive advantage)
- Consider outsourcing these units but only to excellent, reliable and
ethical suppliers
- Consider using contingency employees in peripheral jobs but
minimize their numbers and impact on core functions
 Develop Human Capital
- Recruit the best employee talent
- Invest substantial resources in developing new employee skills and
capabilities
- Reward employee skill development

 Make Effective Use of Technology

 Through continuous environmental scanning regularly identify the

newest and most effective technology relevant to your business ( e.g.
information technology , manufacturing technology )
 Make a commitment to have the newest and best technology and
updating of skills to use it
 Allocate necessary resources to acquire and implement up – to – date
and best technology available

 Engage in Valuable Strategies

 Exploit global markets

- Identify international markets where your firm can participate and
add value
 - Enter those markets using the most effective entry method ( e.g.
strategic alliance with partner from country where market is
located)
- Build a transnational management team ( e.g. culturally sensitive
and knowledgeable top management teams ) and with a loosely
coupled cooperative structure ( e.g. corporate culture emphasizing
cooperation, compensation/incentives for cooperation)
- Engage in cooperative strategies
- Where risks are high and / or adequate internal resources are
unavailable, search for partner to develop a cooperative venture
- Select partners with complementary resources and appropriate
strategic intents
- Find ways for your firm and the partner to reach both goals (make
it a win – win partnership)

 Develop New Organizational Structures and Culture

 Implement a horizontal organization

- Where possible develop teams ( particularly cross – functional
ones)
- Provide managerial attention and support ( e.g. incentives ,
financial resources, training, moral support ) to the teams ( and
individual members thereof)
- Integrate the horizontal with the altered vertical structure (plan it :
do not allow it to “evolve’)
 Develop a learning and innovative organization culture
Include the building of knowledge into the values of the organization
- Develop a program non – linear learning ( e.g. review of major
decisions and actions by group of knowledgeable managers )
- Build a structure that diffuses knowledge throughout the
organization (e.g. jobs with the responsibility to spread best
practices from one unit to others)
 Manage firm as a bundle of assets
- Continuously evaluate the various businesses and units for their
critically and risk
- Spin – off ( spin – out) the riskiest businesses / units , while
maintaining an equity interest
- Focus on and give primary managerial attention to the most
valuable core businesses/units

Strategic Leadership

Leadership – The ability to influence a group toward the achievement of goals.

Types of Leadership

 Authoritarian – high task, low relationship

  Team Leader - high task, high relationship
 Country Club - low task, high relationship
 Impoverished - low task, low relationship

Manager Versus Leaders

Manager Characteristics Leader Characteristics

Administers Innovates
A Copy An Original
Maintains Develops
Focuses on Systems and Structures Focuses on People
Relies on Control Inspires trust
Short Range View Long Range Perspective
Ask how and when Ask What and Why
Eye on bottom line Eye on horizon
Imitates Originates
Accepts the status quo Challenges the status quo
Classic good soldiers Own Person
Does things right Does the right thing

Strategic Leadership

 The ability to anticipate, envision, maintain flexibility, and empower

others to create strategic change as necessary.
 The process of providing the direction and inspiration necessary to create
or sustain an organization.
 Multifunctional task that involves
 Managing through others
 Managing an entire enterprise rather than a functional sub unit
 Coping with change
 Attracting and managing Human ( includes intellectual) Capital
 Being able to meaningfully influence others
 Make a major difference in how well a firm performs.
 Deals with the major purposes of an organization or organizational unit
 Five important components of Strategic Leadership include
 High – level Cognitive ability
 Multiple Inputs to Strategy Formulation
 Anticipating and creating a future
 Revolutionary Thinking, and
 Creation of a Vision
 Components of Strategic Leadership

High Level Cognitive

Creating a Vision Activity
(Come share my (Strategy is hard
dream) mental work.)

Revolutionary STRATEGIC Gathering

Thinking LEADERSHIP Multiple
Inputs
(Nothing like
this has ever (Strategy
been done Anticipating formulation is
before.) and creating democratic.)
a future

(Let’s invent a
new world.)

