UNIVERSITI KUALA LUMPUR

MALAYSIAN INSTITUTE OF AVIATION TECHNOLOGY

WBB 10202 INNOVATION MANAGEMENT

JANUARY 2020

ASSIGNMENT 3

NAME : MOHD ADZRUL SHAHKIZ BIN JASMAN

STUDENT ID : 53213217129

CLASS : 7BAV

SESSION: JAN 2020

LECTURERS NAME : MOHD NOR AZMIN MD HASHIM

Differences between Innovation and Creativity

1. The quality of thinking new ideas and putting them into reality is creativity. The act of
executing the creative ideas into practice is innovation.
2. Creativity is an imaginative process as opposed to innovation is a productive process.
3. Creativity can never be measured, but Innovation can be measured.
4. Creativity is related to the generation of ideas which are new and unique. Conversely,
Innovation is related to introduce something better into the market.
5. Creativity does not require money. On the other hand, innovation requires money.
6. There is no risk involved in creativity, whereas the risk is always attached to
innovation.
Organization Infrastructures

Organization infrastructure is how an organization builds their foundation. It show the goals, focus,
and control within the organization. It determines the level of bureaucracy, innovation, creativity, and
feedback. It defines how the work is done in the organization and sets the boundaries of acceptable
behaviour. It determines how one should work and how to work together to achieve a common goal.
A clear strategy that sets priorities and assigns resources to innovation is essential to ensure the
success of every business.

The infrastructure gives the drive that allows advancement to happen. Individuals, independently and
in groups, promote development that is focused on how the infrastructure reacts to new, unsettling,
and in some cases, odd ideas. While innovators for the most part get energetic about a specific action,
some base level of framework help is fundamental to help push them forward. The infrastructure must
discover means to adjust to the innovation process, or innovation will not occur. Managers
characterize the hierarchical framework through their daily activities. Over and over again the effect
of that infrastructure on performance is neglected. The organizational infrastructure issues are:

• Vision
• Mission
• Objectives
• Strategy
• Structure

1. Vision

Vision statement addresses the inquiry on “What do the company want to become?”. An acceptable
vision creates a complete mission statement. Creating a vision statement is the first step in strategic
planning. A vision statement are made with short and single sentence which emphasise the company.
A vision statement also must include more than being the greatest this or that, but also what is needed
to make the company what it want to be. This requires focus and management competencies. A
company need to figure out what they need to be and convey the message to stake holders. This will
help to drive the dedication of workers to work on their desired directions. A strategic vision will be
effective when the vision statement is situated in the mind of company members and interpreted into
objectives and strategies.
Examples of vision statements

a) To be the leading entrepreneurial technical university (Universiti Kuala Lumpur).

b) We strive to become a successful Malaysian Automotive Manufacturer globally by being customers

oriented and producing competitively priced and innovative quality products (Proton).

c) To be the No. 1 Green Innovation Company in the Electronics Industry in 2018 (Panasonic).

d)To be Malaysia's leading new generation communications provider, embracing customer needs
through innovation and execution excellence (TM).
 2. Mission

A mission statement characterizes what a company is and its explanation for being. For business with
employees, this statement is the basic for managing their operation. For simpler term, the mission
statement is about “What is the company business about?”. Mission statements are an incredibly
important navigational tool when you are thinking about the future of your company.

Mission statements can vary in content, format, length, and specialization. Most effective statements
usually have nine characteristics or components, as follows:

1) Customers: State the firm's customers.

2) Product or service: State the firm's major products or services.

3) Markets: The geographic location of the market.

4) Technology: The firm's technology level.

5) Concern for survival, growth, and profitability: The firm's committment to growth and financial
soundness.

6) Philosophy: The basic belief, values, aspirations, and ethical priorities of the firm.

7) Self-concept: The firm's major competitive advantage.

8) Concern for public image: The firm's reaction to social, community, an environment concerns.

9) Concern for employees: The firm's reaction to their most valuable asset employee.

By identifying the purpose of your work, you can better understand the goals your company should
be committed to accomplishing. Once those goals are set, you and your team can develop a sound
strategy. By having this strong foundation, you can build your organization from the ground up and
ensure its stability through the challenges ahead.

The mission statement is the bedrock of any organization. Make sure it’s as strong as it needs to be.

The mission statement shouldn’t just be your beginning. It should stay with you through every
decision.

The simplicity of the mission statement requires you to isolate only the most important part of your
company’s purpose. By developing a mission statement, you must evaluate every option and decide
what will best suit your company and its future. By talking through your decision process with the
mission statement, you can help your team work through problems and ideas.

The mission statement opens this communication and can refocus a team that has been pulled apart
in too many directions.

Examples of mission statements from different organizations:

Universiti Kuala Lumpur

• To produce enterprising global technopreneurs.

