When Innovation Is Not as Effective Peer-reviewed Articles

Ibrahim Bader A. Alharbi¹, Rossilah Jamil¹, Nik Hasnaa Nik Mahmood², Awaluddin Mohamed Shaharoun^3
aneAzman Hashim International Business organisation School, Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia.
²Razak Faculty of Technology and Information, Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia.
³Engineering College, Islamic University of Madinah, KSA.
DOI: 10.4236/ojbm.2019.73084   PDFHTML XML 1,520 Downloads half dozen,573 Views Citations

Abstract

In recent years, innovation is an important factor for developing organizations in a highly competitive world. Most scholars agree on the positive effect of the innovation on organization, and there are a few studies on the subject. The goal of this paper is to shed light on the definitions, types, importance and how to manage innovation. Through the review of relevant literature, this report intends to deepen our understanding of the theme and provide a comprehensive review of previous research.

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Alharbi, I. , Jamil, R. , Mahmood, N. and Shaharoun, A. (2019) Organizational Innovation: A Review Newspaper. Open Journal of Business and Management, 7, 1196-1206. doi: 10.4236/ojbm.2019.73084.

1. Introduction

Innovation plays an important role individually and organizationally on the changing business surround. Innovation is identified equally value added to organizational operation and activities [i]. Innovation is developing beneficiaries' value past providing new needs or achieving the existing beneficiaries and marketplace demands in distinct ways [2].

At that place is an argument that in the contemporary business world concerning organizations, innovation is widely perceived as an important source of competitive leverage in an increasingly fluctuating world [3]. According to the new World Economic Forum report 2018, effectually 133 meg new jobs may provide by 2022, while 75 million jobs are modify by technical innovation [4]. Therefore, the McKinsey written report shows that 84% of managers agreed that their futurity success based on innovation, allows organizations to survive in the competitive markets, and contributes to economic growth [5].

As stipulated by a majority of management scholars, innovation capacity remains to exist the nearly pertinent determinant of an organization's performance. A quick search on scholarly manufactures using "innovation" every bit the keyword yields tens of thousands of articles. While such manufactures bear on various conducted studies on organizational innovation, an exploratory search on the different aspects of organizational innovation is prudent. Due to the comprehensive studies regarding organizational innovation, information technology is wise to explore the existing definitions of innovations, its applications, and advantages from the organizational perspective.

2. Definitions of Innovation

In the existing literature that this study has reviewed, varieties of definitions exist for the innovation. This stems from the fact that diverse stakeholders in organizations perceive innovation in different manners. Despite this, the existing literature confirms the aspect of creativity in organizational innovation. Co-ordinate to [6], the term organizational innovation by large serves to refer to either the creation or the adoption of a notion or behavior that is new to an organization. The keywords in this definition include "idea/behavior" and "new". Organizational innovation emphasizes ideas that are knowledge-based and behavior, which are transformative. Hence innovation looks at how new ideas and behaviors are depicted in a given organization and they serve to positively affect the organization.

In a comprehensive literature review study that delves into organizational innovation every bit a whole, they explore various definitions of organizational innovation and effort to merge points from each definition to come upwards with an increasingly comprehensive description of the term [7]. Accordingly, the multivariate definition of organizational innovation is that innovation pertains; either to the production or the adoption, the assimilation and utilise of any given value-added novelty in social and economical spheres; the renewal or increase of services, products or even markets; the facilitation of an alternatives techniques of production; and ultimately installing of emergent management system. The definition contends that indeed, innovation can exist a procedure and an outcome at the same time. Such a definition of organizational innovation is indeed quite comprehensive and information technology touches on diverse aspects as it pertains innovation. It tin exist said that innovation is an enhancement of the marketplace, the ideas, the behaviors and other aspects that translate to benefit an arrangement.

In their comparative report, [8] seems to conform with [six] in brevity and preciseness equally it pertains the definition of organizational innovation. According to them; organizational innovation implies the creation and adoption of a notion or beliefs thus its effective implementation in the particular arrangement. They argue that the objective of innovation is to just come up with business organisation value through the development of worthwhile ideas into a customer-centered market place. The concept of organizational innovation refers to a mechanism utilized by organizations to conform to dynamic conditions of technological advocacy, competition, and market expansion by creating unique products, systems, and techniques [9]. In essence, organizational innovation is the process by which an organization develops new avant-garde products or services and its success in introducing those commodities or services to the market. Therefore, it tin can exist defined equally an system'southward ability to transform ideas and cognition into new services, processes, or products regularly for the do good of its stakeholders.