Strategic Leadership Dimensions

High HIGH – Control PARTICIPATIVE

Challenge - INNOVATOR (HCI) INNOVATOR (PI)
Challenge- seeker who Challenge- seeker who
Seeking maintains tight control over delegates control of
organization organization
Challenge -
STATUS QUO PROCESS MANAGER
Seeking GUARDIAN (SQG) (PM)
Challenge- averse who Challenge- averse who
High maintains tight control over delegates control of
Challenge - organization organization
Seeking
High Control Low Control
NEED FOR CONTROL
Strategic Leadership and Strategic Management Process

 Effective Strategic leadership is

The foundation for successfully using
the strategic management process
 Strategic Leaders:
 Shape the formation of vision and
Mission
 Facilitate strategy formulation
and Strategy implementation
 Are needed for the
Achievement of
Strategic
Competitiveness
And above – average returns.

The Role of Top – Level Managers

 Top Level Managers play a critical role in strategy formulation and
implementation.
 Their strategic decisions influence how an organization is designed and
how goals are achieved.
 Top Managers also develop structure, culture, reward systems, and
policies.
 Having a Top Management Team with superior managerial skills is critical
 Managers use their discretion when making strategic decisions and this
discretion influences firm performance.

 Several factors determine the amount of manager’s decision – making

discretion including :
 External Environmental Sources
 Organizational Characteristics
 Characteristics of the Manager
 Factors Affecting Managerial Discretion

The Role of Top – Level Managers

Top Management Teams (TMT)
 In most firms there is a team of Strategic Leaders called the Top Management
team.
 A team is needed to deal with the complexity of challenges and the need for
substantial amounts of information and knowledge to make strategic decisions
 TMT composed of key individuals who are responsible for selecting and
implementing firm’s strategies.
 Usually includes officers of the corporation ( VP and above ) and
members of Board of directors.
 TMT characteristics must fit strategy and strategic implementations.
 TMT’s affect firm performance and strategic change.

Top Management Teams (TMT), Firm Performance and Strategic

Change

 Top Managers need to operate the internal organization and deal with the
external environment and stakeholders groups
 A heterogeneous TMT can facilitate this
 Managerial Group of individuals with different functional
backgrounds, experiences, and education
  Introduce a variety of perspectives and can lead to better decisions
 Tend to “ think outside of the box”, leading to more creative decision
making , innovation, and strategic change
 Offers various areas of expertise and promotes debate
 Having a top management team that functions cohesively and having members
with expertise in the firms core functions and businesses is also important

The CEO and TMT Power

 TMT characteristics can give the CEO’s team power relative to the board of
directors and can influence the amount of strategic leadership the board
provides.
 Can affect CEO discretion and the ability to appoint board members
 CEO Dually and longer tenure can also lead to greater CEO power
 The relative degrees of power held by the board and TMT should be
appropriate for the organization
 TMT characteristics must fit strategy and strategy implementation

Managerial Succession

 The choice of executives is a crucial decision with important implications for

the firm’s performance
 Organizations select managers and strategic leaders from two types of
managerial labour markets
 Internal Managerial Labour Market – opportunities for managerial
positions to be filled from within the firm
 External Managerial Labour Market – opportunities for managerial
positions to be filled by candidates from outside of the firm
 Impacts company performance and the ability to embrace change in today’s
competitive landscape
 Succession, top Management team composition and strategy are related

Effects of CEO Succession and Top Management Team Composition on

Strategy
Benefits of Internal Managerial Labour Market
 Leads to continuity and continued commitment to firm’s vision, mission, and
strategies.
 Insiders are familiar with company products, markets, technologies, and
operating procedures.
 Reduces turn over of existing personnel many of whom possess valuable firm
– specific knowledge.
 Favoured when the firm is performing well.

Benefits of External Managerial Labour Market

 Long tenure with the same firm is thought to reduce innovation.
 Outsiders bring diverse knowledge bases and social networks, which offer the
potential for synergy and new competitive advantage.

Exercise of Effective Strategic Leadership

 Key Strategic leadership Actions
 Determining Strategic Direction

 Involves specifying the vision and the strategy to achieve this vision
over time.
- Vision is a picture of what the firm wants to be and in broad terms
what it wants to ultimately achieve.
 Strategic direction is framed within the context of the opportunities and
threats over next 3 – 5 years.
 Includes a core ideology and envisioned future
 Should serve to motivate, “push”. And guide the organization.

