Jorge Yeshayahu Gonzales-Lara

Strategic Management and Technology

MA 50100
Professor: Dr. Jesus Lemus
Student: Jorge Yeshayahu Gonzales-Lara

Innovation so important for firms to compete in many industries

Strategic Management and Technology

Miami, January 2019

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Jorge Yeshayahu Gonzales-Lara

Innovation so important for firms to compete in many industries

Strategic Management and Technology

1: Why innovation so important for firms to compete in many industries?

Globalization has generated important changes and innovation: companies

have become much more competitive since the last decade. To remain in the
market and increase market share, companies must continuously innovate in the
product, process and service provided to customers.
Technology has grown very rapidly and with this, customer expectations and
preferences are also changing at a fast and growing rate. Therefore, several
innovations are often required for the company to prosper in the market.

 Innovation is important to avoid the downward movement of GDP levels

due to economic cycles.

 Companies to stay in the market and compete with several competitors,

an organization must continue to innovate.

 Businesses require innovation to explore various opportunities.

 Client has generated changes according to the need and innovation is

required to be up to the needs of customers.

 Many products can become reinvented due to the innovation of

technology. Innovation in products must go with innovation in technology.

2: What are some of the advantages of technological innovation?

Disadvantages?

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Technology innovation increases knowledge and makes more options available.

Evidences suggests that technological innovation has increased GDP and
standads of living worldwide

Advantages of Technological Innovation:

 Make communication easy and fast.
 Information exchange become easy
 Improved education and business –online and mobile education
 Provide social networking
 Convenience in travelling
 Improved efficiency and productivity
 Capture a better market share and leads to market expansion.
 Earn fame and prosperity for the organization and represent themselves as
market leaders.
 Encourage a culture of innovation and creativity in the organization.
 Creates mobility of resources.

Disadvantages of Technological Innovation:

 Increased competency
 Agricultural and fishing technologies can result in the erosion, elimination of
natural habitats, and the depletion of ocean stocks.
 Medical technologies can result in unanticipated consequences such
antibiotic-resistant, strains of bacteria and viruses, or moral dilemmas
regarding the use of genetic modification such as externalities.
 Job decreased due to increase in machine
 Better technology may result in less man-power requirement and this may
lead to concerns with employee lay-offs

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 Transition phase of shifting to the new technology may disrupt normal

operations.
 Huge initial investments required.
 Relationships with suppliers and other third parties may get affected as the
organization may not require their services anymore.

3: Why do you think so many innovation projects fail to generate an economic

return?
Reasons for failure of innovation projects to generate an economic return.

Most innovation projects are characterized by both technical uncertainty and

market uncertainty. In their eagerness to innovate, firms are at risk of undertaking
too many projects, overestimating their potential returns and underestimating
their uncertainty.

 Technical uncertainty
 Will the project result in a technically feasible product or service?
 Market uncertainty
1. What features will customer prefer and what will they be willing to pay for
them?
 Overestimating potential return
 Underestimating uncertainty
 Costs and expenses are associated with the project in the initial phase.
 Limitations of capital may lead to projects being disrupted before
completion.
 Focus on long term projects maybe futile as the idea / technology may
become outdated by the time the project is completed.

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 The innovations may not always reach the proper marketplace and
customers.

DISCUSSION QUESTIONS

1. What are some of the advantages and disadvantages of (a) individuals as

innovators, (b) firms as innovators, (c) universities as innovators, (d)

government institutions as innovators, (e) nonprofit organizations as
innovators?

Individuals Advantages

• Many ingenious ideas

• working out their own unmet wishes
• first-rate incentive to clear up their own problems

Individual Disadvantages

• Very constrained capital assets to invest

• constrained range of capabilities and skills
Corporations Advantages

• huge capital to invest

• Complementary belongings to supply, distribute, and many others.
• administration systems to arrange revolutionary efforts

Corporations Disadvantages

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• Rejected projects that don’t show up to have an on the spot business return
• assignment chosen on commercial return instead than value to buyers or
society
Universities Advantages

• broad knowledge and different assets

• funding in long-term or dicey tasks for functions of advancing science
• Ties to more than one other outside entities .

