Innovation and Entrepreneurship - Literature review Example

Innovation and Entrepreneurship Name Institution Innovation and Entrepreneurship Introduction The last three decades have seen a continuous complex, unpredictable and dynamic businesses business (O’Regan, Ghobadian & Sims 2006, p.251). Stiff competition within international market is prompting companies leverage their competencies and capabilities, make themselves unique, and enhance their competitive advantage and their performance. Ndubisi and Iftikhar (2012, p.214) claimed that today, most organizations now use innovation and entrepreneurship to sustain competitive edge and to leverage the capability of the firm. Maritz and Donovan (2015, p.74) stated that on individual perspective, the increase of unemployment in the world market and the inspiration of becoming own boss have seen many people turn to innovation and entrepreneurship as they seek to create themselves wealth. The happenings have led to numerous researches in the field of innovation and entrepreneurship in the recent years as many entrepreneurs seek to right approaches and strategies to success (Lehner & Kansikas 2012, p.30). Therefore, this essay will review various literatures to explain innovation and entrepreneurship. In addition, this easy will chose one change diagnosis and one change intervention and explain how they can be applied to manage organizational change sustainable from innovation and entrepreneurship. Literature review Shane (2012, p.12) and Lewrick et al. (2010, p.3) contended that entrepreneurship is associated with discovery, analysis and taking advantage of the opportunities in the environment and creating something like a business start-up or products out it. In standard terms, innovation is defined as a new idea, concept or a process lie a new product. On the other hand, Crossan and Apaydin, (2010, p.1157) and Lewrick et al. (2010, p.4) argued that innovation implies to development, embracing and using of the value-added actions in social and economic areas. Innovation can be a process or an outcome. Meaning a new idea or concept can also be called an innovation. Innovation is a major factor for growth and competitiveness. Maritz and Donovan (2015, p.79) posited that the necessity to understand innovation and entrepreneurship has gained momentum in the recent years leading to several frameworks of innovation and entrepreneurship being discussed in various literatures. While several scholars and researchers have discussed innovation and entrepreneurship and contributed to theory development, there has been confusion as some use the term alternatively (Crumpton 2012, p.100). On the other hand, some scholars tried to dedifferentiate the terms and show their relationship. Numerous authors and scholars have discussed entrepreneurship as a fundamental action underpinning the innovation that also echoes with Schumpeter’s opinion on entrepreneurship as the key medium for the innovation (Maritz and Donovan 2015, p.78). However, these viewpoints are concerned nearly absolutely with the entrepreneurial acts as a mechanism for radical change. Even though, this is an overlap in definition of the two factors, differences can be noticed. Innovation can take place but outside the entrepreneurship sphere. McFadzean, O'Loughlin and Shaw (2005, p.355) argued that while entrepreneurship is concerned with creating a product and using it to create a business startups innovation is only concerned with creating a product. Innovation and entrepreneurship can be at individual level or company level. At individual level mean a person has identified an opportunity and use the new concept to exploit it (McFadzean, O'Loughlin & Shaw 2005, p.357). At company level means an innovative and entrepreneurial company. Here is where the management identifies an opportunity and directs the employees to pursue it. However, with high competition in the market places, people and company are now recommended to have both innovation and entrepreneurship skills (Lewrick, et al., 2010, p.7). The argument is based on the fact that innovativeness of the company enables it to create new product while entrepreneurial nature of the company enable the management to identify opportunities in the market. As such the company can identify opportunities in the market and develop the existing or new production to exploit such opportunities. According to Munshi (2010, p.161) Innovation and entrepreneurship are not just factors for competitive advantage but of growth. The company identifies a market and expands its operation into a new market. China and the US are some of the countries which have developed as a result of innovation and entrepreneurship. In the US for instance, entrepreneurship and innovation influence started much earlier, and in mid 1980s the country had already employed up to 12 million more individuals as opposed to what was projected (Munshi 2010, p.163). At the time, American vibrant economy pointed toward a mainly entrepreneurially stimulated and innovative business society. The country had several young people who became risk takers and were keen to bear the cruelly long hours needed by the entrepreneurial opportunities, particularly due to prospective success they such activities were offering. According to Lehner and Kansikas (2012, p.32) Information technology industry revolution has taken place due to innovation and entrepreneurship aspirations. The late Steve Jobs can be described as an innovator and entrepreneur due to the fact that he created iPhone and founded Apple Inc. The sentiment can be attributed to Bill Gates who also created and developed Microsoft products and created a technology giant Microsoft corporation. All these were created to bring change. In other words Innovation and entrepreneurship can also be said to be process for change. Normally innovation and entrepreneurship is aimed at creating value to customers and such activity and the activity of such is typified by innovation