 Effectively Managing the Firm’s Resource Portfolio

 Includes financial, organizational ( competencies and capabilities ) and

human capital.
 Firms resources must be managed in a way that is consistent and
supportive of strategy.
 They also must be allocated as efficiently and effectively as possible so
that each area or part of the firm has what it needs for strategy
implementation.
 Changing strategy will likely call for the reallocation of resources and
the movement of people and other resources from one area to another.
 Financial resources are managed through the budgeting and resource
allocation process.
 Core competencies and competitive capabilities should be developed in
a strategy supportive fashion.
- Firms should build their strategy around things they are good at
doing and/or become good at doing things that are supportive of
strategy.
 A firm’s human capital, which refers to the knowledge and skills of
firm’s entire workforce, should also fit its strategy.
- This can be accomplish by:
a. Hiring people who fit the organization and its strategy.
b. An effective training and development program.
- Investments should be made to acquire and develop the firm’s
human capital.

 Sustaining an Effective Organizational Culture

 Organizational Culture : consists of a complex set of ideologies,

symbols, and core values shared throughout the firm and influence the
way business is conducted
- Shapes the context within which the firm formulates and
implements it’s strategies.
- Also helps to regulate and control employees’ behaviour
  There are many things that make up a company’s culture and many
places that is comes from
 Once developed, a company’s culture tends to last because:
- Organizations hire people who fit the firm and its culture
- Employees learn by observing the behaviour of others and through
socialization and systematic indoctrination of cultural values.
- Storytelling of company legends and ceremonies that honour
employees who display cultural ideals
- Visibly rewarding those who follow cultural norms
 Cultures can vary in strength depending on the degree to which they
are imbedded in company practices and norms.
 Firms must match culture to strategy, as a culture that promotes
attitudes and behaviours that are well – suited to strategy will help in
the achievement of strategic competitiveness and above average
returns.
- Related firms develop cooperative cultures
- Unrelated firms develop competitive cultures
- Cost leaders value economy, frugality and efficiency
- Differentiators value innovation, quantity, and excellence
 Changing culture can be difficult but can be accomplished if the
appropriate strategic leadership is in place.

 Emphasizing Ethical Practices

 Ethical practices can be used control employee judgement and

behaviour.
 They should shape the firms decisions making process and are an
integral part of organizational culture.
 Strategic leaders should:
- Establish and communicate ethics related goals.
- Continuously revise, update, and disseminate the firm’s code of
conduct.
- Develop and Implement ethical policies and procedures.
- Use rewards to recognize ethical behaviour.
- Create an appropriate work environment.
 Ethical practices can be used to control ethical behaviour to make sure
people are behaving in the “ right” way.

 Establishing Balanced Organizational Controls

 Strategic leaders are responsible for the development and effective use
of strategic and financial controls.
 Controls provide the parameters for implementing strategies as well as
the corrective actions to be taken when implementation related
adjustments are required
 The challenge is to achieve an appropriate balance of financial and
strategic controls
 - The Balanced Scorecard
a. Framework that allows strategic leaders to verify that they have
established both financial and strategic controls to assess firm
performance
b. Underlying premise is that firms jeopardize their future
performance possibilities when financial controls are
emphasized at the expense of strategic controls
c. An appropriate balance of strategic and financial controls
allows firms to achieve higher level of performance.
d. Use multiple perspectives.

Strategic Controls and Financial Controls in a Balanced Scorecard

Framework

Perspectives Criteria
Financial Cash Flow
Return on equity
Return on assets

Customer Assessment of ability to anticipate

customers’ needs
Effectiveness of customer service
practices
Percentage of repeat business
Quality of communications with
customers

Internal Business Processes Asset utilization improvements

Improvements in employee morale
Changes in turnover

Learning and Growth Improvements in innovation ability

Number of new products compared to
competitors
Increases in employees’ skills

 Developing Policies and Procedures

 Policies and Procedures – are written or unwritten standards or styles
of behaviour that govern how people act and lead people to behave in
predictable ways.
 Can facilitate good strategy implementation.
 Can increase efficiency because they standardize work behaviour and
specify the best way to accomplish a task.
 Provide top down guidance about how certain things need to be done.
  They help ensure consistency in how strategy critical activities are
performed.
 Different types of firms make use of different types and numbers of
policies and procedures.
 Firms need to create a strong supportive fit between policies and
procedures and strategy.

