Innovation is not only the buzzword of policy; it is mainly a critical success factor in today's business. The process of innovation and implementation of innovation has many things to do with the leaders' needs of articulation, priorities and vision of the organization. This is the main view of various studies on projects of innovation revealed during the 21st century. The organizations make an innovation by clubbing the strengths of the organization with different industrial, various other partners of business and market conditions approaches. The management of organization should have the facility of some key priorities in order have innovation success.
The Coca Cola Amatil Ltd is the beverage industry which makes frequent changes in their organization due to the innovation and acquisition. The competition is the main target to be innovative in the market and also there is necessary of innovation due to the fulfilling of long term strategies of the firm. The company is ready in all the aspects for innovation except few of the problems. But still it is maintaining top position in their industry. The main reason for their success is all the factors associated with innovation and key learning process in the company is well structured and manipulated and also top management of the company taking key part in success of the organization. However, issues relating to culture should be implemented in better way, secondly, it has to consider more external factors like suppliers, politics, environmental as there are no leading competitors in CCA operating areas it is fine at the moment, but they should be ready for the future.
Table of Contents:
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1.0. Introduction: 2
2.0. Analysis of Innovation and change in CCA Ltd: 3
2.1 The organizational need for innovation: 3
2.2. CCA's strategy and vision for Innovation: 5
2.2.1. Components of vision: 6
2.2.2. Innovation strategy v/s corporate strategy: 6
2.3. Context and competencies and culture for innovation: 7
2.4. Learning for innovation: 8
2.5. Issues in change management: 10
2.5.1. Leadership role: 12
3.0. Conclusion: 13
4.0. References: 15
The common view of the innovation is creativity means generation of new ideas, creation of knowledge. The competition leads to this creativity and if any organization wants a survival in the market it is very much necessary to be innovative. However, just implementing the innovation doesn't make any sense without the proper facility and preparation and this seems to be like riding a car without fuel. The innovation needs the change in the organization and the effective change management only the way to achieve the innovation. All the most successful organizations in the market consider the innovation itself as a routine business as they don't work without innovation. And even they know in some particular industries they can not survive without that strategy as there is a very tough competition and everyone is innovative in their market. Coca Cola Amatil Ltd is one company which is very much innovative and ready for the change management. In this report, it makes an analysis of the innovation and change management for CCA Ltd.
The aim of the report is to present overall view of the innovation and change in the Coca Cola Amatil Ltd and how it is important for the organizations like CCA. The consequences possible performance outcomes through the innovation also are a theme of the report. In order to explain the aim of the report it considers various things for the explanation and that is the scope of the report. The scope mainly includes the explanation of the need for innovation and change, the organizations vision and strategy for innovation, culture, competencies and context for innovation, what are the key learning for the innovation, and finally, issues relating to change management.
2.0. Analysis of Innovation and change in CCA Ltd:
2.1 The organizational need for innovation:
In general everyone think that there is need for innovation there is a crisis in the market for the organization goods and services. During those times innovation and creativity flourish in the organization as an organization wide program in one or another sort and which will be for a few years and it sends the message of creativity and innovation throughout the organization. It is wrong estimation as that innovation needed only during the crisis. (Abbott, S, 2006) the innovation is mainly required for the overall long term development and survival of the company in the competitive market without any damage. The company with new branches facing some problems with the present strategies and they need to have some innovation in the company in order to protect their investment for that branch. The technological aspect is another thing to be considered for the innovation as there is a frequent change in the technology worldwide market.
