Assignment 2

Corporate Innovation and Entrepreneurship

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 Executive Summary
The creativity, innovation and entrepreneurship are different yet related concepts. Creativity is
about creating novel and practical ideas, innovation is implementing those ideas and
entrepreneurship is creating value from innovation and maintaining sustainability. This purpose
of this report is to analyze the creativity, innovation and entrepreneurship in Unilever context.
The following sections of the report introduces the concepts of creativity, innovation and
entrepreneurship, evaluate the barriers to creativity and innovation in Unilever, evaluate
organizational support for creativity and innovation, application of business model and theory in
Unilever, poses recommendations and finally concludes the report.

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 Table of Contents

Executive Summary.........................................................................................................................ii
Table of Contents...........................................................................................................................iii
Introduction......................................................................................................................................1
Critical Analysis of Organizational Barriers...................................................................................3
Institutional barriers.....................................................................................................................3
Strategic barriers..........................................................................................................................3
Operational barriers......................................................................................................................4
Application of Theory and Model on Case study............................................................................5
Organizational Support drivers for Creativity and Innovation........................................................8
Institutional drivers......................................................................................................................8
Strategic drivers...........................................................................................................................9
Operational drivers.......................................................................................................................9
Recommendations..........................................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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 Introduction
In our evolution, we went through agricultural age then industrial age and now to the information
age and in this information age we require brain based enterprises. For an organization to be
brain based, it is necessary to be aware of higher order business concerns regarding innovation
creativity and managing change. These concerns address the sources of creativity and
imagination, how can the creativity and innovation be promoted and excelled naturally, which
leadership style will make it possible for organization to adopt creativity and innovation as
ordinary task, which techniques to be used to build the creative and innovative teams and which
organizational factors support or limit creativity and innovation in the organizations (Cook,
2016). Leadership, creativity, innovation and change management are entrepreneurial
competencies which enhance the entrepreneurship and helps in improved performance and
sustainable development achievement (Gerardo Barroso-Tanoira, 2017).

In organizations, the creativity is called the creation of new and useful ideas and notions
considering all dimensions of functioning of organization which include goods and services,
management tools and models of business. From this definition, we can infer that an idea can be
called a creative idea only if it is novel and useful. Even if idea is not much practical, it cannot be
called a creative idea. Also, we can infer that creativity and innovation are two different things
but related to one another. It can be said that creativity creates the idea and innovation
implements that idea (Oldham and Cummings, 1996). According to Mostert (2007), innovation
process starts when the creative idea is shared with other people and teams are prepared in
organizations that create the required budget and the description of the project. According to
Gupta (2012), time management, logical reasoning, statistic thinking and innovative thinking are
important for people for innovation. Innovation is all about gaining knowledge and utilizing that
knowledge in empowering people for speedy creativity and innovation for increasing the
customer value. It is vital for innovation to be valued by its users and profitable. As per Gartner
(1990), the process of entrepreneurship consists of cycle of creating value after recognizing the
opportunities, acquiring the right set of resources and them building on them, and finally
implementing new processes with the result of introducing new products or businesses. It means,
this process is a phenomenon with multiple levels starting with amalgamation of creativity,

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finances and technology which will focus on creation of new procedures to arrange production
and new structures of organizations which will result in business growth and competitive
advantages (Phan et al., 2010). In the economy of any nation, entrepreneurship plays a vital role.

In this report, focus is laid on the practices of Unilever company. Unilever is a fast moving
consumer goods company in food, home and personal care products. Unilever is one of oldest
multinational companies in the world and its products are available in more than 150 countries. It
has over 400 brands in their offering that include Lipton, Magnum, Knorr, Dove, Lux and
Sunsilk. This report provides evaluation of organizational barriers and support for creativity and
innovation in context of Unilever. These barriers and supports are classified into institutional,
strategical, and operational levels. This report will also brief on underlying creative and
innovative approaches of Unilever. Moreover, organization model and theories related to
innovation and entrepreneurship are discussed in case of Unilever. In last, clear conclusion and
feasible recommendations are given in order to promote and enhance the creativity, innovation
and entrepreneurship.

