Writing Feedback / Practice essay on Innovation; Start up Companies flourish on change in the business [2]

An entrepreneur expressed the following view: "Start up companies flourish on change in the business environment and are continually reorganizing themselves to take advantage of it. But in established firms there is strong resistance to change, especially change imposed internally." What evidence leads you to assent or dispute his views? Could established firms introduce innovations more effectively by adopting practices used by new firms?

This essay examines the internal resistance against change within established firms in comparison to entrepreneurial firms and discusses their possibilities of adopting entrepreneurial practices to generate effective changes.

Is it within the nature of entrepreneurial enterprises that they are often the agents of innovation and change. In order to survive and achieve continuous success in the competitive business market, it is crucial that they possess the capability to recognise and explore opportunities ahead of everyone else. They are often constrained by limited resources and lack of experience. However the relatively flexible organisational structure within smaller enterprises allow them to pursue opportunities and obtain resources through a much faster route than those in large organisations who awaits budgetary authorisation to take action through the hierarchical structure. The unusual business model that small firms operate on forms the basis for short cycles of firm growth and product introduction therefore enables rapid realisation of changes and adaptation of existing technology or service ideas. This iterative process of seeking alternative solutions nurtures changes and even transformations within the firm.

In comparison, established firms are known to be bureaucratic and operate through complex internal reporting procedures to communicate generated changes throughout the whole organisation. The prestigious traditions that all employees are familiar with also hinder the progress of introducing new work methods or operating systems. People often fix their mindsets to "the way we do things here" hence cannot easily see the benefits of the change and sometimes even fear the damages it may bring to the "comfortable" established practices and their own job security. Yet again the difference in business model and strategic objective between entrepreneurial and established firms determines their different attitudes towards change. Small firms prosper through continuous re-positioning their competitive advantage and re-assessment of opportunity and resource match whereas big ones pursue consistency and stability. Established firms often deal with a large amount of projects and hence the focus of their efforts is highly dependent on their business priority. It is not surprising that employees are often lacking motivation for generating or carrying out change activities due to the long list of jobs within pressing deadlines to be finished.

As the previous arguments illustrate, there are usually more resistance within the established firms against entrepreneurial innovation due to the incompatibility of business model within entrepreneurial mechanisms. However this does not necessarily apply to all organisations. A number of more advance thinking firms have successfully developed effective practices that are coherent within their business principles and systems. For instance, many firms are introducing improvement activities to tackle specific problem with concentrated efforts from a team of employees. Such programs are often scheduled as an independent project and act as an opportunity for employees to contribute their knowledge and skills that are normally inhibited during daily work routines. A good example would be the "Single Week Improvement Program" introduced in Rolls-Royce. In addition, having recognised the competition in today's market, many companies are increasingly investing in R&D and NPD (New Product Development) and providing supports from all associative function (e.g. HR, marketing, sales, engineering) to enable the success of new product launch or consolidation of core technology. Last but not least, the introduction of incentive schemes that associate with business improvement in some established firms have proven to be an effective way to motivate employees to participate in generating positive changes to their work processes as well as for the business as a whole.

In conclusion, established firms do exhibit stronger resistance to change and innovation comparing to the entrepreneurial firms due to a combination of organisational and strategic reasons. However more and more firms have identified and successfully adopted entrepreneurial innovation principles and have generated effective methods to create and implement changes that are compatible with their business needs and empower the sustainability of their competitive advantage.

Writing Feedback / Difficulty to gain acceptance of innovations in companies- innovation essay [3]

Why is it difficult to gain acceptance of innovations in some companies? Describe the characteristics of organisations or innovations that may hinder acceptance. What can be done to build the support of those needed to make an innovation effective? Discuss these questions using case examples to support your arguments.

This essay examines the characteristics of organisations and the effects on innovations. It then discusses the supports required for generating effective innovations within such organisations.

