Importance Of Innovation In Business

2025 Words9 Pages
In today’s fast changing business world, many organizations are paying more attention to innovation .
Innovation is recognized as a key driver of economic growth ,it has become the mainstay of today’s business, and its considered an integral function of organizations (Plessis, 2007) Key factors behind the rapid pace of innovation e.g. : Rapidly evolving technology, shorter product life cycle ,changing in customer requirement and competitive pressure(Kashif, Siddiqui, Nawaz, Ghauri, & Hayat Cheema, 2011) . Organizations Have to ensure that their ideas are innovative to achieve sustainable competitive advantage ,they need to come up with unique ideas (Plessis, 2007) . In Clifton 's words, " Better doesn 't work anymore. Different
…show more content…
The Organization for Economic Co-operation and Development (OECD) defines organizational innovation as : ” the implementation of a new organizational method in the firm’s business practices, workplace organization or external relations”. This involves new approaches for distributing responsibilities among employees, new concepts for the structuring of activities ,and new methods for decision making. (OECD, 2005)
2.2.1 Importance of Innovation
Several studies discuss the importance of organizational innovation on business performance (Armbruster et al., 2008; Honarpour et al., 2012; Laforet, 2011) these studies indicate different results ,organizational innovation considered a primary source of competitive advantage because of their impact on business performance with regard to productivity, operational efficiency ,lead times, better business financial performance, cost benefits, quality , and flexibility.
Kashif et al.( 2011) claim that innovation is a soul to the organization, through innovation organizations produce distinctive and unique products and services, innovation considered a strongest weapon to compete in market, Organizations which are not capable to produce innovative products could be wiped out from industry by other
…show more content…
This type of innovation is so popular because it is less risky for the business compared to radical innovation. Incremental innovation is important for the organization because it helps the organization to increase their market share to be remaining in industry for a long time. On the contrary, firms that innovate radically tend to make unique or significant improvement in existing product or service which improve the cost and performance ,radical innovated products are difficult to commercialize ,therefore it is high risky than incremental innovation. But on the other hand, radical innovation is important for the business because it involves acquiring and applying of new
Open Document