The reflections on Middle Management

In today’s modern world that is being characterized by a number of situations that range from political, social, economic, and social-cultural contexts, middle management and managers (MMs) has been emerged very important and crucial to the success or failure of any contextual dimension within an organization. Over the past few years, stable and mature Western markets has entered stagnancy, due to this fact emerging markets has emerged and created attractive opportunities and makes these markets very lucrative to enter. Yet these are the markets are characterized by high degree of turbulence, uncertainty and risks as compared to the former, stable and mature Western markets.

In this paper written for a class assignment I would like to approach the middle management argument from the perspective I have briefly introduced above. For who would like to pursue a career as middle managers in an international arena can find this approach and discussion interesting and helpful.

Some potential benefits have been drawn in the first paragraph; should go along with a set of managerial decisions and challenges that have to be overcome. Starting with the questions of how to deal with uncertainty and high degree of turbulence, and how to develop an appropriate organizational structure to fit and integrate new markets structure. As we have learned one the most efficient ways to deal with the uncertainty is to be agile. In this sense organizational structure/body carries vital importance, needless to say less hierarchic, more flat, organic, dynamic and decentralized organizations will respond to change and uncertainty more effectively and efficiently than centralized and mechanistic organizations. Having the competent MM in the right place within the organization will gain and maintain the organization needed flexibility by closing the gap between head and foot of the organization by strengthening the internal communication, and will ease the stress of uncertainty and high degree of turbulence upon the top management by taking responsibility of making important as well as urgent managerial decisions by themselves. Today’s hectic business has made it clear that MMs are the vital parts of the organization whenever change initiatives that organizations have targeted McNamara (2008) views indicate that planned change occurs when leaders in the organization recognize the need for a major change and proactively organize a plan to accomplish the change. I believe that in the process of change middle managers are getting quite an important role or should take since they are actual implementers of change (Balogun, J., 2003).

To conclude, I do believe in the importance of MMs for the aforementioned fact that since they are much closer to the lower employees and customers and maintain the internal communication; needless to say they are personally more aware of the issues going on within the company which may possibly affect the company in the long run.

References:

Balogun, J., (2003) From Blaming the Middle to Harnessing its Potential: Creating Change Intermediaries, British Journal of Management, vol. 14, 69-83.

McNamara, Authenticity Consulting Charter. Toronto, 2008.

Champions in the Organization

Taking off from the SMEs module, the literature has made me to think over the importance of the individuals within the organization, though not all yet a few take an important role in the organizational innovation process. These few have been referred as champions in the management literature. According to the Great-Man-Theory that aims to explain history by the impact of “Great men”, the creation of something new is often used to be accredited solely to one outstanding individual. In the same way that historical achievements are linked to certain individuals (e.g. Columbus discovered America) also innovations are accredited to their inventors (e.g. Otto four-stroke cycle) (Hauschildt, 2004).

The concept and the role of one outstanding individual promoting the innovation process was initially identified and coined by Schon`s (1963) study on radical military innovation. Schon names this individual “the Champion”. In his 1963 paper, Schon studied the nature of resistance to innovation in organizations, the requirements of successful technical innovation, and the steps that management can take to ensure that the necessary development work leads into promising proposals for radical new products and processes. Thereby he identified a gap between the wish for elaborate and systematic procedures of innovation and the uncertainty and risk inherent in the innovation process, that every organization faces (Schon, 1963). On the one hand, the recognized need for change and radical product innovations in order to grow, expand, diversify and to get ahead of the competition conflicts with the risk and uncertainty of the innovation process on the other hand. In fact, established systems, structures, processes and procedures in firms are designed to maintain the status quo and avoid risks. However, the pernicious problem is not the existing resistance to change, but the failure to recognize it (Schon, 1963). Unrecognized resistance becomes capable of destroying most product innovations and enables masked defences against change. Nevertheless, innovation does take place but therefore typically one individual emerges as champion of the idea. Especially where radical innovation is concerned, Schon (1963) argues that a champion is required to overcome the resistance to change and to promote new idea. Referring to Schon (1963), the champion of new developments has to identify with the idea and its promotion to a great extent, and has to take the risk to fail with the championed idea. Therefore, he characterizes champions based on the attributes of considerable power and prestige, informal sales and promotion, a wide variety of interests (e.g. technology, marketing, production and finance) and courage of heroic quality (Schon, 1963).

Later, the concept and the term of “the champion” became the prevailing notion in Anglo-American innovation research, were extended and are still leading the discussion (Rost et al., 2006; Hauschildt, 2004). The functions of the champion were specified and names like product champion, innovation champion, project champion, executive champion, and management champion can be found in the literature. Yet the consentaneous perception identifies one outstanding individual in charge of pushing and promoting an idea into an implemented innovation, and empirical research and data has provided evidence of the champion as a crucial factor of success for the entire innovation process.

Chakrabarti (1974) ascribes the importance of the role of the product champion within the innovation process to the selling of the idea to the management. Based on the assumption that successful innovation requires attention of the top management and a nurturing atmosphere, the key task of the product champion is to get the management interested in an idea or project (Chakrabarti, 1974). He defined the champion as “an individual who is intensely interested and involved with the overall objectives and goals of the project and who plays a dominant role in many of the research-engineering interaction events through some of the stages, overcoming technical and organizational obstacles and pulling the effort through its final achievement by the sheer force of his will and energy” (Chakrabarti, 1974:58). Moreover, to influence and stimulate a positive decision-making the champion has to go beyond his formal organizational role and over the hierarchical chain (Chakrabarti, 1974). Based on the notion that the decision to adopt an idea is a collective process that, referring to Rogers and Shoemakers (1971), consists of five sequential stages (namely stimulation, initiation, legitimation, decision, and execution), Chakrabarti concludes that the champion has to play multiple roles (Chakrabarti, 1974). These roles are related to the five stages of the collective decision process and further on, the champion acts as a link between these different phases. Thus, champions are advocates of new ideas, products or projects who are actively involved in all stages of the innovation process, and may use different skills during each of these stages (Chakrabarti, 1974).

Also Rogers (2003) points out the important role that an innovation champion can play in fostering and promoting a new idea in an organization. He describes the champions as “a charismatic individual who throws his or her weight behind an innovation, thus overcoming indifferences or resistance that the new idea may provoke in an organization” (Rogers, 2003: 414).

Day (1994) identifies dual-role champions who combine the role of product champion (bottom up) and organizational sponsor (top down) through their ability to mobilize knowledge, information and power.

The champion theory often considers the champion as a powerful individual with a high rank within an organizational hierarchy. Day (1994) discovers the existence of powerful champions particularly for cost-intensive, risky and radical innovations. Her findings were supplemented by studies that showed that less radical innovations were championed by less powerful individuals (middle management) who acted as brokers and arrangers for an innovation, helping to fit it into the organizational context (Rogers, 2003). Howell and Higgins (1990) came to the result that a champion doesn`t have to be inevitably more powerful than other involved individuals but rather they tend to be more focussed on innovations, influential with others, and higher risk takers. Moreover, Howell et al. (2005) define Champions as “individuals who informally emerge to actively and enthusiastically promote innovations through the organizational stages”.

By reviewing the literature, it is apparent that the role of a champion is one that is internal to the organization. Champions are well connected to people and the organizations resources which support them in championing an innovation successfully. Furthermore, the championing individual emerges unsolicited, come in all ages, with varying degrees of formal power, and with different types of abilities. Champions identify themselves as champions, but are also regarded as champions from all levels within a firm including senior management. Perhaps their exact characteristics depend on the nature of the innovation and the organization. But in any event, the champion’s role is to initiate the innovation process and to guide the new idea through to approval and implementation (Rogers, 2003). Persuasive and willing to take calculated risks, champions adopt innovations, ideas or projects as their own and relentlessly promote them. Thus, the champion’s overwhelming enthusiasm and visionary qualities distinguishes him from other roles and makes him outstanding and unique.