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In the 21st century due to increased technology, education, competition created more awareness to the consumers or to overall society. Each and every organization considers the innovation and change in a serious manner as there is a tough competition in the market. Hipple, 2008, outlined many other reasons why the there is needs innovation to their organization are economic changes it might decline in the market or boom in the market. During the decline the still company need to make profit and it should make sales better to overcome the recession. And in the times of boom to make a much profit compare to other competitors, they should go innovation which suits the boom period. Secondly, the frequent changes takes place in the society, which might includes, ageing of population, the growth in the middle class and lower class category, urbanization, passion trend, education etc increases the desires of the society in the market and organization should cope with those changes in order to be competitive in the market. Thirdly, the rising cost of raw materials which are scarce. Fourthly, environmental, social and financial importance and awareness are increasing. Fifthly, business models changing nature, technological access to the consumers, and the information available relating to supply chain is also increasing. Finally the awareness of concern over the products safety is considered as a main concept, especially in beverage products as increased to the greater extent and those are frequently measured by the government bodies.
Coca Cola Amatil is an organization which produces beverages to the market in six countries and which considers the innovation and change seriously. As CCA should consider each and every reason stated above, but in major it has to consider the environmental safety, technology changes, innovation relating human resources management, packaging, and relationship with the retailers etc. For instance during the summer company undertakes the procedures to identify the availability of products to the shoppers and this strategy was maintained particularly by the Coca Cola Amatil. In this innovation strategy it focuses on the products, place data, time with a targeted output with use of the climatic and demographic data. As the international competitors entering into the market they are thinking create a 24/7 environment. They are also considering innovation programs for the elimination of the issues which dominate the retailers. (Coca Cola Amatil Limited, 2010)
2.2. CCA's strategy and vision for Innovation:
The main aim or vision of the company is to be very good at their manufacturing of products and services and want to be number one in the places where it operates. This requires considerable amount of innovation and innovation requires considerable amount of strategies and resources which help in achieving those vision. In order to be succeeding with the vision, the company should be equipped with the resources like technological resources, human resources, raw materials, suppliers, etc.
The company made a 10 year deal with Telstra (Corner, S, 2009), made a contract with LANSA and KAZ relating to the technological field in order to have innovation (Coca Cola Amatil Ltd, 2005). The made a changes in the employee relations and also in culture to achieve the innovation strategies. The chairman of the company recently outlined that they are using the innovative strategies for human resources like effective incentive plans systems. And they are also having innovation approaches to the manufacturing of the packing containers. This innovation lead CCA's to the world's best manufacturing organization.
Mr Davis MD of CCA has developed some of the key visionary driver on which operates and make innovative strategies to the organization. Firstly, increase the CCA's share of beverage of non alcohol to expand their portfolio of the product. Secondly, broaden the wealth of beverage portfolio into the market of high profit alcoholic beverages in New Zealand and Australia. Thirdly, active ownership review arrangements or options with the coca cola company in the business region of South Korea and remaining committed with the PNG, Fiji, and Indonesia's growing developing markets. Finally, it wants to undertake a major Information Technology development for infrastructure in order to re engineer the process of business and wants to create a world class operating system in CCA Company. (Coca Cola Amatil Limited, 2010)
2.2.1. Components of vision:
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The vision is the most important concept of the organization and it should be based on some of the fundamental and ethical values of the unit. In order to be powerful, the visions should be pull the organizational resources and they should not push. Sometimes, a vision is conceived hastily or presented prematurely and such visions show negative responses. Burt Nanus, 1991, states that there are four main components of the strategic vision of the organization. Firstly, the vision must be realistic in nature, which means it must be meaningful for an organization and they must be achievable. Secondly, Credible in nature and which states that the vision must be able to believe and relevant in order to gain a confidence among the employees and it should be credible. Thirdly Attractive, in order to gain a motivation and inspiring it should be attractive and finally, the future, it means the vision must be future oriented.
2.2.2. Innovation strategy v/s corporate strategy:
The innovation strategy is the one which needs the balancing approach deployment in order to make sure of efficient allocation of resources available and shifts of behaviour amongst the leaders in allowing the programs of innovation for the development and success without any surrender to the corporate competitors which can cripple the opportunities. Whereas, the corporate strategy is a group of decisions from executive level or top level management of the organization which are meant to receive the better rivalries or to attain the ends in the process of the organization (Burt Nanus, 1991). For instance corporate strategies are those which take position in order to continue with normal process of business whereas innovation strategies takes place in position when there is requirement for something new according to needs to survive in changing circumstances of in factors affecting the organization.
