Managing Innovation_organization of innovation

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Session 3 organization of innovation

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Managing Innovation_organization of innovation

  1. 1. Session 3: Organization of Innovation Prof. Dr. Bernhard Katzy 2012www.CeTIM.orgProf. Dr. Bernhard R. Katzy
  2. 2. Overview of Course Content Innovation System Organization of Innovation innovation Governance Innovation Transformation and entrepreneurship Basic innovation concepts Introduction to innovation Innovation Theory …… Dominant theory, Main issues and developments of innovation researchwww.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 1
  3. 3. Session 3: An Overview AGENDA ● Mini-Test ● Challenges when organizations face innovation ● Understanding organization ● Organizing innovation ● Readings for session 4www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 2
  4. 4. Session 3: reading engagement Mini-Testwww.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 3
  5. 5. Challenges when organizations face innovation INNOVATIONS 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 Whether developed the right technology Demand uncertainty Culture • Every two years almost our entire product line turns over. We can almost go out of business in two years if we dont do it right ----Gordon Moorewww.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 4
  6. 6. Challenges when organizations face innovation MODEL OF FUNCTIONAL ORGANIZATION Finance Human Resources Operative core Marketing Purchasing R&D Source: [Thompson]www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 5
  7. 7. Challenges when organizations face innovation AN INFORMATION PERSPECTIVE OF ORGANIZATION DESIGNING Reduce the need for Increase the information information processing processing capability Creation of Investment in vertical slack resources information system Stable organization Increasing planning targets Rules and programs Create information channels, Hierarchy standardize information……. Targets and goals Creation of Creation of Self-contained tasks Lateral relations Uncertainty Difference betweenGroups created based on information required and Direct contact, task forcemarkets, projects……. possessed Teams ……. [Jay R. Galbraith 1974]www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 6
  8. 8. Understanding organization TRADITIONAL ORGANIZATION STRUCTURE Comparison between organic structure and mechanistic one Organic Mechanistic an unclear hierarchy Follow the principle of hierarchy unclear job responsibilities Every official is subject to an impersonal order by which he guides his actions decision making is consultative Each incumbent of an office has a and based on task expertise specified sphere of competence, rather than being centralized in with obligations, authority, and the management hierarchy and power to compel obedience strictly defined communication patterns are The system serves as a career lateral as well as vertical ladder …….. …… [Burns and Stalker 1961]www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 7
  9. 9. Understanding organization-Architecture ORGANIZATION ARCHITECTURE Informal Organization Formal Task Organization Arrangements Individual [ David A. Nadler and Michael L. Tushman, 1997]www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 8
  10. 10. Understanding organization-Growth ORGANIZATION GROWTH Size Growth through Collaboration Growth through Coordination Growth through Delegation ??? Growth through Crisis Crisis of Direction Red Tape Growth through Crisis of Creativity[Greiner Crisis and Controlgrowth model] Crisis of Autonomy Crisis of Leadership Phase / Timewww.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 9
  11. 11. The Case of Siemens AG Fax PBX Internet/ Email EDV Video [Siemens AG, 1999]www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 10
  12. 12. Understanding organization-Culture LINKING INNOVATION AND CULTURE summary from Charles A. OReilly and Michael L. Tushmans idea Unpredictability Nonstandard INNOVATION Solution Risk Taking CREATIVITY IMPLEMENTATION Support for risk taking & change Effective group function Tolerance of mistakes Speed of actionwww.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 11
  13. 13. Organizing innovation - Ambidextrous organization THE CASE OF IBMwww.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 12
  14. 14. Organizing innovation - Virtual Organization VIRTUAL ORGANIZATION Network Project - Co-operation Management - Order platform of dynamic Processing Co-operations - stable - Dynamic [Schuh, Katzy, Eisen, 1997]www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 13
  15. 15. Organizing innovation - Virtual Organization ROLES IN VIRTUAL ORGANIZATION Competence manager - brings partners competencies together - communication with customers Project manager Broker - order processing - acquisition - engineering - merchandising of the network competencies I/O I/O - balancing supply/ demand I/O Auditor - financial control (neutral) - assessment Manager in-/ outsourcing Network-coach - coordination - construction and maintenance of - communication with the the infrastructure project manager - acquisition of partners [Katzy, Schuh, Millarg, 1996] - rules for order processingwww.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 14
  16. 16. Organizing innovation – Virtual organization WHEN IS VIRTUAL VIRTUOUS Vertical Market: Integration Fusion uncertainty and high risk JV high incentives Cooperation Supplier Hierarchy: Contracts Market certainty and low risks Transactions low incentives Integration [Chesbrough, Teece, 1996]www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 15
  17. 17. Readings for session 4 S4: Transformation and Entrepreneurship •Article 22: Dynamic capabilities and strategic management •Article 36: Creating new ventures from Bell labs Technologies Selective reading <Capturing value from technological innovation: integration, strategic partnering, and licensing decisions> by David Teece 1988www.CeTIM.org 14/02/12 16

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