Innovation for Competitive Advantage in International Market

ground employ for matched good in International MarketINTRODUCTIONOrganizations essential run steady to keep up with transports taking place exclusively around them. They must modify themselves exclusively the time. Change, rather than stability, is the norm today. Every business is affect by a number of powerful environmental forces such as technological advances, environmental trades, evolving society and guest desires, and maturation of mart, which drive the deprivation to transmute in todays globalized economy. All of these enviromental forces collect earn a crapd opportunities and threats. Every memorial tablet strives to pick out advantage of opportunities and manage the threats which lead arisen during the remove emergence (Daft, 2001).Organizations, to be considered sophisticated, withdraw to implement technologically novel wargons and functioninges, or convey to suck prodigious technological improvements in existing rank of intersections and serve upes. Organizations generate and apply the countenance cognition ask for producing some(prenominal)(a)thing tonic and improving the existing yield or parade, scarce known as knowl pass on instauration (Atmaca, 2006). The rate of excogitation and adept change is important to an economys rate of growth. Differences in fellowship founding, diffusion, and use choose implications for outdoor(a)(a) competiveness, standards of living, and quality of vivification (Feldman and Massard, 2002).To re of import hawkish, naturalised firms must continually seek out opportunities for growth and clean methods for strategicalalally re antecedenting their performance. Changes in guest involve, upstartly technologies, and shifts in the free-enterprise(a) landscape require that companies continually infix and initiate corporate ventures in order to compete efficaciously (Dess, Lumpkin and Eisner, 2008).The sermon begins with defining the mental home thought foc using on varied literatures from professional writers. conversions give the axe estimate legion(predicate) forms, including rotatory break with dodges as well as incremantal groundbreaking improvements, and todays lookers atomic number 18 iron give c atomic number 18ly emphasizing that universe is one of the around(prenominal) valuable unalikeiator for sustainable competitive advantage. The conceit of blueprint is comp atomic number 18d to the nonion of invention and creativeness as they argon broken in and interchangeably used. Later, the sermon concentrates on the importance of asylum in identifying opportunities and threats sexual climax with change which argon followed by suggestions how to run short successful innovators to over comply these threats.The discussion continues by identifying the four types of changes an presidential term undergoes to happen upon advantage in the internationalististic environment. These changes hatful be used to upda te the harvest-times or the improvements, the engineering science, the existing system and structure, and kitchen-gardening in the ecesis. Then, focus leave be on how musical arrangements mint build globe by applying key elements that shit a authentically innovative and entrepreneurial one. The next chapter identifies nigh successful global innovators that permit payed novel benefits to their customers.This thesis reviews the induction pattern and the forms it beat backs to succeed competitive march on in the grocery store. It identifies the benefits driving from aim, explains wherefore passel and geological formations take content change and identifies the usurp steps to over roll in the hay barriers disapproveing it. It explains the affair oversight has during foot and the key elements to constitute an innovative scheme. It concludes by explaining why healthc atomic number 18 sector is different and identifies the surpass practiced insertions in healthcargon sector.The later chapter concentrates on how origin evolves in the usefulness sector. The biggest industries for RD sp hold backing for 2009 ar determine. The important features of serve sector the concept of military avail launching and its four dimensions be comp bed to the service fruit concept. To conclude, some suggestions how caution in service companies butt joint accomplish effective knowl processability be given.The last chapter concentrates on the healthc ar sector. It focuses on the main and high hat rehearse vicissitudes in the health atomic number 18 sector, as healthcare is a part of the service sector. The reasons that weaken the healthcare sector different from early(a)wises are underlined. Big structure, entangled size, and different government policies are some of the reasons. To sum up, surmount ingenious processes and run which are applied by present healthcare service providers are place.CHAPTER ILITERATURE REVIEW IN INNOVATION1.1 formation revolutionAccording to King (2009) innovation is doing things in untried ship canal in order to get hold of meaningful results and make a spacious difference in performance compared to others. creations terminal is to father a peremptory change, to make someone or something better. Testing and evaluation of ideas is critical in achieving this aim. The ideas that do non manoeuver are identified by testing. ill is an integral part of the innovation process. Failing means collecting info and evidence intimately the changes that systems compulsion to undergo. This view is jump outed by Mulgan and Albury (2003) who sterilize innovation as modernistic ideas that work and a successful innovation can be achieved with the cosmos and effectuation of late processes, carrefours, services and methods of awardy which go out result in significant improvements in the advantageousness and elevate the growth of an enterprise.Innovation is a spec ial case of in move change and victimizeing that either transforms current products, services, and markets, or seduces an entirely new market by introducing a radically new product or service. An organization is considered innovative if it stirs up the marketplace, by creating competitive pres veritables and new opportunities. It has been ac noesis that innovation success in an open up organization requires balancing the stabilised competency of the current market offerings and building new capabilities to create and crack offerings for unknown markets (Bloisi, Cook and Hunsaker, 2003).The changes used to adapt the environment can be evaluated according to the electron orbit and to the extent to which changes are incremental or radical for the organization. Incremental changes maintain the general equilibrium of the organization through a serial publication of continual progressions and affect only one part in organization. On the contrast, radical changes, transform the ent ire organization. Incremental changes include applied science improvements, such as the introduction of computer-integrated manufacturing or product improvements in the established structure and management processes. In radical changes, the engineering science is bidly to be breakthrough, and new products created leave alone establish new markets (Daft, 2001).Importance of innovation seems to be the most(prenominal) talked management hump these days. Knowl brim plays a crucial affair in the sparing processes be curtilage within the fri windupship-based economy, innovation plays a central voice and stands at the heart of economic change. Firms infix to defend their competitive fleck as well as to achieve competitive advantage. Organizations possessing much(prenominal) knowledge outperform those with less. It was believed that an enterprise can maintain competitive advantage through quality and price. While todays different interrogationes seduce revealed that innovat ion is one of the most valuable differentiator for sustainable competitive advantage (Tyagi, 2008).1.1.1 InventionTyagi (2008) has do a distinction between invention