Established organisations are often known for its bureaucratic structure and administration processes. Innovation, however, is best nurtured in an environment that provides relative autonomy and independence to the team that aim to solve problems or generate changes for the organisation. The complex hierarchy in large organisations often constrain individuals from generating revolutionary changes and further communicating across the whole network. In addition, the pattern of work have long been established in these firms that the employees have adapted to set way of proceeding and often are less likely to seek alternative means. This is often influenced by strong company culture. Pressure for uniformity can block innovation and the openness to venture into new methodologies and ideas. Nowadays many established companies such as P&G emphases on strong leadership and believe that it is the key to success and sustainability in today's competitive market. However strong leadership can lead to extreme "group think", in which the team converge to the dominating view and discourage diversity in opinions. Tushman's change equation (D.V.P > C) illustrates the important factors that resist change in organisations and the condition under which change takes place. It is often the case in large organisations that they are generally satisfied with the current status and lack motivation for change. Besides, they are usually risk adverse, weary of the costs to the potential changes (e.g. opportunity cost, re-training cost, reputation). Unlike small enterprises who are eager to establish their position in the market and continually adapt their strategy to improve their performance, the more established ones often exert more resistance towards innovation.

Since innovation often occurs in a group-working situation, it is essential to build effective teams. A good team often consists of a pool of expertise and skills across a spectrum of functional areas, providing multiple perspectives that lead to lots of possibilities for resolving a problem. However in order to gain positive benefits from resources, effective leadership is crucial to bind the talents and orient team efforts in the desired direction that will yield beneficial outputs for the organisation. Managers should match the right mix of people with the suitable project that maximises the combination of competences. A shared vision should be cultivated within the team to ensure all members concentrate their efforts on achieving a common goal that deeply matter to them. Although the project team sit within the organisation structure and connect to several departments, a certain degree of autonomy should be given to the team so that their creativity is not restricted by corporate framework and are free to pursue their own means of work. Managers or team leaders should stimulate team creativity using the various creativity techniques such as "brainstorming", "attribute association", and "five whys". Moreover, they should provide timely and appropriate supervisory encouragement to individuals as well as the team s a whole to maintain high level of commitment. The organisation should also provide easy access to relevant information for the project (e.g. time and finance). The right work environment also contributes tot the success of projects - employees are more likely to generate creative ideas in a permissive, light-hearted and non-judgemental atmosphere. Last but not least, a high quality implementation plan guarantees the innovations generated are effectively retained within the organisation.

In summary, the characteristics of established organisations determine the strong resistance against innovations. Employees in such organisations often lack motivations for generating change and are constrained by corporate framework. However effective innovations can be made possible provided appropriate supports are built within the organisation. Among the various courses suggested in previous arguments, good leadership and functioning team are often the first to be considered in many business cases.

Writing Feedback / Entrepreneurial to a professionally managed organisation - problems [3]

(a) What human resource problems tend to arise as new company moves from an entrepreneurial form of organisation to a professionally managed organisation and why does this transition often create difficulties? Provide some examples to support your account.

When an organisation moves from entrepreneurial form to professional management, a number of human resource issues arise.

Firstly, the scope for improvisation and experimentation diminishes - professional management requires planning and resource commitment. The introduction of professional management system brings efficient procedures but also removes employees' scope for discretion. They are obliged to work under pre-defined routines that may inhibit their innovative capability.

The transition is often associated with change in company's culture. Entrepreneurs who are used to the flexible mode of working - retain autonomy and independence, continually modify objectives and explore opportunities - often find themselves restrained by the bureaucratic organisational structure in professional management system. This often causes key staff leaving and consequently loss of core skills and knowledge.

There are various differences between entrepreneurial and managerial approach which give rise to the human resource issues during transition. For example, entrepreneurs seek opportunities and improvise or iterate strategy to mobilise resources and create value whereas professional management set goals, authorise budget and make detailed plan to capture value and preserve/enlarge assets. Entrepreneurs engage in risk reduction to minimise effects whereas professional management are often cautious and risk adverse. Such discrepancies in culture in two forms of organisations result in early recruits unsuited for new jobs after reorganisation and management unsuited to new managerial style.

(b) Can the problems associated with rapid growth in a new technology-based company be anticipated and averted? Provide examples to support your account.

