Chapter 10 : Organizing for Innovation

Question 1

Advantages of large size firm for innovation

Answer 1

• Better access to financing.
• Better able to spread costs of R&D over large sales
  volume
• Higher likelihood of having complementary activities.
• Greater access to global sources of information &
  other resources
• Access to better research equipment and personnel
• Greater economies of scale and learning effects
  ( ability to select more appropriate projects )

Question 2

Disadvantages of large size

Answer 2

• R&D efficiency might decrease due to loss of
  managerial control
• Reduced incentives.
• More bureaucratic inertia.
• More strategic commitments tie firm to current
  technologies

Question 3

Formalization

Answer 3

The degree to which the firm utilizes rules and procedures to structure the behavior of employees
(Can substitute for managerial oversight but can also make firm rigid.)

Question 4

Standardization

Answer 4

The degree to which activities are performed in a uniform manner
(Facilitates smooth and reliable outcomes but can stifle innovation)

Question 5

Centralization

Answer 5

The degree to which decision-making authority is kept at top levels of the firm OR the degree to which activities are performed at a central location

Question 6

Mechanistic Structures

Answer 6

have high formalization and standardization

• Good for operational efficiency, reliability.
• Minimize variation -> may stifle creativity.

Question 7

Organic structures

Answer 7

have low formalization and standardization; described as “free flowing”
- Encourage creativity and experimentation.
- May yield low consistency and reliability in
manufacturing

Question 8

Ambidextrous organization

Answer 8

• Some divisions (for example, R&D, new product lines)
  may be small and organic; others larger and
  mechanistic.
• Can also alternate through different structures over
  time.

Question 9

Center-for-global

Answer 9

• all R&D activities centralized a single hub
  (Tight coordination, economies of scale, avoid redundancy, develop core competencies, standardize
  and implement innovations throughout firm)

Question 10

Local-for-local

Answer 10

each division does own R&D for local market

Access diverse resources, customize products for local needs

Question 11

Locally leveraged

Answer 11

• each division does own R&D, but firm attempts to
  leverage most creative ideas across company
  (Access diverse resources, customize products for local needs, improve diffusion of innovation
  throughout firm and markets)

Question 12

Globally linked (Managing innovation across borders)

Answer 12

Decentralized R&D labs but each plays a different role in firm’s strategy and are coordinated centrally
- Access diverse resources, improve diffusion of
innovation throughout firm and markets, may help
develop core competencies

Question 13

Transnational approach

Managing innovation across borders

Answer 13

resources and skills anywhere in firm can be leveraged to exploit opportunities in any geographic market
1. Reciprocal interdependence among divisions
2. Strong integrating mechanisms such as personnel
rotation, division-spanning teams, etc.
3. Balance in organizational identity between national
brands and global image.