Shapadu Corporation Sdn Bhd

• To strive for growth and quality of service through teamwork and cost-effectiveness.
TM

• Strive towards customer service excellence and operational efficiency.

• Enrich consumer lifestyle and experience by providing innovative new generation
servicesImprove the performance of our business customers by providing high value
information and communications solutions.
• Deliver value for stakeholders by generating shareholder value and supporting Malaysia's
growth and development.
MdeC

• To realise Malaysia as a global hub and preferred location for ICT and multimedia innovations,
services and operations MAVI VO Figure 4.2 Examples of mission statements.
 3. Objectives

Objectives could be characterized as specific outcomes that an organization seeks to accomplish after
its fundamental mission. Objectives are the organization’s hope to attain in the short and long term
and the implications in connection to growth, products, technologies, and markets. There is no doubt
that both short and long term objectives need to be satisfied. Objectives should be Specific,
Measurable, Achievable, Realistic and have Time frame. The owner has a vision of the type of business
that you wants to build. You has reasons that justify the existence of the company, such as selling a
unique product or providing a special service. The next step is to communicate these visions to the
employees. Give them something that they can understand, and explain their role in making it happen.

Objectives should be SMART, which stands for:

• Specific: Must be specific and clear.

• Measurable: Should be expressed in quantitative terms so that success or failure is easily
measured.
• Achievable: Should be achievable and attainable.
• Realistic: Should be realistic and within reach with the resources available.
• Time frame: Must have a deadline as to when it should be accomplished.

For example TM Objectives

To achieve our vision, we are determined to do the following:

• Be the organization leader in all markets we serve.

• Be a customer-focused organization that provides one-stop total solution.
• Build enduring relationships based on trust with our customers and partners.
• Generate shareholder value by seizing opportunities in Asia Pacific and other selected regional
markets.
• Be the employer of choice that inspires performance excellence.
 4. Strategy

Having a strategy is a process of planning that takes into account the objectives, goals, and policies for
the organization. In addition, planning should consider environmental factors and resources owned
by the relevant organization. The strategies are important to achieve the goals and success of an
organization. It requires top management judgements and a huge amount of the firm's resources.

Strategy gives broad direction to the organization. Organizational strategy can focus on many different
organizational areas, such as marketing, finance, production, research and development, and
innovation.

The Nature of Strategy

Strategic decisions have long-term consequences and very often impact upon a lot of people. There is
often a lot of money involved and many people are affected. Because the consequences can be so
significant, strategic decisions are normally left to the most senior managers within an organization,
although particular individuals and groups lower down the organization may be highly influential. In
most organizations, strategic decisions and their associated strategies can typically be ordered into a
hierarchy.

Figure 1 The hierarchy of strategies

Business strategy: The strategy of the business as a whole; in particular, how it achieves its long-term
objectives or goals, such as growth or internationalization. In meeting these objectives, this strategy
answers the following question: how does the business compete? A business is only likely to grow by
competing successfully and beating its competitors.

Functional strategy: This strategy covers functional areas, such as marketing, human resources, and
operations. It is at a level below business strategy and determines how each of the functional areas
supports the business strategy. For example:

• A marketing strategy would specify a range of goals, policies, and actions designed to engage
with customers and competitors in pursuit of an overall business strategy. It would aim to
integrate a range of marketing activities covering advertising, merchandising, promotion,
market research, market planning, marketing communications, and the like to be used in
achieving marketing goals.
 • A technology strategy comprises the definition, development, and use of technological
competencies (Dodgson, 2000). This strategy decides on how to use technology in its
operations, products, and services to customers. Among the important decisions are which
technologies should an organization utilize, how much investment should be made in
technology, and how can the technology be improved.

Product strategy: This strategy sets the long-term development and projection of the product or
service. It also shows how the item fits with the overall direction of the organization. This is likely to
include the anticipated life cycle of the product; details of how the product will compete (i.e. its
competitive strategy); the product platform in terms of the other products that may be derived from
it; the market segments in which it will compete and the technologies to be emoloyed.

Innovation strategy

Innovation strategy is about the big decisions surrounding innovation. Decisions about the
level of research and development (R&D); the type of innovation; or the most appropriate
intellectual property rights to employ are tactical decisions. Important though these
decisions are, they are not matters for innovation strategy. If the innovation equivalent of
the battlefield is the market, then innovation strategy is concerned with questions of
whether, when, and where to fight.

Whether to enter the market?

It may be more appropriate to let another organization carry out the implementation of the
innovation, which by virtue of financial resources, brand name, or expertise is better
equipped. This is innovation via an external route, a form of open innovation.

When?

of the most crucial decisions is the timing of innovation. Being first to market is the best
strategy.

Where?

