Innovation For Small Sized Firms Commerce Essay

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Small sized firms have been sprouted out quickly and prosperously all over the world, but to face the challenges, like market share, brand awareness, product competitiveness and available resources, that come from industry titans still a huge task for the small firms. When the small sized firms want to win market share, especially for small sized product companies, the most competitiveness they have is about the product and organizational innovation.

In this paper, the author emphasizes three key aspects in the innovation process: team, innovation and intrapreneurship, while the logistic sequence of the paper starts from what the small sized firms need to what should be taken by these companies in the innovation procedure.

The answers to these key points like reasons for being a team, what innovation is, how to create innovation climate in a team and how to select intrapreneurs in a team are explained clearly and orderly in the paper. In short, small sized firms that need to handle the problem about innovation should consider the mentioned following points before they take actions.


Nowadays, industry titans like L'Oreal and P&G in daily care, Microsoft and Google in high technology, exist in almost every area of the commerial domain. Relying on the strong technique, capital and human resources support, those major companies can concentrate on pushing their main brands, while use the brand awareness and the consumer approval degree to expand their business into other industry areas.

Hence, it is wisdom for burgeoning companies, which are always small or medium sized to own their business and market by creating some special and unique products to meet customers' needs. In the process to find the characteristics of their products and services, small sized companies should continuously implement product and organizational innovation. Because only by incessantly innovation can companies get the solutions of the problems in developing new product and adapting the update of product.

Ekvall et al. (1999) pointed out that contemporary organizations are now operating in rapidly changing, fiercely competitive, and confused environment which requires continuous renewal and adaptability. Therefore, the quest for innovation and creativation in products, services, systems, and work processes has increasingly been recognized as a key factor to long-term organizational survival and success.

When compared with large companies, small sized companies have many advantages in the process of innovate. Since product innovation is usually linked with a search for technological competitiveness, and based on high productivity rooted in quality advantages in niche markets for small sized firms (Andrea Vaona and Mario Pianta, 2006).So to realize the advantages of innovation process is essential.

Continual competitive advantage

The awareness of continual competitive advantage is increasingly related to the ability of the firms to create manage and exploit appropriate innovation successfully, and the following two strands can be identified. Meanwhile the interests of the contribution that small sized firms made to innovation-led capital generation and job creation has been noticed in recent year at both international and national levels (DTI, 2001; European Commission, 1996; OECD, 2000).

Firstly, the heighten understanding of the important role that small firms plays in industrial markets. There are four key contributions from small firms, Acs and Audretsch (1991) listed them like, these firms are important part in the technological changing process; a majority of the turbulence are not only creating an extra dimension of the task, but also support and run in a mechanism of the business market; while the atmosphere of competitiveness all over the world provides new positions.

Secondly, Peter Barrett and Martin Sexton (2006) suggested that firms which involved in a category of industries are prefer to choose experiment with project-based models of organization to adjust and develop fundamental changes to meet the nature of the markets and the roles of technologies (Ayas et al. 1996).

To solve the competitive problems that small sized companies may face is a challenge to both managers and employees in each department. But it is essential for managers to have a right cognize of the competitive, since those competitive factors like value added, cost reduction, and new market opportunities may be the spur for innovation, but in essence it has enhanced the firm's activities or capabilities (Jay Mitra, 2000). Managers should restructure of the teams while team members should accept various challenges.

Reasons for being a team

Geert Vissers and Ben Dankbaar (2002) put out their views that because new product development is always team work, product development teams are created that are cross-functional, representing different functional units, or multidisciplinary, involving several disciplines, or both. In any case conceiving and developing new products is a joint effort, which means that the traditional view of creativity may not apply. This view, characterized by a focus on individuals as agents of creativity and by the assumption that creativity is a unilateral quality, not a reciprocal or interactive phenomenon, continues to be influential.

Edgar Meyer and Melanie Ashleigh (2007) also agree that groups and teams can help an organization gain a competitive advantage because they can:

Enhance the organization's performance.

Because there are feedbacks that can be get by the members in the organization, and the communication within the team can help members to find their shortcomings and get better solutions in the further working time, and this behavior is a win-win model for both organization and individual.

2. Increase its responsiveness to customers.

In a new team, which contains new members from other department, the expertise and knowledge in different organizational department is brought together in the skills and knowledge on the team members. So it is possible for the designers and researchers get more information about the different needs that customers may have, and the more information they get, the more practical applicability the new products have.

3. Increase innovation.

Innovation is about the creative development of every new that in relation with the company, and even new organizational structures. Individual working alone does not able to extent and diversify set of skills, knowledge and expertise required for successful innovation. To encourage better innovation, managers can create teams of diverse individuals who together have the knowledge relevant to a particular type rather than by relying on individuals working alone.