References:

• Chakrabarti, A.K. (1974) ‘The Role of Champion in Product Innovation’, California Management Review, vol. 17, no. 2, pp.58–62.
• Day, D.L. (1994) ‘Raising Radicals: Different Processes for Championing Innovative Corporate Ventures’, Organization Science, vol. 5, no. 2, pp.148–172.
• Hauschildt, J. (2004) Innovationsmanagement, Verlag Franz Vahlen, Munich/Germany.
• Howell, J.M., Higgins, C.A. (1990) ‘Champions of Technological Innovations’, Administrative Science Quarterly, vol. 35, pp.317–341.
• Rogers, E.M. (2003) Diffusion of Innovations, The Free Press, New York/USA.
• Schon, D.A. (1963) ‘Champions for Radical New Inventions’, Harvard Business Review, vol. 41, no. 2, pp.77–86.
• Shoemaker, P.J. (1991) Gatekeeping, Sage Publications, Newburry Park, C.A./USA.

Networked Innovation

Nowadays, firms realize more and more the benefits of networked innovation. “Collaboration” is on the top of the agenda. Co-create value with partners, could be suppliers and even competitors, is a crucial and strategic element to maintain competitive advantage (Gulati et al., 2000; Iansiti and Levien, 2005; Sawhney et al., 2005). All type of companies, SME’s or/and MNC’s, are concerned by this topic of current interest because all of them want to acquire complementary resources and increase their technological knowledge.

“An innovation […] should not be seen as the product of only one actor but as the result of an interplay between two or more actors; in other words as a product of a ‘network’ of actors” (Håkansson, 1987, p 3)

The concept of networked innovation is well-explained by Akio Morita, cofounder of the Japanese society Sony. He explains that losing money is not a problem but losing time is a critical issue for a company. So, according to him:

“The best way to gain time is to communicate a lot and establish as many personal relationships as possible”.

Networking is the key to succeed. Akio Morita said:

“The more people you know, the better it is” (Harryson, 2006).

Muller and Pénin (2006) view innovation as the outcome of a group of activities involving interaction and knowledge exchange between people and organizations. In a similar way, Cowan et al. (2007) stake out that it’s the recombination of knowledge held by the partners that result in innovation. These two authors underline the importance that firms’ knowledge complements each other. According to Gulati (1999), social networks are seen as valuable channels of information. The network theory, based on establishing relationships and ties with others, largely influence firms’ behaviors and performances in their implications for their alliances.

“An innovation network can be defined as a reasonably stable set of partners that collaborate in order to improve their research” (Muller and Pénin, 2006, p87).

“In a networked world, more money can be made in managing interactions than performing actions” (Mohanbir Sawhney and Deval Parikh, 2001, p82)

References:

Cowan, R., Jonard, N. and Zimmermann, J-B. (2007) ‘Bilateral Collaboration and the Emergence of Innovation Networks’, Management Science, vol. 53, no. 7, pp. 1051-1067.

Gulati, R. (1999). ‘Network location and learning: the influence of network resources and firm capabilities on alliance formation’. Strategic Management Journal, 20, 397- 420.

Gulati, R., Norhia, N., & Zahere, A. (2000). Strategic Networks. Strategic Management Journal, 21, 203-215

Harryson, S. (2002). “Why know-who trumps know-how”, Strategy and Business Magazine, issue 27, second quarter 2002, pp 1-6.

Håkansson, H. (Ed.) 1987. Industrial Technological Development: A Network Approach. Beckenham: Croom Helm Ltd.

Iansiti, M., & Levien, R. (2004). Strategy as Ecology. Harvard Business Review, March, 1-10

Muller, P. and Pénin, J. (2006) ‘Why do firms disclose knowledge and how does it matter?’, Journal of Evolutionary Economics, vol. 16, no. 1-2, pp. 85-108.

Sawhney M. and Parikh D. (2001), “Where value lives in a networked world”, Harvard Business Review, pp 79-86, January 2001

Sawhney M., Verona G. and Prandelli E. (2005), “Collaborating to create: the internet as a platform for customer engagement in product innovation”, Journal of interactive marketing, vol. 19, n°4, pp 4-17, autumn 2005

Ambidextrous Organization

In order to ensure its long-term profitability, maintaining actual customers and leveraging new ones by innovating, a company has to find the right balance between exploration and exploitation phase (Harryson, 2006; Sawhney and Prandelli, 2000). Exploitation is linked to the creativity network and the inventions. As opposed to exploitation, exploitation relates to the process network based on the commercialization of innovations. In fact, exploration includes searches and discoveries of new knowledge and exploitation is more about selecting and using existing knowledge for application (Benner and Tushman, 2003; Grant and Baden-Fuller, 2004 and March, 1999). A company who succeeds to find equilibrium between the order and the chaos is called an “Ambidextrous organization” (Duncan 1976; Grant and Baden-Fuller, 2004; He and Wong, 2004; Tushman and O’Reilly, 1996). That means the company has developed an ability to design “dual structures” (Duncan, 1976) that facilitate the initiating stage and implementation stage of the innovation process. Indeed, “Organizational ambidexterity refers to an organization’s ability to perform two different things at the same time” (Gibson and Birkinshaw, 2004).

Moreover, for Levinthal and March (1993), an ambidextrous organization is a company who

“Engage in enough exploitation to ensure the organization’s current viability and engage in enough exploration to ensure future viability”.

It has to be the right balance. As Harryson (2006) mentioned it, a firm cannot be 100% on the exploration phase or 100% on the exploitation phase. Each company has to find its own balance in order to be profitable. In line with this argument, He and Wong (2004, 492) claim that

“The organizational tension inherent between exploration and exploitation may become unmanageable when both are pursued to extreme limits”.

References:

Benner, M. J., M. L. Tushman. (2003). Exploitation, exploration, and process management: the productivity dilemma revisited. Academy of Management Review, 28(2) 238–56.

Duncan, R.B. (1976). The ambidextrous organization: Designing dual structures for innovation, In: R.H. Kilman, L.R. Pondy, & D. Slevin (Eds.), The Management of Organization, vol. 1: 167-188. New York: North-Holland.

Gibson, C.B., & Birkinshaw, J. 2004. The Antecedents, Consequences, and Mediating Role of Organizational Ambidexterity. Academy of Management Journal, 47(2): 209-226.

Grant, R. and Baden-Fuller, C. (2004). ’A knowledge accessing theory of strategic alliances’.
Journal of Management Studies, 41, 61-83.

Harryson, S. (2002). “Why know-who trumps know-how”, Strategy and Business Magazine, issue 27, second quarter 2002, pp 1-6.

He, Z-L. and Wong, P-K. (2004). ‘Exploration vs. exploitation: an empirical test of the ambidexterity hypothesis’. Organization Science, 15, 481 – 94.

Levinthal, D.A., & March, J.G. 1993. The Myopia of Learning. Strategic Management Journal, 14: 95-112.

Sawhney M. and Prandelli E. (2000), “Communities of Creation: Managing Distributed Innovation in Turbulent Markets”, California Management Review, vol. 42, n°4, pp 24, summer 2000

Tushman, M. L., O’Reilly, C. (1996). ‘Ambidextrous organizations: managing evolutionary and revolutionary change’. California Management Review, 38, 8-30.