and innovation. Invention is discovering of things never existed to begin with while innovation is discovering how to introduce and commercialize new products, processes and new miens of adding customer value through innovative business models and management systems. This lay of view is fouled by King (2009) who determines invention as the extension of new ideas which get down the potential to make someone or something better. brisk ideas can drawn from scanning other industries, by having conversations and encounters, or accessing knowledge which is non usual in your business. All innovations starting point is invention of creative ideas. The distinction between them is invention is having an idea approximately a service, product, technology or device, while innovation is the successfull application of th ose ideas.A nonher occasion who has discussed some the difference existing among invention and creativity is Sloane (2010). Invention is the creation of a product, device or method that has never been do and existed in front. So, each invention is an innovation. scarce either innovation is non an invention. When a partnership first publishes its website this is a major innovation for the order even though galore(postnominal) other websites may already exist.1.1.2 CreativityCreativity is delimit as the process of thinking and generating new things, new concepts, and new ideas. Converting these thoughts into perceptible things, bringing these ideas to lifetime is innovation. Creativity is like dreaming up new things and innovation is reservation those dreams come true. Expressed in other words, creativity is the capability of conceiving something unusual or original while innovation is the effectuation of those unusual or original things (Difference Between, n.d.). 1.2 Benefits and Barriers of InnovationIn the last long time change has occured incrementally and infrequently. A globalized economy is creating both opportunities and hazards to allone. Firms are forced to make dramatic improvements not only to compete and prosper but besides to survive. wad who ache been through difficult, and not successful change efforts end up drawing pesimistic and angry conclusions. They get under ones skin suspicious of the motives of those pushing for fault (Kotter, 1996).This section ordain focus on the discussion of benefits and barriers that come with innovation. The advantages living a smashed leadership and the factors causing protestance toward change exit be identified. In addition, this section forget excessively explain some methods that managers can use to implement change successfully within the organization.1.2.1 Benefits of InnovationBhatt (2007) states the reasons that make companies innovate, those are listed infraTo advance i n technology.To change the environment.The evolving of the society.The evolving of the customer desires.Competitors improve their products and services.Customers stop buying your old products so you motive to convert them and add new products.Innovation opportunities can arise callable to environmental changes in technology, science, and producement analysis. Environmental changes may result in creation of new customer indigences or may alter the organization to get out better solutions to current customer indispensablenesss. Service or product innovations have to fulfill four benefit aspects listed infraUnique. The target cumulateing should see the new benefits generated from the new service or product as unequalled.Important. The customers should behold the new benefits as important.Sustainable. The new benefits should be protected against pursuit by mea construeeds such as patents, time to market and brand management.Marketable. The organization should have the resources, capabilities and competencies to market the product which also includes an effective and ready to market version of the product (Anon., 2008).Stark (n.d.) has identified the benefits of good innovation, those are listed belowFirst to market.Premium prices.Best customers.Large market share.Increased shareowner return.Increased employee motivation and morale.1.2.2 Barriers to InnovationBeer and Nohria (2000) state that one research police squad concluded that The brutal fact is that close 70 per cent of all change initiatives fail. These researchers conclude that there are two primary reasons why organizations undergo change one is based on hard economic value (e.g. financial return to shareholders) the other is based soft organisational capabilities. The organisational approach transgresss corporate gloss, human capabilities, feedback, measurements and reflections on evolutionary progress.both volume and organizations frequently repulse change, even if it is in the ir trump interests, oddly in large and established organizations. Bloisi, Cook and Hunsaker (2003) suggest five main reasons why individuals resist changeSelective perception. spate sometimes perceive the same thing differently. When changes are initiated, individuals slope to focus on how they will be individualizedly touched rather than seeing the big conniption for the entire organization. overlook of instruction.People will resist change if they are not informed closely what is expected from them or what benefits change will bring. If the reasons for change are not clearly presented, good deal tend to fill in the missing pieces with speculation, which often assumes the worst in terms of initiator intentions and personalised impact. In addition, if plurality do not have enough nurture about how to change, they may fear qualification mistakes, so they will not try.Fear of the unknown. Individuals resist change when they are uncertain about how it will affect their wel l- macrocosm. They fear downsizing, uncertainties about not knowing how to change, not macrocosm able to perform as well as before the change, losing point, income, and spatial relation or power.Habit. Many passel prefer familiar actions and events, even if they are not optimal. Breaking a habit is difficult be fount it takes hard work and involves giving up perceived benefits from the habit, even if the new behavior has to a greater extent desirable consequences.Resentment toward the initiator.If a change seems arbitrary or unreasonable, freshness and anger are directed towards those initiating the change. People resent being manageled and losing familiarity over their works and lives, when their thoughts and feelings are not considered by change initiators. Finally, without combine in the initiators inventions, flock may resist the change out of offense or fear of possible unknown consequences.Bloisi, Cook and Hunsaker (2003) state that organizations resist change for m any of the same reasons individuals do. There are also many forces inside an organization that create resistance to changes initiated by environmental conditions. any(prenominal) of the main ones are summarized belowPower Maintenance. Changes in decision-making inditeity and run into of resource allocations threaten the balance of power in organizations. Units benefiting from the change will welcome it, but those losing power will resist it.Structural stability. Organizations create hierarchies, sub companys, rules and procedures to promote order, consistent and predicable behaviors. People who fit these desired behavioral criteria are hired and shaped to confirm further through the socialization process and organisational conditioning.Functional sub-optimization.Differences in functional orientation, goals and resource dependencies can cause changes that are seen as beneficial to one functional unit and as threatening to another. Functional units usually think of themselves fir st when evaluating potential changes and support those that leaven their own welfare, but resist the one that reduce it. organizational cultivation. organizational finis promotes predicable airs of thinking and behaving. Organizational members will resist changes that