 Developing Reward Systems

 It can be argued that rewards are the single most powerful tool for
winning the commitment of employees to effective strategy
implementation.
 Rewards are an important tool used to achieve behavioural control.
 Firms should create a results oriented system in which those achieving
objectives are generously rewarded and those not achieving objectives
are not rewarded.
 Rewards and incentives should also be tied to strategy:
- Cost leaders should reward people for being efficient and for
identifying ways to reduce costs.
- Differentiators should reward people for being innovative.
 The bottom line is that firms need to reward and motivate people in
ways that are supportive of strategy and strategy implementation.

 McKinsey 7 –S Strategy Implementation Framework

 Basic Premise : there are seven internal aspects of an organization that

need to be aligned if the organization is to be successful.
 These seven elements are interdependent and can be categorized as
either “ hard “ or “soft” elements.
 They are interdependent to the extent that making changes to one
affects all of the others.
 For an organization to perform well each of these elements must fit
with and be consistent with one another.
 These elements include:
- Strategy, Structure, Systems, Shared Values, Style, Staff and Skills
 Key Strategic Leadership Actions

McKinsey 7 –S Strategy Implementation Framework

Role of CEO

 The chief executive is the executive head of the organization. He

represents the management.
 The chief executive’s principle duty is to define long term direction
and scope of the organization.
 He has ultimate responsibility for its success.
 He leads the formulation and implementation of the strategy. He
guided by the board of the directors.
- Formulation of strategy
- Implementation of Strategy
 Formulation of Strategies : Strategy provides future direction and
scope to the organization for gaining competitive advantage. The roles
of chief executive in strategic formulation are:

Formulation of Strategies

 Key Strategic Role: The chief executive plays the role of chief
architect in defining vision, mission, and objective of the organization.
He conceptualizes and crafts strategic to achieve objectives.
 Decision making Role : The chief executive makes strategic decisions
related to strategy formulation. He makes strategic choice from among
strategic options for achieving objectives. This role involves risk –
taking.
 Resources Planning Role : This role of chief - executive involves
coordinated allocation of significant resources to planes. Such plans
can be organization wide or related to strategic business units or
 function. Resources can be people, money, technology, time and
information.
 Negotiator Role : Strategic must fulfil the expectation of various
stakeholders of the organization. The chief executive balance there
conflicting interest by negotiating disputes. The stakeholder can be
owners, customers, employees, suppliers, government, labour unions,
and financial institution.

Formulation of Strategies

 Implementation of Strategy :Implementation is putting strategy into

action. The chief information about strategy to the implementers
within the organization. He serve as a spokesperson for strategic
implementation.
 Leadership role : The chief executive assumes over all leadership for
the implementation of strategy. He inspire trust and self – confidence
among implements of strategy. He ensures there participation. He
motivates them for higher productivity. He provides direction for
implementation of strategy.
 Organizer role :The chief executive is an organization builder. He
determines the structure for strategy implementation. He establishes
reporting relationship and span of control. He assigns authority and
responsibility for petitions and people in the organization for key result
areas.
 Resource Manager Role : The chief executive ensures officiated and
effective mobilization, allocation and utilization of resources for
implementation strategy. Budgets are prepare for management or
resources.
 Monitoring : The chief executive monitors and evaluated the
performance results of strategy implementation. He takes corrective
actions to resolve performance problems. He handles unexpected
distributors and crisis situation.

Role of Middle Level Managers in Strategic Management

 Middle Management is the intermediate management level;

accountable to top management and responsible for leading lower level
managers.
 Middle Management is the intermediate management of a hierarchical
organization, sub ordinate to the senior management but above the
lowest levels of operational staff.
 They are accountable to the top management for their department’s
function. They provide guidance to lower level managers and inspire
them towards better performance.
 Middle management may be reduced in organizations as a result of
reorganization. Such changes include downsizing, delayering, and
outsourcing.
 Motivation

 Strategy – exploitation of signals from environment

 Environmental Dynamism
 Shift Basis for strategy – position based to capability based
 Increased importance of role of middle level managers