Using teams to innovate has other advantages. Firstly, team members can much easier to uncover one another's mistakes or false assumptions, and it is not available for individuals who acting along alone. Secondly, team members can critique one another's approaches when needed.

4. Increase employees' motivation and satisfaction.

In an innovative environment employees can act more activity in the brainstorms and researches, and the free atmosphere with sufficient support may let employees feel more release and comfortable in their working, when a sense of responsibility also exists.

Types of teams

Because big firms are well-equipped and with all rounded departments and human resources, it is easier for those companies to meet the challenges quickly. But when small sized firms should shoulder the problems that occur gustily, they should make rational use of resources by restructure the existing teams. Hence, it is possible for managers in small sized firms to create R&D (research and develop) team to achieve their goals in product innovation, and use task force to challenge with limited time to reach short time and timely work.

But, how to select R&D team members for new team? Edgar Meyer and Melanie Ashleigh (2007) answered the question as follows:

Managers select R&D team members on the basis of their expertise and experience in a certain area. R&D teams are sometimes cross-functional teams with members from departments such as engineering, marketing and production in addition to members from the R&D department itself.

Not only for R&D team, but also for other departments in organization, ideal teammates are required by members from leaders to followers. And Marty Brounstein has listed the qualities that ideal teammates are hoped to have contains: demonstrates reliability, communicates constructively, listens actively, functions as an active participant, shares openly and willingly, cooperates and pitches in to help, exhibits flexibility, shows commitment to the team, works as a problem-solver, treats others in a respectful and supportive manner. However, these characteristics may not be provided by the same person because of the weakness of everyone.

What is task force?

Task forces are set to reach specific organizational goals or handle problems in a certain period; sometimes they are also called ad hoc committees. In the situation that an incident happens in the operations of a company, task forces are be formed to evaluate how it could have happened, and be given a period of time to reach a special goal, when the goal or report is completed and the task force reaches to a conclusion, the team of task force seems to be disbanded. From the definition we can see that it is short-lived and always occur with emergency incidents, it is a capability of emergency response plan and build of the company (Edgar Meyer and Melanie Ashleigh, 2007).

But time is not the only barrier that stops effective teamwork, challenges for effective teamwork may from three aspects: individual behavior (attitudes and beliefs, poor communication, and career aspiration), internal team dynamic (criticism within the team, rules and regulations, lack of commitment, and authority structures) and external influences (training, resources, and physical work settings). What should be paid more attention is that the new team should encourage members from different departments to work together, and they have their own subject or working backgrounds, so there may illustrate multidiscipline in the new organized team. When in this condition, it is better for managers to allow multidisciplinary.

In support of multidisciplinary

Geert Vissers and Ben Dankbaar (2002) argued what Jansen and Goldsworthy (1995) pointed out that multidisciplinary collaboration is a bridge which helps organizations to fill a gap that result from different disciplines and disciplinary specialization, and allows problems to be handled with and beyond the disciplinary skills of an individual scientist.

But because of the differences between team members, conflicts may also exist in the process of completing team goals, and it is more easier for us to accept the conflicts when we aware that there are effectiveness of positive conflicts.

Motivate the team into exploring an issue they may have overlooked. The different views of a same problem may make teammates feel hard to reach a balance, but the process of discussion is useful for members to get and exchange more information about the problem. And the willing to persuade the objectors is an impetus that makes the team more motivate in the exploring.

Adding to team members' interest, increasing positive thinking and reinforcing cohesiveness. Positive conflicts are important drivers for change, innovation and adaptability; they can focus members' interest and attention on the job, while the process provides members more space and time to communicate and enhance relationship.

Driving a team into rethinking a current decision and being more creative. Conflicts are always took place between the opposite viewers, but it gives viewers opportunities to rethink the problem and current decision, then come up with more creative ideas in the finding process.

Encouraging members to collaborate and integrate ideas into one agree solution, which is also an effective way. Compromise is another decisive factor that leads to the effective solution. Since the final goal of the conflict is to reach a balance and find the best solution to the task, sometimes the solution or design may not able to combine everyone's willing, but to compromise and select the best one is all members' duty.

Concept of innovation

While solving the problems about the turnover before small sized companies starting the research and development of their new product, managers should get a new recognition of innovation, which is critical in the process of new product development. And the concept of innovation in business can be defined as a work that contacts people, organizations, and institutes together with where the diffusion, creation and commercial exploitation of the latest research and development technology and other knowledge take place (Malmberg and Power, 2005).

