INNOVATION

Lesson 3B
• Define the concepts of innovation
• Categorize the forms of innovation
• Explain reasons for innovating
• Describe the sources of innovation
• Assess factors affecting innovativeness
What is Innovation
• Innovation is production or adoption, assimilation, and exploitation of
a value-added novelty in economic and social spheres;
• renewal and enlargement of products, services, and markets;
• development of new methods of production;
• establishment of new management systems”
Crossan and Apaydin, 2010
What is Innovation
• Innovation is implementation of a creative idea or opportunity
leading to profitable and effective outcomes
• Innovation is an adoption of change which is new to an organization
and relevant environment.

Knight ,1967
Mapping definitions of Innovations
Forms of Innovation
1. Radical Innovations
• An invention that destroys or supplants an existing model.
• Blows up the existing system or process and replaces it with
something new entirely
• Examples include the first car or first electric car
2. Disruptive Innovation
• Refers to technology that when applied, it significantly alters the way
a market or industry functions,
• For example the internet that has significantly changed how
businesses operate and how individuals interact.
3. Architectural Innovation
• Involves improving the ways in which components are assembled,
without necessarily changing the components themselves.
• For example, a flexible manufacturing system, that does that
improves the assembly process but does not change the component
parts.
4. Incremental Innovations
• Small improvements made to existing products, services, processes or
methods.
• Focuses on improving existing systems and products to make them
better, cheaper or faster.
Sources of Innovation
1. The Unexpected
• Look out for things you never expected to happen
2. Incongruities
• Thinking differently from competitors and society
3. Process need.
• Think differently on how the processes can be changed
4. Changes in Industry and Market Structures.
• Look out for changes happening in the market and industry or how you can influence that change
5. Demographics
• Changes in population
6. Changes in Perception
• Perceptions change over time so look out for them
7. New knowledge
Approaches to Acquiring Innovations
• Buying innovation in the market
• Investing in innovators
• Co sourcing innovation
• Resourcing from highly skilled people
• Internal innovation taskforce
Barriers to Innovation
• Turfism’ –sticking to old thinking patterns
• Punishment for failure
• Rigid rules
• Lack of funds
• Lack of knowledge
• Lack of time given to innovation
• Lack of top management support
Ahmed,1998
Factors Affecting Innovativeness
1. Individual Factors
• Expertise
• Creative thinking skills
• Task motivation
• Self confidence
• Curiosity
• Persistence
Amabile,1983
Factors Affecting Innovativeness
2. Organisational Factors
• Organisational culture
• Degree of specialisation
• Management support
• Tolerance of failure
• Time availability
Hornsby et al, 2002
Factors Affecting Innovativeness
3. Environmental Factors
• Market uncertainties & market changes
• Supply uncertainties
• Perception changes
• Demographic changes

Mc Ginnis & Ackelberg, 1983

Manifestations of Creative Change
Manifestations
• New products and services,
• New methods of production,
• New markets,
• New sources of supply
• New ways of organizing
Group discussion

• Pick one organisation you know well and consider to be innovative.

1. Discuss any four organizational factors that make them innovative.
2. Discuss any four individual factors that can affect your ability to be
innovative
• One page each
• Font size 12, times new roman font, 1.5 line spacing, normal margins, APA referencing
• Due date Thursday 4th March 5pm