 Changing Orientation of Middle Management Work

Traditional Orientation Present Orientation

Developing coordination within Boundary Spanning ( relationships
functional boundaries across boundaries)

Controlling Growth Finding Innovation ( championing)

Executing Plans Synthesizing Information

Applying new technologies to Facilitating Learning ( transferring

production technology)

Theoretical Basis
 Role of middle level managers in Strategy formation:

 Idea generation : centre of information network

 Strategic Initiatives : creation of social networks, knowledge creation,
understanding of organization processes
 Capability Set : Develop New Capabilities
 Three crucial requirements for success of middle managers
- Access to knowledge
- Dynamic and flexible leadership
- Integration of new initiatives and new routine

 Four roles of Middle Managers

 Synthesizing (sense making) – attend, frame and diagnose issues

 Facilitation ( sense making and sense giving) – generation of variant
behaviour , cooperation and experimentation
 Championing ( issue selling ) – bring entrepreneurial and innovative
proposals to the notice of the top management
  Implementation ( sense giving) – translate strategic plans into
operational plans
 Sense making – way managers understand, interpret and make sense
out of information.
 Sense giving – attempts to influence outcomes through communication
of thoughts and gain support.
 Issue selling – process by which individuals affect other attention,
understanding of events, developments and trends that impact
organizational performance.

Model
Section 3: Organizational Purpose
When asked to define the purpose of those leaders in the social service sector of their
organization, each of these knew their purpose and there is a reason. For example, an
educator purpose is to help students to prepare for the real world by helping them to
become independent citizens and by providing them with knowledge needed for
future careers, another in healthcare, they preserve and improve human life, and
another from the Internet Company, they connect people to power and possibilities.
Each was living in a culture where vision, mission, and values were crystal clear. The
Purpose of an Organization is the fundamental reason why the organization exists. It
is not the answer to the question “What do you do?” which typically focusus on
products, services and customers, but rather the answer to the question “ Why is the
work you do important?”
Work should be purposeful and meaningful. It should contribute to making the world
a better place. It should be more than a job. It should be a cause that is making a
difference in people’s lives.
A Purpose statement should be brief in length yet broad in scope. Make it breif so
employees can remember it and use it to their daily actions. The Purpose should also
be broad in scope to allow the organization to adapt over time to a changing world
while it is central focus remains constant. Products and services may change, but the
organization must endure. Organizations are living entities; they are vehicles for
improving life and the world we live in.

Three Questions to ask in defining the purpose:

Employees should find the Organization Purpose Inspirational and
Motivational. It is cause that defines their contribution to society through work.
Businesses exist to make profit, but they also exist to make a difference. Through
work, individuals can make a difference and be part of meningful legacy.
1. Vision – an aspirational description of what an organization would like to
achieve or accomplish in the mid-term or long term future. Just as young
people ask this question upon choosing a career, organizations need to do
the same. Vision emerges from the sense of purpose. It forms the why, but
also embraces the future as in “ to become” the best, the most noted, the
highest quality, or the most trusted.It is intended to serves as a clear guide
for choosing current and future courses of action.

2. Mission It is the Organization’s Core purpose and focus that normally

remains unchanged over time. For example, if you work in mental health
facility, your mission is to care for and provide therapy to those who suffer
from conditions that inhibit their ability to learn, study, work, and get
along with others.
 3. Values Neither vision or mission mean much if they are not reinforced by
strong values. Values shape the culture – that is, the way people behave
towards others. Ethics and integrity must be given. But people want more
than good behavior ; they want to work in a place where cooperation and
collaboration norms. They want also to know their work matters and they
will be recognized for it. Values enforce the behaviors that employees
cherish.

Six Criteria for a Purpose Statement

 Is it a contribution to society – not a product or service?

 Does it answer the question – Why is this work important?
 Is it inspirational and motivational?
 Does it use powerful words?
 Is it brief in length so empoyees will remember it?
 Is it broad in scope to allow for future opportunities and change?

Key Points about Purpose

 Is central and enduring to the culture of the organization.

 Is the cause that defines one’s contribution to society.
 Unites efforts and inspires action.
 Is the answer to the question : Why is this work Important?
 Is a statement that is brief in length and broad in scope.