The corporate strategy development is general process which are same for almost all the organizations and mainly target of those strategy is to made more profits for long term. Example: making target profit of some million dollars, producing products so many units, and hire the employees of certain number etc. In case of innovation strategies mostly work in order to achieve the corporate strategies and to make effective use of resources available in with the view of long term.
2.3. Context and competencies and culture for innovation:
Innovation provides a source for the competitive advantage sustainability. Product innovation means development of new goods and services and such innovation leads the firms to meet the demands of the market. Likewise the innovation process needs the creation of the methods of production, administrative operations and services. The effectiveness innovation process increases the responsiveness and efficiency. The various aspects which support the CCA organization are explained throughout the report.
The main competitors of the CCA Company are Nestle Waters, Dr Pepper Snapple Group. Inc. (dps), PepsiCo, Inc. (pep). These companies are also very good at innovation and changes as they are gaining advantages and acquired the better market in various countries. But as of the research shows, they are not so successful as Coca Cola Amatil in the places where it operates. In comparison with other innovative industries like Toyota, Dell, GE, GM etc CCA doesn't took much popularity and success. But in the industry of beverage CCA lead at extreme level in the countries where it operates. The stay in the number one position of the market for the long period it has to be more competent in such a place where no one should reach.
Khazanchi, S, 2007, study shows that the organizational culture is key to success of innovation management any kind of organization. Innovation supportive culture should be developed which means the firms with cognitive and social environment which share the reality view, collective belief and system of value reflect in behaviour pattern of consistency among the participants. The culture must be providing the overreaching reference frame, which helps in aligning the behaviour of employee with objectives of the innovation meeting the demands of the paradox for flexibility and control.
The culture tend be changing frequently on the basis of external and internal environment of the organization. As the environment changes much faster than the culture of their own results the replacement of cultures which always do not keep the pace. This is the one major factor which has more influence on the organizational life and innovation. And in practice cultures and economy are more related to each other as the factors of economy changes the culture also changes simultaneously. The cultural change varies accordingly with the changes in organizational variables, strategies of company, environmental variables, and ownership characteristics.
2.4. Learning for innovation:
The most important way for the organizations to be innovative at all times is by capitalization on their employees for the ability to innovate. Usually the organization completely depends on the prescribed behavioural blueprints and it is a fragile social system. Partington, D, 1996, states that the work is becoming more based on knowledge and defined less rigidly. The employees are the building blocks of the business performance through the ability of using new ideas, services, products, and processes of work. Each company has their own way of operationalising the innovation.
There are many innovation learning concepts are outlined in relating CCA are (Abbott, S, 2006), Fusing concepts of innovation in which it includes the analysis of the customers needs. Stimulating focus through the articulation of the priorities which give more benefits to the organization is the other one. Analysis of the health related concerns, analysis of the dominance nature of competency, creating the innovation climate, analysis of the organizational culture, performance management, learning to sustain the innovation challenge are the key concepts to be learned in order to maintain and implement the innovation.
During the last ten years company made many changes and innovation it stabilises their organization in the market. In the year 2002 they made an acquisition of the fruit juice and business of cordial from the Pacific Beverages Australia Pty Ltd and Rio beverages Ltd (NZ). In 2003 they acquired Bulk packing water business named Peats Ridge and Office and home water delivery company named Neverfail Springwater Limited. And till 2010 it acquired franchise from Parmalat Australia, Mentone, SPC Ardmona Ltd, Grinder Coffee Pty Ltd, Palm Springs Ltd, joint venture with SABMiller Plc and many more lead the company to number one position for licensing coca cola products. Due to these many acquisitions the company made changes frequently in all the aspects and it was successful (Coca Cola Amatil Limited, 2010).