Automobiles being fueled by flower power

Over the past 15 years OEMs ( Original Equipment Manufacturers) have been facing mature market conditions i.e. stiff price competition (Veloso and Kumar 2002, 2). On top of that over the few past years, the entire automotive industry has entered stagnancy due to the maturity of the developed markets and the lowered demands. The Triad regions (Western Europe, Japan, and United States) have been affected particularly by this downward trend. As a result OEMs around the world are under pressure to meet the challenge of producing distinctive and innovative cars while keeping the cost low. The maturity and demand fall down has lead the industry shift into the emerging markets. South America, India, People’s Republic of China (PRC), and Eastern Europe have emerged as promising markets due to their economical progress, sustainable development and considerable demand of car. Thus most OEMs have invested heavily in plants outside their home base to better reach local consumers and meet their demands. Trade, safety, and environmental regulations establish incentives and requirements for modernization and change in design or production (Veloso, and Kumar, 2002, 2; EMCC, 2004). For instance a compulsory emissions standard dictated by EU Commission for all the EU Member States has led the large-scale industrialization in the industry and moreover biofuels has started to be taken into consideration by the automobile industry that is adapting its motorizations (EurObserv’er 2007). Although internal combustion engine most likely will continue to dominate the automobile industry, I believe that there is still a room for alternatives. Alternative such as ethanol-capable flexible-fuel vehicles (FFV); at present thay are being sold more and more which would have seen impossible just only a few years ago (MacKenzie 2007, 5). Moreover upward slope towards being more environmental friendly especially in the central Europe gives me more confidence to bet on the alternatives.

In today many car manufacturers are working on a host of different technologies of emission. It seems that competition on eco-car market will gain speed since European Commission set an average goal of 130 grams of CO2 per kilometer for all new cars by 2012. To overcome this issue, Saab unveiled its latest 9-5 BioPower car, which runs on biofuel ethanol for the Swedish market, where 80 percent of the Saab 9-5s sold are now BioPower, as well as promoting sales in other European markets and extending BioPower to other models (Saab’s official website). The number of FFVs in Sweden currently has exceeded 70,000 (See Figure).

References:

Bennett, J. (2007) Lessons Learned – Key Biofuel Markets, Power Point Presentation, ASEAN-U.S. Enhanced Partnership - Biofuels and the Automotive Industry Seminar, Bangkok

EMCC, European Monitoring Centre of Change (2004) ‘Trends and drivers of change in the European automotive industry: Mapping report’, prepared for the European Foundation for the Improvement of Living and Working Conditions.

EurObserv'ER (2007) ‘Biofuels Barometer’, www.ethanolstatistics.com/Expert Opinion Interview, Per Carstedt, SEKAB, 22.10.2007.

MacKenzie, D. (2007) ‘The Environmental Performance of Car Companies’, Union of Concerned Scientists.

Veloso, F. and Kumar, R. (2002) ‘The Automotive Supply Chain: Bibliography 143 Global Trends and Asian Perspectives’, Working Paper, Asian Development Bank (ADB), Jan. 2002.

SMEs vs. MNCs in automotive industry (partII)

Tesla Company has a rather unusual history since the company has almost no connection to the traditional American auto industry. The founder had no experience in the auto industry when he decided to create the world’s first high performance electric car.(http://auto.howstuffworks.com/tesla-roadster2.htm)

The founder of eBay the billionaire Jeff Skoll, the founder of PayPal Elon Musk and the founders of Google Larry page and Sergey Brin have contributed with $40 million to Tesla motors because they all want to see an electric car becoming the vehicle of the future.
(http://tyler.blogware.com/blog/_archives/2006/6/1/1998229.html)

Martin Eberhard and Marc Tarpenning founded a company based on a portable eBook reader and became frustrated at the mainstream auto industry’s inability to create an effective electric car that could appeal the mass. Therefore made Eberhard a decision to create one himself and instead of creating an entire car from scratch took Eberhard the advantage of outsourcing. The new company therefore chose a design from England-based Lotus (http://tyler.blogware.com/blog/_archives/2006/6/1/1998229.html).

The partnership between Tesla and Lotus works well for many reasons. Lotus factory in England is well suited to produce cars in small runs, which allows Tesla to basically manufacture the cars that is ordered and then avoids spending lots of money to warehouse not jet sold cars. Another reason for using Lotus factory in England is that the Tesla Roadster is based on the Lotus Elise. The car has the same basic chassis and other parts and this result in savings on material costs. (http://tyler.blogware.com/blog/_archives/2006/6/1/1998229.html)

In Tesla’s business plan it is mention that innovative technology is often very expensive and that very rich customers are usually the first to adopt it. First when the prices come down, the technology could be more available at the market. That’s a reason why Tesla’s first car is a exclusive sports car and only made in limited numbers. In 2008 is Tesla planning to release a four door electric sedan. (http://tyler.blogware.com/blog/_archives/2006/6/1/1998229.html)

An electric car will probably always be more expensive then a gasoline car and the savings for the customers come when they look at the fuel costs and how they have an impact in the environment. An electric car will always have zero emissions, but if you count the emissions created when the power is produces then is the electric car more environmental friendly even if the power comes from a coal plant.

Ebhard claims that the energy provided by one gallon of gasoline could be used to drive an electric car 110 miles. Also if the price of gasoline and electricity is compared, you could go 150 miles for the price of one gallon of gasoline. (http://auto.howstuffworks.com/tesla-roadster2.htm)

Musk the CEO of Tesla Motors says that this company has the potential to be one of the greatest car makers of the 21st century. "The starting point is a high performance sports car, but the long term vision is to build cars of all kinds, including low cost family vehicles. Tesla is one of those rare opportunities to change the world in a positive way and build a valuable company in the process." (http://tyler.blogware.com/blog/_archives/2006/6/1/1998229.html)

SMEs vs. MNCs within automotive industry

Koenigsegg Automotive AB is a Swedish manufacturer of high-performance cars. The company was founded in 1994 by Christian von Koenigsegg who is recognized as a true entrepreneur and innovator. Since 1994 the company has launched three different models. Each model has been updated and reengineered upon the previous one. By this the initial unique concept has never changed and kept its uniqueness. The last model called CCX –Competition Coupe X, has been recently completed and unveiled at Geneva Motor Show. According to the company this new car has been reengineered upon the previous model called CCR to comply with the US regulation. Therefore company will have met the international standards and taken advantage of the market potential in America. Although the car is one of a kind like its ancestors in many ways – holder of the production road car speed record, one of its features makes it even more special and unique; environmental friendliness. The latest model of the Koenigseggs runs on bioethanol. Even though the very low and exclusive production volume of Koenigsegg can hardly be considered to have a measurable impact on the Co2 problem that global society is facing, it is an impressive statement that even a small and extreme company like Koenigsegg can afford to develop environmentally focused solutions.

The concept for these supercars had been set from the very first start, a two-seat mid engine construction with a hardtop; all based on state-of-the-art Formula One technology. However Koeningsegg lacked the resources of the automotive MNCs possess in the automotive industry and therefore had to compete in other ways. A network of competent designers and engineers, with connections to both the Swedish car industry and the universities, was tied together might have been the solution to tackle the aforementioned issue. Over the past years the company has become known by its large network of suppliers and partners which are tied to the company, these are small companies and craftsmen, mostly located in Sweden, that produce low volumes of high quality components. The company has ability and freedom to establish weak ties and turn these weak ties into strong ones by choice with selected suppliers as opposed to large and dependent automotive MNCs which are ruled by policies.