Conclusively speaking, there are various existing definitions of organizational innovation in reported studies. Withal, it is prudent to note that they all refer to it equally ane process which is systematic and engages both ideas and behaviors which when enacted tin can serve to alter the arrangement positively. The definitions of organizational innovation considerably overlap with administrative and management innovation [x]. Table ane shows a summary of the definitions of organizational innovation.

3. Types of Innovation

It is necessary to empathize that in that location are many types of innovation to know the nature of the organization's work [18]. Throughout history, in that location are many types of innovation explained and reported in the literature. The first author in innovation area was [19], who divided the innovation into particular types including a unique style of production, unique products, new supply chain, new markets, and a new method to manage the business concern.

Tabular array one. Summary of organizational innovation definitions.

Some researchers such [18] [19] explained that innovation can be achieved through two types which are a product innovation and process innovation. The production innovation relates to introducing new service or unique products. The process innovation relates to developing of new tools and equipment. However, based on [21] they classified the innovation to four types identified as Position, Paradigm, Procedure, and Products, the position innovation involves the differences in the way of viewed products. The paradigm innovation means the differences in the rational thinking, which reflects into the work. Moreover, [22] classified the innovation into incremental and radical innovation. The incremental innovation is the improvements and changes of the current products or process. While radical innovation is the newness that replaces an existing process and products.

On the other paw, some scholars classified the innovation into administrative and technological innovation [12] [23] [24]. The authoritative innovations relate to the alter in the arrangement structure or administrative processes. The administrative innovation develops and implements organization activities such as organizational administrative processes, organizational construction and member's social organization within the organisation [25] [26] ; information technology includes rules, procedures, management systems, and training programs for members [2] [x] [27]. The technological innovations relate to innovations that upshot in changes of organizations by adoption the changes in applied science by some tools such as new equipment, techniques, processes, methods, and systems. Technological innovation is essential in the technical and it is usually related to technology [28].

Moreover, [24] asserts that administrative innovation causes that organizations come up with innovations to conform with environmental changes and achieve strategic goals for sustaining and improving performance. Further reviewed technological innovation focus on culling technological procedure and products. Therefore, organizations innovate and focus on enhancing productivity, profitability, and boost market share. Table 2 shows a summary of different types of innovation.

4. Importance of Innovation

Its notes that initially, innovation has a pertinent role in the economy [35]. Appropriately, the importance of innovation lies in the fact that it can manifest itself in 1 of the various means. For instance, innovation is important when there is the introduction or commercialization of either a new or improved production or service as opposed to the current products or services. Thus explains that organizational innovation is indeed crucial equally it leads to the emergence of new products and services to the market. On the same annotation, innovation serves to improve the existing services or products.

Secondly, organizational innovation can serve to come up with an alternative production process or even amend the electric current business concern process in the about basic and complex manner. Coming up with a new form of production, or rather

Table ii. Summary the different types of innovation.

a ways of production, in this example, implies extreme efficiency as it pertains production and tin include reduction of time, increase in production or yielding improve products in the same production [36].

Thirdly, organizational innovation is crucial since it can open doors for a new market. This tin be perceived as the marketing dimension, and it pertains efforts to ensure that there is polish marketing of the products. Under this, innovation on the part of the employees, and direction alike will translate to better marketing options and yield better sales. Fourthly, organizational innovation can result in the development of culling supply sources like materials, equipment, and various other inputs. Last just not least, organizational innovation results in fundamental transformations in industrial structures and organizational construction amongst others. It paves the way for the promotion of employees who are innovative [36].

Organizational innovation improves the creativity and flexibility, which promotes the improvement of technological innovations [37] [38] [39], which provide a justification for the important influences of organizational innovation. Moreover, [17] proved the positive influence of organizational innovation on other different types of innovations was proved, specially on improving organizations' capability to implement new technologies and innovative process. Furthermore, [38] clarified that organizational innovation has a significant influence on firm innovation and competitive advantages, meaning that they afford input for innovation capabilities and firm innovation processes.

From an organizational perspective, managers around the world encourage organizational innovation because of the value information technology can create in their companies. It has been proven that when employees are innovative, there is increased productivity as a result of executing and creating new processes [40]. This has the effect of creating the much-needed differentiation and increases an organization'due south competitive advantage. In essence, organizations that embrace organizational innovation are able to react more finer and faster to avert capture and risk opportunities.

