Innovation, Organization and Entrepreneurship (441081B6)
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Summary- Innovation, Organization and Entrepreneurship (441081-B-6)
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Innovation, Organization and Entrepreneurship (441081B6)
Institution
Tilburg University (UVT)
This document contains an extensive summary of the lectureslides, notes taken during the lectures, and the articles that are the base for the course. These are all merged in the summary and provide a good base for the exam. Also contain the lecture and course goals.
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Innovation, Organization and Entrepreneurship (441081B6)
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Innovation, Organization & Entrepreneurship
Lecture 2: The innovation environment
Literature: William J. Abernathy, & James M. Utterback. Patterns of Industrial Innovation.
Technology Review, (June/July 1978). Pp. 41-47. & Michael L. Tushman; Philip Anderson:
Administrative Science Quarterly, Vol. 31, No. 3. (Sep., 1986), pp. 439-465.
Firm survival rates
- Less than 0.1% of US firms live to the age of 40
- Firms founded in 1976: 10% survived 10 years later and 2.5% survived 20 years later.
Examples
Lehman Brothers, Nokia and Kodak
- Both Nokia and Kodak weren’t able to keep up with the technological developments
and went bankrupt.
- Lehman Brothers invested in mortgages and unfortunately a lot of these mortgages
were given to people that couldn’t pay it back Lehman Brothers bankrupt.
So, what explains firm survival rates?
- Darwin: “Neither strength nor intelligence guarantees survival”, only adaptation can
do that.
- The ability to adapt to changing circumstances and to innovate.
Types of innovations
Improvement vs renewal
Improvement/Incremental Renewal/Radical
Evolutionary; incremental Revolutionary: Jumps
“leitmotiv”: we can always improve Leitmotiv: crisis – we have to change (first
(more of the same; 1st order solutions) change, then improve; 2nd order)
Focus: management of operations Focus: management of opportunities
(efficiency) (resource leverage; NBD/NPD)
Dominant role of planning and control Focus on creativity and entrepreneurship
Small changes to a pre-existing thing Something brand new has to be
implemented
Cell phones are always being improved; Firms create departments that focus on
reducing waste in organizations creativity and entrepreneurship
,Consequences of incremental vs radical innovations
Improvement/incremental
- Source of short-term financial revenue
- NO guarantee for long-term survival
- Every time Apple releases a new iphone, it is hoping to sell more phones to sustain
the business in the future. These improvements are no security for staying in
business.
Renewal/Radical
- Source of long-term financial costs
- Necessary for long-term survival
Product life cycle / S-curve
,
, Phases of product design
Fluid phase Transactional Specific phase
Competing designs phase Exploitation
Selection dominant dominant design
design
Innovation Functional product Product optimization Process optimization
emphasis performance & variation (cost reduction)
Stimulated by Technological Users and Cost pressure and
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