Understanding the Importance of an Innovation


Effective innovation can help organization to transform poor businesses into world great leaders. The ability of the organizations to manage innovation is a key step towards the organization competence in the environment. In today's era organizations are required to keep tools that can help organization for the relationship and knowledge exchange of innovation not only in their boundaries but also towards the collaboration across organizations. Innovation is one of the best ways to grow economies providing the organizations with the ability to adapt the change and keep on growing (Dooley & O'Sullivan 2007).

To innovate on a regular basis organizations have to acquire a strong knowledge capability through a qualified workforce that can manage innovation. The strategies used to manage innovation also depend on the size of the different organization. As large organizations have easy access to the conventional factors such as skilled workers, better knowledge infrastructure, and better technology as compared to the small organizations. On the other hand small organizations have also got their strengths in factors like trust, homogeneity which can help small organizations to find innovation as productive means to develop in the growing world. To maximize knowledge spillovers in an organization localization and urbanization effects can be used to strengthen the economy by innovation (Therrien 2005)

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It has been widely accepted that innovation is amongst the major roads for the organizations to survive in this competitive world of today and to achieve sustainable development path. Knowledge has always played an important part for helping the organization to gain competitive advantage in the market over its competitors. The increase in the learning capacity is an important for an organization as they can get the modern technology from the other organizations but before that they should the way to use it more effectively and efficiently for their use. (Varbalane, Dyker & Tamm 2007)

According to Smith et.al (2008) Studies have found out that there are several factors which influence the innovation and few are discussed below:

Technology which is often defined as an output of the innovation. Technology helps in to facilitate innovation.

Organization structure: it is also an important factor influencing the innovation in organizations. It relates to the configuration of an organization and how it impacts on an organizations ability to manage change in a more effective manner.

Organization culture: it relates to the values and beliefs of the people of the organization and how can this impact on the innovation management of an organization. In this section it considers when organizations undergo collaboration to determine the risks they can face.

Employees: employees of an organization also have a great influence on the innovation in the organization because of the different personal characteristics of different people in the organization.

Knowledge: it relates to knowledge available in an organization and how it can be used effectively for managing innovation in the organization.

Management Style & Leadership: it defines the way the upper management influences its employees and how the staff of an organization is motivated by the leader to adapt to the innovation change in an organization.

Organizational change is defined as the adoption of a new idea or behavior by an organization. There are some elements that are considered to be essentially present in the organization for it to implement the change successfully. If the organizations are missing any of the elements mentioned, the organization will fail to implement the change. The elements considered important for the change process are:

Ideas: it is very hard for organizations to come up with new ideas in today's world otherwise they will be lagging behind in this competitive world. There should be creativity in the organizations which helps organization to respond to the better opportunities more effectively.

Need: there should be a need for the organization otherwise the new ideas of the organizations are not going to be considered seriously which will result in failure of the change process in the organization.

Adoption: the Managers and Employee have to be in agreement with each other to support change

Implementation: it occurs when the organization actually starts using the new proposed idea. To make the implementation successful the organization has to provide support to the employees to overcome the problems which they are facing towards the new change which can be like providing training, new equipment to the employees.

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(Daft, 2007)

According to Bell (2007) there are three forms of the technological capabilities that can help to promote creation, development and use of knowledge in efficient and effective manner. The three forms are as follows:

Operating & Production capabilities are defined as the sections which uses the knowledge that is closely related with the existing production capabilities and the facilities in the organization. These cannot be directly related to the creation of a new knowledge but they help in the creation of new technologies in association with the research and development management capabilities.

Designer & Engineering department are associated with the capabilities that uses the existing knowledge to transform into new, innovative configurations that can led to the development of a new production system. This is one of the capabilities that most of the developing economies are lacking and is the major drawback for the creation of new technology.

Research & Development capabilities that are used to create new technology. These capabilities of an organization provides a way for successful and commercialization of new knowledge.(Wamae 2009)

It has been found through studies that development of technological capabilities requires a constant and complex process that is linked to the innovative efforts within the productive activities of an organization. The ways of learning that can create competitive skills includes two critical elements:

Explicit learning: this is a process in which the staff is given specialized training inside or outside the firms.

Learning by Doing: this can be achieved by doing the routine tasks but they do not add much too innovative capabilities of individuals in the organization while the other way to develop innovative capabilities is through practicing the innovative technology developing tasks which add much more to the innovative capabilities of an organization. (Wamae 2009)

It's been found in management literature that some of the most dynamic innovators of the world work in collaborative network of alliances. They work in alliances through the liaisons that are the representative between the organizations to form a linkage between different organizations which otherwise are not connected to work together. The two distinctive innovative processes are called "Knowledge Brokers" and "Technology Brokers". The broker acts as the intermediaries between the sources of new ideas and the potential users of those ideas in the innovative network (Winch & Courtney 2007)

Businesses which are serious about competing in the fast changing markets with fast changing technology must innovate otherwise they will be lagged behind in the line. Product innovation provides a important means for generating the revenues whereas the process innovation provides a mean for safeguarding and improving the quality. It also considers factors to save the costs related to the business and provide a better performance for the long term run of the business. In order to be the market champion an organization has to consider several factors which directly have an influence on the performance of the business. Organization has to consider factors like preferences of the customers, the likely reaction of the competitors and the core competencies of the business. So a business wanting to have good long run in the market have to consider all these factors carefully and have to be innovative (Johne 1999)


According to Wang (2005) HRM strategies can help an organization to achieve higher performance through managing the innovation going in the organizations. There are many strategies which can be used to give rise to a better co-ordination working environment which relates to the outcome of an organization. It can make easy for the organizations to undergo innovation as they develop such an environment to provide better results in the organizations. Few strategies are discussed below:

Personnel strategy: this strategy focuses on the HR practices which facilitate employees for high performance, providing motivation to the employees to work towards their goals; it also concentrates on enhancing their skills through team work and leadership. This can be achieved by training or supervising.

System strategy: this strategy aims to get the communication channels structured in the organizations so that better decisions can be made and innovation can be handled more effectively.

Organizational Strategy: this strategy emphasizes on the HR practices which encouraging team work, cross-cultural leadership qualities, and organizational development programs.

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Studies have shown that these strategies in organizations add towards the innovation management in organization.

According to (Prajogo et.al 2007) Order Qualifiers are those criteria that an organization has to meet before being considered as a supplier while on the other hand the order winners are those criteria that win the order over competition. As at present the market conditions have changed due to which the basis of competition also has been changed to a great extent. The globalization is increasing day by day and there are lots of changes taking place in the markets where competitive dimensions such as flexibility, responsiveness and particularly the innovation are being regarded as the order winners in the changing market of today.


It has been found that innovation for every business in the market is really important and organizations have to understand its importance. They have to implement various strategies in their organization to make them prepare for any change that can occur at any time. It’s also been found that human resource of an organization are of real importance for the organization so they should be provided with adequate resources to learn and grow their skills which are an important factors to be considered for the innovation to be successful. In the end it found that innovation is crucial factor that all organizations have to consider to survive in this competing and changing world of today.


Organizations must innovate in this competing world to survive and grow.

Organization structure and organization culture should be well maintained to manage innovation in a better way.

Organizations should implement various training programs to provide their employees with better resources to learn and grow. (Varbalane, Dyker and Tamm 2007)

Need to implement strategies with a long-term objective instead of short term financial objectives.

The firms should be motivated to change and then should be supported for the process of building capabilities (Varbalane, Dyker and Tamm 2007).

Human capital development which is an important factor should be considered carefully (Varbalane, Dyker and Tamm 2007).

Adoption of better techniques to manage innovation