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 Critical Analysis of Organizational Barriers

The managers of organizations encounter many challenges ranging from disruptive technologies
to novel models of businesses. According to Kodak, the in the age of digitalization and
technology, innovation is also a challenge for existing business and on Kodak’s statement,
Canon said that such challenging innovation can result in rejuvenation, relevant and competitive
advantage and increasing share of market (Coulson-Thomas, 2017). Thomas (2017) also said that
businesses should avoid unwanted innovation and change for the sake of innovation. Business
existence, sustainability and growth is dependent on creativity, innovation and entrepreneurship.

Bocken and Geradts (2020) identified barriers at institutional, strategical, and operational levels
that hinder the dynamic capabilities of Unilever for innovating business models. When a
company goes for innovative initiatives, there exists a factor of uncertainty. Shareholders of any
company do not see uncertainty in their favor so those companies merely focusing on the
maximization of shareholders’ wealth avoid uncertainty and focus on short term goals. These
institutional level barriers are their norms, values and rules which turn into organizational
behavior. Organizational behavior further guides organization’s strategies which are also
formulated to achieve short term goals and only profitability. Further, strategic barriers lead to
operational barriers in terms of constant innovation methods, budgeted resources, short term
incentives and standardized performance system. When each organizational level faces barriers
to innovation, it forgoes opportunities at each level.
Institutional barriers

Hoffman (1999) suggests that organization design is significantly affected by present norms,
values, rules and beliefs of people in organization. Because of their norms and beliefs, managers
act accordingly. In Unilever, the institutional level barriers identified by Bocken and Geradts
(2020) are maximizing shareholders’ wealth, getting short term benefits, striving for certainty
which inhibit innovating business models.
Strategic barriers

After institutional barriers of maximizing shareholders’ wealth, getting short term benefits,
striving for certainty, Bocken and Geradts (2020) identified the strategic barrier of functional

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strategy. Unilever focuses on functional strategy which tries to reap short term profits,
exploitation, and short term growth. Organization’s strategy is formulated around the goals and
objectives of businesses which shows that direction of organization (Johnson et al., 2017).
Operational barriers

These strategic barriers mentioned above are further leading towards the operational level
barriers. Operations are the functions that are designed by functional strategy. It means the
strategy defines the organizations’ operations. When the strategy is formulated at short term
goals, the operational barriers appear. These are functional excellence, standardized processes for
innovation, fixed resources, budgeting and allocation, short term incentives and financial
performance metrics.

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 Application of Theory and Model on Case study

For competitive advantage and sustainability in multinational corporations, sustainable business

model innovation is considered as a main factor. Simply business model innovation is to
innovate and create value to customers and in return customers agree to pay which result in
company’s profits. Multinational companies use this model to have competitive advantage over

other companies (Wirtz et al., 2016). Companies nowadays face challenge of sustainability from
their stakeholders which is making manager more aware to handle these challenges and also
realizing that handling these challenges strategically can result in greater profits for companies.
For such purpose, MNCs are now more inclined to integrate social issues in business model
innovation (BMI) process. Tucci et. al. (2017) says that when such issues are taken in the model,
it is called sustainable business model innovation (SBMI).

Figure 1: Sustainable business model innovation

Source: (Shakeel et al., 2020)

Such model does not only create an economic value in terms of profit but also social and
environmental value considering all the stakeholders of company apart from only consumers and

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stockholder. It means it provides business profits, advantage in stakeholders concerns and
improved organizational image as well as employee commitment. As per this model, three
components of sustainable business model innovation are shown in figure 2.

Figure 2: SBMI Components

Source: (Shakeel et al., 2020)

These three components of model are defined in literature by Shakeel et al., (2020) as followed:

“sustainable value propositions innovation (SVPI) is defined as a firm’s promise to its

customers by tapping into new opportunities and creating long term relationships with its
customers and society. Sutainable value creation and delivery (SVC&DI) is defined as
the firm’s capability to organize value chain networks by managing resources,
capabilities, activities, and partnership relative to customes, competitiors and
collaborators. Sustainable value capture innovation (SVCI) is illustrated as a firm’s
ability to capture environmental, social and economic value by designing new
sustainable revenue models and cost structures.”