force them to abandon established assumptions and approved ship mien of doing things.Group norms. Groups rear their own norms to promote desirable behaviors. Many members conform these norms. Consequently, any change that disrupts group norms, tasks or use of goods and services relationships will probably be resisted.Strategos conducted a survey of innovation practices of much than 550 large companies, where majority of respondents in each intentness rated innovation as critical and verbalize that the importance of innovation would grow in the future. According to Loewe and Dominiquini (2006) the top six obstacles to innovation identified by respondents across industries areShort-term focus. deprivation of time, resources or staff. leading expects payoff sooner than is realistic.Management incentives do not reward innovation.Lack of a systematic innovation process.Belief that innovation is inherently risky. infra is a list of suggestions how to become successful innovators about over access the barriers to innovation prolong a vision for change. Innovation has to have a blueprint, a assertion which defines the direction for the business and which flock will readily understand and remember. Your team up call fors to know the direction they are headed in order to be innovative. Illustrate the goals and explain to masses how their role is determining(prenominal) in collision the goals to fulfill the organizational vision.Fight the fear of change. Innovative leaders invariably explain the wish for change. They must paint a check that shows an captivating future that is worth taking risks to achieve. countenance a dynamic suggestions scheme. vast suggestion schemes are focused and open to all. Leaders do not need to offer Brobdingnagian rewards. almosttimes, recognition and response are mostly to a greater extent than important.Break the rules. To achieve radical innovation leaders need to challenge all the assumptions related to how things should look in your environment. Business is like Art, with no well-defined rules and referees. Innovation is filled with opportunities for people who can take advantage in creating new managements to provide the goods and services that customers loss. lend every(prenominal)one two jobs. Ask your people to run their current jobs in the most effective way possible and at the same time to take place completely new ways to do the job. Encourage them to identify the office of their role, the outcomes delivered through this role and if there is a better way to deliver that purpose.Collaborate. CEOs must see collaboration as key to their success during innovation. achievement can not only be achieved by using int rinsic resources, but also by face international of the organization for people to partner with.Welcome failure. The innovative leader encourages a coating where people feel free to innovate and experiment. Innovative leaders tell people that each unsuccessful attempt is a step along the pathway to success. When innovative leaders welcome innovation and create a nicety of experimentation, means that they except failure and welcome it.Build prototypes. Innovative leaders are suggested to try the new ideas at low cost by building prototypes and see what the customer reaction is. You will come across to a greater extent in the real world than you will in the test laboratories.Be passionate. Leaders must concentrate on the things they want to change, on the challenges they want to face and be passionate about overcoming them. Organizations need passionate supporters, who are inspired to innovate and change the way they do things to come up with extraordinary results. Be passionate about what you believe, communicate that passion every time you speak and explain why reaching the destination is sincerely worthwhile (ArticleSnatch, n.d.).1.3 Types of InnovationThere exist four types of changes to achieve strategic edge within an organization. Managers can use these four types of changes to achieve competitive advantage in the international environment. Each company can have maximum impact upon the chosen market through its own ridiculous configuration of technology, product and services, scheme and structure, and culture as explained below (Daft, 2001).1.3.1 scientific Innovation expert innovations refer to changes in an organizations production process to change distinctive competence. Changes in an organizations production process, including its knowledge and skills base, are inclinationed to rear greater in volume or to have a much efficient production. Changes in technology involve the work methods, equipment, and work fly the coop techniques for m aking products or services. For lawsuit, in a university, technology changes are about changes in methods for teaching the courses. Tyagi (2008) suggests that traditionally innovation has been associated with the use of technological knowledge, and research and development activities. A technological innovation is any innovation receivable to an industrial application of scientific knowledge.Dess, Lumpkin and Eisner (2008) suggest that innovation involves the usage of new knowledge to transform organizational processes or create commercially possible products and services. The latest technology, results of experiments, creative insights, or competitive information may be the sources of new knowledge. However it comes about, innovation occurs when new combinations of ideas and information bring about demonstrable change. Among the most important sources of new ideas is new technology. Technology creates new possibilities and provides the raw material that firms use to make innova tive new products and services. just technology is not the only source of innovation. There can be innovations in human resources, firm infrastructure, marketing, service, or in many other value-adding areas that have little to do with anything high-tech.1.3.2 harvest-time and Service Innovation return and service innovations refer to the product or service outputs of an organization. unfermented products may be in the form of entirely new product lines or small adaptions of existing products. New products are externalizeed to develop new markets, or customers, or to increase the market share. Tyagi (2008) states that product innovation is about the introduction of new goods and services which have improvements in terms of design excellence, join characteristics, technical specifications etc. and are derived from customer or intentness insight, or strategic alignment of the organization.Godin (2005) suggests that the old rule was to create full and ordinary products that were combined with great marketing. The new rule is to create rare products and figure out a great theory by flavor at whats working in the real world and what the various successes have in common. Identify what the successful companies have in common and do something to be scarce.Roberts (2002) has made a distinction when discussing if innovation is between product/service innovation and process innovation. Product/Service innovation refers to efforts to develop new products or services for end users. Product/Service innovations tend to be much than(prenominal) radical and are more common during the early stages of an industrys life cycle. As an industry matures, there are fewer opportunities for newness, so the innovations tend to be more incremental. Process innovation, by contrast, is associated with improving the energy of an organizational process, in particular manufacturing systems and operations. Process innovations occur in the later stages of an industrys life cycle as companies seek ways to endure practicable in markets where demand has flattened out and competition is more intensive. As a result, process innovations are often associated with overall cost leader strategies because the quarry of many process improvements is to lower the cost of operations.There are some(prenominal) problems with seeking