Cmi Unit 6008

Unit No: 6008 Managing ideas and innovation
Table of Contents
Introduction ............................................................................................................................................. 3
Task 1 ...................................................................................................................................................... 4
A.C. 2.1 - Evaluate the relationship between strategic management and leadership .......................... 4
Task 2 ...................................................................................................................................................... 7
A.C. 1.1 - Analyse the impact of the organisations culture and values on strategic leadership ........ 7
Task 3 .................................................................................................................................................... 17
A.C. 1.2 - Discuss how organisational specific, legal, regulatory and ethical requirements impact on
strategic leadership demands ............................................................................................................ 17
Task 4 .................................................................................................... Error! Bookmark not defined.
A.C. 1.3 - Evaluate current and emerging social concerns and expectations impacting on strategic
leadership in the organisation ........................................................... Error! Bookmark not defined.
A.C. 2.2 - Evaluate leadership styles and their impact on strategic decisionsError! Bookmark not
defined.
A.C. 2.3 - Discuss why leadership styles need to be adapted in different situations and evaluate the
impact on the organisation ................................................................ Error! Bookmark not defined.
A.C. 3.1 - Evaluate two differing leadership strategies .................... Error! Bookmark not defined.
A.C. 3.2 - Determine situational variables which could cause a change in leadership strategy Error!
Bookmark not defined.
A.C. 3.3 - Analyse a leadership strategy to support organisational directionError! Bookmark not
defined.
Bibliography ......................................................................................................................................... 21
References: ........................................................................................................................................ 22

Introduction

Idea management is a structured process for the collection, handling, selection and distribution of
ideas. It may include support for gathering, storing, improving, evaluating and prioritizing ideas by
providing methods and tools, such as templates and guidelines. Idea management is an
integrated part of the innovation process. Idea management is relevant for all types of ideas,
from incremental improvements to new and disruptive business opportunities. The scope can
range from being limited to one internal unit, to cover the entire organization, to include also
external stakeholders, such as customers and partners. Some companies that have implemented
idea management systems are IBM, Accenture and Whirlpool. Ericsson started collaborative idea
management in 2008 by developing a generic solution aligned with the existing collaboration
platform and strategy.
Creativity and innovation has changed the world since ages now. Any creativity or innovation in
organisations leads to growth and achieve new heights of success. Today employees are more
empowered to think freely and implement new ideas and thoughts that benefit the organisation.
Innovation is seen as the ability to change the rules of the game. The rapid developments in IT
have thrown up opportunities for many more organisations to do business in new ways.
Innovation will be influenced by how people are managed and how they interact e.g.
organisational structures that encourage interaction and integration, rather than formal division of
responsibility, may encourage innovation. There are increasing numbers of organisations that
claim to depend substantially on innovation for their strategic success, and still others that argue
the importance of becoming more innovatory. But, this can only occur if an organisation is able to
both generate and integrate knowledge from both inside and around the organisation to develop
and deliver new product or service features. If an organisation wants to increase the creative
production of its members there are four broad strategies it can follow.
It may introduce procedures to encourage the generation of new ideas-such as the well-
known brainstorming (Osborn, 1953) technique.
It may train its people about the skills required for successful creative performance.
It may use selection and assessment processes to recruit creative individuals and
allocate people to positions appropriate to their level of creativity.
It may change its own characteristics, such as structure, climate and culture, in ways
which can facilitate creativity.

McDonalds background
Two brothers, Richard and Maurice McDonald founded McDonalds in 1937.The brothers developed
food processing and assembly line techniques at a tiny drive-in restaurant east of Pasadena,
California.
In 1954,Ray Kroc ,a milk-shake mixer salesman, saw an opportunity in this market and
negotiated a franchise deal giving him exclusive rights to franchise MacDonalds in the USA.Mr Kroc
offered a McDonalds franchise for $950 at a time when other franchising companies sold restaurant
and ice-cream franchises for up to $50,000. Mr Kroc also took a service fee of 1.9 per cent of sales for
himself plus a royalty of 0.5 per cent of sales went to the McDonalds brothers. The MacDonalds
brothers sold out for $2.7 million in 1961.
McDonalds first international venture was in Canada, during 1967. Shortly afterwards, George
cohon bought the licence for MacDonalds in eastern Canada, opening his first restaurant in
1968.cohon went on to build network of 640 restaurants, making MacDonalds in Canada more
lucrative than any of the other McDonalds outside the USA.
The key to the international success of MacDonalds has been the use of franchising. By
franchising to local people , the delivery and interpretation of what might be seen as US brand culture
are automatically translated by the local people in terms of both product and service.
MacDonalds now has over 20,000 restaurants in over 100 countries, and around 80 per cent are
franchising.