Being provided with these all benefits, many MNCs including Unilever do not adopt SBMI. The
reason behind not adopting this model by Unilever is absence of dynamic capabilities for
innovation of SBMI. Such dynamic capabilities mean if the company is capable to “integrate,
build, and reconfigure internal and external competence to address rapidly changing
environments” (Teece, 2018). Unilever should build on these dynamic capabilities and adopt
SBMI in their organization.

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It is clear that systems are required to be more dynamic and actually change, such system are
called “complex adaptive systems” (CAS). This theory shows some clear perspectives regarding
change process. As mentioned by Mirvis (2011), Unilever’s Cescau adopted concept of CAS and
reflected some characteristics of transformational leadership and gave limited leadership in
Unilever. CAS theory suggests the participative leadership instead of only one leader leading the
organization. CAS is modelled in figure 3.

Figure 3: Complex adaptive system

Source: (Lambert, 2018)

People referred as agents in this theory in Unilever backed by Cescau brought more than hundred
executives together as a team to create a participative process. In results, chaos is created and
everyone started thinking about the system and brought creative ideas on potential responses of
Unilever towards the challenges. Due to this system, everyone in organization starts to
understand the dynamic system in real and thinks practically which ultimately enhance evolution
of innovation in the organization. In this team, people were made to think and understand the
dynamic and changing world around them and the needs of organization to gain a competitive
edge with customers and employees.

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 Organizational Support drivers for Creativity and Innovation

According to OECD (2005) definition of innovation in FMCG is that to implement new and
improved products or services, new production methods, new marketing plans or a new
organization model. Also, it can be defined as working different and better. It is also said that
companies which adopt innovation come up with improved new products and services,
production processes, increased market share, sales growth and, competitive advantage. The
innovation is an ongoing process to gain and keep a competitive advantage in FMCG industry
(Mustapha, 2010). For an organization to do innovation in the industry, it is also important for an
organization to have innovative business model (Teece, 2018). When the purpose of organization
is to maximize the shareholder’s wealth, then arises the institutional, strategic and operational
barriers. This section list down some supporting drivers identified by Bocken and Geradts (2020)
in Unilever which foster the dynamic capabilities of organization. To cope with institutional
level barrier of solely focus on shareholder value, shareholder and stakeholder value concept will
help organization to attain innovation business model along with sustainability. These are called
institutional drivers which shape strategic drivers of collaborative innovation, sustainable
business model innovation, and patient investments. Further, strategic drivers shape operational
drivers which include development of capabilities of people, structure that enable innovation,
resources for SBMI, flexible incentives and sustainability performance metrics instead of
financial performance metrics.
Institutional drivers
Organization design is significantly affected by present norms, values, rules and beliefs of people
in organization which are referred as institutional drivers (Hoffman, 1999). The institutional
level barriers of maximizing shareholders’ wealth, getting short term benefits, striving for
certainty create a negative approach and to alleviate these negative effects, Bocken and Geradts
(2020) came up with a balanced approach of shareholder as well as stakeholder value, embracing
ambiguity and valuing business sustainability which are called institutional drivers for creating
dynamic capabilities for innovation in organization.

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Strategic drivers
Abovementioned institutional drivers open door for strategic drivers that are collaborative
innovation, strategic focus on SBMI, and patient investment. Such drivers help organization to
thrive for innovation and overcome strategic barriers.

Operational drivers
As discussed, strategic drivers enable organizations to transform themselves for innovation, they
also promote activities that enhance dynamic capabilities of organization for innovation.
Operation level drivers are development of capabilities of people, structure that enable
innovation, resources for SBMI, flexible incentives and sustainability performance metrics
instead of financial performance metrics.