competitive advantage through investments in process technology. Firstly, the people who sell you robots or point-of-sale terminals, software to analyze production or service delivery will sell the robots, terminals, and software to your competitors. Your ability to arrive at the benefits of this technology depends on your ability to implement it more rapidly and more efficaciously. Secondly, investment in specialized technology is not a deputize for skill in managing the work force. This is because more skills may be call for to operate the more sophisticated and advanced equipments. Having a higher take aim of investment per employee will result in increasingly expensive interruptions in the process which means that the ability to operate, maintain, and repair equipment effectively becomes even more critical (Pfeffer, 1996).1.3.3 Strategy and Structural InnovationStrategy and structural innovation refers to the administrative section in an organization. It is related to the management and supervision in the organization, including changes in an organizations strategic management and structure, policies, accounting and budgeting systems, reward systems, labor relations, coordination devices, management information and control systems. Strategy and structure changes in an organization are mandated by top management. They usually have a top-down structure. An illustration may be if the corporate goes downsizing. On the other hand, product and technology changes may come from the bottom up.1.3.4 Cultural InnovationCultural innovation refers to changes that may occur in an employees attitudes, beliefs, values, expec tations, abilities, and behavior. Culture innovation tends to change the way employees think. These are changes in mindset rather than the technology, structure, or products and services.Culture can be a powerful force undermining or shoring up the effectiveness of a nation, a business, and a manager. Recognizing the presence and power of culture will ease in better navigating through the rough seas of international business. Discovering how to harness the power of culture in an organization will protagonist the organization gain competitive advantage (Schneider and Barsoux, 2003).To conclude, it can be utter that successful innovation in an organization occurs when technological and product or process innovations in the value chain are implemented through effective strategy and structure innovation. Innovation in an organization, which includes people, leadership, creativity, process and organizational culture, is the driver to grow, to achieve high profits and to succeed in the market. Innovation in an organization should be approached in a systematic way and not a piecemeal manner and should be initiated even at the lowest aims (Tyagi, 2008).1.4 leaders in Practice of InnovationMany organizations are resistant to changes and continue operating the way they had been operating in the past. To pillow competitive, they work harder, improve efficiency, reduce cost and implement best practices. But, this is not enough. Instead of getting stuck in their standard mode of operations, organizations need to suck up innovative ways to change the strategies. The best way to create a competitive edge and be in the head of the competition is to innovate by drawing advantage from the creative power of your people. Turn your sterling(prenominal) assets into opportunistic entrepreneurs who discover new ways and improve the way they do business. Management innovation involves total mutation of existing culture to enhance organizational performance in an integrated man ner involving technological innovation, product and service innovation, and strategy and structural innovation (Tyagi, 2008).Sloane (2003) suggests that every organization needs to have a vision, a culture and a process of innovation to build a sincerely yours innovative environment. There are eighterer from Decatur key elements that create a truly innovative and entrepreneurial organization as belowPainting the vision. The first step is to paint a desirable, challenging and believable vision. Innovative leaders must be sure that people share a common goal and embarke on a journey all together. Being all together means they take to easier the changes, all the challenges and difficulties that show up during the journey. Innovative leaders should delegate more responsibility, and empower the staff with control over their work. Once staff is apprised of the goal and direction headed, they contribute the best creative ways to break up challenges and obstacles that lie ahead.Build an open and questioning culture. The painted picture chop-chop fades away from view, so great leaders should take time to meet staff and illustrate the goals to be achieved and the challenges to overcome. Leaders inspire the staff to become entrepreneurs call uping innovative routes to success and unceasingly remind them how their role is determining(prenominal) in fulfilling the vision and meeting the challenges.Empowering. The purpose of empowering your people is to turn them into entrepreneurs tone for new opportunities. By empowering, leaders enable them to develop the skills for the task and achieve the change through their own efforts to come up with radical innovations. People need freedom to succeed and need to understand and agree on what management expects of them. People and management must agree on the mount of freedom and responsibility. Empowering means thinking your people, supporting and believing that they will achieve great things.Set goals, deadlines and m easurements for innovation. Change is uncomfortable, resulting in anxiously people fearing an bunglesome or costly failure. Leaders should spend time with people supporting(a) them to undertake risks and come out from their safetyty zones. Leaders should reassure them that risks are necessary and worth taking and no one will be punished if their initiatives do not succeed.Use creativity techniques to generate a large number of ideas. Innovative leaders should build a culture where everyone can come up with creative solutions and crazy ideas through techniques, methods, and workshops. The goal is to change the people within the organization from people who do snatch jobs into highly energized entrepreneurs who constantly search for new and better ways of making the vision a reality. People need to be trained to learn the skills and to develop the confidence to try new methods, and use creative techniques to come up with new solutions.Review, filter and select ideas. In the innov ation process many ideas are generated in response to a given issue or challenge. At the end, the most promise idea is selected.Prototype the declare proposals. After the idea is selected, then the move is to rapidly prototype it. conk out the results and the successful projects. New product is tested for its feasibility, beautifulness and payback. Those that pass these criteria are given more funding.King (2009) suggests that the most effective, efficient and leading edge organizations are those that innovate and encourage innovation. Innovative organizations require a strong leadership team to approve the importance of innovation and create a culture for it. A development of strong capabilities for innovation leadership need to be started early in the career development process. In an innovative culture, the staff is given freedom to innovate and experiment. In an innovative culture, risks are managed and the organization understands and accepts that future success is built on a series of culture from unsuccessful attempts. Collaboration with outside parties to generate and get into innovations is encouraged. achiever will depend on strong leadership. We can take schooling from market leaders to help us identify key leadership behaviors to promote innovation as explained belowLead continuous innovation and improvement. Develop and communicate an encouraging