Flashcards
Innovation management
Cards in this deck (83)
- 1What is formalization?The degree to which the firm utilizes rules, procedures, and written documentation to structure the behaviour of individuals or groups within the organization.
- 2What is disaggregated?When something is separated into its (constituent) parts
- 3What is standardization?The degree to which activities are performed in a uniform manner.
- 4what is (de)centralization?Centralization is the degree to which decision-making authority is kept at top levels of management. Decentralization is the degree to which decision-making authority is pushed down to lower levels of the firm.
- 5What is a mechanistic structure?An organization structure characterized by a high degree of formalization and standardization, causing operations to be almost automatic or mechanical.
- 6What is an organic structure?An organization structure characterized by a low degree of formalization and standardization. Employees may not have well-defined job responsibilities and operations may be characterized by a high degree of variation.
- 7What is an ambidextrous organization?The ability of an organization to behave almost as two different kinds of companies at once. Different divisions of the firm may have different structures and control systems, enabling them to have different cultures and patterns of operations. A complex organizational form that is composed of multiple internally inconsistent architectures that can collectively achieve both short-term efficiency and long-term innovation, e.g., decentralized and unstandardized R&D department + centralized and standardized manufacturing/sales department.
- 8What are skunk works?A term that originated with a division of Lockheed Martin that was formed in June 1943 to quickly develop a jet fighter for united states army. It has evolved as skunk works to refer more generally to new product development teams that operate nearly autonomously from the parent organization, with considerable decentralization of authority and little bureaucracy.
- 9What is modularity?The degree to which a system’s components may be separated and recombined. This can increase the number of configurations from a given set of inputs (IKEA). Is achieved in product design through the specification of standard interfaces. Becomes more valuable when customers have heterogeneous demands.
- 10What is loosely coupled?Development and production activities are not tightly integrated but rather achieve coordination through their adherence to shared objectives and common standards. Development and production activities are not tightly integrated but rather achieve coordination through their adherence to shared objectives and common standards.
- 11What is technological inovation?The act of introducing a new device, method, or material for application to commercial or practical objectives.
- 12What are externalities?Costs (or benefits) that are borne (or reaped) by individuals other than those responsible for creating them. Thus if a business emits pollutants in a community, it imposes a negative externality on the community members; if a business builds a park in a community, it creates a positive externality.
- 13What is innovation?the practical implementation of an idea into a new device of process.
- 14What are sources of innovation?- Firms
The main producer of innovations because of their resources and management systems. They also face strong incentives to develop differentiating new products and services, which may give them an advantage over non-profit or government-funded entities.
- Individuals
- Universities
- Government-funded research
- Private non-profits
Most important is the linkage between these sources! - 15What is creativity?the ability to produce novel and useful work. Novel work must be different from work that has been previously produced and surprising in that it is nog simply the next logical step in a series of known solutions.
- 16What is a reinvention?a product that is novel to the person who made it, but known to most everyone else.
- 17What is individual creativity?An individual’s creative ability is a function of his/her intellectual abilities, knowledge, thinking style, personality, motivation and environment. Intrinsic motivation and knowledge are important.
- 18What is organizational creativity?Individual creativity, social processes & contextual factors. Like the idea box for employees.
- 19What are the personality traits of an inventor?- Mastered basic tools and operations of the field in which they invent, but they have not specialized solely in that field. They have pursued 2 or 3 fields simultaneously, permitting them to bring different perspectives to each;
- They are curious and more interested in problems than solutions;
- They question the assumptions made in previous work in the field;
- They often have the sense that all knowledge is unified. They seek global solutions rather than local solutions and are generalists by nature. - 20What is basic research?Research targeted at increasing scientific knowledge for its own sake. It may or may not have any long-term commercial application.
- 21What is applied research?Research targeted at increasing knowledge for a specific application or need.
- 22What is R&D?A range of activities that extend from early exploration of a domain to specific commercial implementations. A firm’s R&D intensity has a strong positive correlation with its sales growth rate, sales from new products and profitability.
- 23Demand pull model of R&D?Innovation is driven by the perceived demand of potential users. Research staff would develop new products in efforts to respond to customer problems or suggestions.