Internet Sources:

http://www.koenigsegg.com/

Rethinking hierarchy to increase responsiveness to external changes: The case of PT Timah

The analysis of the PT. Timah case has revealed to us the importance of organizational structures, as Ill as management systems such as the internal environment which is so important and crucial while coping with the rapidly changing external environment. Before proceeding further, I would like to provide a brief account to the case. The first crisis in 1985 was triggered by an over-supply of tin, which resulted in the enormous fall in the price of tin. Due to the above proceedings, PT. Timah went into debt, a scenario that led the company to undergo extensive re-structuring pressure. The resulting effects meant that the sudden change in the structure of the industry had a drastic impact over the company to change its internal structure. As if that wasn’t enough pain, the over-stuffed, highly bureaucratic, and mechanistic organizational structure of the company disallowed taking necessary actions hence responding back to the change call immediately.

Our assumption is that if the company had been less hierarchical, more flexible and in the hands of professional managers, the impact of the crisis would have been of little effect to the company. Yet despite the company’s inability to manage the crisis under the new CEO, the company underwent large-scale re-formation movement which proved successful in the following years. Nevertheless, some fundamental changes had taken place as follows;

Rethinking hierarchy to increase responsiveness to external changes
Reducing the number of hierarchical layers
Decentralizing decision making
Shrinking headquarters staffs
Emphasizing horizontal rather than vertical communication
Shifting the emphasis of control from supervision to accountability

Can the destructive changes in the structure of the industry create constructive impacts over the companies? Recommendations to re-organize the structure and the management system of the company

According to Mccallaster’s (2004) article titled “The 5 P’s of Change: Leading Change by Effectively Utilizing Leverage Points within an Organization”, it is argued that if the 5 P’s are used constructively, they can help organizations and their members to accept and cope with change. The author lists the 5 P’s as Pain, Process, Politics, Payoff and Persistence. In relation to the case therefore, the deduction is that PT. Timah had no intentions whatsoever to initiate a move from being over-stuffed, highly bureaucratic and mechanistic organizational structure, towards being decentralized, more organic and contemporary organizational structure in terms of executive management, re-focusing into long term indicators and having systematic financial reports. This did not happen not until the time PT. Timah was forced by an external change and faced with a high level of pain that left the company with no options but employing the 5 P’s and re-structuring the organization in order to survive.

In regard to these facts, the destructive changes in the structure of the industry can create constructive impacts over the companies. Yet recognizing the pain and executing the necessary change by professional hands can only lead to success. I hence provide a road map which is essential for the companies to turn destructive impacts of the external change into constructive pain of change.

• Strategic Planning Systems

• Statement of the goals

Setting up a goal involves establishing specific, measurable and time targeted objectives Goal setting is an effective tool for making progress by ensuring that participants (both employer and the employees) are clearly aware of what is expected from them, if an objective is to be achieved.

• Specific action steps

In order to pursue the stated goals, organizations must set specific action steps. These are to stir the organization in line with the goals, moreover not to lose the track in the course of diffusing the alterations throughout the organizational body.

• Corporate Culture

Beliefs, values, behavioral norms of the company that influence how employees think and behave. Leader’s have a vital role in changing work attitudes, and instituting a strong corporate by injecting a new mind-set, values, behavioral roles and making sure that these alterations pass through the organization. In his article ‘Goal setting: A five-step Approach to Behavior Change’ Latham (2003) stresses how leaders must model their subordinates. Similarly, Mcallaster (2004, 326) opines that no change will occur ‘if it is not constantly reinforced and monitored by the people at the top and then repeated throughout the management chain of command.’


References
MCallaster, C.M. (2004) “The 5 P’s of Change. Leading Change by Effectively Utilizing Leverage Points within an Organization”. Organizational Dynamics. Vol 33, no 3, 318-328.
Gary P.Latham (2003) Goal setting: A five-step Approach to Behavior Change, Organizational Dynamic, Vol.32, No.3, pp.309-318

"Management must manage!" Harold S. Geneen quotes (American Businessman, He was CEO of ITT (International Telephone and Telegraph) (1959-77)

Based on our today’s seminar, the Leadership within Innovation and Business Creation, I would like to write over some of my thoughts did surface after the lecture. We had a really interesting and helpful discussion, contemporary and future challenges and possible implications towards these directions for the managers were discussed, and many interesting points were raised. Eventually some of the issues which we as candidates of future’s managers should expect to deal with emerged as globalization, environmental issues, cultural clash, rapid technological changes, and scarcity of natural resources, financial breakdown and possible recession and such. Needless to say these alterations will be strong reflections over the managers therefore apart from the regular management duties as planning, organizing, monitoring and such, the management level will also need to revise some old habits and further gain some new skills, abilities, attitudes and behaviors to overcome these ongoing and some newly born issues. You will find some of the crucially important abilities and attitudes from my perspective in the following paragraphs:

Success comes along with trust
Building up relationship on mutual trust is located in the heart of the organizations, the other way around will block the development and the progress. Being trustworthy and open minded will definitely ease the work on managers’ shoulders.

The coming age will be the age of collaboration
Managers have to have the ability and capability to create a strong business network and cooperate with various external parties in order to gain and conceptualize knowledge and innovative ideas.

Doing the right things to do
Generally speaking environmental consciousness around the world has been increasing over the past decade. Consumers are more aware of the issues emerging around them. In this sense future managers shouldn’t be driven merely by profit and success, in fact always act socially responsible manners.

Steve Jobs' 2005 Stanford Commencement Address

True eye opener!

An Organic Organization and Cross-functionality to Spark Creativity

Here in this my new entry I will bring up some of my thought and points which struck me in the lecture we had with Mr. Ulf Spendrup and combine these thoughts with the learning’s I gained at Organizing and Leading Change seminars. Having said that, I must admit that I have always enjoyed hearing the pioneers and successful leaders form industries like Mr. Spendrup earlier this week, also I have always thought that these are great chances in order to put theory we have been taught into practice. So this week was a great opportunity in this sense.

During the lecture with Mr. Spendrup, he many times emphasized and praised being small and organic organization, he further put his view as a “Small is beautiful!”. As we know from the theory some of the main characteristics of being small can be counted as the following; flat structure, less hierarchy/more organic, flexibility, cross-functionality, cross-reference and less categorization. In small organizations ideas tend to be exchanged quickly between the employees, everyone can and should contribute from their own perspectives because it is being needed to survive. There is also a distinct lack of categorization of people within the company. Of course, employees are fulfilling their roles as engineers, electricians, and so on, but everyone is encouraged to give input on ideas. In addition the employees usually are not focused on one area, but diversified and skilled in many different areas with the ability to cross-reference in their work. At this point I believe the points has been mentioned above are completely in line with the Spendrups experience and besides these are the points Mr. Ulf and his brothers counted upon while they had been struggling their ways through today’s success. The cross-functionality and valuation of past learning’s was further highlighted in Spendrups’s ability to start new projects and jump between projects, and in the process make use of what had been learnt. The total flexibility to jump between projects was crucial for the company to be able to jump more quickly onwards. I believe these are highly important learning’s at the same time that much harder to control and follow in the course of growth. As in line with the theory, being small also brings chaos into the company and it might be destructive for those not familiar dealing with it!

One last point should be made for trust. Trust is the headstone of a healthy organization, without trust none of the points been made above will work properly. Trust among employees and more impotant trustworthy management is a must to set up a well functioning organization.

Open Innovation - External Sources in Innovation

According to Chesbrough (2003, 36) a fundamental shift has emerged in how companies generate new ideas and bring them to market. In the old model of closed innovation, firms adhered to the following philosophy: Successful innovation requires control, in other words, companies must generate their own ideas that they would then develop, manufacture, market, distribute and service themselves (see Figure below).