Task 1
A.C. 1.1 - Discuss the approaches to the encouragement of ideas, generation and
innovation across the organisation.

Creativity is the ability to develop new ideas and discover new ways of looking at problems and
opportunities, Innovation is the key to economic development of any country. McDonalds is one such
company which has earned its brand image over the years with effective use of entrepreneurship,
creativity and innovation all put in right place in the organization allowing the company to achieve
massive competitive advantages and an edge at building new ideas and defining new and better
means of customer satisfaction. The company serves around 50 million customers in 31,000
destinations worldwide on a daily basis and pulling that off whilst successfully obtaining high
revenues is a job that requires continuous innovation and out of the box thinking. McDonalds focus
over the years has been nothing less than the customer itself. McDonalds took its strong roots in
building a name in innovation during the 1990s and the early 2000ss when the competition first
started to grow. McDonalds at that time did not take its brand equity for granted and infused its
creative teams minds into the thought process that have and continue to generate innovative products
and campaigns like Big Mac and Egg McMuffin (Entrepreneur, 2006 [online]). McDonalds offers an
extensive case study of the application of a well thought of and thorough innovation strategy, a
product planning and developmental process that effectively reflects the changing industry, its
opportunity recognition and analysis to stay on top, and the Mcdonalization culture and leadership
embedded with innovation that it follows to successfully practice innovation in all aspects and obtain
customer satisfaction that defines industry standards. "Think big, start small, scale fast." This is the
innovation strategy being followed by McDonalds. This idea was brought together by the managing
director of McDonalds Ventures, Mats Lederhausen (Entrepreneur, 2006 [online]). The key players
are all of the employees of the company who are well ingrained with the 5PS that form the paradox of
the company. These 5 PS are: People, Product, Promotion, Place and Price.
A democratic and participative leadership style is commonly recommended as encouraging group
innovation. It is widely agreed that creativity is facilitated by high levels of discretion(Nicholson and
West, 1988) and that people feel more committed to changes if they have participated in decisions
about them.A positive association between group innovativeness and participative leadership style has
been found in several studies.
A.C. 1.2 - Relate the organisations strategy to innovation with the organisational
objectives.
Case studies focusing on this part of the curriculum illustrate what having a mission, vision, aims and
objectives means to a business and how a company decides on the strategies and tactics that will
deliver its aims and objectives.
Other core aspects of strategy include:
Managing change
Decision making
Growing the business
Managing stakeholder relationships.
Business objectives are the ends that an organisation sets out to achieve. A business creates business
plans to enable it to achieve these ends - thus plans are the means to the ends. The objectives and
plans that an organisation creates are determined by balancing the requirements of the various
stakeholders in the organisation. The stakeholders are those individuals and groups that are affected
by and have an interest in how the business is run and what it achieves. Every business has a range of
stakeholders including the objectives that a company establishes are based on blending the various
interests of these stakeholder groupings. For example, an objective to be the market leader, will
benefit all stakeholders because customers will receive high quality products, shareholders will
receive high dividends, employees will receive good wages, and so on. Organisations create a
hierarchy of objectives. At the top level an organisation will often create a 'mission' setting out the
purpose of the organisation. This will be followed by a set of objectives relating to such aspects as:
Objectives about market share.
Objectives about customer satisfaction.
Objectives about employee satisfaction.
Objectives about returns to shareholders.
Objectives about cutting pollution.

