The paper "Innovation in Entrepreneurial Organizations" is an outstanding example of management coursework. There are two common approaches used by firms to boost profitability and create a sustainable competitive advantage. These are embracement of cost reduction measures and differentiation through innovation. During the economic recession, the first approach tends to disappear in three years. Therefore, innovation supersedes as the main source of an overall sustainable competitive advantage. According to Jarrar & Smith (2014), innovation mediates the relationship between entrepreneurial strategy and the balance-score card, just in time, organizational performance, total quality management as well as activity-based costing.
Innovative firms create heightened value to their shareholders within the long-term. Lack of innovation leads to imitation of the firm’ s value proposition which results in competitive price for products and services. Innovation is assumed as a prerequisite of entry into the market. Perrini & Vurro (2006) argue that despite its value, a number of firms don’ t measure the immense benefits created by innovation. They lack internal structures to derive the magnitude of innovation. Innovation management is disregarded while the majority of firms fail to seize the support of the management and hence work in a vacuum.
In this respect, the balanced scorecard is proposed as a measure of innovation. This innovation scorecard does not only evaluate the entire value derived from innovative activities but also guarantee that such activities get aligned with the firm’ s strategy (Jarrar & Smith, 2014). Balance-score card is normally based on innovation metrics which is defined prior to the evaluation of the project with a view of obtaining the intended results. Thus, the scorecard does not only ascertain the supplementary value to a project but also acts as a management tool applicable to determine the specific projects to be implemented. The authors assert that TQM and innovation contain similar purpose pertaining to the firm’ s performance.
While used in innovative capacity, total quality management integrates the firm’ s objectives and functions with a view of satisfying the clients and realizing competitive advantage. A combination of the two lures organizational employees to be part of the management process as well as the business process. Moreover, they provide continuous improvement coupled with the sustainable development of the firm.
The continuous improvement, open culture, as well as client satisfaction, forms part of the core goals exhibited by TQM and innovation. This means that the relationship prevailing between innovation and TQM is a major determining factor of the firm’ s performance and development (Jarrar & Smith, 2014). Just in Time Technique is an innovative approach adopted by firms to purchase and produce as per the immediate needs of the market. The authors suggest that JIT can be used by firms that seek to gain a competitive advantage within the market.
JIT contains some major characteristics which include supplier cooperation, material quality, training, transportation, quantity purchased as well as employee relations (Jarrar & Smith, 2014). According to the article, JIT is directly related to the firm’ s performance. The major benefits derived from this innovation include increased inventory turnover, product quality as well as improved productivity, which in essence reduce the overall costs. The high product quality coupled with reduced overall cost results to lower prices which increase market share as well as profitability (Jarrar & Smith, 2014).