Elliot, S, Loebbecke, C, 2000, states that electronic commerce is recognised as one of the main source of change for the business conduct. The exploitation through the business for the innovative approach of payment required the companies to adopt the new technology and process in order for the companies to adopt the innovations. These innovations of the organizations are primarily for inter-organizational and interactive to consumers and other organizations.
In the year 2005, Coca Cola Amatil made a contract with LANSA and KAZ as partners for the purpose of having a technological innovation in their organization. The main target of this partnership was to develop new strategic information technology solutions to the organization in order to take the business forward. The very first project with LANSA enabled the company to deliver the manufacturing reliability reporting in full and on time. The extension was web based a national driver payments system which was achieved through the LANSA. Later CCA made a deal with Telstra and it is for 10 years of period which helped in the ways of communication up gradation. The importance of IT lies through the help of innovation and the value of IT can be measured by knowing the improvement in the bottom line of the CCA organization. In this case the technology is not the main focus but the focus is enabling the business improvement.
Rees, D, 2004, the success of innovation strategies in the Coca Cola Amatil is completely depends on the employment relation strategies by them. CCA places a great prominence to the employment relations. The CCA tries to introduce new practices of work in order to avoid the disruption and costs in an innovation techniques. The CCA mainly uses some of the strategies for the effective employment relations. Firstly, open communication; this is the first company in which employees are authorised to speak on behalf of the company and this helps the company to have more ideas relating to innovation. Secondly rewards, CCA provide both non financial and financial rewards to attract the employees of higher quality and also help in motivating them. Thirdly and most importantly, training and development, CCA provides effective training and development during the implementing phases of innovation strategies in the organization. Fourthly, Flexible working conditions, which helps the employees to have more interest on CCA innovation and finally, the Occupational health and safety, CCA has a commitment to the development and maintenance of safe working conditions in the organization.
2.5. Issues in change management:
After all the potential benefits of the innovation it posses some of the challenges in organizational change. For instance efforts of innovation might be disruptive to the organization, relationship alert between the boundaries of occupational and functional or requires some change to the structure of the organization and climate. The paradoxes of the innovation might posses some less understood and fundamental challenges explains. Successful innovation and change requires flexibility controls in tension management. Flexibility should enable the empowerment, creativity and change which is necessary for the exploration which boosts the innovation. Control is the other important thing which gives discipline, innovation initiatives focus, like achieving long term goals, core competencies leverage, and budget meetings etc. These paradoxes of innovation show some messages with mixed nature and ambiguity role which affect the performance adversely (Khazanchi, S, et al, 2007)
Lientz, B, Rea, K, 2004, outlined the management problems or issues relating to the innovation and change are bit complicated compare with normal processes. As the change happen in a quicker time compare with normal processes and they should analysed very quickly. There are some particular problems identified in each of the organizational changes are, resolution of the issue, impact of the previous issue which was not resolved, team issues, management issues, personnel issues, and change effort issues.
There are some drivers of the organizational change which have more influence on the effectiveness of innovation. Harris, A, Sohal, A, 2002, stats some of the drivers for manufacturing companies including Coca Cola Amatil are, firstly, internal influences of the company: which includes mainly the Culture which is shared by social group or organization. The aspects of frequently changing culture have more influence on the workforce of the organization.
Secondly, Occupational health and safety, as mentioned earlier CCA have got very good OHS but still in countries like Australia as employees got dominant role there might some conflicting issues arose during the changes in the organization (Harris, P). Thirdly, External influences, the CCA decision in integrating and manufacturing Polyethylene Terephthalate (PET) had threaten the market share potentially for the aluminium cans. As the aluminium can belong to very competitive market it leads to maintain a position of low cost. Fourthly, Operational inefficiencies, Even though there is effective management in the company sometimes due to tuff times it is more complicate to manage the change, which made operational inefficiencies in turn lead to some extent of change or innovation failure. The employment relation is also one of the main reasons for the operational inefficiencies in the organizational change.
