In a recent story entitled “Enterprises en Route Growth and Innovation: Survey, published by Silicon India on October 17th, 2010, they demonstrate how important companies in India deem innovation to be as they try to rise from the recent global recession. During a recent survey 84 percent of executives agreed that innovation was very important to their company’s strategies. Yet many of the survey’s respondents indicated that their “companies don’t make good use of specific tactics” and only a third said that their companies were “effective in setting formal priorities for innovation during the strategic planning process.”
This means that the degree of formalization in these firms may be what is causing them to be less successful at innovation. According to the textbook, Strategic Management of Technological Innovation, by Melissa Schilling, “if a firm codifies all of its activities with detailed procedures, it may stifle employee creativity” and likewise if they lack structure, they can also lose employee motivation. Many times firms found that when human and financial resources worked together the companies were able to achieve better results, so by decentralizing and spreading out who was making decisions, the outcome was more beneficial to everyone.
Almost all of the respondents thought that more organization would lead to a more innovative company if the company’s were more standardized, yet the textbook mentions that this can also be stifling. As the solution can differ depending on the company, each would have to work to achieve the correct balance of standardization and freedom so that they would feel free to be creative, yet they also would not become careless, creating a situation where innovation fails to flourish.
http://www.siliconindia.com/shownews/Enterprises_en_route_growth_and_innovation-nid-72754-cid-3.html
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