Toward the end of the 20th century, Chesbrough (2003, 36) points out two fundamental changes which have occurred radical changes in the notion of closed innovation:

…the dramatic rise in the number and mobility of knowledge workers, making it increasingly difficult for companies to control their proprietary ideas and expertise. Another important factor was the growing availability of private venture capital, which has helped to finance new firms and their efforts to commercialize ideas that have spilled outside the silos of
corporate research labs.

Sawhney (2002, 26) analyzes the alteration propounded by Chesbrough; ‘the innovation challenge has become how to best identify and use the knowledge that’s available both within and outside the company’.

Gallagher and West (2006, 319) define ‘open innovation as a powerful framework encompassing the generation, capture, and employment of intellectual property at the firm level.’ They identify three fundamental challenges for firms in applying the concept of open innovation: finding creative ways to exploit internal innovation, incorporating external innovation into internal development, and motivating outsiders to supply an ongoing stream of external innovations. Motivating outsiders to supply external innovations might be difficult, and Gassman and Gaos (2004) instead highlight the need for firms to identify such external ideas by using technological listening posts as a mean of technological knowledge sourcing. Later on Chesbrough (2003, 36-37) introduces the model of open innovation; ‘commercialization of external (as well as internal) ideas by deploying outside (as well as in-house) pathways to the market.’ (See Figure below)

Chesbrough (2004, 23) states that: Firms can and should use external as well as internal ideas and internal and external paths to market, as they look to advance their technology. Open Innovation assumes that internal ideas can also be taken to market through external channels, outside a firm's current businesses, to generate additional value.

Chesbrough and Schwartz (2007, 55) further explain the open innovation concept:

Traditional business models center around the idea of developing a product from internal technology (R&D) and then producing, marketing and selling that product one selves. Whereas the use of partners in the research and/or development of a new product or service creates business model options that can significantly reduce R&D expense, expand innovation output, and open up new markets that may otherwise have been inaccessible.

Van der Meer (2007) argues that an open innovation system requires a different way of thinking - different set of norms, beliefs and values. This claim is backed up by King et al. (2003, 600) in that: Given the “not-invented-here” emphasis that prevails in many firms, managers may not be naturally inclined to augment their firms’ internal resources with complementary, externally acquired resources. Such a bias may predictably decrease a firm’s ability to regularly appropriate rents from technological innovations. King et al. (2003, 600) argue that managers should be ‘receptive to obtaining from external sources the resources needed to create or exploit technological innovations’. Kirschbaum (2005, 24) claims that ‘innovation is a culture not a process’ and ‘successful, profitable innovation depends upon teamwork and an entrepreneurial culture’ by ‘combining internal and external competencies and knowledge, both in R&D and marketing’. Kirschbaum (2005,25) describes the successful approach of the Dutch company DSM - its ‘open innovation model for creating and nurturing new businesses involves the continuous appraisal and testing of ideas, projects and businesses until they are fully developed, spun off or rejected’. Gassmann (2006, 224) also suggests that:

Open innovation includes various perspectives: globalization of innovation, outsourcing of R&D, early supplier integration, user innovation and external commercialization and application of technology. Chesbrough and Crowther (2006, 229) further define inbound open innovation as ‘leveraging the discoveries of others’, and outbound open innovation as ‘looking for external organizations with business models that are better suited to commercialize a given technology’ Chesbrough and Crowther (2006, 235) further clarify that ‘the concept of open innovation ought not to be interpreted to imply the outsourcing of the entire R&D function’. Huston and Sakkab (2006, 62) adds substance to this, explaining that Proctor and Gamble’s open innovation model “Connect and Develop”; ‘ it is about finding good ideas and bringing them in to enhance and capitalize on internal capabilities’, and they stress that it was ‘crucial to know exactly what we were looking for’. As far as technology is concerned, Dodgson et al. (2006, 344) discuss in their study of Procter and Gamble’s approach towards open innovation that ‘as well as improving the company’s receptivity to external inputs into its innovation activities, technology also assists internal “openness”, by helping build effective communications between disparate groups in the company’. Actually, this is in accordance with Gassmann’s idea (2006, 225) which ‘by cooperation with external partners, many of a company’s orthodoxies – basic values and beliefs – are questioned, thus enabling breakthrough thinking’. In addition open innovation increases the extent of business and technological interdependencies between firms. Chesbrough (2007a, 25) states further on that open business models enable an organization to be more effective in creating as well as capturing value. These models also allow greater value capture by utilizing a firm’s key asset, resource or position not only in that organization’s own operations but also in other companies’ businesses. Sawhney et al (2007) argue that if all firms in an industry are seeking opportunities in the same places, they tend to come up with the same innovations. Thus, viewing innovation too narrowly blinds companies to same opportunities and leaves them vulnerable to competitors with broader perspectives. They define business innovation as the creation of substantial new value for customers and the firm by creatively changing one or more dimensions of the business system. When Christensen et al (2005, 1536) talk about the industrial dynamics of open innovation in the case of consumer electronics, they suggest that there will always be a level of “closedness” in innovating firms depending on how large a portion of the overall value they strive to appropriate and there need not be a consistent linear movement from closed towards open styles of innovation: A highly extrovert innovation strategy that is considered necessary for managing and controlling a technological discontinuity in the early stages of a new technology, is succeeded by a much more closed strategy in the subsequent rounds of follow-up innovations as the technology becomes more matur (Christensen et al. 2005, 1558). Similarly Kirschbaum (2005, 24) describes the successful approach of the Dutch company DSM emphasizing that ‘different management styles are required, ranging from a scientific approach in the early stages, to an entrepreneurial attitude in the early phase of commercialization, to a more risk-adverse mindset once the business has matured.’ These studies seems to confirm Chesbrough and Crowther’s (2006, 229) view that many companies on the market today are recognizing that ‘not all good ideas come from internal sources’. However, Chesbrough and Crowther’s (2006, 229) also stress upon that ‘not all good ideas can be successfully marketed internally.’ In this point Chesbrough (2007a, 22) states ‘one company develops a novel idea but does not bring it to market. Instead, the company decides to partner with or sell the idea to another party, which then commercializes it’. Companies yield by ‘allowing unused internal technologies to flow to the outside, where other firms can unlock their latent economic potential’:

The firm no longer restricts itself to the markets it serves directly. Now it participates in other segments through licensing fees, joint ventures and spinoffs, among other means. These different streams of income create more overall revenue from the innovation. (Chesbrough 2007a, 24) The concept of outbound open innovation that Chesbrough and Crowther (2006) use and later developed by Chesbrough (2007a) further conceptualized by Lichtenthaler (2007a, 67), who states that ‘product marketing and licensing are a complement to the firm rather than a substitute in technology exploitation’. Lichtenthaler (2007b) finds differences between external technology exploitation and internal innovation by arguing that ‘efficiency is essential in internal innovation, but it is less important in external technology exploitation’. He suggests that ‘the data point to managerial deficits in planning and intelligence, which are considered the greatest challenges of successful external technology exploitation’ and therefore calls for ‘competence-based approaches to organizational boundaries’. Further, Lichtenthaler (2008) states that to leverage ‘technology assets in the presence of markets for knowledge’, it’s often a case that ‘technologies are simultaneously applied inside the firm and transferred across firm boundaries’. As a result ‘companies have to develop integrated strategies that facilitate ‘keep and-sell’ approaches to technology exploitation’ and that such ‘dynamic capabilities may constitute an important source of competitive advantage’. Chesbrough (2003) presents a useful comparison to summarize the debate between the closed and open innovation (See Table below).

References:

Chesbrough, H. (2003)’ The Era of Open Innovation’, MIT Sloan Management Review, Vol. 44, No. 3, pp. 35-42.

Chesbrough, H. (2004) ‘Managing Open Innovation’, Research Technology Management, Vol. 47, No. 1, pp. 23-26.

