Globalization is the process that involves global implementation of markets for capital, services and products that let organisations to change their practices (Davenport, 2013).Information technology affects and motivates organizations to acquire competitive benefits with the help of technology (Slater et al, 2014). The innovation made within the organization is the major competitive weapon in globalization. Innovation is termed as the implementation and development of new concepts for solving issues (Burkeand Noumair, 2015). In accordance with Van de Ven, innovation can be called as a new concept, which can be termed as the link of some old concepts, a schema that gives challenges to the current order, a unique aspect, or formula which is taken as new one by the individuals who are involved in it (Osborne, 2013).In organisations, where there is a need of bringing innovation and creativity, management has to focus on structure and processes of the firm. The structure of an organisation helps in ensuring better implementation of innovative approaches and techniques. In addition to the structure, various processes within an organisation help in implementing innovation (Cajaiba-Santana, 2014). This essay includes an analysis about the influence of structure and processes on capability of organisations to bring innovation.
Innovation is defined as a new idea, procedure or a device. Innovation is a process that results in the development of totally unique and newproducts or services along with new systems of administration. It is also defined as use of better and creative solutions for meeting new needs, unarticulated requirements or current needs in market (Davila et al, 2012). There are different kinds of innovation like radical, incremental, linear, networked, open and closed innovation. Different types of structures and processes result in different types of innovation. In order to gain competitive advantage organisations should look over the significant role of innovation. Specifically, the innovation of organization, it involves administration and technical innovation. Findings of Scott and Davis (2015) stated that there is some strong direct and positive link present in between performance and innovation. Therefore it is similar to the administration and technical approaches which are the basic component of organizational innovation. Organizational innovation involving administration and techniques are the basic components of organization for acquiring competitive benefit through newness. The firms have to implement advanced information technology for fulfilling needs of customers; seeking for inspiration or new ideas for developing products of organisation. Along with it, strategic orientation with reactors, analysers, defenders and prospectors determine that how organizations will compete in market or industry (Rangaand Etzkowitz, 2013). This should provide guidance to organisations for setting the policy for the better future of business. Along with it, strategic fit among different activities is most important not only for the competitive benefit but also for the sustaining the benefit. Along with it, capabilities of an organisation related to innovativeness are affected directly by structure as well as processes of an organisation(Jay, 2013).
According to Vaccaro et al (2012), the major prosper organization while dealing with process and product innovation are the ones whose structures make up the progress of information with the help of development processes and formal research and the knowledge is developed depending on interaction with suppliers, clients and employees, and on practice and experience. In every business, organizational structure is quite different and which is most appropriate for the strategic integration. Brownand Osborne (2012) stated that structure of organization (like integration, specialization, centralization and formulation) is the major factor of strategy integration. Innovation is also the major component of strategy orientation (Tan, 2001). The appropriate organizational structure can also affect the organizational innovation. Then it results into basic performance of organization.
In order to bring innovation, more agile and flexible structures are needed. Those structures must be formed within an organisation that permits more of the communication and interaction in between employees. Organic structure or “adhocratic” allow the progress of the information dependent on the interaction and practical experience, which leverages the innovative capacity of organisation (Luschand Nambisan, 2015).This configuration of organisation also enables the handling of events, as described by Rice (2013) that is to refer to the chance presences and unforeseen actions, which are the basic feature of innovative surroundings.
One of the significant structures of organisation is vertical structure. Vertical implementation is termed as a corporate structure through which the development of product with the help of supply chain is totally controlled by the organisation. This structure permits the organisation to manufacture or design factors, final good assembly, subsystems before giving it to the consumers. Power of Ford or GM train systems are developed due to the reason that organisation does the aluminium casting of piston and engine blocks, results into implementation and assembly into some vehicle (Skarzynskiand Gibson, 2013).
It has been stated by Alexy et al (2013), in horizontal implementation the major objective of business is over one approach of the value chain and it does the implementation of all of the items offerings at the level of supply chain. With the help of horizontal organisational structure, a firm ensures open innovation by making suppliers and customers involved in the process of product development. A famous example is of Theragnostic Company. The firm focuses highly on networking with various other suppliers, organisations and clients. It overall affects the process of innovation and creativity. The firm uses the value chain position for interacting the concepts wanted by them and can leverage the perfect concepts through implementing them into other items. This assists in getting creative and unique ideas from members included in whole supply chain. This makes the whole process of product development unique and distinct through which firm can gain competitive advantage (Newell et al, 2009).
