Strategic leadership is also highly important for achieving cross-functional integration and promoting innovation. Leaders set goals and allocate resources. The goals include integrated development and commercialization of new goods and services. Effective strategic leaders also ensure a high-quality communication system to facilitate cross-functional integration. Creating Value from Internal InnovationThe model in Figure 13.2shows how value can be created for the firm from internal processes designed to develop and commercialize new goods and services. An entrepreneurial mind-set must be developed so that managers and employees will seek to identify and exploit opportunities for new goods and services and new markets. Cross-functional teams are important to promote integrated new product design ideas and commitment to their implementation thereafter. Effective leadership and shared values promote integration and vision for innovation and commitment to it. The end result for the firm is the creation of value for the customers and shareholders through development and commercialization of new products. FIGURE 13.2 - Creating Value through Internal Innovation Processes The model in this figure shows how firms can create value from the internal processes they use to develop and commercialize new goods and services. An entrepreneurial mind-set is necessary so that managers and employees will consistently try to identify entrepreneurial opportunities the firm can pursue by developing new goods and services and new markets. Cross-functional teams promote integrated new product ideas and commitment to their implementation. Effective leadership and shared values promote integration and vision for innovation and commitment to it. The end result for the firm is the creation of value for the customers and shareholders by developing and commercializing new products. As the model in Figure 13.2suggests, internal corporate ventures must be effectively managed to facilitate cross-functional integration so a firm will be able to gain maximum value from its product design and commercialization efforts. 7 Explain how firms use cooperative strategies to innovate.INNOVATION THROUGH COOPERATIVE STRATEGIESVirtually all firms lack the breadth and depth of resources (e.g., human capital and social capital) in their R&D activities to develop internally a sufficient number of innovations. Firms frequently use cooperative strategies to develop innovations and to quicken the pace at which some of their own innovations are distributed. In other instances, they use cooperative strategies to align what they believe are complementary assets with the potential to lead to future innovations. The rapidly changing technologies of the twenty-first century competitive landscape, globalization, and the need to innovate at world-class levels are primary influences on firms’ decisions to innovate by cooperating with other companies. Indeed, some believe that because of these conditions, firms are becoming increasingly dependent on cooperative strategies as a path to successful competition in the global economy.
- Summer '12
- Business, Entrepreneurship, Strategic Entrepreneurship