Innovation and Change Essay Example | Topics and Well Written Essays - 3250 words - 1

Innovation and Change - Essay Example Legitimate innovations are not always the commercialisation of a significant advance in product concept, but can be the process of making enhancements to an existing product. Beacham (2006, p.9) reinforces that innovation is â€Å"the successful exploitation of new ideas†, meaning that specific business processes or management ideology can be representative of legitimate innovation which radically or incrementally change the methodology by which a business improves itself. The end result of innovation as a new idea, rather than a radically exclusive and exceptional product development, is being able to differentiate the innovative firm from its competitor base. For the sake of argument, it should then be recognised that genuine innovations involve making non-replicable changes to business strategy, service delivery processes, internal cultural dynamics both professional and social, improving functionality through software technology implementation, or blending existing technol ogies to create greater value for the firm in a way that has not been conceived of by rival firms. When attempting to determine whether SMEs are better able to innovate than larger organisations, it is necessary to clearly define the concept of what actually constitutes an innovation. An initial assessment of innovation, using the premise that a legitimate innovation is solely related to radical product development, would seem to point toward a larger organisation being more equipped to provide innovation than their smaller business counterparts due to higher capital availability, more labour and divisional support, and more refined manufacturing capacity. Taking into consideration the tangible definition of innovation, involving a variety of conceptions not always related to product, it is actually much more realistic to believe that the SME is much better equipped to provide innovation than the larger corporation. This essay describes the characteristics of the SME that actually m ake innovation more easily achievable than larger businesses, including an emphasis on leadership, cultural development, the political hierarchy, the nature of SME team functioning, organisational structure and managerial prowess in understanding the relationships between inputs and outputs that assist in sustaining the small to medium enterprise. The political hierarchy and business culture In order to successfully innovate, it is necessary to transform tacit knowledge into explicit knowledge within an open culture environment. Tacit knowledge is highly specialised, consisting of expertise that is not easily translatable and transferrable to individuals within the organisation that do not maintain similar expertise. Explicit knowledge is generally defined as documented, easy-to-transfer information such as journals, drawings, schematics and internal procedures that is accessible and understood by all organisational members (Fodor 1968). In the large organisation, especially a multi -national company which maintains a high volume of inter-dependent business divisions, including procurement, research and development, sales and marketing, human resources, and manufacturing, each business unit/division maintains expert (tacit) knowledge labourers. Within the large corporation, it is uncommon for individuals that have been hired for their specific skills and capabilities to be cross-trained under a job rotation