For instance Science Co. was established in the year 1980. It is consultancy organization, based on technology, which is present in the London. It performs its operations on international basis. At this inception time, the founder suggested to develop an environment of consultancy that will not only result into the development of solutions related to the issues of clients, but also will stimulate innovation and invention. Eighty-five percent of organization involves highly educated technologists and scientists, who are dependent mainly over the knowledge and expertise rather than systems or equipment’s for providing innovation and invention solution to pharmaceutical, engineering and manufacturing organizations present all around the globe. Since 1980, the organization has got development from a very small business, the organisation provided employment to scientific consultants who were expert in the field of communication and engineering to medium-sized organization that employed around 200 people and they also incorporated some other disciplines related to science like information systems, applied sciences and biotechnology. Different trials have been made in the organization for maintaining the structure of organization for the development of organization. Even now-a-days, there is one major management level, which involves the Managing Director and Chairman, and the founder (Executive Chairman). Decision making within the organization involves major consultants along with management. The Management Board and the worker committee, which involve two support staff, consultants, and then suggestions, are made for the management related to the organizations and operations. Management does the communication constantly with the whole organization (specifically through e-mail) related to the future projects and new projects. Profitability and turnover are also delivered to people on monthly basis. Consultants are motivated for making innovations outside of the project work, and they can also make requests related to the financial resources with the help of Innovation Exploitation Board. This forum involves consultants from the entire organization, and also the ones belonging to the management team, who have daily meetings for discussing the feasibility of ideas that are given by consultants, which makes contribution in the team working in the organization (Newell et al, 2009). This case study analysis shows that the company focuses primarily on that structure through which communication among members can be improved. The management focuses on communicating all important aspects to employees as well as consultants. For the purpose of bringing innovation, the management focused on motivating consultants and employees so that they can brin something unique and different from the project work. This ensures that with the help of better organisational structure, a firm can increase its capability of bringing innovation (Laforet, 2013).
Vertically implemented organizations tend to have more capabilities of product development. These organisations need to target the previous strategies through initiative, collaboration of research with research labs or universities, or they develop some of the alliances and makes participation in the innovative networks (Yoo et al, 2012). For example, Midlands Hospital NHS Trust is an organisation that is famous for its innovativeness. The company focused primarily on building networks for the purpose of innovation. The management faced difficulties in implementing simple idea of best practice transfer but due to the focus on networking, the firm got success in bringing open innovation (Newell et al, 2009).
Outside-in open innovation let the organizations to get advantages from ideas, but they can also monetizing such technologies with the help of external / alternative paths towards market. It is not the basic intention to do the comparison of the effectiveness of open innovation in both kinds of implemented organizations. It is though very obvious that open innovation results into various chances and it should be developed different in both kinds of organizations. It also means that open innovation is related to various kinds of industries and organizations with the structuring of open innovation in the suitable manner to acquire the innovation of organization (Kotter, 2012).
However, it is quite sure that open innovation results into various opportunities and it should be structured in accordance with organizations. In more generic term, it is always important to observe that which conditions of organization cause development of innovation. Some of the authors recommend that some of the structures of organization may support innovation and some of the other can result into hindrances. Mauser et al (2013) for example stated that the informal structure of organization is linked with the development of the innovation through organization. A formal structure of organization is negatively linked with the development of innovation through organization. For example Oakland Furniture brought various changes in its structure and overall system for supporting innovation and knowledge sharing. The company had to face various cultural and structural barriers while changing the system, but after this change the company got success in a way of bringing open innovation (Newell et al, 2009).
In addition to the structure of organization, different processes in an organization are considered to be very important for supporting an organization to innovate. In case of organizational processes, knowledge creation and sharing are very important through which innovation in an organization can be ensured. For bringing innovation and creativity in an organization, knowledge has to be developed and disseminated within the firm. Development of knowledge mainly includes integration and collaboration among all individuals within the organisation and it also involves looking over the issues which cause hindrances to such collaboration. Along with it, concentration over the development of knowledge is most significant (Chesbrough, 2013). These bases of knowledge should be combined in order to generate new knowledge which results into the development of innovative services, products or process of organisation. Generally, this diverse knowledge is not acknowledged by a single person, but the knowledge is supposed to be dispersed in the entire organisation (for instance among different groups or departments) and among different organizations. Therefore, it cannot be said that knowledge is developed by just one person. Organisations have to face difficulties in dissemination of knowledge due to the lack of trust. For example, ResearchTeam is a research firm that faced a lot of difficulty in building trust among members of organisation. Due to this reason diverse knowledge is not integrated successfully. Due to lack of trust, management was failed to disseminate knowledge all over the organisation (Newell et al, 2009). In order to increase ability of an organisation for bringing innovation, there is a need of sharing knowledge among all individuals and they must work together in the form of teams. Cross-functional teams who work within companies is depicted as the main factor for prosperity and creativity of organizations. A long such research is present related to the psychological study on team-work depicting that how the entire can be more than the sum of components (Baer, 2012). Occasional interaction between different members belonging to different departments, clients or consumers is not sufficient, because of the reason that it does not permit the knowledge sharing which is most important for development of knowledge. For instance, the HR management of Buckman labs formulated various HR strategies for encouraging knowledge sharing within the organisation. HR managers were involved in building diverse teams and different appraisals and compensations plans were built for motivating employees to share knowledge. This helped the management in bringing innovation with the help of knowledge sharing among employees involved in teams of the firm (Newell et al, 2009).