Fifth, the process of transition: the transition process of change is also important as complications can not be maintained easily in the normal routine. This needs effective long term planning, consistent improvement in systems of operations in the organization. Sixth, the improvement among employees is also important issue, if the employment relation strategies are not meeting employee criteria then there won't be any improvement in the process of change. But in case of CCA the employee relations are built in a proper manner and this issue doesn't have much influence in CCA.
Seventh, the technological improvements, as the innovation and change need adequate facility of technological equipments and support. Usually in many organizations, the change failure takes place because of lack of technological support or facility. As mentioned earlier the CCA is very effective in technological facility and assistance, so this issue also doesn't have much influence in the CCA. Finally, strategic implementation, organizational structure and operational process of new practices have some extent of influence on the change management. The improper implementation process after being everything fit doesn't going to workout in achieving the change (Lientz, B, Rea, K, 2004). It as to be planned, maintained, processed in a better manner. Similarly, organizational structure and operational processes should be executed in a well manner or else it will be great problem not only for CCA it applies to any of the innovative organization.
There are few more issues which effect on the organizational change is (Rees, D, 2004), firstly, there is need for communication skills and credibility to the process driving, secondly, understanding of the whole organization, objectives and processes while making change in the organization, thirdly, should have endorsement and enormous support from the executive and support team. These three things are major in maintenance of the change and innovation in the organization.
The human health, environmental wellbeing is the other issues in relating to the change management. As the CCA provides beverages, the management of health and environment is also important. Harris, P, 2009, outlined that the company should make an assessment of their product and services in each of the year. As the assessment board of Australia mentions some of the organizations showing risk and in the list CCA also assessed. In this assessment they have considered risks associate to health and they shown zero in the entire category which means CCA took all the measures relating to health and environmental wellbeing.
2.5.1. Leadership role:
Some literature innovation outlined that the leaders behaviour influence by the use of models developed in relation outcomes of performance shows that the behaviour of leader has positive affect on the outcomes such s efficiency and effectiveness instead of outcomes related to innovation. Leadership Quarterly a special issues concludes that, no one can expect the models of existing leadership to be applicable entirely to the individuals innovative leadership.
Jong, J, Hartog, D, 2007 outlines that, in the process of innovation it mainly consists of two aspects like generation of idea and application of the behaviour. The employees generate ideas by the use of the engaging in exploring the opportunities. Innovative behaviour is the one which is closely relate to the creativity of employees. In achieving these, leadership reflect the elements like goal, group and influence. Change agents are also taking a considerable importance in the innovation. They provides agreed framework in order to achieve the innovation. This Change agents nomination will takes place only when there is not sufficient facility in the existing organization to perform the innovation strategies in a complete manner.
The project management mainly faces problem with pressure which is due to the rise or fall in the bureaucracy of machine, forces of new wave of change. Partington, D, 1996 outlined, the organizational reflect with the number of demands for the change in the various ways like downsizing due to the new technical climate, innovation of administration, cooperation as the organizational boundaries become less distinct, Delayering by means of lessened levels of management, increases in emphasis of learning and knowledge.
The innovation and change is most considerable aspect in the business process due to their importance in the organizations. The overall benefit and success is possible through the strategies of innovation in the industry. CCA's adequacy in facilities required for the fulfilment of innovation strategies are helping them to succeed with the innovation. The change management is also very good at the CCA as the management operates in a very efficient manner and their concern relating to employees boost the learning for innovation. Their tremendous achievement to be number worlds top packing container manufacturer in the world is achieved by means of innovation through the research and development. The continuation of the innovation strategies in the company will help in entering to many other countries and also help in building market for other four countries like Australia and New Zealand.
Through out the analysis of the report, it can be noticed that for the present market how important the innovation and change are. The various advantages can be received through the development of the innovation strategies effectively. However it is very much necessary to consider the change management. As the innovation is completely a deal with the change management it is very much important to consider the issues relating to the change management in applying the innovation to the organization.