This paper seeks to define basic terms, to explain and discuss necessary details involving innovation and change to how paramount it is to an organizational profitability, productivity and corporate social corporate responsibility in the Jamaican context. The project further goes on to answering these questions.
What is innovation and change; and the difference between the two? How innovation and change is vital to management? What is innovation and profitability? How does innovation and change contribute to profitability, productivity and corporate social responsiveness? It also seeks to highlight the advantages and disadvantages of innovation along with productivity and corporate social responsibility.
What is Innovation?
Innovation is the process and outcome of creating something new, which is also out of value.
Innovation involves the whole process from opportunity identification, ideation or invention to development, prototyping, production marketing and sales while entrepreneurship only needs to involve commercialization.
What is Change?
Change is the process of causing a function, practice, or thing to become different somehow compared to what was present or in the past. Companies do make changes in specific division, such as marketing division, or as a whole.
Key Steps towards Business Innovation
- Conduct an analysis of the trends in the market environment, you customers’ wants and needs and your competitions.
- Consult with customers and employees for ideas on improving processes, products and services both internally and externally. Find out more about connecting with customers for ideas.
- Seek advice. Use available resources such as business advisers, grants and assistance to drive innovation in your business. This may include seeking Intellectual Property (IP) more about local collaboration and international collaboration with researchers.
- Be open to new ideas and adaptive to change.
- Develop a strategic, responsive plan, which promotes innovation as a key business process across the entire business. Learn about creating an innovative business culture and developing a strategy for innovation.
- Train and empower your employees to think innovatively from the top down.
Why is Innovation and Change Important for an Organization?
Innovation is a vital component in any business. This is because with technological and social advancement it is necessary for a company to stay relevant and profitable.
Linkage Analysis and Change Processes
According to Christensen, Baumann, Ruggles and Sadler (2006) “Organizations are set up to support their existing business models.”(pg.96). If the business model is sluggish in providing innovative ideas, the management should replace it. Self-Admiration is definitely one of the most held back behaviours in an organization.
Chris Agner (as cited in Euchner, 2013) developed the idea of organizational defensive routines (ODRs), which were behavioural practices which members of an organization had to embrace in order to ignore the change that is necessary for game-changing innovations. Firms are locked in a tricky position, which leads to the question, How do they handle the DI without getting rid of the fundamental structures and routines that maintain their business activities?
Linkage analysis is a supporting tool that aids managers in identifying barriers that hold back the organization from possible improvements. Linkage analysis (LA) provides the managers with the ability to manage employee satisfaction while undergoing an adjustment. LA directs managers to take drastic decisions while producing seen results. As a matter of fact, LA leads managers in gathering resources, and also helps to determine the most favourable investments for the organization.
Innovation management allows the organization to respond to external or internal opportunities, and use its creativity to introduce new ideas, processes or products. Innovation management is based on some of the ideas put forth by an economist, Joseph Schumpeter, working during the 19030s, who identified innovation as a significant factor.
The importance of innovation plays an important role in an organization’s success. Market leaders derive a significant proportion of their income from new product, according to Forbes. Innovation can take the form of a major breakthrough or improvements to existing products.
Four Ideas to Promote Innovation in your Workplace
Be Easy Going
A relaxed and flexible work environment increases your team’s productivity by letting ideas flow.
Hire for Culture
Look for team members who understand your vision and align your culture. Having a team that shares one vision and works together helps the organization run smoothly. Encourage different perspectives-it will help your company to stay ahead of the curve.
Bring on People who Love what they Do
Hire people that are passionate about their work. You want people at your company who really care; people who are excited to go to work because they believe in the product. Adding people that want to improve your product will be the most beneficial for your company.
Put together a team with different backgrounds, passions and capabilities. Having a group with a diverse set of ideas and problem-solving approach helps push your product forward. Embrace and celebrate your team members’ individuality.
What is Innovation and Profitability?
Many economists agree to the statement; ‘technological innovation is considered as a major force in economic growth,’ including Professor of economics (Emeritus) of Stanford University, Nathan Rosenberg. Rosenberg recorded accumulated information on the relationship between innovation and economic growth in a document titled; ‘Innovation and Economic Growth’.
Rosenberg found that in the mid-1950s Prof. Abramovitx, of the same institution, suggested that instead of increasing the output of the economy of an organization, by increasing the number of inputs that go into the productive process, it is better to choose its only alternative. That is, to think of new ways in which you can get more output from the same number of inputs; innovation. Abramovitz simply compared the growth in the output of the American economy between 1870 and 1950 with the growth in inputs (of capital and labour) over the same time period.
Statistically, only 15% of the actual growth in the output of the economy was accounted for by its input. Therefore, there was an unexplained residual of 85%. Multiple economists used multiple methodologies and periods but still resulted in a similarly large unexplained residual. Rosenberg suggests that introducing new technology, skills and organizational operations as well as to improve those that were available, was the cause of 85% of the calculated growth.
Locally, in order to provide the best products and services, Sagicor has been consistently looking towards innovation and change. According to their 2017 Annual Report titled ‘Driving Growth Through performance and Innovation,’ their recently upgraded Banking and Investments systems allowed them to launch new products seamlessly. The Human Resource management system has also been upgraded and they have invested in additional training for their technical team. With the changing business environment, leveraging data and technology to lead and differentiate themselves in the marketplace has been their aim.
Net profit, attributable to Stockholders for 2017 was $12.07 billion, which is 7% above 2016.
