Innovation--necessity for a performant management of organization.

Popescu, Luminita ; Popescu, Virgil

Abstract: Innovation is necessary for the economic existence of all firms in a modern society. A successful innovating firm is the one in which the management succeeds to take maximum advantage of existing or potential markets and new opportunities by making appropriate use of the firm structures and resources.

Innovation has become the basis for creating and sustaining competitiveness. In other words, innovation is at the heart of economic growth and development.

Key words: innovation process, strategy, quality, market

1. INTRODUCTION

The traditional idea that innovation is based upon research (technology-push theory) and interaction between firms and other actors is replaced by the current social network theory of innovation, where knowledge plays a crucial role in fostering innovation.

In the knowledge-driven economy, innovation has become central to achievement in the business world. With this growth in importance, organizations large and small have begun to reevaluate their products, their services, even their organizational culture in the attempt to maintain their competitiveness in the global markets of today. The more forward-thinking companies have recognized that only through such root and branch reform can they hope to survive in the face of increasing competition.

For a successful developing of innovation process, this has to benefit by the advantages generated by a novelty element (a technological innovation). It is very difficult, almost impossible to try the penetration in a new market or to be obtained a modification of the existent market quotations if the organization doesn't own a technological innovation and it is not adopted an innovating strategy based on a new organization form, on new methods of work administration and organizing.

2. INFORMATION

The development of the innovative capacity in an organization requires certain essential competences which implies to carry out the structures for innovation (methodologies, procedures, rewards, organizational system) as well as the effective management of this process (including educational management and innovative environment in order to create the innovative behavior at individual and organizational level).

In order to develop a system for innovation of products at organizational level must be run trough four stages, included in a model named "Diagnosys, Decision and Action" (Christiansen, 2000):

--development of a changing strategy, identification of the key projects and revealing the need of changing;

--initial efforts for changing, the stage when begins the changing of organizational culture and incentives used, improvement of the system of projects' management; medium changes, the stage of breaking the organizational barriers, of establishing new segments of market for innovative projects and rationalization of projects;

--advanced changes, establishing of general system of management.

Essentially the programmed change at organizational level implies to determine precisely its position regarding the best results obtained in the field, implication of management in changing of the present state of matters by creating the organizational structures needed for systematic innovative process, open-mindedness to new and proper motivation of the employees.

The innovative process is influenced by numerous factors and their study created several orientations among the specialists.

Some economists (Goldenberg, 2001) sustain the priority of technical attributes of inventions in the future achievements of the organizations.

On the other hand other economists (Schmooker, 1966) consider that the increase of demand causes the intensification of innovative activity because the needs of the customers are the factor that guides the innovative process.

Regarded from the marketing perspective, "to innovate" represents the process that the new product goes through from the moment when the need of existence is observed and until it is distributed on the market, accompanied by the pursuit of the behavior in consumption, while "the innovation" is the new product as materialization of the innovation efforts.

The innovation process, as path from the invention to the launch of the product on the market doesn't automatically lead to commercial success. It is precisely the role of the marketing to ensure the chance of success of the new product and the strategy, conceived as the first step of the innovation process, fulfills this function.

The analyses of the portfolio of products of the enterprise emphasize the need of a new product but it doesn't indicate where it can be searched. That is why any empirical demarche can have as consequence the waste of resources. The problem raised is not only if the new ideas are viable from technical and marketing points of view but also if they are the most appropriate for the firm. The complexity of the multifunctional aspects involved in the innovation process generates the need of strategy that integrates the specific research-development, marketing, production, financial and human resources activities.

That is why in a modern enterprise the innovation has to be not only a spontaneous process but also a planned one. Although by its specificity the innovation seems to be more resistant at the formal planning, the decisions concerning the markets that can be served and the products that need to be developed are so important that together with the amplification of this activity at firm level it is intensified the need for a scientific management and for the development of a strategy for the new products. The studies that were made about enterprise, about the stage from the life cycle and about the activity field showed the importance of the marketing strategy in the innovation process. The substantiation of a strategy on this line becomes this way a condition of the conception of the tactical programs concerning innovation.

In the initial steps of preliminary investigation and planning, when the orientation capacity of the new product towards the zones of competition advantage is big, the implication of the management is usually weak. The rapport is reserved during the phases of the innovation process.

In the specialty literature there are the authors that completely ignore the problem of the strategy of the new product or they place it on the path of its development, as business analysis. In the practice of the innovative enterprises there are attitudes of rejection of any formal intervention of strategic research, or partial treatments of some elements but also formalized and flexible approaches.

