There is a diverse range of definitions of innovation. Having analysed these definitions, the research divided them into two groups (Table 2.1). Firstly, much of the research shows that innovation means a creative thing. For example, Rogers (1995) shows that innovation creates
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a new idea, practice, or object according to the view of an individual or other unit of adoption. In addition, Rogers discusses another concept known as diffusion of innovation which, over time, focuses on the spread, through particular channels, of innovation among the members of a social system. In contrast, Amabile (1983) suggests that innovation is different from creativity which is the only thing that could be defined as the production of new ideas. Innovation generates and implements new ideas, processes, and products (Trott, 2005). Therefore, creativity is a component of innovation (West and Farr, 1990).
Secondly, this group considers that innovation included the creation and adoption of new ideas. The European Commission (1995) shows that in the social and economic scopes, innovation is a function of the successful exploration and exploitation of novelty. Furthermore, it means the introduction of a new solution to tackle problems. This solution should satisfy the need of firms, employees and other stakeholders. For example, innovation can provide easier communications (internet, mobile phones), new marketing methods (E- banking) and better working environments (computers). Damanpour (1991) believes that innovation is the adoption of a new idea or behaviour.
In view of the above definitions, this study considers that innovation is a planned integrated activity to adopt or develop a new behaviour, product or process to achieve some benefits for employees, firm, group or other stakeholders. The definition suggests that:
1- Innovation is a planned activity to obtain many anticipated benefits (West and Farr, 1990). Moreover, it is not a single activity but it includes both the creation andadoption of novelty. The research suggests that innovation which focuses on either creation or adoption reflects an unproductively narrow understanding of innovation.
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Table 2.1: The Definitions of Innovation Author(s) Date Definition
Innovation means creative.
Tushman and Nadler 1986 It is defined as the creation of any product, service, or process which is new to a business unit.
Rogers (p. 12) 1995 Innovation is “an idea, practice, or object that is perceived to be new by an individual or other unit of adoption”.
Hurley and Hult 1998 It is the notion of openness to new ideas as aspects of a firm's culture. Innovation includes both the creation and implementation of a new idea.
Becker and Whisler 1967 Innovation is defined as the first or early use of an idea by one of a set of organizations with similar goals.
Zaltman et al., 1973 It is defined as any idea, practice, or material artefact perceived to be new by the relevant unit of adoption.
Damanpour and Evan 1984 Innovation is defined as the adoption of an idea or behaviour new to the adopting organization. Drucker 1985 Innovation is the specific tool of entrepreneurs; the means by which they exploit change as an
opportunity for a different business or service. It is capable of being presented as a discipline; capable of being learned; capable of being practiced.
Poole and Van de Ven 2004 Innovation is defined often as developing and implementing a new idea in an applied setting. Fruhling and Siau 2007 It is as "an idea, practice, or object that is perceived as new to an individual or another unit of
adoption."
Grawe, et al. 2009 Service innovation is the development of a new service which is perceived to be new and helpful to a particular focal audience.
West and Farr 1990 They defined innovation as the intentional introduction and application within a role, group or organization of ideas; processes; products; or procedures, new to the relevant unit of adoption, designed to significantly benefit the individual, the group, organization or wider society.
Europe Commission (EC)
1995 Innovation is a function of the successful exploration and exploitation novelty in the social and economic scopes.
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methods of delivery which result in significant improvements in outcomes efficiency, effectiveness or quality.
Brown, et al. 2004 Innovation is creating something new and implementing it successfully to a market.
Egbu 2004 Innovation can be viewed as a process of inter-linking sequences from idea generation to idea exploitation which are not bound by definitional margins and are subject to change.
Tidd, et al., 2005 It is turning opportunity into ideas and putting these into widely used practice.
Trott 2005 Innovation is not a single action but a total process of interrelated sub processes. It is not only the conception of a new idea, nor the invention of a new device, nor the development of a new market. The process is all these things acting in an integrated fashion.
Oddane 2008 Innovation is a collective, open-ended activity aimed at the creation and implementation of new, appropriate products or processes in order to generate significant economic benefit and other values.
Kim,D., Kumar,V., Kumar, U.,
2012 Innovation refers to new applications of knowledge, ideas, methods, and skills which can generate unique capabilities and leverage an organization’s competitiveness
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This means that it produces new tangible and intangible items and such items are then utilised to obtain an economic or social value. Therefore, the following simple equation summarises these activities:
2- In the context of innovation, it is important to clarify the use of the term ‘new’. Descriptions of innovation are absolute novelty and relative novelty. Absolute (objective) novelty means that this type of innovation has never been used before in other organisations and, therefore, it is considered to be a new thing to the industry or market. This view is consistent with Levitt’s study (1962) where it emphasises that innovation relates to completely new something, whilst relative (subjective) novelty refers to the extent to which innovation is new to the particular company or the department (Totterdell et al., 2002). Following this approach, the novelty of financial services innovation includes (Den Hertog, 2000):
• According to its customers, the service is considered to be new.
• Customers should be involved in the production and consumption stages of the service.
• Employees should change the ways which are used to deliver the service.
• Technology can be applied to a process and product innovation.
The requirements of absolute novelty would create large difficulties in collecting the research data from firms which used objective novelty. Additionally, it is quite rare to find something “entirely new” (Leifer et al., 2000; Gaynor, 2002 as cited in Oddane, 2008). Therefore, the research considers that relative novelty of innovation is more appropriate for this study. 3- The definition is not limited to technological change and includes new ideas, products or processes which have administrative and technological innovation. Damanpour and Evan
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(1984) state that innovation could occur not only in technological processes, but also in management methods and organisational practices.
4- Successful innovation should satisfy the needs of stakeholders. West and Farr (1990) show that innovation has significant benefits for the individual, the group, the organisation or other stakeholders.