The investigation on organizational innovation is still relatively limited but information technology has kept increasing steadily increasing in the literature [18] [41], and has been identified as a cause of competitive advantage [42] [43].

5. How to Manage Innovation?

Innovation is non only just focused on the creation of alternative markets, only it also tin avail alternative techniques of serving established and mature markets. Innovation works with emergent technology, and involved in enabling radical opportunities. The importance is about improving quondam product/technology with the aid of using the more current technologies [44]. The upshot of innovation in organizations is not new; organizations are braced with the challenge of thinking about changing what they avail to the world and the style they create and deliver what they offer to go on surviving in a changing market. It was offered a simplified model of innovation, which has iv steps [44]. The first step pertains searching for new ideas in the organisation using R&D, and they include regulations, market signals among others. The second step is to select from the set of options; the variants that accept high prospects for growth and development. The third stride is implementation, and it pertains the conversion of ideas into reality. The last stride in the model of innovation is capturing value. This pertains answering the question of how to ascertain that the efforts put across are justified; it can be in either commercial terms or social value. Conclusively speaking; equally organizational innovation is perceived as quite important, its management remains to be quite important. Therefore, diverse models have been offered to dissect organizational innovation using many of theories that including importantly institutional theory, market orientation theory, cognitive theories, socio-technical approaches, and resource-based view theory. The problem of using many unlike theories is that the results of the theories, brings different innovation puzzle, practice not provide a complete frame of the factors that manage innovation properly. All the same, some theories emphasized the management complexities, while some emphasized on a specific system or industrial, and others focused on the organizational structure [9].

Moreover, managing innovation for managers is critical since organizational innovation is a risky process associated with a high degree of complexity [45]. Notwithstanding, there are various suggestions on how to manage organizational innovation; this newspaper discussed the v dimensions of (Tidd & Bessant) model to organizational innovation direction: strategy, organization, process, linkages and learning [21].

The Starting time dimension is a strategy, which holds that for organizational innovation to be successful there must be a carefully drafted innovation plan. The organization leadership should work with the senior direction squad on the innovation strategy that can pb to the system's innovation efforts. In essence, the innovation strategy comprises of a master plan that houses a fix of goals and management required for effective coordination of all innovation initiatives [46]. The second dimension is an organization, which holds that the companies should ensure that their civilization and structure promotes innovation [47]. The organization should ensure that a comprehensive innovation institution system is in place. It should contain of a cross-functional team, which is made of individuals with creative and independent thinking. The tertiary dimension is that of the process. It includes factors such equally an organization's geographical coverage, size and flexibility [21]. These aspects should be adult or else an organization will non be able to obtain competitive advantage due to innovation. The quaternary dimension is that of linkages. The organization should have constructive internal and external linkages to ensure production of innovative output and input [48]. Internal linkages can exist in the class of increasing employee interaction, while the external linkages refer to good relationships with other institutions such as inquiry institutions. If these linkages are potent, so an organization is able to reduce the amount information technology spends on innovation [46]. The final dimension necessary for constructive innovation management is learning. An organization should exist able to offer new data to its employees and ensure its implementation [49]. New knowledge should be available to bring new means of thinking and equally a milestone to creativity, a solid route to modify and innovation [50].

six. Conclusions

Organizational innovation is one of the about critical and most circuitous aspects firms are faced within the mod world we live in. This is because research has depicted that innovation has a substantial effect on an organization's performance and survival. In essence, innovation helps an organization to gain a competitive border over its rivals and to expand its market place share by producing new and unique products for its clients. When an organisation is able to achieve this, information technology will optimize its profitability, an attribute which immensely determines its success rate. In order for managers to ensure effective organizational innovation, they should accost the addressing the four domains of strategy, process, supportive organizational context, effective external linkages, and learning. These v domains assistance an organisation to foster the spirit of individual innovation in its employees, which ultimately translate to organizational innovation. The innovation'southward importance is not just for organization competitiveness just also for social evolution.

Many of the scholar findings are still dispersed. However, some empirical studies emphasized on the motivations for innovation, organizational atmosphere, and participative management for innovation equally the core elements for managers to be able to lead organizational innovation, while some emphasized on the capability, flexibility, and organizational structures to manage organizational innovation [nine]. Additionally, the role of internal organizational forces such as the capacity for learning, the power of organizational transformation, the changes in the engineering, interests, and societal value is identified as important factor of organizational innovation [51]. Therefore, future studies should explore more deeply on the internal and external key factors to enhance organizational innovation.

Conflicts of Interest

The authors declare no conflicts of interest.

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