- 24Sources of information and ideas for R&D- In-house research and development (incl. basic research);
- Linkages to customers or other potential users of innovations;
- Linkages to an external network of firms that may include competitors, complementors, and suppliers;
- Linkages to other external sources of scientific and technical information, such as universities and government laboratories. - 25What is a technology/science push?• Scientific discovery --> invention --> manufacturing --> marketing
• Linear model emphasizes “supply side” - 26What is the need/demand pull?• Customer suggestions --> invention --> manufacturing
• Linear model emphasizes “demand side” - 27What are the supply determinants of innovation?• Technological opportunity state of the relevant scientific and technological knowledge
• Cost and availability of inputs knowledge workers, scientific personnel, equipment
• Appropriability ability to capture profit from innovation - 28What are demand determinants of innovation?• Cost reduction potential from innovation (process innovation; new sources of supply; organizational change)
- Consumer or producer benefit from novel product (product innovation)
- Consumer or producer benefit from improvements (incremental product innovation) - 29What are the risk of technology push?develop solution for which there is no problem
- 30What is the risk of demand pull?missing ability to invent technology to solve problem
- 31What is a collaboration?Alliances, participation in research consortia, licensing arrangements, contract research and development, joint ventures, and other arrangements. They can pool resources (like knowledge and capitol) and share risks. Most frequent: collaboration between firms and their customers, suppliers, and local universities.
- 32What are complementors?Producers of complementary goods or services.
- 33What is absorptive capacity?The ability of an organization to recognize, assimilate, and utilize new knowledge.
- 34What are external sources?- Licensing, Purchasing
- Externalities (technological, pecuniary) - 35What are combinations of external and internal sources (3)?- Strategic partnership
- Cross licensing
- (Networks for exchange, Joint venture, collective research associations, government-sponsored joint research programs, informal networks, …) - 36What are technology transfer offices?offices designed to facilitate the transfer of technology developed in a research environment to an environment where it can be commercially applied. Goal: increase the degree to which university research leads to commercial innovation.
- 37Science parksRegional districts, typically set up by government, to foster R&D collaboration between government, universities, and private firms.
- 38IncubatorsInstitutions designed to nurture the development of new businesses that might otherwise lack access to adequate funding or advice.
- 39Technology clusterRegional clusters of firms that have a connection to a common technology, and my engage in buyer, supplier, and complementor relationships, as well as research collaboration.
- 40complex knowledgeKnowledge that has many underlying components, or many interdependencies between those components, or both.
- 41Tacit knowledgeKnowledge that cannot be readily codified (documented in written form).
- 42Agglomeration economiesThe benefits firms reap by locating in close geographical proximity to each other
- 43Benefits of agglomeration economies (5)- Proximity facilitates knowledge exchange.
o A willingness to exchange through building trust via interaction
o Develop common ways to understand and articulate the knowledge
- Cluster of firms can attract other firms to area;
- Supplier and distributor markets grow to service the cluster;
- Cluster of firms may make local labour pool more valuable by giving them experience;
- Cluster can lead to infrastructure improvements (e.g., better roads, utilities, schools, etc.). - 44Downside of agglomeration economies (3)- Proximity of many competitors serving a local market can lead to competition that reduces their pricing power via a vis buyers and sellers;
- Increase in the likelihood of a firm’s competitors gaining access to the firm’s proprietary knowledge;
- Can lead to traffic congestion, excessively high housing costs and increased pollution. - 45Knowledge brokersIndividuals or organizations that transfer information from one domain to another in which it can be usefully applied.
- 46Likelihood of innovation activities being geographically clustered depends on (3)- Nature of technology
- industry characteristics
- Cultural context of the technology - 47Spill overEconomic events in one context that occur because of something else in a seemingly unrelated context.
- 48Technological spill overA positive externality from R&D resulting from the spread of knowledge across organizational or regional boundaries
- 49Likelihood of spill overs is a function of (3)• Strength of protection mechanisms (e.g., patents, copyright, trade secrets)
• Nature of underlying knowledge base (e.g., tacit, complex)
• Mobility of the labour pool - 50Technology trajectoryThe path a technology takes through its lifetime. This path may refer to its rate of performance improvement, its rate of diffusion, or other change of interest
- 51Product innovationEmbodied in firm output (good or service) --> New product
- 52Process innovation (2)• Techniques of producing output (more efficient production);
• Marketing goods or services. - 53Radical innovationAn innovation that is very new and different from prior solutions. Might be conceived as the combination of newness and the degree of differentness. Defined in terms of risk
- 54Incremental innovationAn innovation that makes a relatively minor change from (or adjustment to) existing practices.
- 55Competence enhancing/destroyingAn innovation that builds on (renders obsolete) existing knowledge and skills. Whether an innovation is competence enhancing or destroying depends on whose perspective is being taken. An innovation can be enhancing for one company but destroying for another.
- 56Competence enhancing ifAn innovation is competence enhancing if the innovation build on the firm’s existing knowledge base
- 57Competence destroying whenAn innovation is competence destroying if the innovation renders a firm’s existing competencies obsolete (achterhaald).
- 58Component (or modular) innovationAn innovation to one or more components that does not significantly affect the overall configuration of the system. A component innovation entails changes to one or more components of a product system without significantly affecting the overall design (i.e. adding gel-filled material to a bicycle seat).
- 59Architectural innovationAn innovation that changes the overall design of a system or the way its components interact with each other.