Examples of Purpose Statements

Bank We help people achieve their dreams
Beverage Company We benefit and refresh
Bread Company We nourish life
Communications We enhance image
Entertainment Company We make people happy
Food Company We nurture health and well – being
Non – profit We reduce poverty
Chemical Company Improve living environments
Library To connect people and information
Financial Company To buid value
Technology Company To help realize one’s full potential
Insurance Company To provide peace of mind
Consumer Products CompanyTo make life fun and easy
Section 4: Management Innovation
What is an Innovation?
 It is an idea, practice or object that is perceived as new by an individual or
other unit of adoption.
 It is a use of new knowledge to offer a new product or service that customers
want. Thus it is
Invention + Commercialization
“Innovation is the search for and the discovery, developed, improvement, adoption
and commercialization of new process, new products and new organization structures
and procedures.”

Characteristics of Innovation
 There is an object or target which is being changed.
 It can be a product, a process, an individual’s lifestyle, an organization’s
strategy, a society culture.
 Innovation vary in extent or magnitude i.e. degree to which one deviates from
the past.
 It is closely related to problem solving since generation and implementation of
ideas change never transpire without difficulty.
 Impact of change, the significance or range of its effects.
Difference Between Innovation and Invention

Invention Innovation
1. It is a creation of new product, service 1. It is the introduction of new product,
or process. service or process into the marketplace.
2. May not be commercialized 2. Results into commercialization
3. It can be autonomous or induced 3. Usually Induced
4. Can be for economic or non – 4. Economic motive
economic motive
5. Usually restricted to R & D Centre 5. Spread across the Organization
6. May bring few changes in 6. Brings organizational Change
Organization
7. Precedes Innovation 7. Succeeds Invention

Why Innovate?

Goals of Innovation
 Improving Quality
 Creation of New Markets
  Extension of the Product range
 Reducing labour Cost
 Improving production Process
 Reducing Environmental Damage
 Replacement of Products/ Services
 Reducing Energy Consumption
 Conformance to Regulations

Sources of Innovation
 Organic Structure
 Organic Structures positively influence innovation. As there is lower vertical
differentiation, formalization, centralization. Organic organizations facilitate
the flexibility, adaptation and cross – fertilization.
 Long Tenure in Management
 Managerial tenure apparently provides legitimacy and knowledge of how to
accomplish a task and obtain desired outcomes.
 Slack Resources
 Having an abundance of resources allows an organization to afford to
purchase innovations, bear the cost of instituting innovations and absorb
failures.
 Inter - unit Communications
 Innovative Organizations are high users of committees, task forces, cross –
functional teams that facilitate interaction across departmental lines.

Types of Innovation
1. Product and Process Innovation
Product
Innovation is
the introduction
of a good or
service that is
new or has
significantly
improved
characteristics
or intended
uses; a Process
Innovation
refers to the
implementation
of a new or
significantly improved production or delivery method. Evidence from firm innovation
surveys suggests that the share of firms with a product or process innovation varies
significantly across countries and that firms often adopt mixed modes of innovation,
meaning that they combine product and process innovations.

2. Open and Closed Innovation

Difference Between Open and Closed Innovation

Closed Open
1. Mostly Internal Ideas 1. Both Internal and External Ideas
2. Low workforce mobility 2. High Workforce Mobility
3. Low role of venture capital 3. Active Role of Venture Capital
4. Few new businesses 4. Many new Businesses
5. All the best people working within the 5. Not all the best people working within
company company, tapping into knowledge and
expertise of individuals outside the
company
6. R & D creates profit only when the 6. External R & D can create value
company invents, develops and markets
everything themselves
7. Develop the product internally and be 7. External R & D can generate profit by
the first to market forming forces with outside parties
8. Aim to get the innovation to the market 8. It is more important to develop a better
first business model than to be the first in the
market
9. Have the Intellectual Property (IP) 9. Profit from licensing IP and buy others’
under internal control IP when required
 3. Incremental and Radical Innovation
Difference Between Incremental and Radical Innovation
Radical
1. Explores new technology
2. High uncertainty
3. Focuses on products, processes or
services with unprecedented performance
features
4. Creates a dramatic change that
transforms existing markets or industries,
or creates a new ones
4. Modular and Architectural innovation
Innovation Process
Incremental
1. Exploits existing technology
2. Low uncertainty
3. Focuses on cost or feature
improvements in existing processes,
products or services
4. Improve competitiveness within
current markets or industries
  Recognizing or scanning the environment.
 Aligning the overall business strategy and proposed innovation.
 Acquiring technology in – house.
 Generating technology in – house.
 Exploring and selecting the most suitable response to the environment.
 Executing and Implementing Innovation.
 Learning lessons for improvement.
 Developing the organization.