A.C. 1.3 Determine methods to communicate the innovation strategy across the
organisation.
Innovation Communication Management
In particular in the Open Innovation economy, innovative companies facilitate the flow of ideas,
initiate innovation programs, make innovation capabilities & an innovation portfolio visible.
Innovative companies are inspired through the exchange of thoughts and ideas with different people
world-wide. That requires overcoming the fragmentation of communication systems and activities in
cross-functional and cross-organizational collaboration for effective communication for innovation.
Innovation communication is a new communication field for organizations and collaborative networks
aimed at carrying on innovation dialogue with stakeholder groups and building up a unique resource
portfolio for re-invention and strategic change. Managing innovation communication is a new
management function and a strategic capability to create business value through efficient
communication management for innovation
Five key principles of effectively managing innovation communication:
Strategic Communication Management : Different communication fields have to be
classified and integrated in communication management. For instance, the integration of
strategic tools in a companys communication plan, such as scenario planning, portfolio
mapping, framing, and inter-cultural communication considering resource markets,
communication markets, and sales markets.
Intelligent Information Management : Using ICT and web-based systems supports to
exploit potentials for effective information processes within and across organizations. For
instance, collaborative innovation platforms might facilitate communication within and across
organizations; however, intelligent information management including knowledge
management as a crucial task also implies a need to invest in integrative concepts and
reporting tools for effective communication.
Stakeholder Relationship Management: The basic idea is to determine stakeholder
relationships on intra- and inter-organizational levels and to analyze/interpret data for creating
valuable dialogue with stakeholders to build long-term relationships.
Design Management: Communication design, portfolio design, and process design are
impact factors for effective communication. To overcome fragmentation of communication
systems, for instance, it requires designing an integrative portfolio and integrative processes.
Capabilities Management: Resources (human resource, financial resources) and
organizational capabilities (reputation management, marketing) have to be coordinated and
systematically built up for re-invention and strategic change.
Critical view on communication of ideas/innovation
Note: Communication does not mean to create new buzzwords. Nor is it meant to overemphasize
innovation over various communication channels as to be the only important factor for business
success in global dynamic environments. It is, indeed, the long-term perspective to understand
sustainable innovation as progress and strategic change. Any successful company involved in global
business thus is innovative. In particular in the Open Innovation economy companies get used to new
ways of sharing ideas, creating new products/solutions in close relationships with customers and
being linked to people around the world in multiple relational arrangements. Hence, communication
plays a key role in building relationships, presenting thoughts and ideas and developing new customer
solutions.
However, there is a tendency to communicate ideas in a simplified way and to use buzzwords to
follow emerging issues and trends. Any exchange about ideas should not remain nice infotainment
from a business perspective. For instance, new cloud-based IT solutions, such as Micro blogging, can
support project & team communication within and across companies. But what follows next after idea
exchange, after the fuzzy front end of innovation?
From a strategic management perspective developing innovation communication as an organizational
capability helps companies to carry on smart innovation dialogue with different stakeholder groups
over time. This allows a company to build and re-configure a resource portfolio for re-invention and
thus for effective innovation portfolio management, including the use of new tools and methods.
Critical thinking and asking probing to dig deeper and to get new insights from around the world or
inside companys sub-group worlds (for instance, to understand different views in idea management,
marketing, and corporate communication) takes on an important role as a building block for
innovation capability.
The Innovation Communication Management Framework can provide a foundation to establish
Innovation Communication as an organizational strategic capability to overcome fragmentation in
communication activities, tools, and systems and to create business value through efficient
communication management for innovation.

Task 2
A.C.2 .1 Outline a method to motivate others in the organisation to identify
ideas and innovations and the sharing of these ideas and innovations.

