Alcances y Limitaciones

There is a definite relationship between learning, knowledge creation and innovation and it is the combination and application of all these elements that will provide the platform for an organisation to have an edge over its competitors. For incremental innovation to take place there must be a large degree of intra-organisational and/or inter-organisational co-operation, each function providing its input to the process108.

Innovation requires that a firm extracts value from its knowledge assets or acquires the knowledge to produce new knowledge. It is understood that firms that invest in research and development either formally or informally will perform better than those that follow. In order to create new knowledge, existing knowledge with the organisation has to be transformed. This implies that knowledge which is tacit must e made explicit, i.e. it must be codified and abstracted.109

The type of incremental innovation will be determined by the market as well as the ability to improve on the existing technology. Both radical discontinuous and incremental approaches to innovation can only take place in organisations that have a learning culture and have the ability to continuously change. These organisations are able to muster the support of staff across the organisation to provide insight into product requirements based on environmental requirements, i.e. feedback loops110. A highly innovative organisation is therefore extremely

108

Westerlund, M, Rajala, R, 2010, Learning and innovation in inter-organizational network collaboration, 437

109

Boisot, MH, 1998, Knowledge Assets Securing Competitive Advantage in the Information Economy, 42-44

110

Hyland, PW, Gieskes, JFB, Sloan, TR. 2001. Occupational clusters as determinants of organisational learning in the product innovation process 198

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dynamic and the people have the ability to adjust to the change fairly quickly111. For learning to be of value to the organisation, it is imperative that diversity exists, not only in people and process but also in strategy112. New product development is a result of incremental innovation but may consist of multiple developments in other areas/categories. Complex products are made up of a number of subsystems, i.e. they are made up of independent components that each has their own product or technology life cycle113_.

Innovation in technology follows a particular life cycle that influence the next generation of product innovation as well as new product development. The process of innovation can result in competing products being launched, as was the case VHS and Beta114. This would require that the organisations through its engagement with the external environment will push to become the dominant player, but the choice is now ultimately influenced by the external environment. Depending on the technology category, the external environment and actors will influence the outcome of the selection which may include government, social bodies, consumers and alliance partners. Once the “decision” has been made and the design has been adopted as an industry standard, the innovation that will subsequently take place is incremental, continuously improving the product options115. Existing technologies and processes that are continuously and incrementally improved can be viewed as exploitative innovation. It is the process of analysis and development of existing knowledge, producing product enhancements to satisfy the market segment. Process innovation would be using current knowledge to build on to improve the process efficiency116.

Tushman and Andersen discuss another form of innovation that involves a shift within the component technology of a product. This innovation leads to the creation of new markets and expands the reach of the organisation, however they point out that it is different to

111

Hyland, PW, Gieskes, JFB, Sloan, TR. 2001. Occupational clusters as determinants of organisational learning in the product innovation process 199

112

Hyland, PW, Gieskes, JFB, Sloan, TR. 2001. Occupational clusters as determinants of organisational learning in the product innovation process 203

113

Tushman, LT, Andersen, P. (eds) 2004. Innovation Streams, Organisation Designs, and Orgnisational Evolution in Managing Strategic Innovation and Change A Collection of Readings 2nd _{Edition. 3, Adapted from Chapter 17 “Organizational Technology” by ML Tushman}

and WK Smith

114

Tushman, LT, Andersen, P. (eds) 2004. Innovation Streams, Organisation Designs, and Orgnisational Evolution in Managing Strategic Innovation and Change A Collection of Readings 2nd _{Edition. 6, “Beta was more technologically advanced (e.g. the tapes held greater}

amount of information with higher resolution) and initially captured more of the market, JVC was able to beat Sony through proactive alliances with strong producers and distributors.

115

Tushman, LT, Andersen, P. (eds) 2004. Innovation Streams, Organisation Designs and Organisational Strategy in Managing Strategic Innovation and Change A Collection of Readings 2nd _{Edition. 5-6, Adapted from Chapter 17 “Organizational Technology” by ML Tushman}

and WK Smith

116

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incremental innovation. Even though there is a difference, there is reluctance on the part of the innovators to treat it as an “architectural innovation” which seems to have a debilitating impact on the future of the organisation, as the organisation is unwilling to adjust its internal functioning. Reference is also made to a “discontinuous innovation”, one that changes a current technology to the extent that the core of the “old” technology becomes redundant. A market-based innovation is one that uses incremental innovation to cater and pander to the market requirements. These incremental innovation changes are usually introduced by the competitors who ultimately displace the position of the innovator and become more successful in the market. The primary reason for this is the fact that the innovating organisation’s structures were not able to deal with the “disruption” and consequently were not able to retain their position in the market117.

Innovation is also viewed as a result of using internal and external environmental knowledge to develop new knowledge leading to the development of new products in which the demand is unknown and the tested technology uses is innovation and adopts a process of exploration118.

Innovation and the ability to develop new knowledge are influenced by organisational culture. The internal environment in which the boundaries are set and the rules of engagement which governs the internal environment influences the behaviour of individuals and teams. The following section will take a closer look at organisational culture.