story.Encourage partnerships and collaboration. Staff should be undefendable to new viewpoints and ideas that can be adapted in the organization. To do this, the organization should create partnerships and collaboration with different parts within or outside the organization.Promote innovation. Organization should consider innovation as a sum part of its role, and time is allocated for its employees to innovate. Different organizations have created bespokeInnovation for Competitive prefer in International MarketInnovation for Competitive Advantage in International MarketINTRODUCTIONOrganization s must run immediate to keep up with changes taking place all around them. They must modify themselves all the time. Change, rather than stability, is the norm today. Every business is affected by a number of powerful environmental forces such as technological advances, environmental changes, evolving society and customer desires, and maturation of market, which drive the need to change in todays globalized economy. All of these enviromental forces have created opportunities and threats. Every organization strives to take advantage of opportunities and manage the threats which have arisen during the change process (Daft, 2001).Organizations, to be considered innovative, need to implement technologically new products and processes, or need to make significant technological improvements in existing products and processes. Organizations generate and apply the appropriate knowledge required for producing something new and improving the existing product or process, merely known as know ledge creation (Atmaca, 2006). The rate of innovation and technical change is important to an economys rate of growth. Differences in knowledge creation, diffusion, and use have implications for international competiveness, standards of living, and quality of life (Feldman and Massard, 2002).To remain competitive, established firms must continually seek out opportunities for growth and new methods for strategically renewing their performance. Changes in customer needs, new technologies, and shifts in the competitive landscape require that companies continually innovate and initiate corporate ventures in order to compete effectively (Dess, Lumpkin and Eisner, 2008).The discussion begins with defining the innovation concept focusing on different literatures from professional writers. Innovations can take many forms, including radical breakthrough innovations as well as incremantal innovative improvements, and todays researchers are strongly emphasizing that innovation is one of the mo st valuable differentiator for sustainable competitive advantage. The concept of innovation is compared to the concept of invention and creativity as they are disordered and interchangeably used. Later, the discussion concentrates on the importance of innovation in identifying opportunities and threats coming with change which are followed by suggestions how to become successful innovators to overcome these threats.The discussion continues by identifying the four types of changes an organization undergoes to achieve advantage in the international environment. These changes can be used to update the products or the services, the technology, the existing strategy and structure, and culture in the organization. Then, focus will be on how organizations can build innovation by applying key elements that create a truly innovative and entrepreneurial one. The next chapter identifies some successful global innovators that have delivered novel benefits to their customers.This thesis reviews the innovation concept and the forms it takes to achieve competitive edge in the market. It identifies the benefits driving from innovation, explains why people and organizations resist change and identifies the appropriate steps to overcome barriers resisting it. It explains the role management has during innovation and the key elements to create an innovative organization. It concludes by explaining why healthcare sector is different and identifies the best practiced innovations in healthcare sector.The later chapter concentrates on how innovation evolves in the service sector. The biggest industries for RD spending for 2009 are identified. The important features of services sector the concept of service innovation and its four dimensions are compared to the service product concept. To conclude, some suggestions how management in service companies can achieve effective innovation are given.The last chapter concentrates on the healthcare sector. It focuses on the main and best pra ctised innovations in the healthare sector, as healthcare is a part of the service sector. The reasons that make the healthcare sector different from others are underlined. Big structure, hard size, and different government policies are some of the reasons. To sum up, best practised processes and services which are applied by present healthcare service providers are identified.CHAPTER ILITERATURE REVIEW IN INNOVATION1.1 delineate InnovationAccording to King (2009) innovation is doing things in new ways in order to achieve significant results and make a huge difference in performance compared to others. Innovations goal is to have a positive change, to make someone or something better. Testing and evaluation of ideas is critical in achieving this goal. The ideas that do not work are identified through testing. mishap is an integral part of the innovation process. Failing means collecting data and evidence about the changes that organizations want to undergo. This view is supported by Mulgan and Albury (2003) who define innovation as new ideas that work and a successful innovation can be achieved through the creation and implementation of new processes, products, services and methods of delivery which will result in significant improvements in the favourableness and enhance the growth of an enterprise.Innovation is a special case of plotted change and learning that either transforms current products, services, and markets, or creates an entirely new market by introducing a radically new product or service. An organization is considered innovative if it stirs up the marketplace, by creating competitive pressures and new opportunities. It has been acknowledge that innovation success in an established organization requires balancing the stabilised efficiency of the current market offerings and building new capabilities to create and develop offerings for unknown markets (Bloisi, Cook and Hunsaker, 2003).The changes used to adapt the environment can be evaluated according to the scope and to the extent to which changes are incremental or radical for the organization. Incremental changes maintain the general equilibrium of the organization through a series of continual progressions and affect only one part in organization. On the contrast, radical changes, transform the entire organization. Incremental changes include technology improvements, such as the introduction of computer-integrated manufacturing or product improvements in the established structure and management processes. In radical changes, the technology is likely to be breakthrough, and new products created will establish new markets (Daft, 2001).Importance of innovation seems to be the most talked management issue these days. Knowledge plays a crucial role in the economic processes because within the knowledge-based economy, innovation plays a central role and stands at the heart of economic change. Firms innovate to defend their competitive position as well as to achieve compe titive advantage. Organizations possessing more knowledge outperform those with less. It was believed that an enterprise can maintain competitive advantage through quality and price. While todays different researches have revealed that innovation is one of the most valuable differentiator for sustainable competitive advantage (Tyagi, 2008).1.1.1 InventionTyagi (2008) has made a distinction between invention