If there is a consensus about the need of an innovating marketing strategy, the problem of practical possibilities to formulate it raises diverging opinions. That is why an interesting aspect is that of the evolution of the view of the specialists over the rapport between the marketing strategy in innovation and the innovation process on the whole.

These situations that are present in the theoretic and practical plan can be gathered in the order of their evolution, this way:

* inexistence of a strategy;

* approaching some dispersed elements that can not fulfill practically the role of a strategy;

* the realization of a marketing strategy as a preliminary stage of the innovation process;

* projecting the strategy for the entire process of innovation, influencing its every stage.

In what concerns their general functions, the marketing strategies from the innovation limit trough selection, the great number of opportunities that are a part of the enterprise at a certain moment and oriented the entire activities of development as the new product. Realizing a marketing strategy in the innovation process allows to the management as the top part of the enterprise to influence the search of the new ideas for new products.

In the present situation, the substantiation of a marketing strategy in innovation must be understood as a process whose characteristics give it a more effective and efficient note, fact that distinguishes it from the traditional conception over launching a new product (Gellatly, 1999).

This process can be noticed first of all by its complexity, as a result of the different nature of the activities contained in each stage realized, as well as the connection with other functions as research--development, engineering and production.

Second of all, some of their activities can be processed simultaneously by the members of the project team, the common goal being that of finding as fast as possible the optimal concept of a product.

In the third place, the process is iterative, resuming some investigation phases and repeated negotiation between the objectives and the resources being a rule.

In innovation, the marketing strategy goes also from the correlation with the other strategy types of the enterprise. For diverse lines of a scale an enterprise can utilize different strategic alternatives. But the most important thing is their adaptation to the specific particularities of a product in discussion and the assurance of an internal coherence of the whole strategy applied to the line.

Regarded from the point of view of the substantiation process of its marketing strategy, the innovation must be seen as an open system, as a net of pyramidal type, formed by products, lines of products, together with the appropriate strategies and the connections between them.

We can end by saying that the examination of the concrete aspects of the innovation management was underlined by the complexity of the strategic approach. That is why it must be created the thinking frame and the practical action over the complex system of interactions that must be taken into account by the specialists trained in substantiation the marketing strategy in innovation.

The economical practice showed that for a greater number of enterprises the competitions is not manifested locally but also globally.

In the conditions of the competition economy, the open national markets, there is a flux of foreign products, that in most of the cases are cheaper and better from the qualitative point of view.

3. CONCLUSIONS

Innovation is the result of actions of numerous factors both from outside and inside of the organization by interaction between different departments, colleagues, managers and employees.

In organizations where innovation became a constant activity it can be ascertained a different vision regarding the way to conceive and practice the management.

In this way, activities related to innovation and dissemination are not under a sever guidance or hierarchical and exhaustive control. Their refined character makes the difference between the formal and informal character to become insignificant and the official external control to be changed with auto-control. (Dragomirescu, 1995). The managerial act is focused on elaborating of strategic vision and facilitating the coordination of several qualified and competent actors which are self-responsible regarding the decisional aspect. The manager becomes more and more a hearer of conceptual responsibility (designing "the framework" of systems and processes, validations of solutions, ratification of purposes) than of administrative power.

The common element of the all innovating processes is the existence of innovating strategy. The significant factor to create a competitive advantage is not a better application of the real rules of business development, in comparison with other competitors, but the change of one or more of these existent rules.

On long term basis, innovation can produce significant economical and social changes due to the introduction of novelties and causes differences in terms of performance among organization. The companies which promote innovation have productivity and incomes much higher than the less innovative companies.

4. REFERENCES

Christiansen, J. (2000). Building the Innovative Organization: Management systems that encourage innovation, Macmillan, Basingstoke

Goldenberg, J., Lehmann, D.R., Maazursky, D. (2001). The Idea Itself and the Circumstances of Its Emergence as Predictors of New Product Success, Management Science, No. 47, pp.69-84

Dragomirescu, H. (1995)--Memorisation processes in hierarchical organisations: a systems perspective versus the bureaucracy pattern. In "Critical Issues in Systems Theory and Practice" (Keith Ellis et al.--eds), Plenum Press, New York and London: 233-238

Gellatly, G., Peters, V. (1999). Understanding the Innovation Process: Innovation in Dynamic Service Industries, Available from: http://www.statcan.ca/english/research/11F0019MIE/ 11F0019MIE2000127.pdf, Accessed: 2006-12-07