Concepts and Theories

Question 1

Describe Radical innovation

Answer 1

A radical or disruptive innovation is an innovation that has a significant impact on a market and on the economic activity of firms in that market.

The innovation could, for example, change the structure of the market or create new markets

Question 2

Describe Incremental innovation

Answer 2

Incremental innovation concerns an existing product, service, process, organization or method whose performance has been significantly enhanced or upgraded.

Question 3

Name the Generic phases of the innovation process

Answer 3

1. Searching and scanning (internal and external environments)
2. Filtering and selecting potential opportunities
3. Implementing development & commercialization
4. Reviewing & learning from experience. Capturing the benefits.

Question 4

What is the purpose of creating a Business Model Canvas?

Answer 4

It describes how an organization creates, delivers, and captures value.

Question 5

Describe what exploration and exploitation entails?

Answer 5

Exploration: Smaller and newer organizations rely on exploration, which involves risk-taking, experimentation, discovery, and innovation.

Exploitation: Larger companies rely on exploitation, whereas innovation emerges on the existing assets of the organization and improves them through innovation.

Question 6

What is Ambidexterity?

Answer 6

The ability to do two different things at the same time; for example, exploitation and exploration.

Question 7

What is Structural ambidexterity?

Answer 7

It allows organisations to separate their exploration units from their exploitation units, enabling them to have different processes, structures, and cultures.

Question 8

Describe Absortive capacity

Answer 8

The ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities.

Question 9

What is meant by the ‘Perpetual search trap’?

Answer 9

Relating to discovering something new, but the organization does not have the patience or persistence to build on the new discovery or idea.

Question 10

What is meant by the ‘Success trap’?

Answer 10

Related to ‘doing business as usual’ because the organization is reluctant to innovate itself, as it’s difficult to change.

Question 11

Name Mintzbergs six structural archetypes

Answer 11

1. Simple structure (centrally controlled but can quickly respond to changes in the environment).
2. Machine bureaucracy (controlled centrally by systems e.g., McDonald’s or Ford).
3. Divisionalized forms (decentralized organic form designed to adapt to local environmental challenges).
4. Professional bureaucracy (power located with individuals but coordination via standards e.g., hospitals).
5. Adhocracy (not always long-lived but offer a high degree of flexibility).
6. Mission-oriented (organization held together by a common purpose).

Question 12

Describe the meaning of Open vs Closed innovation

Answer 12

Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation and expand the markets for external use of innovation.

Closed innovation, all the intellectual property is developed internally and kept within the company.

Question 13

Define ‘Explicit knowledge’

Answer 13

Codified, always conscious and easy to transmit and store.

Question 14

Define ‘Tacit knowledge’

Answer 14

Uncodified, sometimes unconscious, and difficult to transmit and store.

Question 15

Name the dimensions of innovation space (the 4 P’s)

Answer 15

• Product (what we offer to the world)
• Process (how we deliver and create that offering)
• Position (where we target that offering and the story, we tell about it)
• Paradigm (how we frame what we do)

Question 16

Define ‘competency trap’

Answer 16

When a company only relies on exploitation, hence it gets trapped in its own competences and does not search for new ideas

Question 17

Define ‘Organizational slack’

Answer 17

Organizational slack is the difference between resources available & those currently needed.

Organizational slack allows an organization to adapt successfully to internal pressures for adjustment or to external pressures for change in policy, as well as to initiate changes in strategy with respect to the external environment.