Session03 organization ofinnovation

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  • 1. Session 3: Organization of Innovation
    Prof. Dr. Bernhard Katzy
    Winter 2011
  • 2. Overview of Course Content
    1
    Innovation System
    Innovation Governance
    Organization of innovation
    Innovation
    Transformation and entrepreneurship
    Basic innovation concepts
    Introduction based on life cases
    Innovation Theory
    Dominant theory, Main issues and developments of innovation research
    Innovation Practice
    High tech entrepreneurship,
    Service innovation……
    Prof. Dr. Bernhard Katzy
    11/01/11
  • 3. 2
    Session 3: An Overview
    AGENDA
    Mini-Test
    Challenges when organizations face innovation
    Understanding organization
    Organizing innovation
    Readings for session 4
    Prof. Dr. Bernhard Katzy
    11/01/11
  • 4. Session 3: reading engagement
    Mini-Test
    3
    Prof. Dr. Bernhard Katzy
    11/01/11
  • 5. Challenges when organizations face innovation
    4
    Innovation's uncertainty
    Survival depends on maintaining a stream of innovations but
    INNOVATION
    Technology uncertainty
    Market uncertainty
    Organization uncertainty
    R&D capabilities to develop new technology
    Competition uncertainty
    Formal structure
    Demand uncertainty
    Culture
    Whether developed the right technology
    • Every two years almost our entire product line turns over. We can almost go out of business in two years if we don't do it right
    ----Gordon Moore
    Prof. Dr. Bernhard Katzy
    11/01/11
  • 6. Challenges when organizations face innovation
    5
    Finance
    Model of functional organization
    HumanResources
    Operativecore
    Marketing
    Purchasing
    R & D
    Source: [Thompson]
    Prof. Dr. Bernhard Katzy
    11/01/11
  • 7. Challenges when organizations face innovation
    6
    An information perspective of organization designing
    Reduce the need for information processing
    Increase the information processing capability
    Investment in vertical
    information system
    Creation of
    slack resources
    Stable organization
    Rules andprograms
    Increasing planning targets
    Create information channels, standardize information…….
    Hierarchy
    Targets and goals
    Creation of
    Self-contained tasks
    Creation of
    Lateral relations
    Uncertainty
    Difference between information required and possessed
    Groups created based on markets, projects…….
    Direct contact, task force
    Teams …….
    [Jay R. Galbraith 1974]
    Prof. Dr. Bernhard Katzy
    11/01/11
  • 8. Understanding organization
    7
    Traditional organization structure
    Comparison between organic structure and mechanistic one
    [Burns and Stalker 1961]
    11/01/11
    Prof. Dr. Bernhard Katzy
  • 9. Understanding organization-Architecture
    8
    Organization architecture
    Informal
    Organization
    Task
    Formal
    Organization
    Arrangements
    Individual
    [ David A. Nadler and Michael L. Tushman, 1997]
    Prof. Dr. Bernhard Katzy
    11/01/11
  • 10. Understanding organization-Growth
    9
    Organization growth
    Growth throughCollaboration
    Size
    Growth throughCoordination
    Growth throughDelegation
    ???Crisis
    Growth throughDirection
    Crisis ofRed Tape
    Crisis of
    Control
    Growth throughCreativity
    Crisis ofAutonomy
    [Greiner Crisis and growth model]
    Crisis ofLeadership
    Phase / Time
    Prof. Dr. Bernhard Katzy
    11/01/11
  • 11. The Case of Siemens AG
    10
    Fax
    PBX
    Internet/
    Email
    EDV
    Video
    [Siemens AG, 1999]
    Prof. Dr. Bernhard Katzy
    11/01/11
  • 12. Understanding organization-Culture
    11
    Linking innovation and culture
    summary from Charles A. O'Reilly and Michael L. Tushmans' idea
    Unpredictability
    INNOVATION
    Nonstandard Solution
    Risk Taking
    CREATIVITY
    IMPLEMENTATION
    Support for risk taking & change
    Effective group function
    Tolerance of mistakes
    Speed of action
    Prof. Dr. Bernhard Katzy
    11/01/11
  • 13. Organizing innovation - Ambidextrous organization
    12
    The case of ibm
    Prof. Dr. Bernhard Katzy
    11/01/11
  • 14. Organizing innovation - Virtual Organization
    13
    Virtual OrGANIZATION
    Network
    Project
    - Co-operation
    Management
    of dynamic
    Co-operations
    - Order
    Processing
    platform
    - stable
    - Dynamic
    [Schuh, Katzy, Eisen, 1997]
    Prof. Dr. Bernhard Katzy
    11/01/11
  • 15. Organizing innovation - Virtual Organization
    14
    Roles in Virtual organization
    Competence manager
    - brings partners competencies together - communication with customers
    Project manager
    - order processing
    - engineering
    Broker
    - acquisition
    - merchandising of the
    network competencies
    - balancing supply/ demand
    I
    /
    O
    I
    /
    O
    Auditor
    - financial control (neutral)
    - assessment
    I
    /
    O
    Manager
    in-/ outsourcing
    - coordination
    - communication with the
    project manager
    Network-coach
    - construction and maintenance of
    the infrastructure
    - acquisition of partners
    - rules for order processing
    [Katzy, Schuh, Millarg, 1996]
    Prof. Dr. Bernhard Katzy
    11/01/11
  • 16. Organizing innovation – Virtual organization
    15
    When is virtual virtuous
    Vertical
    Integration
    Market:
    uncertainty and high risk
    high incentives
    Fusion
    JV
    Cooperation
    Supplier
    Contracts
    Hierarchy:
    certainty and low risks
    low incentives
    Market
    Transactions
    Integration
    [Chesbrough, Teece, 1996]
    Prof. Dr. Bernhard Katzy
    11/01/11
  • 17. Readings for session 4
    • Article 1: Michael E. Porter. Clusters and The New Economics of Competition. Harvard Business Review, November- December, 1998.
    • 18. Article 2: Anna L. Saxenian. Comment on Kenney and von BURG, "Technology, Entrepreneurship and Path dependence: Industrial Clustering in Silicon Valley and Route 128". Industrial and corporate change, Volume8, Number1, 1999.
    16
    11/01/11
    Prof. Dr. Bernhard Katzy