The term innovation is derived from the Latin word innovatus, which is the noun form of innovare to renew or change. Although the term is broadly used, innovation generally refers to the creation of better or more effective products, processes, technologies, or ideas that are accepted by markets, governments, and society. Due to its widespread effect, innovation is an important topic in the study of economics, business, entrepreneurship, design, technology, sociology, and engineering. In society, innovation aids in comfort, convenience, and efficiency in everyday life. In business and economics, innovation is the catalyst to growth. With rapid advancements in transportation and communications over the past few decades, the old world concepts of factor endowments and comparative advantage which focused on an area’s unique inputs are outmoded for today’s global economy. Now, as Harvard economist Michael Porter points out competitive advantage, or the productive use of any inputs, which requires continual innovation is paramount for any specialized firm to succeed. In the organizational context, innovation may be linked to positive changes in efficiency, productivity, quality, competitiveness, market share, and others. All organizations can innovate, including for example hospitals, universities, and local governments 2.
Objective: This study has tried to analyze how companies have become successful by following the path of innovation. The main objectives of the study include different types of innovation mostly practiced by companies, how to adapt a culture of innovation in a company and how to be innovative in shaky economy. Live examples of companies have been taken for this study. 3.
Introduction to the study: Organizations have long sought how to achieve a competitive advantage in uncertain and changing environments. There has been a great deal of interest in the effects of innovation, and in particular, an innovation orientation on an organization’s strategy and performance. Innovation has been touted as the differentiator that will lead to the next level of competitive advantage. Economist Joseph Schumpeter, who contributed greatly to the study of innovation, argued that industries must incessantly revolutionize the economic structure from within, that is innovate with better or more effective processes and products, such as the shift from the craft shop to factory. He famously asserted that “creative destruction is the essential fact about capitalism.” In addition, entrepreneurs continuously look for better ways to satisfy their consumer base with improved quality, durability, service, and price which come to fruition in innovation with advanced technologies and organizational strategies. 4.
Getting innovative: It is important to recognize that corporate cultures do not change because the CEO states, "Innovation is the key to our future success." It is a slow process that often takes years before appreciable financial benefits are realized. This presents near-term challenges to management attempting to balance short-term financial results with longer-term initiatives. As a result, corporate leadership must commit itself to innovation as a long-term success platform. The first step in becoming innovative is to recognize that innovation is multidimensional spanning across all aspects of the business. How and where companies innovate will determine whether or not they succeed. Therefore, innovation needs to be directed within the context of a company's overall strategic or business plan. Implicit in the ability to innovate successfully is a good understanding of both the external world in which a company competes and its internal competencies.
Although many companies indicate that innovation is a core strategic platform, not all are successful in actually being innovative companies. To be successful, a company must effectively communicate the innovation message...
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