There are some other drivers which were extracted from the real-life experiences of the leaders
and entrepreneurs (Morgan, 2018). Firstly, make everyone responsible for the innovation. This
means that indulging everyone no matter what they value to you, but their contribution will be
fruitful. Secondly develop innovation process that everyone can use. This means that even the
organization use the structured techniques like six sigma or design thinking but there are much
more than that. People needs flexibility can it comes to creative thinking. Thirdly, going beyond
to developing things. Big innovations are more than the product this means that the innovation
changes the mode services, processes and channels. For example, iPod is more than the gadget.
Its innovation creates a link between the apple and the music industry. One glories with the
innovations of others. Fourth creating a team support. As the individual participants are
responsible for the innovation but do not done this alone. There must be some team work lies
under the umbrella. People needs a recognition as a team to innovation. If someone is not
following the rules they must be answerable. welcoming new ideas creates a phycological
comfort. When organization welcomes new employees, they are welcoming new ideas. It doesn’t
mean that every innovation idea is excellent and needs ab immediate implementation but they
may matter in future. Leveraging diversities among the organizational team is an effective driver
to the innovation. Every team member in the organization have some strength and weaknesses.
The job of a leader is to embrace them. There are so many things available for each other and to
learn from each other. Take your time to learn others.

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Building a culture of innovation in the organizations can team up the people for the future
success. The excessive research show that there are four cultural dimensions which are People,
Process, Policy and climate. Culture within the organization is mode of evaluating the future
success because if the climate is flexible and decentralized the people in the team are more
confident in the values they pose and the act they incorporate. Here are few ways that motivates
the employees for the innovations.

 Training of employees in creative problem-solving skills

 Giving team members time to explore more original creative ideas when they fail in their
attempts.
 Train the employees for how to lead towards innovation
 Rewarding the employees, managers and other subordinates on every inch of success
measures. This will improve their motivation level and enhance skills and loyalty towards
the organization.

Designing the separate space for the people to endure creativity through the development of
physical environment will the driver that people needs to foster creativity. This does not mean
that the organizations have to heavily invest in the coffee bars and comfortable rooms but the
creativity needs a separate space. Even during the tough times of economic changes innovation
process needs to be go on. This makes some sensible efforts because pressure creates focus. And
innovation and creativity pop up when it dealt into the focus of intellectual brains.

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 Recommendations

It can be inferred from above sections that Unilever is facing barriers to its innovation at
institutional, strategic and operation level. The barriers include short termism, solely focus on
shareholders’ wealth, norms and values, short term growth objectives, functional strategies and
so on. There is much to recommend for organization for fostering creativity, innovation and
entrepreneurship.

1. The complex adaptive system to be adopted so that leadership does not only come from
the top but the activities are designated to teams which will create the chaos and foster
the thinking processes of agents in teams and they will start to understand the system and
bring creative ideas on potential responses of Unilever towards the challenges. Due to
this system, everyone in organization will start to understand the dynamic system in real
and think practically which ultimately will enhance evolution of innovation in the
organization.
2. The realization for the addition of strategic perspective with commercial relevance and
potential rewards for managers will make managers see the significance of moving
forward in creativity and innovation and ultimately sustainability.
3. Use the evidence in FMCG industry to better understand the behavior change in industry
and also ensure such behavior change with large scale research in the industry so that
consequences can be learned for coping the issues in the industry and taking innovative
initiatives.
4. For creativity, not only the diversity of people is vital but the diversity of the mind is
important. We recommend the diversity barriers to be managed in creativity sessions
because there is one kind of diversity which is needed to bring creative ideas and
innovation which is diversity of minds. In Unilever’s case, diversity of the mind includes
arranging the creativity sessions with diverse people like scientists, microbiologists,
marketers and brand managers, and process engineers.

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 Conclusion

It is believed that companies valuing innovation bring new and improved products and services
to market, increase their market share, grow sales and gain competitive advantage. But this
process of innovation is ongoing process to keep a competitive advantage. This report shed light
on a multinational company Unilever by identifying its barriers to innovation and also
identifying drivers for innovation for the company. The barriers and drivers are identified at
three levels of organizations named institutional, strategic and operational. The sustainable
business model innovation is discussed in context of Unilever and it is concluded that Unilever is
not one of those MNCs which adopt SBMI in their organizations for innovation. The reason
behind not adopting this model is lack of dynamic capabilities in Unilever. The drivers such as
stakeholders value, people development, innovation enabling structure, allocating resources for
SBMI and sustainability performance metrics are identified to build dynamic capabilities in
Unilever for creativity and innovation. Lastly, some recommendations for Unilever are the
adoption of sustainable business model innovation, diversity of the mind, understanding of
behavior change in industry and complex adaptive system.

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