Critical Perspectives on Innovation Management

The Bright and Dark Sides of Innovative Firms

Patryk Dziurski

• Publisher: Routledge
• Year: 2021
• eBook ISBN:
  9781000484267
• Topic: Betriebswirtschaft
• Subtopic: Business allgemein

Most firms perceive innovation as the best way to grow. However, how it can best be managed is still unclear. While the number of publications on innovation has skyrocketed over the past two decades, it is still increasingly difficult to gain an overview of its most critical aspects.

Much has been written about the possible benefits of innovation, but there is still a lack of understanding of its downsides at the innovative firm level. This can lead to detrimental effects, such as a lower commitment to innovation, a lack of effective innovation strategy, inappropriate organizational design that does not enhance innovation, and either a too cautious or too risky approach to innovation. Thus, the book aims to explore the concept of innovation management as well as to identify the bright and dark sides of innovation in innovative firms. A better understanding of the positive and negative effects of product and process innovation expands the knowledge base on innovation management and allows managers to manage innovation in a more efficient and effective manner.

This book will be valuable to researchers, academics, managers, and advanced students in the fields of management studies, strategy, and organizational studies.

1 The Essence of Innovation and Innovation Management

Agnieszka Sopińska

DOI: 10.4324/9781003203841-2

Introduction

The continuing processes of globalization and the rapid development of information and communication technologies have significantly redefined the set of determinants that shape the competitiveness of modern companies. Currently, one of the most important sources of the competitiveness of modern companies is their innovativeness that is defined as the ability to create, implement, and commercialize innovation. According to the most recent version of the Oslo Manual, an innovative company is one that reports at least one innovation within the observation period, while it may be individually or jointly responsible for innovation (OECD and Eurostat, 2018). The term innovation, in the etymological sense, means introduction of something new or a certain novelty, while in practice the essence of innovation is understood and defined differently depending on the research perspective adopted. The consequence of the ambiguous understanding of the essence of innovation is the multiplicity of its classifications. However, regardless of the type of innovation created, modern companies require efficient innovation management, i.e., planning, organizing, coordinating, and controlling of the innovation process. It should be noted, however, that the process of innovation can take place according to different models and schemes, which over the years have clearly evolved from closed to open innovation model.

Essence and Types of Innovation

The term innovation, which comes from the Latin words: innovatus – renewal, and novus – novelty, means introduction of something new or a newly introduced thing, a certain novelty (Bańko, 2005). In the field of economics, the concept of innovation was first commonly used in the 1960s, and the father of innovation is considered to be Schumpeter (1967). In his view, innovation means the materialization of an invention and its practical application, as opposed to the mere fact of its creation. Invention that has no application in real life is not considered innovation. Imitation (diffusion) of innovation is not treated as innovation, either. An innovation is only the first use of a given solution, while its diffusion is not considered innovation. Innovation thus includes:

• a product: introduction of a new good or of a new quality of a good;
• a process: introduction of a new method of production;
• a business model: opening of a new market;
• a source of supply: conquest of a new source of supply of raw materials of semi-finished goods; and
• mergers and divestments: carrying out a new organization of any industry (Schumpeter, 1967).

Despite the fact that many years have passed since the publication of Schumpeter’s work, the term innovation still has not been clearly defined. On the contrary, the concept of innovation can be interpreted quite differently, depending on the optionally adopted broad (sensu largo) or narrow (sensu stricto) understanding of the term and the material (static) or functional (dynamic) approach to innovation.

A broad understanding of innovation means creative changes not only in technology, but also in the social system, the economic structure, and even in nature. On the other hand, a narrow understanding of innovation limits its meaning to changes in production methods and products (also in the organization of the production process) based on new or previously unused knowledge.

Selected examples of broad and narrow understanding of the innovation are presented in Table 1.1.

Table 1.1 The broad (sensu largo) and narrow (sensu stricto) understanding of innovation

Broad understanding of innovation (sensu largo)		Narrow understanding of innovation (sensu stricto)
Innovation is “the introduction to wide-spread use of new products, processes or ways of doing things”	Allen (1966, p. 7)	“Innovation is a new application of either old or new knowledge to production processes (production defined broadly)”	Kuznets (1959, pp. 29–30)
Innovation is “the development of a creative idea into o finished article” Innovation is “the whole cycle of translating a piece of original thinking into something tangible”	Whitfield (1975, pp. 7, 29)	Innovation is “the first commercial transaction involving a new product, process system, or device”	Freeman (1982, p. 6)
“The essence of innovation is to re-create the world according to a particular ideal or vison”	Nonaka and Takeuchi (1995, p. 10)	“Innovation concerns process of learning and discovery about new products, new production processes and new form of economics organization”	Dosi (1990, p. 299)
“An innovation is an idea, practice, or object that is perceived as new by an individual or other unit of adoption”	Rogers (2003, p. 12)
Innovation is “an invention, creation, or discovery, to bring forth something truly new and useful” Innovation is “an adoption of what is new to you, whether ‘you’ are an individual or an organization”	Coates (2003, p. 1073)

Source: Allen 1966, p. 7; Whitfield, 1975, pp. 7, 29; Kuznets, 1959, pp. 29–30; Freeman, 1982, p. 6; Dosi, 1990, p. 299; Nonaka and Takeuchi, 1995, p. 10; Rogers, 2003, p. 12; Coates, 2003, p. 1073.

The concept of innovation can be defined in both static (material) and dynamic (functional) terms. The material (static) approach to innovation refers to the effects and results of the innovation process, which can include products, services, and organization of the production process, and which are based on knowledge that is new or has so far been unused, which has been accepted and implemented by a company. On the other hand, the functional (dynamic) approach to innovation covers the innovation creation process, starting from the creation of an idea, through design and creation of a prototype, to implementation and adaptation of the innovation in the economy; consequently, this approach is often referred to as a process approach to innovation. Thus, innovation is the result or process of bringing new or significantly improved solutions to the market.

Selected examples of the understanding of the innovation according to the material and functional approaches are shown in Table 1.2.

Table 1.2 The essence of innovation according to the material (static) and functional (dynamic) approach

The essence of innovation according to the material (static) approach		The essence of innovation according to the functional (dynamic) approach
Innovation is “the introduction to wide-spread use of new products, processes or ways of doing things”	Allen (1966, p. 7)	Inn...

Table of contents

• Cover
• Half Title Page
• Series Page
• Title Page
• Copyright Page
• Contents
• List of Contributors
• Introduction
• 1 The Essence of Innovation and Innovation Management
• 2 Innovation Strategy
• 3 Organizing Innovation Activity
• 4 Measuring Innovation
• 5 Different Shades of Innovation
• 6 Bright Sides of Innovation
• 7 Dark Sides of Innovation
• 8 Case Studies on Innovative Firms
• 9 Managing Innovation in the Context of the Bright and Dark Sides of Innovation – Conclusions from the Study
• Index