Chesbrough, H. and Crowther A.K. (2006) ‘Beyond high tech: early adopters of open innovation in their industries’, R & D Management, Vol. 36, No. 3, pp. 229-236.

Chesbrough, H. and Schwartz, K. (2007) ‘Innovating business models with co-development partnerships’, Research Technology Management, Vol. 50, No. 1, pp. 55-60.

Chesbrough, H. (2007a) ‘Why Companies Should Have Open Business Models’, MIT Sloan Management Review, Vol. 48, No. 2, pp. 22-28.

Christensen, J., Olesen, M. and Kjaer, J. (2005) ‘The industrial dynamics of Open innovation – Evidence from the transformation of consumer electronics’, Research Policy, Vol. 34, No. 10, pp. 1533-1549.

Dodgson M., Gann D. and Salter A. (2006) ‘The role of technology in the shift towards open innovation: the case of Procter & Gamble’, R&D Management, Vol. 36, No. 3, pp. 333-346.

Gassmann, O. and Gaos, B. (2004) ‘Insourcing Creativity with Listening Posts in Decentralized Firms’, Creativity and Innovation Management, Vol.13, No. 1, pp. 3-14.

Gassmann, O. (2006) ‘Opening up the innovation process: towards an agenda’, R&D Management, Vol. 36, No. 3, pp. 223-228.

Huston, L. and Sakkab, N. (2006) ‘Connect and Develop: Inside Proctor & Gamble’s New Model for Innovation’, Harvard Business Review, Vol. 84, No. 3, pp. 58-66.

King, D.R., Covin, J.G. and Hegarty W.H. (2003) ‘Complementary Resources and the Exploitation of Technological Innovations’, Journal of Management, Vol. 29, No. 4, pp. 589-606.

Kirschbaum, R. (2005) ‘Open innovation in practice’, Research Technology Management, Vol. 48, No. 4, pp. 24-28.

Lichtenthaler, U. (2007a) ‘The Drives of Technology Licensing: An Industry Comparison’, California Management Review, Vol. 49, No. 4, pp. 67-89.

Lichtenthaler, U. (2007b) ‘Externally commercializing technology assets: An examination of different process stages’, Journal of Business Venturing, forthcoming 2008.

Lichtenthaler, U. (2008) ‘Leveraging technology assets in the presence of markets for knowledge’, European Management Journal, forthcoming 2008.

Sawhney, M. (2002) ‘Managing Business Innovation: An Advanced Business Analysis’, Journal of Interactive Marketing, Vol. 16, No. 2, pp. 24-26.

Sawhney, M., Wolcott, R.C. and Arroniz, I. (2007) ‘The 12 Different Ways for Companies to Innovate’, MIT Sloan Management Review, Vol. 47, No. 3, pp. 75-81.

Van Der Meer, H. (2007) ‘The Dutch Treat: Challenges in thinking in business models’, Creativity and Innovation Management, Vol. 16, No. 2, pp. 192-202.

West, J. and Gallagher, S. (2006), ‘Challenges of open innovation: the paradox of firm investment in open-source software’, R & D Management, Vol. 36, No. 3, pp. 319-331.

Absorptive Capacity

The concept of absorptive capacity was first introduced by Cohen and Levitnhal (1990, 128) in their study called “A New Perspective on Learning and Innovation” and defined as ‘the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends’ and this process ‘is critical to the firms innovative capabilities’.

Cohen and Levitnhal (1990, 128) further argue that ‘the ability to evaluate and utilize outside knowledge is largely a function of the level of prior related knowledge’. Besides, according to them; absorptive capacity certainly begins with individuals. They also emphasize the exploitation dimension of the absorptive capacity by stating ’absorptive capacity refers not only to the acquisition or assimilation of information by an organization but also to the organization's ability to exploit it’ (Cohen and Levitnhal 1990, 131).

Zahra and George (2002, 186) redefine absorptive capacity (ACAP) and offer a third definition as ‘a set of organizational routines and processes by which firms acquire, assimilate, transform, and exploit knowledge to produce a dynamic organizational capability’, while Jones (2006, 357) further defines it as ‘a dynamic capability based on the creation and utilization of knowledge that contributes to improved competitive advantage’. Zahra and George (2002, 186) subsequently reconceptualize the notion of ACAP through dividing into two subsets namely “potential and realized absorptive capacity.

Potential capacity comprises knowledge acquisition and assimilation capabilities, and realized capacity centers on knowledge transformation and exploitation (Zahra and George 2002, 185).

Zahra and George (2002) stress upon the four dimensions of ACAP comprehended by their definition – acquiring, assimilating, transforming, and exploiting the knowledge, they state that these four dimensions ‘play different but complementary roles in explaining how ACAP can influence the organizational outcomes’. In their study, they relate each of the four dimensions that compose ACAP to its respective components, roles, and importance (See Table Below).

Absorptive capacity begins with individuals, it is the organizational ability to acquire and apply new knowledge that is of primary interest (Cohen and Levinthal, 1990). Zahra and George (2002) reconceptualise absorptive capacity (ACAP) as a dynamic capability based on the creation and utilization of knowledge that contributes to improved competitive advantage. Dynamic capabilities place more emphasis on the ability of firms to respond to an unstable business environment.

References:

Cohen, M. W. and Levinthal, D.A. (1990) ‘Absorptive Capacity: A New Perspective on Learning and Innovation’, Administrative Science Quarterly, Vol. 35, No. 1, pp. 128-153.

Jones, O (2006) ‘Developing Absorptive Capacity in Mature Organizations: The Change Agent’s Role’, Management Learning, Vol. 37, No. 3, pp. 355-376.

Zahra, S.A. and George, G. (2002) ‘Absorptive Capacity: A Review, Reconceptualization, and Extension’, Academy of Management Review, Vol. 27, No. 2, pp. 185-204.

Big Threat; Solution is Underway!

Over the past few decades, our world has been continuously struggling with environmental issues. Recently global and regional climate change has emerged as the biggest and most urgent issue the global society has to face, no doubt various industries will be affected by this upheaval. Fortunately, awareness across the world over environmental issues has been growing to some extent simultaneously though hasn’t came to the desired level. In this entry I will try to address some of these issues which are highly related in being Green Innovation.

As a matter of fact fossil fuel consumption is being accused for having the biggest impact over global warming. New ways and innovative solutions such as wind mills, bioenergy and especially second generation biofuels which employ advanced technical processes can potentially displace a substantial amount of fossil fuel and eventually make the world better off.

However second generation is an ongoing progress and doesn’t seem economically viable in some future time therefore evaluated as some long-term promise. Though, it is an attractive topic and being developed rapidly. Currently the biofuel industry is dominated by mainly two countries; USA and Brazil (OECD 2004, 2007). In his State of the Union speech on January 23, 2007, President Bush set the goal of producing 35 billion gallons of renewable and alternative fuels by 2017, citing the need for independence from foreign oil since oil prices has been showing high volatility and this pattern seems to persist.

Besides many car manufacturers have welcomed this new era by hosting different technologies and adapting new innovative solutions. One example is Swedish car manufacturer Saab which believes that one viable direction is to move towards ethanol. Saab has developed the 9-5 BioPower model which runs on biofuel ethanol for the Swedish market, where about 80 percent of Saab’s sales are now BioPower models, and Saab is promoting sales in other European markets and extending BioPower to other models (Saab’s official website).

It can be said that green innovation is growing rapidly. I strongly believe that by relying on green innovation the followings will actualize soon; recycling waste, diversifying the sources of energy and not but least reducing CO2 emissions and other pollution.