or pattern-breaking change (Phillips et al. 2015, p.430). For instance, in the Philippines slums some entrepreneurs have made solar skylights from the plastic bottle which they then fill with bleach and water. This product provides novel light to locals and is equal to the 55W bulb and reduces bills of electricity by roughly US$12 a month (Berthon et al. 2012, p.263). Therefore, Lehner and Kansikas (2012, p.30) argued that entrepreneurs are regarded as change agents who use innovation at a logical level so as to create change with the social equilibrium. Change diagnosis There are various ways to diagnose change at which have been identified by scholars. However, this essay settled for McKinsey 7S model. McDonald (2014) claimed that McKinsey 7S model is most used organizational diagnoses tool which analyzes and monitors changes within the internal environment of a company. This model is majorly divided into two either as hard or soft elements. McDonald (2014) contended that hard components are often easier to identify or define and organizational management influences them. Hard elements include strategy statements, reporting lines, organization charts, IT systems and formal processes (Hayes 2014, p.35). In other words, change can be diagnosed through these elements. Strategy elements are one of the ways the company diagnose change. According to Bielinska-Kwapisz (2014, p.407) the strategy means plans or approaches the company uses build and maintain competitive edge over competitors. Therefore, in diagnosing change the company can compare its strategy and those of competitors to see the strength of strength and if any change is required. Innovation and entrepreneurship can be applied particularly on strategy dealing with product and expansion. If the company has weak low product sales, they can diagnose the problem let say product features, pricing or place. Brem (2011, p.8) pointed out that entrepreneurial skills enable the manager to identify an opportunity in the market and carry out product innovation to improve sales. Structure as an element of diagnosing change means how a company’s organization structure is arranged in terms of hierarchy, coordination and integration mechanisms and division of tasks (Hayes 2014, p.39). Every structure has its shortcoming while others have more problems and does not encourage change. For instance, divisional organizational structure has several managerial levels thus complicated process of decision making and flow of communication. It means a product development (innovation) exercise can take a long time due to long decision making process. However, innovation of the structure to for instance flat organization eliminates the middle level manager hence reducing decision process duration. In addition, the system such as resource allocation and rewards can be used to diagnose change (Hayes 2014, p.38). One company can compare its system with that of the market to determine its strength. Lehner and Kansikas (2012, p.41) argued that how the company rewards or allocate resource determine its level of innovation and entrepreneurship. Skills can also be used to gauge the company’s change level. In the current settings, staffs are encouraged to have innovation and entrepreneurship skills so as to improve products or services to create value to customers. The Innovation and entrepreneurship skills can be impacted through training (Maritz & Donovan 2015, p.75). Change intervention Several change interventions have been discovered over the years. However, one which compliments innovation and entrepreneurship is training. Inadequate training is considered one of the reasons why people do not attain their goals (Weiner 2009, p.49). More training is therefore one of the means of taking the corrective or intervention plan. Change diagnosis provide the organization with the problem while change intervention help in solving the problem. The change in the business environment time and again means the style of operations and strategies must be changed overtime by the organization to enhance its competitive edge. For constant change, the organization must instill innovation and entrepreneurial skills and culture. Training is an effective intervention approach which can foster innovation and entrepreneurial skills and culture (Maritz & Donovan, J 2015, p.77). This approach ensures that company is always ready to change with changes in the market. The current training on innovation and entrepreneurial often taken after market research to ensure it is linked to market trends. Conducting market enable the company to understand the type of product and service which are trending in the market. The management trained on innovation and entrepreneurial skills will therefore identify the opportunities in the market to exploit (Crumpton 2012, p.99). With innovation skills and culture, the company can then develop new and unique products which satisfy market needs. Everyone in the organization always needs refresher training to be updated on the business environment trends. Weiner (2009, p.50) stated that feedback after training is important for change process because it shows the company capability in terms of resources and readiness for change. Conclusion In the current competitive environment, companies are challenged to inculcate innovation and entrepreneurship culture to have a competitive advantage. These two concepts are found to complement each other. While entrepreneurship spot the opportunity and exploit it, innovation enable the company create new products and ideas which can help in providing uniqueness in its operations. The essay has found out that there is a correlation between innovation and entrepreneurship and organization change. Innovation and entrepreneurship enable the company to create new product and bring to the market to satisfy the ever changing needs. As such, it enables a company to attract more customers than the competitors. 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