The problems associated with rapid growth in a new technology-based company can be anticipated and averted in a number of ways. Firstly, management should recognise patterns in company's phases of growth to enable them to be responsive to any upcoming issues. Management should allow transition period for employees to adapt to the professional operating procedures and educate staff the benefits of adopting an efficient management system. The company should remain flexible and reactive to market change and continually re-position itself in the market. In order to retain competitive advantage, management of such companies should plan for a variety of scenarios and set up procedure for detection of new opportunities. Companies should not restrain themselves from other potential opportunities even if they do not currently possess the resources or capability to realise the venture. Equally important, companies should learn from earlier problems to stimulate change of direction and allow avoidance of making similar mistakes in the future.

Writing Feedback / Essay on work offshoring - feedback welcome [2]

Moving work offshore where labour is abundant and low cost is a logical extension of scientific management, whether in the factory or in the office." Explain and assess this argument, citing case evidence to support your position. Can anything be done to mitigate stressful working conditions associated with scientific management in offshore sites of work?

This essay examines the economic conditions of scientific management and discusses its relation to the exportation of work offshore in both manufacturing and service sectors. Mitigations against employees stress in offshore sites are also suggested.

The economic conditions required for scientific management to be productive include: scale economies, standardisation of output and strong skill-pay differentials. In the factory, standard product requires workers to perform repetitive, low cycle time tasks; high steady level of demand maintains optimum capacity; economies of scale is needed to cover high administrative costs of planning, implementing, and monitoring production; continuous workflow is required in production process to balance line and avoid delays. Same principles can be applied to service sector. In particular, in order to gain economies of scale, unskilled labour is needed for de-skilled tasks at lower wages. However, there may be a shortage of unskilled local labour or there may be local institutional obstacles (e.g. trade union) to paying low wages. These local labour market conditions provide incentives to alter economic conditions through offshoring work to countries where labour is both abundant and low cost. This applies to both manufacturing and service work as long as the work process is labour intensive and requires low skills. In service sector in particular, skills are scarce and labour costs are a much higher proportion of total cost than in manufacturing.

Task decomposition is used as basis for export of services to low wage offshore sites. Digitisation induces workflows to be organised in the direction of dividing workflow into tasks that are separable in term of technical skills and interactivity; certain portions of the activity that requires low levels of face-to-face interactivity could be relocated offshore. There has been emphasis on reengineering - decompose, examine and standardise the activities necessary to complete a business process. This resembles the Taylorism scientific management activities that tasks took place in the factories back in 19th century. Large numbers of firms have offshore business processes (e.g. insurance claims, medical transcription, call centres and accounting) to low wage countries such as India. The firms benefits from the combination of low labour costs, project management skills and technological sophistication offered by the offshore location. All in all, relocation of jobs offshore results in economies of scale while paying low wages. This satisfies the economic conditions required for achieving high productivity in scientific management.

A number of mitigations can be done to reduce worker stress associated with scientific management at offshore sites.
Introduce technical changes to improve work efficiency.
Encourage worker participation in improving tools, workplace design and task organisation.
Provide employment security - e.g. permanent employment, promotion opportunity and bonus schemes.
Provide opportunity for employees to participate in improvement activities to increase workers commitment.
Address employees' complaints and concerns.
Provide in-time and sufficient technical support when requested.
Organise workplace in work cells/community and provide social support.
Make overtime voluntary and prepare pools of cross-trained workers to fill in for absenteeism.
Provide job enlargement and enrichment to reduce stress caused by performing repetitive low cycle time tasks.
'No blame' culture - avoid individual performance display, recognise worker sensitivity for negative feedback about defects, and train workers in designing and implementing foolproof techniques.

Reduce ergonomic difficulty by investing in process design and capital equipment.
Avoid intensity speed-up and consider impact of resource removal on team performance.

In conclusion, there is increasing tendency of relocating low skilled work offshore across various industries. Such phenomenon exhibits characteristics of scientific management - low cost labour, economies of scale, and standardised outputs. The stressful working conditions associated with scientific management inevitably affect the offshore sites; however such stress can be managed through a number of effective mitigation causes.