A.C.2.2 Recommend ways to overcome barriers to idea and innovation generation.
Contextual factors: Barriers to innovation
As already mentioned, innovative behavior as well as influence behavior is not only determined by
personal factors such as individual power bases but also by contextual factors. However, research on
the contextual determinants of influence decision-making in innovation management is very limited
and a comprehensive operationalization of influence context does not exist. The only study that
includes contextual factors in a setting relevant to innovation is Maute and Locanders (1994) analysis
of organizational and contextual factors as predictors of influence decision-making in new product
management. In their study they describe the influence context in R&D by struggles for ascendancy
as well as by struggles for collaboration (Maute & Locander 1994). Struggles for ascendancy usually
occur among organizational actors with incompatible new product objectives and are often manifested
in the competition for scarce resources and in battles among competing technologies or product
designs. As organizations have scarce material and human resources, individuals, groups, and
departments must compete for what is available. Such struggles for ascendandcy typically take place
prior to crititical go/ no go development decisions when some new product ideas, technologies, or
prototypes are approved for further development and others not. On the other hand, struggles for
collaboration involve actors with compatible new product objectives, but for whom the means to
achieve these goals are unclear or in dispute and are reflected in efforts to establish and maintain new
product alliances. This type of struggle is common during later development stages where few, or
perhaps only one, new product idea is in play and multi-disciplinary involvement in the development
process escalates. Their results suggest that influence method and influence intensity differed during
struggles for ascendancy and struggles for collaboration. However, this study lefts out personal factors
which might have an impact on individual influence behaviour in these two context situations. It is
reasonable to assume that different types of barriers to innovation are associated with different
demands and constraints, require different decision processes, and thus may require the mobilization
of different sources of power (i.e. personal factors) departments must compete for what is available.
Such struggles for ascendancy typically take place prior to critical go/ no go development decisions
when some new product ideas, technologies, or prototypes are approved for further development and
others not. On the other hand, struggles for collaboration involve actors with compatible new product
objectives, but for whom the means to achieve these goals are unclear or in dispute and are reflected
in efforts to establish and maintain new product alliances.
This type of struggle is common during later development stages where few, or perhaps only one, new
product idea is in play and multi-disciplinary involvement in the development process escalates. Their
results suggest that influence method and influence intensity differed during struggles for ascendancy
and struggles for collaboration. However, this study lefts out personal factors which might have an
impact on individual influence behaviour in these two context situations. It is reasonable to assume
that different types of barriers to innovation are associated with different demands and constraints,
require different decision processes, and thus may require the mobilization of different sources of
power (i.e. personal factors).
Conceptualization of a model of innovative behaviour in barrier situations.
The model of innovative behaviour in barrier situations contains personal factors as well as contextual
factors which serve to explain the shape and intensity of individual behaviour. As described before
personal factors are represented by different power bases which enable a person to exert influence in
order to overcome a certain barrier to innovation. Thus, individual power bases are declared as input
variables in the model of innovative behaviour in barrier situations.

A.C.2.3 Devise to methods to encourage and support originators of ideas and
innovations.

We look here in some detail at the people who actually work in or for
organisations, the individuals who together comprise organisations - be
those organisations clubs, charities, companies, local councils or
government departments. We will look in particular at the development
and motivation of people, also at their creativity and their capacity for
innovation, all of these primarily in the context of the organisations
that people work for or in.
All the organisations mentioned above depend on people, on their
many and varied individual blends of skills, energies, experience,
attitudes and motivation - by this we mean their inclination or
motivation to 'do their jobs', earn wages or salaries and, importantly,
to 'add value' to whatever it is that the organisation does. Motivation
is, as we shall see later, a key factor in the employment and the
management of people.
So too is development - development of individuals in the sense of
learning, growing, progressing, acquiring knowledge and skills, using
these perhaps to take on more responsibility within an organisation,
probably to use their skills and experience to help the organisation
itself develop. When Peter Senge (The Fifth Discipline, 1990) wrote in
the early '90s about 'learning organisations' he was identifying the
benefits of organisations encouraging, motivating, supporting their
employees to learn, to grow to develop - and in doing so help the
organisation they worked for to learn, grow and develop also.
Motivation
In considering the attitude and activities of people in the work
environments, we use in this section the work of Maslow, McGregor
Schein, Herzberg, Adair and Handy and consider particularly some key
aspects of 'motivation' - what has come to be known in management
circles as 'motivational theory'. We also take an initial look at the work
of F.W.Taylor, the father of what is known worldwide as Taylorism.
The word motivate, says guru Charles Handy in 'Understanding
Organisations', is somewhat ambiguous, typically defined in
dictionaries as 'to give incentive to' - but who or what provides the
incentive? And to whom or what is that incentive given? Can people
motivate themselves? Most of us would say, yes they can - and often
do.
Let's start with a look at the work of Maslow and his well-known
'hierarchy of needs'.
Maslow (1943)
From his studies, Abraham Maslow, the psychologist, proposed that
there exists a 'hierarchy' of human needs, rising from the most basic
needs (e.g. food, water, shelter) to what he calls 'self-actualisation', a
'fulfilment of personal potential through processes of growth'. These
needs are typically presented, as below, in the form of a pyramid,
building from basic needs (naturally at the base) to higher, more
sophisticated needs at the top.
Hierarchy of Needs