For the purpose of bringing innovation, those processes must be adopted through which interactions can be done for a longer period of time within what is defined as an enabling index. Team-working is termed as the basic technique that gives enabling index for development of knowledge, where interpretation of knowledge can be acquired depending on the experience for longer time period. Personal interaction is most important for the ones who are involved for getting enough chance for knowledge sharing. Following this requirement for personal interaction, the major problem is that how to motivate this when the ones who actually interact don’t even meet each other, because of the reason that they are dispersed geographically (Thornton et al, 2012).
According to Fichman et al (2014) in order to bring innovation in an organisation, it is important to focus on knowledge creation. The process of knowledge creation as well as dissemination must be focused primarily by the management of organization. For the purpose of knowledge management in an organisation, technology adoption is considered to be an important factor. Only the adoption of technology does not help in promoting knowledge work, particularly in case when employees show resistance to change. The management has to follow those processes through which change can be efficiently negotiated to all users by making them participate in the process, ways of using the technology for supporting their routine tasks. In order to manage knowledge in the organisations in an effective way, there is a need of implementing a knowledge management system. The implementation of knowledge management system should be done by considering various significant factors. For example, an International Consultancy Company use knowledge management system only for less experienced consultants. According to this company, people who are less experienced can make use of knowledge management system effectively and efficiently. By applying this perception, the company also got success in the industry (Newell et al, 2009).
In order to ensure effective knowledge management process for the purpose of bringing innovation, information communication technology (ICT) is considered to be a very effective process. ICT includes different packages through which process of knowledge is supported. In order to get creative and innovative ideas from users, representatives from various parts of organization must be involved in implementation of project. It has been estimated by Johnstonand Marshall (2016) that 70% of software projects get failure because of poor management of knowledge sharing processes. In order to successfully implement a system of knowledge processing for the purpose of innovation, there is a need of effectively managing organizational change. An important aspect for knowledge sharing through ICT is coordinating action that helps in achieving broad goals. The management can achieve a workable situation by treating it as different cycles of design implementation and utilization rather than one stage of design followed by implementation and usage. In order to share knowledge within the organization through technological processes, a process with various stages must be followed by the users as well as management. It has been suggested by evidence that during initial stages of identifying requirements users might face difficulty for seeing beyond their recent practices and anticipating ways of doing things in a different way in case of using different unique tools. In case of implementation of new techniques and practices, users start evaluating the new system and raising concerns related to ways of configuring and customizing the system. This usually results in resistance of users and requirement for modifications after implementing the process. Usually, more resistance is shown by workers in case when aim of technologies is at knowledge workers because these types of workers possess high power than other types of workers. Therefore, instead to emphasize on user participation during phase of pre-implementation, it is helpful for companies to consider technological innovation as a process of interaction that involves integrated approaches of implementing and using design (Wright et al, 2012).
For example, in 1996, an elite US-university started modernizing its administrative information system by implementing two year ERP. This university was one of the first universities that implemented ERP and selected working with ConsultCo Corporation for developing two modules of software. The technical experts from the consulting company had the responsibility of teaching workers about the software and providing completing software suits. The technical experts were usually not present within the premises of university and workers had to work with incomplete software suits. Due to increased disturbance and tension about progress of software, consultants were hired by University for auditing the software readiness. The university management did not recognise the needs and wishes of faculty before implementing the ERP system. Due to this reason, the process of ERP implementation was proved to be ineffective for bringing innovation within the institution. The management of university recognized the needs of faculty in post-implementation process. After recognizing the needs of faculty after implementing the ERP system, appropriate changes were made to the process for ensuring creative and innovativeness within the institution. After bringing appropriate changes, the institution became successful in getting competitive advantage through bringing innovation (Newell et al, 2009). It can be analysed from the above discussion that in order to get competitive advantage through innovation, the management of a company should focus on structure and processes of the organisation. Different kinds of structures can help in supporting the ability of an organisation to innovate. In addition to this, various processes like knowledge creation and sharing, teamwork, human resource management and so on can assist in bringing creativity within the organization (Ceylan, 2013).
It can be concluded from the above analysis that now a day due to increased globalization and competitiveness, innovation has become an important factor for getting long term success and competitive advantage. Companies have to focus on various factors through which innovation can be brought easily within the firm. Organizational structures and processes are considered to be two main factors that assist the ability of an organisation to bring innovation. Different companies have focused towards their structures and processes in order to ensure innovativeness. Knowledge creation, sharing and technological processes are considered to be very important processes in an organisation to bring innovation.
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