- An architectural innovation entails changing the overall design of the system or the way components interact (i.e. transition from high-wheel bicycle to safety bicycle).
- Most architectural innovations require changes in the underlying components also. - 60S-curveThe rate of a technology’s performance improvement and the rate at which the technology is adopted in the marketplace. S-curves in technology performance and in technology diffusion (are related but fundamentally different processes). Technology improvements come first then technology diffusion.
- 61Discontinuous technologyA technology that fulfils a similar market need by building on an entirely new knowledge base. Technologies may not always get the opportunity to reach their limits because of this.
- 62Technology diffusionThe spread of a technology through a population. Adoption vs time
- 63Technology diffusion (4 steps)- Adoption is initially slow because the innovation is unfamiliar.
- Diffusion increases as innovation becomes better understood.
- Eventually market is saturated and rate of new adoptions declines.
- Innovation diffusion tends to take far longer than information diffusion. - 64S-curve as a prescriptive toolA tool for predicting when a technology will reach its limits and as a prescriptive guide for whether and when the firm should move to a new, more radical technology.
- 65Pro's s-curve as a prescriptive tool- Managers can use data on investment and performance of their own technologies or data on overall industry investment and technology performance to map s-curve;
- While mapping the technology’s s-curve is useful for gaining a deeper understanding of its rate of improvement or limits, its use as a prescriptive tool is limited; - 66Limitations of S-curve as a prescriptive tool- True limits of technology may be unknown;
- Shape of s-curve can be influenced by changes in the market, component technologies, or complementary technologies. - 67Switching benefits dependent on (4)- Advantages of the new technology
- New technology’s fit with the company’s current abilities
- New technology’s fit with the firm’s position in complementary resources – lacks them or may make compatible products
- Expected rate of diffusion of the new technology - 685 adopter categories- innovators
- early adopters
- early majority
- late majority
- laggards - 69Creative destruction (Schumpeter)The emergence of a new technological discontinuity can overturn the existing competitive structure of an industry, creating new leaders and losers.
- 703 phases of technology evolution model1. fluid phase
2. Transitional phase
3. Specific phase - 71fluid phaseConsiderable uncertainty about technology and its market. Experiments with different form factors or product features to assess the market response. Eventually, producers and customers begin to arrive at some consensus about the desired product attributes dominant design. This establishes a stable architecture for the technology and enables firms to focus on process innovations.
- 72transitional phaseProcess innovation increases while product innovation decreases because of the acceptance of the dominant design.
- 73Specific phaseHighly developed and integrated process. Focus lies on cost-minimizing and efficient production. Called specific phase because everything is specific to the dominant design
- 74segment zeroTechnologies often improve faster than customer requirements demand and/or customers can learn and adapt them to their work. This enables low-end technologies to eventually meet the needs of the mass market. Thus, if the low-end market is neglected, it can become a breeding ground for powerful competitors (= “segment zero” ) that Intel focused on was low-end personal computers. It’s margins were unattractive at the beginning but, as the technology curve advanced, the needs of the mass market were met at a lower price than the high-end technology.
- 75Industrial Dynamicsthe study of the means and processes through which industries change over time
- Forces driving industry evolution
- Important implications for innovative activity and strategy of firms - 76Industry life cycle (ILC)ILC uses the metaphor of a biological organism (birth, growth, maturity, decline) to understand general patterns of structural change across different industries.
- Idealized pattern of industrial change
- Emphasizes interactions between consumer demand and technology - 77Phases 1 2 and 3 of ILC
- 784 aspects of spinoffs and ILC- Better-performing firms have a higher spinoff rate
- Better-performing firms spawn better-performing spinoffs
- Spinoffs perform better than the average firm
- Spinoffs locate in proximity to their parents Detroit as centre of automobile production
Routines and knowledge (passed from parental firms to spinoffs) important for industry evolution - 79Technological regimesNature of knowledge base impacts the way innovation takes place depending on selection environment and underlying technology, sectors will show specific patterns of development.
- 80Aspects of technological regimes (4)• Opportunity conditions (scarce or pervasive)
• Appropriability conditions (high or low appropriability)
• Cumulativeness (dependence on previous technological achievements)
• Knowledge base (degree of tacitness and complexity, i.e. reliance on one or several different sciences and knowledge bases) - 81Routinized regime• Lower probability of innovation (for the same amount of R&D spending)
• Cumulativeness of knowledge (external and internal sources important)
• Innovative advantage of large incumbents - 823 types of regimes1. technological
2. routinized
3. entrepreneurial - 83Entrepreneurial regime (3)• High probability of innovation
• Low levels of cumulativeness
• Advantage of innovative entrepreneurs and small firms over large incumbent firms
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- Flashcards on Innovation management, created by c.l.bakker on 20/03/2015.
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