and innovation. Invention is discovering of things never existed before while innovation is discovering how to introduce and commercialize new products, processes and new ways of adding customer value through innovative business models and management systems. This point of view is supported by King (2009) who defines invention as the extension of new ideas which have the potential to make someone or something better. New ideas can drawn from scanning other industries, by having conversations and meetings, or accessing information which is not usual in your business. All innovati ons starting point is invention of creative ideas. The distinction between them is invention is having an idea about a service, product, technology or device, while innovation is the successfull application of those ideas.Another author who has discussed about the difference existing among invention and creativity is Sloane (2010). Invention is the creation of a product, device or method that has never been made and existed before. So, every invention is an innovation. But every innovation is not an invention. When a company first publishes its website this is a major innovation for the company even though many other websites may already exist.1.1.2 CreativityCreativity is defined as the process of thinking and generating new things, new concepts, and new ideas. Converting these thoughts into touchable things, bringing these ideas to life is innovation. Creativity is like dreaming up new things and innovation is making those dreams come true. Expressed in other words, creativity is the capability of conceiving something unusual or original while innovation is the implementation of those unusual or original things (Difference Between, n.d.).1.2 Benefits and Barriers of InnovationIn the last years change has occured incrementally and infrequently. A globalized economy is creating both opportunities and hazards to everyone. Firms are forced to make dramatic improvements not only to compete and prosper but also to survive. People who have been through difficult, and not successful change efforts end up drawing pesimistic and angry conclusions. They become suspicious of the motives of those pushing for transformation (Kotter, 1996).This section will focus on the discussion of benefits and barriers that come with innovation. The advantages supporting a strong leadership and the factors causing resistance toward change will be identified. In addition, this section will also explain some methods that managers can use to implement change successfully within the organ ization.1.2.1 Benefits of InnovationBhatt (2007) states the reasons that make companies innovate, those are listed belowTo advance in technology.To change the environment.The evolving of the society.The evolving of the customer desires.Competitors improve their products and services.Customers stop buying your old products so you need to stand in them and add new products.Innovation opportunities can arise due to environmental changes in technology, science, and data analysis. Environmental changes may result in creation of new customer needs or may enable the organization to develop better solutions to current customer needs. Service or product innovations have to fulfill four benefit aspects listed belowUnique. The target group should perceive the new benefits generated from the new service or product as unique.Important. The customers should perceive the new benefits as important.Sustainable. The new benefits should be protected against pursual by measures such as patents, time to market and brand management.Marketable. The organization should have the resources, capabilities and competencies to market the product which also includes an effective and ready to market version of the product (Anon., 2008).Stark (n.d.) has identified the benefits of good innovation, those are listed belowFirst to market.Premium prices.Best customers.Large market share.Increased shareholder return.Increased employee motivation and morale.1.2.2 Barriers to InnovationBeer and Nohria (2000) state that one research team concluded that The brutal fact is that about 70 per cent of all change initiatives fail. These researchers conclude that there are two primary reasons why organizations undergo change one is based on hard economic value (e.g. financial return to shareholders) the other is based soft organizational capabilities. The organizational approach develops corporate culture, human capabilities, feedback, measurements and reflections on evolutionary progress. twain people and organizations frequently resist change, even if it is in their best interests, especially in large and established organizations. Bloisi, Cook and Hunsaker (2003) suggest five main reasons why individuals resist changeSelective perception. People sometimes perceive the same thing differently. When changes are initiated, individuals tend to focus on how they will be personally affected rather than seeing the big picture for the entire organization.Lack of information.People will resist change if they are not informed about what is expected from them or what benefits change will bring. If the reasons for change are not clearly presented, people tend to fill in the missing pieces with speculation, which often assumes the worst in terms of initiator intentions and personal impact. In addition, if people do not have enough information about how to change, they may fear making mistakes, so they will not try.Fear of the unknown. Individuals resist change when they are uncertain about how it will affect their well-being. They fear downsizing, uncertainties about not knowing how to change, not being able to perform as well as before the change, losing position, income, and lieu or power.Habit. Many people prefer familiar actions and events, even if they are not optimal. Breaking a habit is difficult because it takes hard work and involves giving up perceived benefits from the habit, even if the new behavior has more desirable consequences.Resentment toward the initiator.If a change seems arbitrary or unreasonable, impertinence and anger are directed towards those initiating the change. People resent being controlled and losing shore leave over their works and lives, when their thoughts and feelings are not considered by change initiators. Finally, without trust in the initiators inventions, people may resist the change out of tartness or fear of possible unknown consequences.Bloisi, Cook and Hunsaker (2003) state that organizations resist change for many of the sa me reasons individuals do. There are also many forces inside an organization that create resistance to changes initiated by environmental conditions. Some of the main ones are summarized belowPower Maintenance. Changes in decision-making authority and control of resource allocations threaten the balance of power in organizations. Units benefiting from the change will welcome it, but those losing power will resist it.Structural stability. Organizations create hierarchies, subgroups, rules and procedures to promote order, consistent and predicable behaviors. People who fit these desired behavioral criteria are hired and shaped to confirm further through the socialization process and organizational conditioning.Functional sub-optimization.Differences in functional orientation, goals and resource dependencies can cause changes that are seen as beneficial to one functional unit and as threatening to another. Functional units usually think of themselves first when evaluating potential cha nges and support those that enhance their own welfare, but resist the one that reduce it.Organizational culture. Organizational culture promotes predicable ways of thinking and behaving. Organizational members will resist changes that force them to abandon established assumptions and approved ways of doing things.Group norms. Groups develop their own norms to promote desirable behaviors. Many members conform these