It is not so much a matter of the market geographical location. It is more about considering
the possibilities of any alternatives to a full-scale market and if there are any particular
market niches which might be better to target.
 Figure 2 : External and Internal routes

External Routes to Innovation

Should the organization enter the market with its innovation? However, a negative reply to this inquiry
may appear; it could be suitable for various reasons such as lack of resources.

• Licensing

Licensing is open to organizations that can practice control over their intellectual property rights.
With patent protection set up, a firm can give an alternate organization a license to fabricate
products utilizing its technology. Under the terms of a license, (the patent holder typically holds
intellectual property rights over the technology, yet permits the licensee to utilize the technology
within the products or services it creates, in exchange for royalty fees.

• Spin-offs

A spin-off is where one firm quite literally creates another in order to exploit the innovation. It is
likely to be an attractive option where the technology of the innovation is not closely related to
the core technology of the firm, because it avoids unnecessary distractions. In order to spin off
the innovation through the sale of a subsidiary company, it is necessary to 'package' the
technology with the staff who have developed it and the associated corporate resources (e.g.
equipment, facilities, etc.), and sell it off. This is what is meant by a (spin-off where the parent
company divests itself of the technology by selling off the subsidiary company where it is based.
Internal Routes to Innovation

If the answer to the question about entering the market is affirmative, then there are a number of
potential innovation strategies that can be employed where market entry occurs. The following are
four strategies to be taken.

• First-mover strategy/pioneer strategy

The first-mover strategy is about being first to market a new product or service. It is the most
obvious strategy and probably the most appealing for innovation. Its intuitive appeal lies in the
fact that most people probably picture innovation as being rather like a race, and a first-mover,
by being first to get an innovation to the market, is the race winner.

• Follower/latecomer strategy

Variously described as a follower or latecomer, or sometimes even an imitator strategy, this

involves taking a 'wait-and-see' approach. The idea is to deliberately hold back when a
discontinuity occurs and technological advances mean that an innovation is imminent, in order to
see how both the market and the 0 technology adapt to the innovation. When it becomes clear
that there is a high level of consumer acceptance in the market or the number of competing
designs begins to show signs of diminishing, only then does the latecomer enter the market.

• Side-entrance strategy

One of the difficulties that innovations, particularly those based on a new technology, often face
is that initially they are uncompetitive compared to existing products, in terms of cost and
sometimes even overall performance. The first steamships provide a classic example. In terms of
overall performance, wind-powered clipper ships were for many years faster than steamships. The
technology S-curve shows how in the early years of a new technology this can occur. Under these
circumstances, there is no particular reason for consumers to purchase an innovation, other than
perhaps the novelty factor.

• Derivative strategy

A derivative strategy essentially involves applying a new technology to an existing product to

create a new product. The original product will already have a presence in the market and the
derivative strategy aims to capitalize on this existing market position, in order to gain market entry
for the 'new' product. Hence, a derivative strategy is a hybrid strategy. Clearly, it is not a strategy
that can be used by new firms, as there has to be an existing product and it has to already be
positioned in the market. However, for established, reputable products, it can be an attractive
strategy. The exploitation of new technologies is not confined to new-product development. It
can also happen through 're- innovation'. In many industry sectors, there are relatively few
completely new products entering the market. Instead, one often finds a large number of what is
called 'post-launch improvements'.
 Types of Organizational Structure

Functional

If you’ve had a job, you likely worked in a functional organizational structure.The

functional structure is based on an organization being divided up into smaller groups with
specific tasks or roles. For example, a company could have a group working in information
technology, another in marketing and another in finance.

Each department has a manager or director who answers to an executive a level up

in the hierarchy who may oversee multiple departments. One such example is a director of
marketing who supervises the marketing department and answers to a vice president who is
in charge of the marketing, finance and IT divisions.

An advantage of this structure is employees are grouped by skill set and function, allowing
them to focus their collective energies on executing their roles as a department.

One of the challenges this structure presents is a lack of inter-departmental

communication, with most issues and discussions taking place at the managerial level
among individual departments. For example, one department working with another on a
project may have different expectations or details for its specific job, which could lead to
issues down the road.

In addition, with groups paired by job function, there’s the possibility employees can
develop “tunnel vision” — seeing the company solely through the lens of the employee’s job
function.
Divisional

Larger companies that operate across several horizontal objectives sometimes use a
divisional organizational structure.

This structure allows for much more autonomy among groups within the organization.
One example of this is a company like General Electric. GE has many different divisions
including aviation, transportation, currents, digital and renewable energy, among others.

Under this structure, each division essentially operates as its own company,
controlling its own resources and how much money it spends on certain projects or aspects
of the division.

Additionally, within this structure, divisions could also be created geographically, with
a company having divisions in North America, Europe, East Asia, etc.