Sagicor’s Jamaican division achieved this industry record because of New Annualised Premium Income. Sagicor achieved $3.39 billion in 2017; 12% more than in 2016 and holding a market share of 60%. This is inclusive of individual health sales activity. Group Insurance and annuity premiums were much higher in 2017 than 2016 and during the year 2017, $8.86 billion of new business was achieved due to improvements in the Annuities portfolio.
How innovation cause productivity and corporate social responsibility?
“Innovation is an essential driver of economic progress that benefits consumers, businesses and the economy as a whole”.
For example: how innovation cause productivity and corporate responsibility (National Commercial Bank).
Under the National Commercial Bank’s Brand Pillars, one of which is innovation which clearly states that “At NCB, we are constantly finding financial solutions to meet the changing needs of our customers. We also drive innovation in our operations by using technology as a key enabler of greater efficiency”. This organization as used innovation to direct production with the use of technology and has proven to work very efficiently. National Commercial Bank Jamaica Limited: provides an array of product and services to meet the banking needs of customers; deposit accounts, unsecured loans and secured loans, credit cards, overdraft lines, foreign exchange, personal and private banking services are part of the offerings.
Corporate Responsibility is considered as a simple way for companies to take responsibility for the social and environmental impacts of their business operations.
National Commercial Bank is determined in its focus to “building a better Jamaica”. “Marketing Jamaica” has been eyeing this company for a very long time and is now ready to “Talk Di Tings Dem”, by shining the spotlight on a company that personifies innovativeness, embodies the true spirit of what it means to make Jamaican a take corporate social responsibility to another level.
NCB as always supported Jamaica 100% by giving back to communities, and the very same people that has helped them to become the “powerhouse” that they are today. They have instituted an NCB Foundation; a charitable venture which takes a multifaceted approach to building Jamaica from the ground up. The company has spent millions or even billions on building Jamaica; providing scholarships, grants and CXC subsidizations to the needy; partnering with institutions & training centres to foster entrepreneurship; and assisting in special charitable projects aimed at building a specific community within which the company operates project change.
This cycle shows how one can positively affect the other if done efficiently. When there is successful innovation where ideas or inventions are translated into efficient goods and services, we should see a boost in productivity. In companies or organizations where there is an increase or a greater level of output in relations to input, we will see where both the companies or organizations and the employees benefits from such growth, this may be monetary or otherwise.
Advantages of Innovation, Productivity and CSR
An innovation company normally seeks to employ large number of individuals who are skilled and creative to build up the work force in the production of new products. In order to achieve success in producing a good it will have to pass through a series of steps that is; conceptualization which is to create model, design on that plan and carry out results in the finished product that is highly desirable to consumers.
For innovation companies to achieve success they must have a comparative advantage over other organization in the process of product development; due to previous experiences from past production being repeated over and over again.
Corporate social responsiveness
- Improve Marketing and Public Relation
You have to build friendly relation socially and environmentally. The more you will interact the more you attention and resources are devoted to worthy causes. This is one of the main responsibilities of the business to increase friendly interaction. Try to get valuable things from your public relation and avail the amazing benefits for your business
- Enhanced Learning Opportunities
It is also necessary for the staff to enhance their learning opportunities. If they will learn more so they can increase their skills and knowledge that would be helpful for your company to build up with amazing ideas and inspiration. There is no limit to learning that’s why you should always enhance your learning opportunities. You will be capable of answering the question and easily resolve each of the problems.
A business needs to make a profit to keep its doors open in the long run. Increasing productivity lets a firm make more products without increasing costs. Producing more creates the opportunity to make more sales, which in turn offers the potential to increase profits. Higher productivity can increase a company’s profit margin in addition to raising total profits. Profit margin is measure of how much profit a company makes for each dollar it spends.
- Business Growth
Increasing productivity can give a firm opportunity to grow. If company is just barely scraping by or losing money, managers might not be able to take risks or expand. High productivity and revenue can give companies the cash flow necessary to take risks, make investments and pursue new projects. Boosting productivity can also increase the incentive to hire new workers and buy new equipment.
Disadvantages of Innovation, Productivity and CSR
- Failing to involve the entire team
If the entire work team along with their experience and perspective is not elected by the business leader and he or she just selects the product developers and founders in the production process then the business will be at risk, therefore resulting in a huge set back on the company’s development process.
- No system for identifying innovative ideas.
Most if not all successful businesses sets up systems to identify their business schedules for showing these activities as well as, developing of new ideas and solutions. It is important for the business team to create ideas that can tackle any arising issues in the production process. If such system is not in place then evaluating ideas will not be recorded thoroughly before the actual making of decisions which could reduce error.
Corporate social responsiveness
Business social responsibility is too costly for small businesses and we must say that it is one of the major disadvantages. But with the passage of time, everything gets to manage and you can easily success your business. It is not easy to make a profit but critics argue that the CSR of companies is simply to make a profit.
- Less Money Given to Shareholders
It is one of the main problems that is faced by the shareholders and employees that they get less money. Some of the percentage of profit diverted to charitable activities. The more product you will sale, the more you will get profit and then profit will equally divide by the shareholders and other staff. It is the main fault that is faced by many of the employees.
This assignment consist of a statement to prove and explained. Each member received or was assigned a question to conduct their own research and this assignment duration was about 3 weeks but all research was carefully analyzed and completed in the best way suitable. We have found out the definitions of what is innovation and what is change. The different types of changes.
The research continued and we analyzed how innovation and change is important to management then what are the advantages and disadvantages of introducing innovation and change in a company, pertaining to profitability, productivity and corporate social responsibility and we went into details with this question. And the last question was does innovation and change contribute to profitability, productivity and corporate social responsibility.