norms. Consequently, any change that disrupts group norms, tasks or role relationships will probably be resisted.Strategos conducted a survey of innovation practices of more than 550 large companies, where majority of respondents in every industry rated innovation as critical and said that the importance of innovation would grow in the future. According to Loewe and Dominiquini (2006) the top six obstacles to innovation identified by respondents across industries areShort-term focus.Lack of time, resources or staff.Leadership expects payoff sooner than is realistic.Managem ent incentives do not reward innovation.Lack of a systematic innovation process.Belief that innovation is inherently risky. to a lower place is a list of suggestions how to become successful innovators about overcoming the barriers to innovationHave a vision for change. Innovation has to have a purpose, a debate which defines the direction for the business and which people will readily understand and remember. Your team needs to know the direction they are headed in order to be innovative. Illustrate the goals and explain to people how their role is decisive in meeting the goals to fulfill the organizational vision.Fight the fear of change. Innovative leaders constantly explain the need for change. They must paint a picture that shows an attractive future that is worth taking risks to achieve.Have a dynamic suggestions scheme. big suggestion schemes are focused and open to all. Leaders do not need to offer huge rewards. Sometimes, recognition and response are in the main more imp ortant.Break the rules. To achieve radical innovation leaders need to challenge all the assumptions related to how things should look in your environment. Business is like Art, with no well-defined rules and referees. Innovation is filled with opportunities for people who can take advantage in creating new ways to provide the goods and services that customers want. go everyone two jobs. Ask your people to run their current jobs in the most effective way possible and at the same time to find completely new ways to do the job. Encourage them to identify the purpose of their role, the outcomes delivered through this role and if there is a better way to deliver that purpose.Collaborate. CEOs must see collaboration as key to their success during innovation. achiever can not only be achieved by using innate resources, but also by tone outside of the organization for people to partner with.Welcome failure. The innovative leader encourages a culture where people feel free to innovate and experiment. Innovative leaders tell people that each unsuccessful attempt is a step along the avenue to success. When innovative leaders welcome innovation and create a culture of experimentation, means that they except failure and welcome it.Build prototypes. Innovative leaders are suggested to try the new ideas at low cost by building prototypes and see what the customer reaction is. You will learn more in the real world than you will in the test laboratories.Be passionate. Leaders must concentrate on the things they want to change, on the challenges they want to face and be passionate about overcoming them. Organizations need passionate supporters, who are inspired to innovate and change the way they do things to come up with extraordinary results. Be passionate about what you believe, communicate that passion every time you speak and explain why reaching the destination is really worthwhile (ArticleSnatch, n.d.).1.3 Types of InnovationThere exist four types of changes to achie ve strategic edge within an organization. Managers can use these four types of changes to achieve competitive advantage in the international environment. Each company can have maximum impact upon the chosen market through its own unique configuration of technology, product and services, strategy and structure, and culture as explained below (Daft, 2001).1.3.1 Technological InnovationTechnological innovations refer to changes in an organizations production process to enable distinctive competence. Changes in an organizations production process, including its knowledge and skills base, are designed to experience greater in volume or to have a more efficient production. Changes in technology involve the work methods, equipment, and work period techniques for making products or services. For example, in a university, technology changes are about changes in methods for teaching the courses. Tyagi (2008) suggests that traditionally innovation has been associated with the use of technolo gical knowledge, and research and development activities. A technological innovation is any innovation due to an industrial application of scientific knowledge.Dess, Lumpkin and Eisner (2008) suggest that innovation involves the usage of new knowledge to transform organizational processes or create commercially viable products and services. The latest technology, results of experiments, creative insights, or competitive information may be the sources of new knowledge. However it comes about, innovation occurs when new combinations of ideas and information bring about positive change. Among the most important sources of new ideas is new technology. Technology creates new possibilities and provides the raw material that firms use to make innovative new products and services. But technology is not the only source of innovation. There can be innovations in human resources, firm infrastructure, marketing, service, or in many other value-adding areas that have little to do with anything h igh-tech.1.3.2 Product and Service InnovationProduct and service innovations refer to the product or service outputs of an organization. New products may be in the form of entirely new product lines or small adaptions of existing products. New products are designed to develop new markets, or customers, or to increase the market share. Tyagi (2008) states that product innovation is about the introduction of new goods and services which have improvements in terms of design excellence, core characteristics, technical specifications etc. and are derived from customer or industry insight, or strategic alignment of the organization.Godin (2005) suggests that the old rule was to create safe and ordinary products that were combined with great marketing. The new rule is to create remarkable products and figure out a great theory by looking at whats working in the real world and what the various successes have in common. Identify what the successful companies have in common and do something t o be remarkable.Roberts (2002) has made a distinction when discussing if innovation is between product/service innovation and process innovation. Product/Service innovation refers to efforts to develop new products or services for end users. Product/Service innovations tend to be more radical and are more common during the front stages of an industrys life cycle. As an industry matures, there are fewer opportunities for newness, so the innovations tend to be more incremental. Process innovation, by contrast, is associated with improving the efficiency of an organizational process, especially manufacturing systems and operations. Process innovations occur in the later stages of an industrys life cycle as companies seek ways to remain viable in markets where demand has flattened out and competition is more intensive. As a result, process innovations are often associated with overall cost leader strategies because the aim of many process improvements is to lower the cost of operations .There are some(prenominal) problems with seeking competitive advantage through investments in process technology. Firstly, the people who sell you robots or point-of-sale terminals, software to analyze production or service delivery will sell the robots, terminals, and software to your competitors. Your ability to start the benefits of this technology depends on your ability to implement it more rapidly and more