leads to internal innovations that are highly consistent with the firm’s current strategies. IMPLEMENTING INTERNAL INNOVATIONSHaving processes and structures in place through which a firm can successfully implement the outcomes of internal corporate ventures and commercialize innovations is critical. Indeed, the successful introduction of innovations into the marketplace reflects implementation effectiveness. Effective integration of the various functions involved in innovation processes is required to implement the innovations resulting from internal corporate ventures. Increasingly, product development teams are being used to integrate activities associated with different organizational functions. Cross-Functional Product Development TeamsCross-functional teams facilitate efforts to integrate activities associated with different organizational functions (e.g., design, manufacturing, and marketing). In addition, new product development processes can be completed more quickly and the products more easily commercialized when cross-functional teams work effectively. Horizontal organizationrefers to changes in organizational processes where managing across functional units becomes more critical than managing up and down functional hierarchies. Some of the core horizontal processes that are critical to innovation efforts are formal; they may be defined and documented as procedures and practices. More commonly, however, these processes are informal—that is, these routines or ways of working evolve over time. Often invisible, informal processes are critical to successful product innovations and are supported properly through horizontal organizational structures more so than through vertical organizational structures. There are two primary barriers that may prevent the use of cross-functional teams as a means of integrating organizational functions: (1) independent frames of reference of team members and (2) organizational politics. Research suggests that functional departments vary along four dimensions: time orientation, interpersonal orientation, goal orientation, and formality of structure. Thus, individuals from different functional departments have different orientations on these dimensions and will view product development activities in different ways. Political activity may center on allocating resources to different functions. Interunit conflict may result from aggressive competition for resources among those representing different organizational functions. Facilitating Integration and Innovation Shared values and effective leadership are important to achieving cross-functional integration and implementing innovation. Highly effective shared values are framed around the firm’s vision and mission, and they become BUSINESS POLICY°LEARNING NOTES
Chapter 13: Strategic Entrepreneurship 13-5 the glue that promotes integration between functional units. Thus, the firm’s culture promotes unity and internal innovation.
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- Summer '12
- Business, Entrepreneurship, Strategic Entrepreneurship