University Disadvantages
• Esoteric projects alternatively than these with instantaneous purposes
• Lack capabilities or assets to implement innovations on the market
• Lack of fiscal self-discipline

Government Advantages

• extensive abilities and different resources

• investment in lengthy-time period or risky initiatives for functions of advancing
science
• fine influence over different stakeholders or contributors to innovation

Government Disadvantages

• Lack of complementary resources to put in force innovation on the market

• Lack of financial discipline

Nonprofits Advantages

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• Ties to more than one other external entities (e.g., universities, non-gains, and
many others.)
• Mission-situated focal point that makes it possible for them to pursue lengthy-
term or risky tasks
• Credibility advantages for eliciting the cooperation of alternative
stakeholders

Nonprofits Disadvantages

• counting on external sources of funding corresponding to charitable

donations or gives you, which will constrain capital useful resource
• Lack complementary resources to implement innovation available on the
market

2. What traits appear to make individuals most creative? Are these the same

traits that lead to a successful innovation?

An individual trait that make most individuals creative is their knowledge,

personality, curiosity and motivational drive. Everyone has a creative side, but not
everyone will have the confidence and motivation to pursue their creativity. The
personality traits that are most important, is a person's confidence in their own
capabilities. The most creative individuals can decide between important
problems and unimportant problems and make that choice. When an individual
works on something that they are truly interested in, their creative side is more
prevalent.

I feel that a lot of the same traits that make a person creative, can also lead to
successful inventions. The traits that make a person creative, give them the
capability of conceiving something original and an invention is something that

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has never been made before. I feel by developing the qualities of creativity, it
can lead to a successful invention.

3. Could firms identify people with greater capacity for creativity or

inventiveness in their hiring procedure?

Creativity is the source of innovation in the workplace and companies can

benefit from having creative employees that generate new ideas. Hiring
innovative thinkers can become a bit of a challenge. Technical skills and
knowledge of a job can be measured through tests and experience can be
verified through previous employers, Creativity is a bit more challenging because
it goes beyond just the resume and testing; it looks more to the imagination of
candidates. I feel job recruiters should look for a candidate with a high level of
curiosity. This is one of the defining traits of a creative person and might give
possible insight to other creative qualities."

Creativity is the source of innovation in the workplace and companies can

benefit from having creative employees that generate new ideas. Hiring
innovative thinkers can become a bit of a challenge. Technical skills and
knowledge of a job can be measured through tests and experience can be
verified through previous employers, Creativity is a bit more challenging because
it goes beyond just the resume and testing; it looks more to the imagination of
candidates. I feel job recruiters should look for a candidate with a high level of
curiosity. This is one of the defining traits of a creative person and might give
possible insight to other creative qualities."

4. To what degree do you think the creativity of the firm is a function of the

creativity of individuals, versus the structure, routines, incentives, and

culture of the firm? Can you give an example of a firm that does a
particularly good job at nurturing and leveraging the creativity of its
individuals?

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Creativity is the result of a talented person, regardless of the services we enjoy.

The products we use, all these are creations of another person. Today, the
companies promote innovations of their employees towards new inventions,
Google is one of the examples in the market of innovation and creativity. Once
they invented any new product or service, they enter the market and enact the
best ideas.

The people who work in this should be encouraged, provide firm support to those
people. Some may feel happy if the benefits of the monitor were announced,
someone may feel when they were given a higher designation, and someone
may feel happy because they achieved something.

When they invent new things and innovations. when employees feel protected
and supported and work at their best capacity and good results to organizations.
The structure of the organization must have a good impact on policies, rules and
regulations, the working procedures of a company, etc. and the culture of the
organization.

A good business and social organization help employees to perform better. If the
company follows an open system, focused on the employee and always
encourages innovations, employees feel better and work better.

A good example is Google that has achieved success by implementing an

original form of management. Management and leadership are really very
important for the promotion of creativity. Google has identified eight
characteristics that make managers effective, including strengthening their
team, being attentive to employee success and personal well-being, establishing
a shared vision and strategy for the team and having technical knowledge that

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allows them to advise properly. to the team and assess creative ideas. Google
has identified five key factors for the success of the teams: psychological security,
trust, structure and clarity, sense of work and the impact of the work. What most
influences the success of the team is psychological security, which also facilitates
the exchange of knowledge, vitality, as well as learning.

Miami, January 2019.

Reference:
 Schilling, Melissa A. Strategic Management of Technological Innovation.
Fourth Edition. 2000

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