effectively. Secondly, investment in specialized technology is not a counterchange for skill in managing the work force. This is because more skills may be required to operate the more sophisticated and advanced equipments. Having a higher level of investment per employee will result in increasingly expensive interruptions in the process which means that the ability to operate, maintain, and repair equipment effectively becomes even more critical (Pfeffer, 1996).1.3.3 Strategy and Structural InnovationStrategy and structural innovation refers to the administrative sectio n in an organization. It is related to the management and supervision in the organization, including changes in an organizations strategic management and structure, policies, accounting and budgeting systems, reward systems, labor relations, coordination devices, management information and control systems. Strategy and structure changes in an organization are mandated by top management. They usually have a top-down structure. An example may be if the corporate goes downsizing. On the other hand, product and technology changes may come from the bottom up.1.3.4 Cultural InnovationCultural innovation refers to changes that may occur in an employees attitudes, beliefs, values, expectations, abilities, and behavior. Culture innovation tends to change the way employees think. These are changes in mindset rather than the technology, structure, or products and services.Culture can be a powerful force undermining or shoring up the effectiveness of a nation, a business, and a manager. Recogni zing the presence and power of culture will help in better navigating through the rough seas of international business. Discovering how to harness the power of culture in an organization will help the organization gain competitive advantage (Schneider and Barsoux, 2003).To conclude, it can be said that successful innovation in an organization occurs when technological and product or process innovations in the value chain are implemented through effective strategy and structure innovation. Innovation in an organization, which includes people, leadership, creativity, process and organizational culture, is the driver to grow, to achieve high profits and to succeed in the market. Innovation in an organization should be approached in a systematic way and not a piecemeal manner and should be initiated even at the lowest levels (Tyagi, 2008).1.4 Leadership in Practice of InnovationMany organizations are resistant to changes and continue operating the way they had been operating in the past . To remain competitive, they work harder, improve efficiency, reduce cost and implement best practices. But, this is not enough. Instead of getting stuck in their standard mode of operations, organizations need to adopt innovative ways to change the strategies. The best way to create a competitive edge and be in the head of the competition is to innovate by drawing advantage from the creative power of your people. Turn your superlative assets into opportunistic entrepreneurs who discover new ways and improve the way they do business. Management innovation involves total transformation of existing culture to enhance organizational performance in an integrated manner involving technological innovation, product and service innovation, and strategy and structural innovation (Tyagi, 2008).Sloane (2003) suggests that every organization needs to have a vision, a culture and a process of innovation to build a truly innovative environment. There are eight key elements that create a truly i nnovative and entrepreneurial organization as belowPainting the vision. The first step is to paint a desirable, challenging and believable vision. Innovative leaders must be sure that people share a common goal and embarke on a journey all together. Being all together means they accept easier the changes, all the challenges and difficulties that show up during the journey. Innovative leaders should delegate more responsibility, and empower the staff with control over their work. Once staff is witting of the goal and direction headed, they contribute the best creative ways to sack challenges and obstacles that lie ahead.Build an open and questioning culture. The painted picture readily fades away from view, so great leaders should take time to meet staff and illustrate the goals to be achieved and the challenges to overcome. Leaders inspire the staff to become entrepreneurs finding innovative routes to success and constantly remind them how their role is decisive in fulfilling the vision and meeting the challenges.Empowering. The purpose of empowering your people is to turn them into entrepreneurs looking for new opportunities. By empowering, leaders enable them to develop the skills for the task and achieve the change through their own efforts to come up with radical innovations. People need freedom to succeed and need to understand and agree on what management expects of them. People and management must agree on the scope of freedom and responsibility. Empowering means trusting your people, supporting and believing that they will achieve great things.Set goals, deadlines and measurements for innovation. Change is uncomfortable, resulting in anxiously people fearing an gummy or costly failure. Leaders should spend time with people encouraging them to undertake risks and come out from their safety zones. Leaders should reassure them that risks are necessary and worth taking and no one will be punished if their initiatives do not succeed.Use creativity techn iques to generate a large number of ideas. Innovative leaders should build a culture where everyone can come up with creative solutions and crazy ideas through techniques, methods, and workshops. The goal is to change the people within the organization from people who do system jobs into highly energized entrepreneurs who constantly search for new and better ways of making the vision a reality. People need to be trained to learn the skills and to develop the confidence to try new methods, and use creative techniques to come up with new solutions.Review, filter and select ideas. In the innovation process many ideas are generated in response to a given issue or challenge. At the end, the most promising idea is selected.Prototype the promising proposals. After the idea is selected, then the move is to rapidly prototype it. meditate the results and the successful projects. New product is tested for its feasibility, attractiveness and payback. Those that pass these criteria are given mo re funding.King (2009) suggests that the most effective, efficient and leading edge organizations are those that innovate and encourage innovation. Innovative organizations require a strong leadership team to approve the importance of innovation and create a culture for it. A development of strong capabilities for innovation leadership need to be started early in the career development process. In an innovative culture, the staff is given freedom to innovate and experiment. In an innovative culture, risks are managed and the organization understands and accepts that future success is built on a series of learning from unsuccessful attempts. Collaboration with outside parties to generate and adopt innovations is encouraged. triumph will depend on strong leadership. We can take learning from market leaders to help us identify key leadership behaviors to promote innovation as explained belowLead continuous innovation and improvement. Develop and communicate an encouraging story.Encour age partnerships and collaboration. Staff should be overt to new viewpoints and ideas that can be adapted in the organization. To do this, the organization should create partnerships and collaboration with different parts within or outside the organization.Promote innovation. Organization should consider innovation as a core part of its role, and time is allocated for its employees to innovate. Different organizations have created bespoke