Maslow made assumptions that people need to satisfy each level of
need, before elevating their needs to the next higher level e.g. a
hungry person's need is dominated by a need to eat (i.e survival), but
not necessarily to be loved.
'A satisfied need ceases to motivate' writes management guru John
Adair, 'Once you have enough food and drink and somewhere to
sleep,' he writes, 'other needs rise up in the human heart.'
When basic needs are met you become interested, says Charles
Handy, in a job, a salary, a pension - and of course fundamentals such
as safety at work. Beyond these it becomes about self-respect and
self-esteem, e.g. the quality of work related relationships, job
satisfaction, perhaps more responsibility, larger salary and benefits as
the individual grows and develops via processes of personal physical
and intellectual growth. So bonus pay may matter less to health
professionals than rewards of peer esteem, honours such as
knighthoods and so on.
Comment : Maslow's theory still finds quite a lot of favour even 60
years after he first presented it - many of us can relate personally to
the hierarchy that he proposed.
McGregor (Theory X and Theory Y)
In his 1960 management book, The Human Side of Enterprise, Douglas
McGregor proposed two motivational theories by which managers
perceive employees and their motivation. He referred to his two
opposing motivational theories as Theory X and Theory Y. Each
theory assumes that management's role is to organize resources,
including people, to 'best benefit the organisation'. However, beyond
this commonality, the X and Ytypes are highly dissimilar as we can see
:

Theory X Theory Y
Lazy Like working
Avoid responsibility Accept/seek responsibility
Therefore need control/ coercion Need space to develop imagination/ ingenuity
Comment : Although many people find it useful to consider the two
extremes or types that McGregor identified, many these days accept
that they are merely parts of a continuum and that there are 'many
places and types in-between'. Within health organisations some staff
are required to keep accurate time diaries (Theory X); others are freer
to get the work done and manage their own time (Theory Y). The
recent drive to make consultants agree job plans with specified
activities for each half day is a Theory X response to the belief that
consultants spend their time on the golf course or at their private
practice.
Schein,1980
Ed Schein looked further into these motivational aspects and identified
two different motivational types :
'rational economic man' - people primarily driven by economic needs
but essentially 'passive' and typically controllable by organisations
'self-actualising man' - those of us who are primarily self-motivated
and self-controlled and who, even inside organisations, seek to 'find
their own way' towards realisation of their personal goals and
objectives.
According however to guru Charles Handy, who writes in his well
known and very well read book 'Understanding Organisations'..
'We do not necessarily have to find fulfilment of all our needs in any
one situation,' pointing out that Schein comes down in favour of what
he calls 'complex man'
Schein's complex man is based on the fact that people are variable,
change in the ways they seek fulfilment, respond in a variety of ways
to a 'variety of managerial strategies' writes Handy.
Handy also links Schein's work with that of Levinson and what is
referred to as the psychological assumption which states that a person
is a complex unfolding, maturing organism who passes through
physiological and psychological stages of development. 'We evolve an
ego ideal towards which we strive,' writes Handy. The most powerful
motivating force in us, he says, over and above such basic drives as
hunger, sexuality, aggression is the 'need to bring ourselves closer to
our ideal.'
'Work is part of our identity, our ego ideal,' writes Handy and
opportunities must be provided, he adds, for us to work towards our
ego ideal in work if we are to be 'motivated'.
Comment : Schein undertook useful classification of a number of
assumptions which motivational theorists had been making and it is
interesting to note that his categories follow each other in some sort of
historical progression that starts from the time of the industrial
revolution.
Herzberg's motivation hygiene theory
Herzberg's (1968 Harvard Business Review) research was based on
200 engineers and accountants who were asked to recall the
times/occasions when they experienced satisfactory and unsatisfactory
feeling about their jobs. Later this also involved manual and clerical
staff with similar results claimed:
Herzberg showed two categories of findings:
1. 'Motivators' - factors giving rise to satisfaction
2. 'Hygiene factors' - factors giving rise to dissatisfaction
Motivators Hygienes
Achievement Company policy and recognition
Recognition Supervision - the technical aspects
Work itself Salary
Responsibility Interpersonal relations supervision
Advancement Working conditions
Other features include:
Motivators Hygiene
Related to content of work related to context/environment of
work
promote satisfaction only prevent dissatisfaction
only neo-human school attempts to
address these
Taylor (salary) + Mayo
(interpersonal relations) look at
these
Herzberg's work led to a practical way to improve motivation which
had up to that point been dominated by Taylorism...
F.W. Taylor, 1856-1915, believed to be the father of 'Scientific
Management' whose views and recommended management methods
had dominated early 20
th
century industrial production systems where
organisations tended to be viewed as machines - Handy states that
Taylor and his supporters thought of organisations as 'machines with
human parts.'
Taylor's doctrine is that there is one best way to accomplish any task -
the manager's task is to identify that one best way and make everyone
conform to it. Initiatives to improve efficiency within operating theatres
and A&E departments, including the current NHS 'Action on'
programmes are founded in this belief - e.g. in A&E should the doctor
walk to the patients or should the patients walk to the doctor? The
former achieves quicker patient throughput.
Key points about Taylor include:
he was in the scientific management school
his emphases were on efficiency and productivity
but he ignored many of the human aspects of employment
For the workers, scientific management required them to:
stop worrying about the divisions of the fruits of production between
wages and profits.
share in the prosperity of the firm by working in the correct way and
receiving wage increases.
give up their idea of time wasting and co-operate with the
management in developing the science
accept that management would be responsible for determining what
was done and how
agree to be trained in new methods where applicable
From the work of Herzberg and others in the 1960s and early 70s,
greater attention began to be paid to the needs of the individuals and
groups of individuals in workforces. 'Job enrichment' programmes
began to emerge, the aim of these being to design work and work
structures to contain an optimum number of motivators. This approach
countered the years of Taylorism which had consistently sought to
break down work into its simplest components and to remove
responsibility from individuals for planning and control.
Comment : there remain to this day doubts about the applicability of
Herzberg's factors to non-professional groups, this despite the fact that
some of his later studies involved both clerical and manual groups. The
numbers in these categories were small and many researchers still
argue about the results in these groups. Social scientists meantime
continue to argue about the validity of Herzberg's definition of 'job
satisfaction'.
Let us close this discussion on motivation with some telling statements
by Charles Handy :
'Organisations are to me, first and foremost, fascinating collections of
people. The challenge is to make them productive and useful
communities. That requires the use of power in all its guises as well as
an understanding of the context of the organisation, of its history and
its purpose - the politics of the practical you might say, or the
organisation as it really is. I call these practicalities because what is
the use of all our understanding if we cannot turn it into something
practical and useful?'
Creativity and Innovation
Man's progress and development on our planet over millennia has been
highly dependent upon our species' ability to adapt, to create and to
innovate. It has allowed us in many Western societies to move from
meeting Maslow's basic needs of food, water, shelter and safety
towards the attainment of what he calls 'self-actualising' man. Through
the agricultural revolution that got underway in the Middle East from
around 10,000B.C to the invention of the printing press and the dawn
in the late 18
th
century of the industrial revolution, the invention of the
railways, electricity, the motor car, the telephone, right through radio
and television to the internet and today's multi-purpose '3G' mobile
phones we can trace the development of an ever-accelerating pace of
human innovation.
Creativity and innovation remain today vital ingredients to the success
of any organisation and it has become an increasing challenge for
many large organisations to encourage and stimulate the generation of
new ideas, new innovations that can benefit not only the organisation
but also the creative and innovative individuals themselves. In today's
competitive, consumer driven markets innovation is often described as
'the power of taking new ideas through to customers to satisfy
increasingly sophisticated needs'. But the need to create, come up
with new ideas, innovate is certainly not confined to overtly
commercial organisations; innovation and creativity also have an
important place in so-called 'not-for-profits' and increasingly in the
public and government sectors where the drives for greater efficiency
and effectiveness, for enhanced productivity are driving organisations -
and the people in them - to find new and better ways of working, to
find innovative new solutions to both old and new problems, to look to
technology and modern business processes to find ways of 'doing more
for less' to 'keep the customers and consumers happy'.
Henry Minzberg in 'The Nature of Managerial Work' (1992) discussed
the creation of frameworks in organisations that would help and
encourage creativity:
'brainstorming' - a word now discouraged in NHS because of
connotations with mental health but still heavily used elsewhere,
NHS suggestion = 'cloudbursting'
team meetings
suggestion boxes
communication strategies
The difference between Invention and Innovation
It is important to make the distinction between innovation and
invention.:
Invention is the first occurrence of an idea for a new product or
process, while innovation represents putting something into practice, a
new application of an old concept, a new value or a new way of doing
things.
To be able to turn invention into innovation organisations normally
need to combine several different types of knowledge, capabilities,
skills and resources. For instance, the introduction of a new technology
for cervical cytology will require new equipment, new knowledge and
skills through training and development as well as a 'whole system'
approach to ensure a 'joined-up' service.
A `key characteristic of innovation is that it is a continuous process -
innovation is often an effect of the small incremental/ marginal
changes in products and/or processes.
Following the understanding that innovation is crucial for economic
change, 'radical' innovations shape big changes in the world, whereas
'incremental' innovations contribute to the process of continuous
change.

