Chapter 10

Question 1

organization type and how it matters in innovation

Answer 1

An organization’s structure, including its formalization and standardization, significantly influences its innovation capabilities.

Question 2

organization structure to support innovation

Answer 2

1. cultural context
2. retention of innovators
3. sales impact of innovation
4. employer branding
5. holistic ecosystem
6. inequality and inclusivity

Question 3

Company Size and Its Impact on Innovation

Answer 3

Large Companies
- financial access and resources for R&D
- economies of scale in R&D processes
- larger risk taking

Smal Companies
- better ability to adapt to market changes
- flexibility and entrepreneurial spirit

Question 4

Key Structural Dimensions of Firms

Answer 4

1. Formalization:
   
   • The degree to which rules and procedure’s structure employee behaviour. While it improves efficiency and control, excessive formalization can stifle creativity.
2. Standardization:
   
   • Ensures uniformity in processes and outputs, facilitating consistency and quality but potentially limiting experimentation and novelty.
3. Centralization:
   
   • Refers to the degree of decision-making authority retained at the top or centralized in a single location.

Question 5

Centralized vs. Decentralized R&D

Answer 5

1. Centralized R&D:
   
   • All R&D activities are concentrated in a central hub (e.g., Intel’s centralized process development).
   • Pros: Economies of scale, coherence, and consistency.
   • Cons: May lack responsiveness to local market needs.
2. Decentralized R&D:
   
   • R&D is spread across divisions or geographic locations, each tailored to specific needs.
   • Pros: Greater alignment with local markets and diverse ideas.
   • Cons: Redundancy and inefficiency.
3. Hybrid R&D:
   
   • Combines centralized and decentralized elements but is cost-intensive to manage.

Question 6

Size vs. Structure: Mechanistic and Organic Models

Answer 6

1. Mechanistic Structures (Large Firms):
   
   • High levels of formalization and standardization.
   • Efficient for operational consistency but less conducive to creativity and innovation.
2. Organic Structures (Small Firms or Divisions):
   
   • Low levels of formalization and standardization.
   • More adaptable and innovation-friendly but potentially less efficient.

Question 7

Managing Innovation Across Borders

Answer 7

1. Center-for-Global:
   
   • Centralizes all innovation activities and diffuses results globally.
   • Suitable for standardized industries but less responsive to local needs.
2. Local-for-Local:
   
   • Each subsidiary focuses on innovations tailored to its local market.
   • Promotes customization but risks inefficiencies and limited knowledge sharing.
3. Locally Leveraged:
   
   • Shares the best local innovations across the company to leverage diverse ideas.
4. Globally Linked:
   
   • Decentralized R&D units specialize in specific tasks (e.g., IT, design) while remaining globally coordinated to serve corporate objectives.
5. Transnational Approach:
   
   • Combines the strengths of centralized and decentralized strategies by encouraging collaboration and resource sharing across divisions.