Innovations Occurs at Three Levels

Innovation
Management

 Innovation Management is all about

 Learning to find the most appropriate solution to the problem of consistently
managing a fore stated process doing so in the ways best suited to the
particular circumstances in which the organization find itself.
 It is the search of effective routines.
 It is about managing the learning process to deal with the challenge of the
innovation process.
  Management of Innovation comprises three things :
- Linking of engineering
- Science
- Management Disciplines
 to plan, develop and implement technological capabilities to shape and
accomplish the strategic and operational objectives of an organization.

Need/Objectives of Innovation Management

- To reap in the economic benefits of new technological inventions by
commercializing them on time.
- To get into and out of the technologies faster and more efficiently.
- To integrate technology into overall strategic objective of the organization.
- To accomplish technology transfer.
- To reduce new product development time.
- To manage large, complex and interdisciplinary projects and systems.

Organizational Process for Innovation Management

Value Innovation
- One of the most prominent programmatic approaches to innovation currently
in use.
- It is different from building layers of competitive advantages and does not
means segmenting market and accommodating customer needs.
- It’s main focus is on offering those products and services which creates a
superior buyer valuein existing markets and enables a quantum leap for the
firm to create new markets.
 - Value Innovation also differs from technology innovation. New technology
developed does not becomes a value innovation unless it is cheap enough for
MASS BUYERS.

Three Basic Building Conventional Focus Value Innovation

Blocks of Strategy Process
Competition Outperforming the Seeking Radically
Competition Superior value to
capture the entire mass
market
Customers Retaining and better Targeting the mass of
satisfying existing buyers by following non
customers – customers closely and
willingly losing some
existing customers
Corporate Capabilities Leveraging and Willing to combine a
extending the current company capabilities
capabilities of with other
companies

Challenges faced while Managing Innovation

1. Why Change?
- Only innovation matters.
2. What to Change?
- Ranging from changes in product and service to the ways ( i.e process
innovation).
3. Understanding innovation
- Understanding common problems associated with partial views of innovation.
4. Building an Innovation Culture.
- Managing Innovation is all about creating frim specific routines ( i.e. repeated,
reinforced patterns of behaviour) which define its particular approach to the
problem.
5. Continuous Learning
- Firms constantly needs to develop their routines to deal with the
environmental challenges.
6. High Involvement Innovation
- Higher level of participations in innovation represents a competitive
advantage.
7. Managing Connections
- In current scenario business organizations are required to operate in
relationship with others rather than splendid isolation.

Barriers to Innovation
 External Barriers
- Market – Related Barrier
 - Government and its Policies
- Others ( Technical, Societal, and Inter – Organizational Barriers)
 Internal Barriers
- People Related
- Structural
- Strategy Related
-

Learning to Manage Innovation

How to Overcome these Barriers

Shared Vision, Leadership and the will Clearly Articulated and shared sense of
to Innovate purpose
Stretching Strategic Intent
Top Management Commitment

Appropriate Culture Encouraging Creativity

Enabling learning and Interaction
Balancing between ‘ organic and
mechanistic’

Key Individuals Promoters, champions and other roles

which facilitate innovation

Effective team Working Use of teams at cross – functional and

inter – organizational level
Investment in team Selection and
Building

Continuing and Stretching Individual Education and Training of employees to

Development ensure high level of skills and
competence

Extensive Communication Within and between the organization and

outside

Creative Climate Positive approach to Creative Ideas,

supported by relevant motivation systems

Learning Organization High Level of Involvement within and

outside the firm in proactive
experimentation
Knowledge capture and dissemination
Conclusion

Enterprises Should Emphasize

Pp
Planning and Respect for Tolerance for
Controlling Individual mistakes and
Systems with Initiative and allowing room
High Degree of personal Growth for failures
Flexibility