References:
OECD (Organization for Economic Co-operation and Development) (2004) ‘Biofuels for Transport; an International Perspective’, International Energy Agency
OECD (Organization for Economic Co-operation and Development) (2007) ‘Biofuels for Transport: Policies and Possibilities’

Reflection over the Creativity Module Articles

Jane Epstein has just become a manager at TechniCo. She's trying to get a fix on the various personalities and roles of her new coworkers, and by and large, she seems to have inherited a pretty good team. Something about Andy Zimmerman, though, has her worried. Andy is a kind of guy humiliates and insults other employees for minor mistakes; ruthlessly cuts down colleagues when they present ideas that aren’t fully developed, and makes everyone in the group feel small and stupid. But on the other hand he is a kind of guy notably good at his job; almost the best in the group. I believe Jane is very well aware of that leaving Andy out of the group would be no good for her group. However she also knows that tolerate Andy’s unacceptable behaviors will obviously have some undesirable consequences for the group too. Well, it seems that this kind of confrontations that Jane has to face come off often in many organizations. I believe that finding one-size-fits-all solutions for these kinds of confrontations is almost impossible. Also this is where one manager separates from one another. In the organization where I used to work, we had one Andy as well; he was the kind of guy prefers doing nothing but sitting in his office, you could have seen him rarely out of his office or talking to anybody. But alike our Andy was gifted too when we stuck in numbers. Though everything about him had to be complicated and problematic; every time when we needed his help, he criticized everything what we had been doing and demanded the work to be redone as the way he requested. Well as many might guess, that was driving us crazy. At first we tried to get along with him; invited him out to have some drink with us, he simply refused. Nevertheless we didn’t give up on him, called him at the breaks for a coffee, it didn’t work out. At times we had serious discussions; one could say we were at each other's throats! One might ask where the manager was standing on this picture. Well he was very well aware of what was going on however Andy was not the kind of guy easily bent his head over, he was literally stubborn. His rights were the universal ones according to his logic. Besides with his unique abilities he was not easily disposable. Eventually after some time things got seriously worsened. Nobody was talking to our Andy; neither was he. Finally the situation got unbearable, when the top management realized that the business started to get affected by the conflict through communication slowing downs, emerging a hostile atmosphere etc… our Andy was dismissed. Unfortunately even after his dismissal we couldn’t regain the peaceful environment back.

In the article The Weird Rules of Creativity. Sutton (2001) outlines several ideas for managing creativity that are clearly odd but somehow effective. Such ideas echoed by well-known scholars are being captured; like creative destruction by Schumpeter takes the form of ignoring what has worked before or pushing perfectly happy people into fights among themselves. The author discusses new approaches to hiring, managing creative people, and dealing with risk and randomness in innovation. I believe that these practices will broaden the companies’ views and guide them to look for alternative ways of getting innovative information and ideas then the traditionally way or past models.

And lastly I would like to reflect my opinions over the article called the MBA Admission Criteria and an Entrepreneurial Mind-Set: Evidence from “Western” Style MBAs in India and Thailand by Shepherd et al. (2008). The finding that Shepherd et al. (2008, 169) ‘an existing selection criterion for MBA admission —the GMAT— was negatively associated with the mind-set believed to be necessary for managerial success’ didn’t surprise me. In this week the study I made for the assignment to prepare the entrepreneurship literature debate made me come to conclusion that by not underestimating the importance of proper education, being entrepreneur has nothing to do with getting higher GMAT scores. What I believe is that the dynamics of the country living in and the culture carry much more importance. Being good at GMAT shows one that who he has capacity and capability to learn however apart from that doesn’t prove anything whether he has ability to be a good manager.

Entrepreneurs Born or Made?

Tonight I'd like to go spontaneously and briefly write my reflections over today's class. First of all, over the past 6 years I've been studying business related courses and last couples of years I have focused on entrepreneurship and innovation related studies. However to be honest I have never thought seriously whether entrepreneurs born or made where Entrepreneurship Literature Seminar made me think and research over the argument. In the beginning while choosing the side I was pretty sure about entrepreneurs are born therefore I decided to set off with this topic. The first articles which I went through aim at understanding and explaining entrepreneurship as a phenomenon from the point of the entrepreneur's traits and characteristics, since the entrepreneur "causes" entrepreneurship. Without getting into details Gartner (1989) says that entrepreneur is he who creates organizations, while non-entrepreneurs do not. Besides Gartner (1989, 47-48) stresses upon some traits that differentiate entrepreneurs from non-entrepreneurs; ' need for achievement, locus of control, risk taking, values, and age are few of them’. According to Carland et al. (1988) entrepreneurship is a complex and dynamic process. Thereafter while I was going through the articles particularly published in favor of entrepreneurs are born to form our own argument, I realized that there was no clear distinctions in between and has never been! Bricklin (2001, 55) — who has started number of start-ups and is widely being recognized as successful entrepreneur —states that: “So, are entrepreneurs born or made? For me, the answer has been both: through a combination of following my instincts and being in an environment that cultivated and directed my talents. And I suspect this is the case for most entrepreneurs.”

However on the other hand (Anonymous 2007, 18) according to a survey by Northeastern University's School of Technological Entrepreneurship: “There isn't really such a thing as an accidental entrepreneur. Some 62% of entrepreneurs surveyed say they were inspired to start their own companies by their innate drive. Work experience and the success of their peers were cited by only 21% and 16%, respectively, as factors. In fact, 75% of those surveyed say they launched their first venture by the age of 30.”

In the end no doubt there is definitively something unique underneath the entrepreneurial logic. It is really hard to come up with some logical argument where in many employs risk averse approach but on contrast entrepreneurs are purposely being driven by risk taking behaviors. For me I strongly believe that — though definitely not underestimating the importance of education, culture and all external factors — successful entrepreneurs are unique personalities who to large extent behave and act according to their instincts and intuitions toward success; they need it. Some put it as entrepreneurial gens. To conclude it should be acknowledged that there is no clear distinctions in between whether entrepreneurs are born or made.

References:

Anonymous (2007) 'Are entrepreneurs born or made?', Black Entrepreise.

Bricklin, D. (2001) 'Natural-Born Entrepreneurs', Harvard Business Review.

Carland, J.W.; Hoy, F.; Carland, J.A.C. (1988) ‘"Who is an Entrepreneur?" Is a Question worth Asking?’, American Journal of Small Business.

Gartner, W.B. (1989) ‘"Who is an Entrepreneur?" Is the Wrong Question’, Entrepreneurship Theory and Practice.

Achieving Innovation Leadership and Competitive Advantage

We are living at a time of great changes in which walls are falling down under the great pressure of globalization, and today's environment driven by fast-paced technological changes. At the same time in terms of accommodation with this new era, fundamental changes consecutively have been taking place in production and manufacturing processes and hence consequently several structural evolutions have been witnessed in the structure of complex product industries as well as in the structure of organizations. These aforementioned changes have led to the acceleration of the process of competitive confrontation among industrial companies or in other words outburst of the competitive challenge in our global world.

Blomqvist et al. (2004) underline the fact that ‘… change creates incentives for innovation and entrepreneurs seeking opportunities’. In this sense in today’s world it should be acknowledged that being innovative has emerged as crucial pattern in order to cope with these aforementioned challenges more than ever. Albeit the industrial companies are highly stimulated and striving to capture the notion to survive and prosper in this new era, often lack the necessary resources. Chesbrough (2007a, 24) underlines the latter; he states that ‘as a result of both trends — rising development costs and shorter product life cycles — companies are finding it increasingly difficult to justify investments in innovation’. It is therefore important for industrial companies to broaden their views and look for alternative ways of getting innovative information and ideas in addition to the traditional ways or past models. Thereby the industrial companies will be able to keep up with the innovation competition to get a sustainable growth and to respond effectively, rapidly and less costly on the market. Apart from the fact mentioned above; Pérez and Sánchez (2003, 823) claims that small “hi-tech” firms can have a ‘catalyzing role to technology’.