What Drucker pointed out about innovation is that it is a tool for developing entrepreneurship in the organization, it gives human resources new capabilities and allows them to create wealth and benefits both for organization and individual. Meanwhile, innovation is both a social and an economic term, with no restrict to the use of technology, furthermore, the important thing that should be mentioned is that innovation can be taught and put into practice, so it is not a personality behavior (Li-min Hsueh, Ying-yi Tu, 2004).

Being an innovation team

The benefits of being an innovation team can be seen from five points by Ashleigh and Prichard (2012). Mutual helping behaviour, trustworthiness, team cohesiveness, leadership and distributed knowledge (transactive memory) .

Since team or group cohesiveness is the evaluation criterion to which team members are attracted to or loyal to their team or group. Research suggests that managers with leadership skills should strive to implement a moderate level of cohesiveness in the team and group they manage because that is most likely to contribute to an organization's competitive advantage.

Cultivate innovation climate

How to meet the challenges in business by cultivate innovation climate? Mathisen, G. E. et al. (2004) mentioned that the concept of an innovation climate has been mostly defined as sharing experiences at workplace and an organizational level or members in the team work together to work out problems. This shared perception method stressed on the joint experience of members themselves as the linchpin of the conception of climate.

Meanwhile, Jay Mitra (2000) reported that the process of innovation combines variety of activities like product design, new product research, market investigation, development plan, reconstruct of the organization and employees' personal development. To some degree, the innovation process has connections with skills, technologies, markets, commercial production, function and other organizations.

Expect from the external factors like team and climate, the internal factors like personalities and capabilities are also important when innovation is needed. So to distinguish persons with ability from a team, the characteristics they have should first be concerned.

What are intrapreneurs?

Intrapreneurs are employees that take direct responsibility for turning an idea into a profitable finished product through assertive risk-taking and innovation intra, and they are assisted by their employers with enough resources. That is to say, intrapreneurs are not just managers or leaders which are named entreprenures, but also employees with creativities and have ideas to motivate others in the innovation process.

What's more, intrapreneurs are more like the image of the metaphor that they are the powerhouses within companies that create new businesses, that keep a company or organisation moving forwards, they motivate colleagues and keep profits up. The intrapreneurial employees are energetic, enthusiastic, imaginative and inventive. They have ideas for creating new products or services often working on them in their own time. They can see how savings can be made. Because of these characteristics that intrapreneurs have, businesses are indeed need intrapreneurs. How processes can be improved? and the steps to encourage an intrapremurial environment are critical points that should be discussed.

Early identification of potential intrapreneurs. With awareness of the characteristics that intrapreneurial employees show off, managers or leaders of a team can identify potential intrapreneurs, which can help team to innovate and develop, and the earlier that intrapreneurs be found, the more benefits team can be effected.

Top management sponsorship of intrapreneurial projects. Intrapreneurial projects can be defined as a long-term investigation that can cultivate intrapreneurial employees within organizations to help the whole organization continue innovate. Management levels in organizations should realize the importance of the project since it will reach a win-win situation for both employees and organization.

Creation of both diversity and order in strategic activities. An intrapraneurial environment is like the brainstorm in discussion, diversity is allowed in the process. The creation of diversity in strategic activities can represent how energetic of the organization and in what degree does organization accept innovation, and so does creation of order.

Promotion of intrapreneurship through experimentation. Quantitative analysis are essential when intrapreneurship is needed to promote, and the analysis like experimentation can give managers clear ideas in choosing intrapreneurs and cultivate intrapreneurial environment.

Development of collaboration between intrapreneurial participants and the organization at large. Because of the link between intrapreneurial employees and organizations, to enhance the link is a way to maximum the benefits that are brought by the process or project of creation and innovation.


This paper has provide a view of the outlet that small sized firms may choose in their competition with big companies. The key solution to the problems in the small is about innovation, while the team factor like innovation climate and employee factor like intraprenures are been taken into consideration in this paper.

The whole paper is structured with a clear thread that what are the problems small sized firms facing, what should be taken by these firms and steps about how to address problems.

In the thread, the first part mentioned some issues that are barriers to stop small sized firms to develop. Since new products are needed in the process of fighting for market, and limited time is block that influence effective team work, R&D team and task force team are introduced as solutions. The reason why effective conflicts are necessary, the reason for being a team and the advantages of intraprenurial employees are also explained clearly in each mentioned point of the paper.

The second part of the paper is concerned with solutions like how to cultivate innovation climate, how to select R&D members and how to distinguish or cultivate intraprenuers in the team. It gives managers in small sized firms suggestions to meet there challenges in todays' fierce market competition.

Because the main solution should be focus on innovation to meet stresses from time and product, the listed steps about the methods are summarized from previous studies and have added some new view from the latest researches. While, there still exist some uncertain problems and solutions that need researchers to do further study. The shortcoming of this paper is that there is very little view from empirical study.