This type of structure offers greater flexibility to a large company with many divisions,
allowing each one to operate as its own company with one or two people reporting to the
parent company’s chief executive officer or upper management staff. Instead of having all
programs approved at the very top levels, those questions can be answered at the divisional
level.

A downside to this type of organizational structure is that by focusing on divisions,

employees working in the same function in different divisions may be unable to communicate
well between divisions. This structure also raises issues with accounting practices and may
have tax implications.
Matrix

A hybrid organizational structure, the matrix structure is a blend of the functional

organizational structure and the projectized organizational structure.

In the matrix structure, employees may report to two or more bosses depending on
the situation or project. For example, under normal functional circumstances, an engineer at
a large engineering firm could work for one boss, but a new project may arise where that
engineer’s expertise is needed. For the duration of that project, the employee would also
report to that project’s manager, as well as his or her boss for all other daily tasks.

The matrix structure is challenging because it can be tough reporting to multiple

bosses and knowing what to communicate to them. That’s why it’s very important for the
employees to know their roles, responsibilities and work priorities.

Advantages of this structure is that employees can share their knowledge across the
different functional divisions, allowing for better communication and understanding of each
function’s role. And by working across functions, employees can broaden their skills and
knowledge, leading to professional growth within the company.

On the other hand, reporting to multiple managers may add confusion and conflict
between managers over what should be reported. And if priorities are not clearly defined,
employees, too, may get confused about their roles.
Flatarchy

While the previous three types of organizational structures may work for some
organizations, another hybrid organizational structure may be better for startups or small
companies.

Blending a functional structure and a flat structure results in a flatarchy organizational

structure, which allows for more decision making among the levels of an organization and,
overall, flattens out the vertical appearance of a hierarchy.

The best example of this structure within a company is if the organization has an
internal incubator or innovation program. Within this system, the company can operate in an
existing structure, but employees at any level are encouraged to suggest ideas and run with
them, potentially creating new flat teams. Lockheed Martin, according to Forbes, was famous
for its skunkworks project, which helped develop the design of a spy plane.

Google, Adobe, LinkedIn and many other companies have internal incubators where
employees are encouraged to be creative and innovative in order to promote the company’s
overall growth.

A benefit of this system is it allows for more innovation company-wide, as well as

eliminating red tape that could stall innovation in a functional structure. As for the negatives,
the structure could be confusing and inconvenient if everyone involved doesn’t agree on how
the structure should be organized.
 Rothwell Innovation Models

1. TECHNOLOGY PUSH

From 1950 to the mid-1960’s, fast economic growth led to a ‘black hole demand’ that
allowed a strong ‘technology push’ and industrial expansion in the Western world and in
Japan. Companies focused predominantly on scientific breakthroughs -- “the more R&D in,
the more new products out.” This was nicknamed the ‘strategy of hope’ -- “Hire good people,
give them the best affordable facilities, then leave them alone.” Research & Development
was considered as corporate overhead and relegated to an ‘ivory tower’ position. Innovation
occurred at the fast growing multinationals isolated from universities.

2. MARKET PULL

The mid 1960’s to early 1970 were characterized by a ‘market shares battle’ that
induced companies to shift their development focus to a ‘need pull’. The central focus became
responding to the market’s needs. Cost-benefit analyses were made for individual research
projects including systematic allocation and management of resources. Stronger connections
were initiated between R&D and operating units by including product engineers in scientist
run research teams in order to decrease time to market.

3. COUPLING OF R&D AND MARKETING

From the mid 1970’s to the mid-1980’s, ‘rationalization efforts’ arose under the
pressure of inflation and stagflation. The strategic focus was on corporate consolidation and
resulted in ‘product portfolios’. Companies moved away from individual R&D projects.
Marketing and R&D became more tightly coupled through structured innovation processes.
Operational cost reduction was a central driver behind this ‘coupling model’.
 4. INTEGRATED BUSINESS PROCESSES

When the Western economy recovered from the early 1980’s to the mid-90’s, the
central theme became a ‘time-based struggle’. The focus was on integrated processes and
products to develop ‘total concepts’. Typical of this fourth generation was the ‘parallel and
integrated nature’ of development processes. Externally, strong supplier linkages were
established as well as close coupling with leading customers.

5. SYSTEM INTEGRATION & NETWORKING

Finally, from the 1990’s onwards, resource constraints became central. As a result, the
focus was on ‘systems integration and networking’ in order to guarantee ‘flexibility’ and
‘speed of development’. Business processes were automated through enterprise resource
planning and manufacturing information systems. Externally, the focus was on ‘business
ecosystems’. Advanced strategic partnerships were setup as well as collaborative marketing
and research arrangements such as ‘open innovation’. Added value for products was to be
found in quality and other non-price factors.