Nevertheless, progressively industrial companies have started to comprehend the importance and necessity of networking and knowledge sharing towards this way. The coming age will be the age of collaboration. According to Van der Meer (2007), by forming and setting up champions, task forces, venture teams, skunk works, spinoffs, enabling acquisitions, spin-ins, venture capital, licensing, innovative budgets, partnering, listening posts etc., industrial companies will be able to create a strong business network and cooperate with specialized companies, universities and research laboratories in order to gain and conceptualize knowledge and innovative ideas. As captured by a number of authors (Chesbrough, 2007; Harryson, 2006; Sawhney, 2002; Zaheer and Bell, 2005), firms in various ways should tap into the potential of external sources to acquire new knowledge to be utilized in successful innovations. Though that is where the challenge has kicked off in how to identify such knowledge and then successfully transform this externally acquired knowledge into innovation.


References

• Blomqvist, K., Hara, V., Koivuniemi, J. and Aijo, T. (2004) ‘Towards Networked R&D Management: the R&D approach of Sonera Corporation as an example’, R&D Management, Vol. 34, No. 5, pp. 591-603.



• Chesbrough, H. (2007a) ‘Why Companies Should Have Open Business Models’, MIT Sloan Management Review, Vol. 48, No. 2, pp. 22-28.



• Harryson, S.J. (2006) Know-Who Based Entrepreneurship: From Knowledge Creation to Business Implementation, Cheltenham, UK: Edward Elgar.



• Pérez, M. P. and Sánchez, A.M. (2003) ‘The development of university spin-offs: early dynamics of technology transfer and networking’, Technovation, Vol. 23, No. 10, pp. 823-831.



• Sawhney, M. (2002) ‘Managing Business Innovation: An Advanced Business Analysis’, Journal of Interactive Marketing, Vol. 16, No. 2, pp. 24-26.



• Van Der Meer, H. (2007) ‘The Dutch Treat: Challenges in thinking in business models’, Creativity and Innovation Management, Vol. 16, No. 2, pp. 192-202.



• Zaheer, A. and Bell, G. (2005) ‘Benefiting from network position: firm capabilities, structural holes, and performance’, Strategic Management Journal, Vol. 26, No. 9, pp. 809-825.

Coincidence and Creative Destruction

This entry will be written for submission as a class assignment of Innovation and Business Creation. In the following paragraphs I will generate some ideas over the question of “if I had a company, how would I select the people who can assure me the max productivity and efficiency?

Before I proceed further I would like to provide a brief account about my philosophy, I have a philosophy early on, that anyone can do anything if they’re motivated enough, and I still believe that, but what I’ve learned from my previous experiences is that it’s easier to motivate certain people than others. Having said that, does not mean whoever comes and knocks on my door and the ones that seem the best would be hired!

Well let’s put it this way, first of all if I ever started up a new business, I would like to set off with good friends of mine the ones who are close to me in order to grow rapidly into a company. Rapidly is the key word; I wouldn’t waste my time to recruit employees. Furthermore I would keep and enhance close ties with my recruited friends, besides I wouldn’t lose my weak ties to the students at my home universities. Also I would employ and operate the snowball-effect which Harryson (2006, 49-50) argues in his case study of Anoto Corporation:

'(…) recruiting people who knows where to find the other stars based on previous experiences, such as old co workers and friends. A snowball-effect occurs as these newly recruited stars also bring along their personal contacts. This is how you manage to achieve a rapid recruitment without losing focus on quality.'

Eventually, snowballing led to identification and integration of further complementary brainpower.

Also I strongly believe that it’s very much about personal contacts and networking activities, anytime I may go out on the Internet and see what research group is good in this area and look at the names. If I find a good person in an area of research, the world is not that big, so if I find a good person and talk to him I believe I can get quite a good view of the situation.

Well to be honest, it is very much coincidence! At least close to. In this sense until I found a better process I would do what I am thinking is the best; that is; keeping the aforementioned philosophy in the mind, putting down criteria, and looking at the people who contacts us. Then I may use a recruitment company or ad even.


References
· Harryson, S.J. (2006) Know-Who Based Entrepreneurship: From Knowledge Creation to Business Implementation, Cheltenham, UK: Edward Elgar.

Today as we all know, have been given a really interesting assignment on creating our own blog, which to be honest I have no clue how these things has been working out. That being said, here is my first blog entry; in my first entry I’d like to pursue the topic of innovation’s itself because first of all I’d like to give deeper insight to the concept of innovation to make it more understandable. To do so, I will try to aim at summarizing the most respectful ideas in this research area that are already extant in the world literature.

Innovation can be viewed as a way of reaching sustainable growth, and Van der Meer (2007, 192) introduces the idea that the essential question is not why to innovate, but how to innovate. And he suggests two approaches of how to enable innovation – ‘the cultural approach towards enabling innovation entails creating an innovative climate; the structural approach towards enabling innovation concerns the organized use of enabling innovation mechanisms’ such as champions, task forces, venture teams, skunk works, spin-offs, enabling acquisitions, spin-ins, venture capital, licensing, innovative budgets, partnering, listening posts etc. Kirschbaum (2005, 24) says ‘Innovation is a culture not a process’ and ‘successful, profitable innovation depends upon teamwork and an entrepreneurial culture’ by ‘combining internal and external competencies and knowledge, both in R&D and marketing’. Many companies on the market today are recognizing that ’not all good ideas come from internal sources and not all good ideas can be successfully marketed internally’ (Chesbrough and Crowther 2006, 229). Lichenthaler (2007, 67) develops this when he states that ‘product marketing and licensing are a complement to the firm rather than a substitute in technology exploitation’.

Sawhney et al (2007) argue that if all firms in an industry are seeking opportunities in the same places, they tend to come up with the same innovations. Thus, viewing innovation too narrowly blinds companies to same opportunities and leaves them vulnerable to competitors with broader perspectives. They define business innovation as the creation of substantial new value for customers and the firm by creatively changing one or more dimensions of the business system.

It is becoming more and more important for companies to keep up with the innovation competition to get a sustainable growth and to respond effectively and rapidly on the market today. It is therefore important for the companies to broaden their views and look for alternative ways of getting innovative information and ideas then the traditionally way or past models.

To get a well-functioning organisation it is important to manage to have the right managers on the right position. I think that it is important to be very open as a manager and be open for new ideas and rapid changes. It is also important to give out clear directions to research end development employees so ideas really happen and do not stop a good idea in the company. It is also important that managers are open and supportive for spin off projects. Spin off projects will spin in to the company with new ideas if internally ties were successfully made in the past. This enables the company to gain more innovative ideas that can result in sustainable growth.

References

• Chesbrough H., Crowther A.K. (2006) “Beyond high tech: early adopters of open innovation in their industries”, R & D Management, vol 36, no 3, pp 229.
• Kirschbaum R. (2005) ‘Open innovation in practice’, Research Technology Management, vol. 48, no. 4, pp 24-28.
• Lichenthaler U. (2007) “The Drives of Technology Licensing: An Industry Comparison”, California Management Review, vol 49, no 4, pp 67.
• Sawhney M., Wolcott R.C. and Arroniz I. (2007) “The 12 Different Ways for Companies to Innovate”, vol 47, no 3, pp 75-81
• Van Der Meer H. (2007) “The Dutch Treat: Challenges in thinking in business models”, Creativity and Innovation Management, vol 16, no 2, pp 192.