The Importance Of Organizational Innovation

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Innovation is a powerful source of growth and an important element of competitive advantage for many organizations. To adopt innovation, it requires the organized effort of different people and integration of different knowledge areas, specialized functions and contexts of application. Therefore, a suitable structure for the organization is a fundamental element for the process of innovation. (Van de Ven et al 1999). The capacity of an organization to absorb innovation is prerequisite for the successful adaptation of new technologies and inventive resources. On the contrary, new technology often produces complex opportunities and exhibit several challenges for the organizations that leads to the adjustment in managerial practices and sometimes…show more content…
Due to lack of understanding and clarity among the managers dealing with the change regarding the plans and strategies for ascertaining the capability of organization, few theories deals with normalization and stability recommended some techniques and rules to enhance capability of organizational innovation. Although having broader theories on advance management, still no literature has presented the concrete theory (Wolfe, 1994). Several theoretical models to analysis organizational innovation have been proposed such as; market orientation, resource based view, cognitive theories, socio-technological approaches, transaction cost economies and institutional model but due to diversity in approaches each model added new puzzle in adapting innovation. No model completely propose the highlighted factors that needs to be focused properly while managing innovation. In industrial context, some theories focused on specific firms and others in general emphasize on management complications and structures of organizations. Two major theories related with innovation management are dynamic capability approach and resource based view (RBV). Teeceand Pisano (1994: 541) defines the dynamic capability theory as “subset of the competences/capabilities which allow the firm to create new products and processes and respond to…show more content…
Freeman and Hannan 1984; 1977) individual organizations sometimes get success to make radical changes in structures and strategy to deal with the environmental disturbance by having strong organizational inertia. Such organizations have tendency to go with the environment due to established structures and fixed range of vastly regenerative routines. These routines not only make organizations stable and reliable but also provide ability to adjust according to the change. This results in relatively slow response of organization towards threat from the environment. Organizational ecology theories formulate that within an industry changes in the organizational structures principally should occur, otherwise old organizations that fail to have proper structure will be replaced by the new
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