Jan 12, 2018 in Management

Leadership and Change

To begin with, innovation is the process of development, implementation and operation of industrial, economic, social and organizational capacity. According to A. Rickne (2012), innovations, on the one hand, contrast with the entire conservative, targeted to preserve the existing situation, and on the other hand, are aimed at significantly improving the technical and economic efficiency of the organization. Implementing innovation requires to change existing forms and methods of management. New products are a reliable means of ensuring advantages over competitors, establishing favorable prices and increasing market share.

Analyzing the concepts of "innovation" and "organizational changes", it is necessary to consider the notion of “risk”. Referring to M. Poole (2000), it can be suggested that the risk is the probability of occurrence of an event that can have both negative and positive effects, and characterized by uncertainty and alternative options for action during implementation of organizational changes. The main purpose of implementing changes is, as noted, improvement or optimization of the enterprise. That is, the final result of the implementation of organizational changes, which should benefit the company, or bring it a profit. As Drucker, one of the well-known businessmen, says “Entrepreneurs need to search purposefully for the sources of innovation, the changes and their symptoms that indicate opportunities for successful innovation”..

Thus, analyzing innovation factors as a method of increasing companies’ strategic advantages the following conclusions can be made:

-Innovations play a crucial role in the cycles of economic development, form the basis of transformation of socio-economic systems, determine the pace and extent of economic processes;

 -Among the most important factors that determine the strategic advantages of enterprise are: the level of technology, quality, innovation systems, effective use of human capital, and institutional environment;

-Companies achieve competitive advantage due to the innovation.

o conclude, the process of innovation is more effective, than conservative methods of running the company. Citing The Economist, we live in the changeable world, where the market conditions and frames are uncertain and slightly vague. The similar statement we find in Bessant’s management research: “At the same time new product development is an important capability, because the environment is constantly changing…Legislation may open up new pathways, or close down others – for example, increasing the requirements for environmentally friendly products”. As it was mentioned, the innovations and various changes can bring some negative results, but if the strategy of changes is well overthought and systemized, and led by an experienced leader, then it would be successful.

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