Advantages And Disadvantages Of Innovation In Organizational Structure and Characteristics

We explain what innovation is and what its advantages and disadvantages are. In addition, its characteristics and organizational structure.

What is innovation?

Innovation refers to a change, it has to do with updating in a certain field, discipline, and so on . In the daily register, the term is used to refer to the novel and its strongest meaning is obtained within the business world: it indicates the implementation of a new production function. It is then defined as the key to economic growth .

On the other hand, the term innovation is a concept of the human sciences . It refers to the search for knowledge , curiosity and creativity. Wanting to find solutions supposes a taste for renewal, for change. This is how the avant-gardes would be explained.

According to the Royal Academy , innovation means the « creation or modification of a product, and its introduction into a market. ». In this sense, the term is specifically integrated into the field of business sciences and can refer to an idea , a product, a service or a new way of working , for example.

Characteristics of the innovation :

1. Innovation research

Research on innovation deals with the genesis of the events that lead to productive renewal . Your question is for the how, for the processes.

Everett M. Rogers explains that the subjective advantage of a product (for example, that it is prestigious), the simplicity that is perceived on the first encounter, the possibility of trying it, the affinity with a value system and the tangible evidence of innovation , they have a positive effect on the imposition of innovations on the market , on their diffusion.

2. Creativity

Innovation implies creativity . It means rearranging and creating original content . This is the case in marketing , in products and services that enter the market. Through a creative exercise, companies seek consumer attraction and diffusion.

3. Uncertainty

There is no way to accurately predict the results, so any innovative measure carries a degree of uncertainty that could interfere with the investment , even if the company feels pressure to renew.

Risk is always considered in innovation , however, the latter is important for a company to remain competitive. Entrepreneurs will have to weigh the consequences.

4. The innovative entrepreneur

The innovative entrepreneur is different from the arbitrage entrepreneur , who, according to Joseph Schumpeter (1911), makes a profit simply through price differences.

The innovative entrepreneur is a creative person , he obtains advantages through improvements in productivity , in marketing, etc. It would be the market that would validate the degree of innovation, at the same time, innovative measures would result in higher levels of well-being and greater employment opportunities.

5. Business innovation management

The administration of the innovative action is made up of three phases:

• Impulse phase. Trends are observed and new technologies are recognized .
• Evaluation phase. The relevance of the area is evaluated.
• Technological transfer. The project is carried out serially.

6. Organizational structure

The structure of a company will determine its capacity for innovation . The way it is organized will make you benefit from updates to it.

With teamwork , it will be easier to generate optimal changes immediately. Interaction between departments will determine the impact of innovative measures; the greater the coordination, the greater the multiplicity of opinions and, as a result, creativity. The presence of the leader is important to put the ideas that arise into practice, quickly transforming them into products and services.

7. Investment

All innovation requires investment in equipment, services, employees, etc. , and it is done with the expectation that it will be beneficial and achieve a high return on investment (ROI). In order to invest, it will sometimes be necessary to take advantage of public support, policies that encourage business innovation.

8. Knowledge of technology

In today's society , it is essential to extract the greatest benefits from technological knowledge , since advances contribute to productivity . Business purchases are actually knowledge purchases, whether it is hiring a consultant or an employee, or buying a tool.

Interaction with organizations , whether they are faculties or business schools , is necessary to advance technological knowledge, through the dissemination of learning. By getting new technologies, companies improve their knowledge about them, which in turn encourages them to produce new knowledge. In the computer age , information is extensive but it can be difficult to find what is relevant; thus, communication and interaction would facilitate this access.

9. Competitive

Although it is true that innovations are very likely to be imitated and cease to be "original" , with all the privileges that this entails, the truth is that a competitive advantage is still obtained in relation to other producers, that is, the The objective of innovation is to obtain that moment, although small, of monopoly , that is, to move the demand curve in a way that is favorable. So all innovation is linked to a competitive purpose.

10. Advantages and disadvantages

In general, innovation makes production more efficient ; technology, for example, speeds up the production process, but it can also require less labor and affect employment.

In small companies, innovation has its advantages and disadvantages. On the one hand, the bureaucracy is smaller and managers can carry out the changes with enthusiasm. These changes prepare them better for competitiveness, in addition, assuming companies innovation strategies, the small company will innovate more than the large one, mainly because their internal communication is simpler and there is greater care about the destination of the investment.

As a disadvantage, it is a requirement to have qualified personnel and not all companies have it . It is the same with external communication. It must also have its own capital, to be able to effectively face a growth in demand . Large companies, for their part, meet these requirements. They are the ones who would contribute to the micro-business growing, specializing, determining quality guidelines, signing jobs on demand.

The above content published at Collaborative Research Group is for informational and educational purposes only and has been developed by referring reliable sources and recommendations from technology experts. We do not have any contact with official entities nor do we intend to replace the information that they emit.