Innovation and New Product Development in smes: An Investigation of the Scottish Food Industry




НазваниеInnovation and New Product Development in smes: An Investigation of the Scottish Food Industry
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2.7The process perspective to innovation in SMEs



A fourth strand of scholarly work on innovation, apart from the abovementioned concerning definition, taxonomy and determinants of innovation, is the one that analyses the process of innovation. From this point of view, innovation is visualised as a chain of events, not necessarily chronological, that culminate in successful new product or process development.


Though a major part of analytical writing on innovation involves the examination of determinants of innovation and the writings on the process of innovation have been less prolific and more recent (Wolfe, 1994), it is argued that the process perspective to the phenomenon of innovation, particularly amongst SMEs, is more meaningful and relevant than its determinant based view because of its sensitivity to the ‘micro-processes of innovation’ and its ability to explain ‘the embededness of innovation in SMEs’ (Edwards et al. , 2005)


The argument is that it is only through a process perspective that one captures the essence of the relationship between management practice at the level of a firm and its external environment, a focus of research, which has remained underdeveloped in the existing literature of innovation in SMEs (Edwards et al., 2005). It also helps in a better understanding of ‘the individual entrepreneur, her or his venture and its context by considering them jointly’ (Johannisson and Monsted, 1997).


Nooteboom’s (2000) observation that managerial learning leads to the development of structures through application of ideas in evolving contexts too is consistent with a process perspective which explains how ‘ideas, innovations and routines settle into a best practice or a dominant design that serves as a prototype for applications and variations in new contexts’.


The seminal work on product development process by Cooper and his stage–gate® model is the best-known example of this genre (Cooper, 1990). Cooper describes a stage-gate system as “…both a conceptual and an operation model for moving a new product from idea to launch.’ The basic thought behind the stage-gate approach is that the new product development process passes through many stages, such as, assessment, business case preparation, development, testing, validation and market launch. Before it can enter a particular stage, it must pass through a ‘gate’ or pass a test of having fulfilled all criteria that are designated to ensure that the project is worthy of going forward. Failing these tests, the project is stopped in its tracks for it to improve enough to pass these tests subsequently and go though the ‘gate’ to reach the next stage or else it must be killed. The notion behind the stage-gate system is that if a project were tested for its further potential at every stage of development then ideas without merit would not use up resources only to eventually prove failures. Through such continuous testing of merit of product development projects the company would be able to focus on ideas that will eventually succeed, in the process making the product development process more successful and cost effective.


http://www.prod-dev.com/images/process_icons.gif

Figure : An Overview of the Stage-Gate System

Source: Cooper (1990)


Cooper’s work concerns the large corporation and looks at innovation from a high-tech perspective. As will be explained later in this thesis, the process of innovation in small low-tech enterprises is quite similar to the one described by Cooper, the main distinguishing feature being the greater informality in the later case.

2.8Management of innovation



One further strand of literature on innovation discusses the management or implementation of innovation. McAdam (2005) observes that though there is a substantial body of work on the concept of innovation, the work on management or implementation of innovation is limited and is of recent origins. He argues that such work is equally if not more important as no matter how well versed the entrepreneurs and managers are about what innovation is and what its determinants are, in absence of knowledge about how to manage and implement it, progress on a practical level cannot be made. McAdam (2005) believes that innovation management is influenced by three issues, normative evaluation, legitimisation and conflict. Alvesson and Willmott (1992) define normative evaluation or normalisation as “comparison against a set of norms, standards and routines which conform to a corporate agenda and require obedience from individual and groups in a structurally prescribed manner.” (The same notion is termed as ‘functionalism’ by Alvesson and Deetz, (2002) in a subsequent work). It can be understood that there are obvious normative evaluation issues in the management of innovation as the very process of innovation disrupts the ‘set of norms, standards and routines’. Legitimisation involves accepting or rejecting a proposed innovation at the group or organisational level. It is easy to see the interplay between legitimisation and normative evaluation. If the normative evaluation is favourable, legitimisation occurs otherwise not.


The third issue suggested in this context by McAdam is conflict. Innovation by its very nature disrupts the status quo and may cause conflict. Successful innovation may enhance the profile of individuals directly presumed to be responsible for it and may cause a relative decline in status of people not associated with or seen to have been its opponents. Here one can visualise a conflict between the entrepreneur and the leader. If an entrepreneur were to find that one of his employees is taking a leadership role in championing and executing innovation he may feel threatened and this may cause a conflict between two. Another kind of conflict that can be visualised here is where there is a conflict between the two roles of entrepreneur as an innovator and as a leader.

The distinction between 'good and ‘bad’ conflict is also important here (Brown and Duguid, 1999). The former leading to benefits and the later causing disruption and damage, implying that the organisations that are able to manage the conflict resulting from innovation implementation positively, would gain whereas those that fail to do so would not reap the benefits of innovation but and lose organisational cohesiveness.


Carmen et al. (2005) in their work on the influence of top management team visions on innovation outcomes show that vision alone does not result in innovation success. This means that leadership in any organisation cannot usher in a climate of innovation or cause actual innovation to occur just through a strategic vision. They, however, find that organisational autonomy is a good predictor of successful innovation management. This shows that the way forward to avoid a conflict amongst the stakeholders in an organisation whether they are entrepreneurs, leaders, or innovators, is through the independence of decision-making. Autonomy being an antidote to conflict, it can address the issue of damaging consequences of conflict on innovation. Chanal (2004) draws attention to other kinds of conflict the entrepreneur and the managers face while managing innovation. One is between the demands of maintaining a structured organisation needed to satisfy schedules and budgets and the flexibility required for creating innovative goods and services as pointed out by Brown and Eisenhardt (1998). The others are conflicts between change and persistence and between novelty and repetition as discussed by Sztompka (1991). She argues that a discursive rather than an intuitive approach is needed for successful management of innovation if these conflicts are to be redressed constructively.
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