Task 3
A.C. - 3.1 Evaluate ideas and innovations against the organisations objectives
or opportunities.

A major consideration in selecting objectives is that their achievement should
be at least verifiable and, ideally, measurable. That is to say, it should be
clear that the selected objectives have or have not been achieved and also
the extent to which they have been achieved should be quantifiable or
determinable in a robust qualitative ma
Management by objectives is about setting yourself objectives and then breaking these down into
more specific goals or key results.
MBO is a systematic and organized approach that allows management to focus on achievable goals
and to attain the best possible results from available resources. The principle behind MBO is to
make sure that everybody within the organization has a clear understanding of the aims, or
objectives, of that organization, as well as awareness of their own roles and responsibilities in
achieving those aims. The complete MBO system is to get managers acting to implement and
achieve their plans, which automatically achieve those of the organization.
Setting Objectives
"The one thing an MBO system should provide is focus", says Andy Grove who ardently practiced
MBO at Intel. So, have your objectives precise and keep their number small. Most people disobey
this rule, try to focus on everything, and end up with no focus at all.
For MBO to be effective, individual managers must understand the specific objectives of their job
and how those objectives fit in with the overall company objectives set by the board of directors. "A
manager's job should be based on a task to be performed in order to attain the company's
objectives... the manager should be directed and controlled by the objectives of performance rather
than by his boss."
The managers of the various units or sub-units, or sections of an organization should know not only
the objectives of their unit but should also actively participate in setting these objectives and make
responsibility for them.
The review mechanism enables leaders to measure the performance of their managers, especially
in the key result areas: marketing; innovation; human organization; financial resources; physical
resources; productivity; social responsibility; and profit requirements.
However, in recent years opinion has moved away from the idea of placing managers into a formal,
rigid system of objectives. Today, when maximum flexibility is essential, achieving the
objective rightly is more important.
Achieving the Balance between Management and Employee Empowerment
The balance between management and employee empowerment has to be struck, not by thinkers,
but by practicing managers. Turning their aims into successful actions, forces managers to master
five basic operations:
setting objectives,
organizing the group,
motivating and communicating,
measuring performance, and
developing people, including yourself.
These MBO operations are all compatible with empowerment, if you follow the main principle of
decentralization: telling people what is to be done, but letting them achieve it their own way. To
make the principle work well, people need to be able to develop personally. Further, different people
have different hierarchy of needs and, thus, need to be managed differently if they are to perform
well and achieve their potential.
Empowerment recognizes "the demise" of the command-and-control system, but remains a term of
power and rank. A manager should view members of his or her team much as a conductor regards
the players in the orchestra, as individuals whose particular skills contribute to the success of the
enterprise. While people are still subordinates, the superior is increasingly dependent on the
subordinates for getting results in their area of responsibility, where they have the requisite
knowledge. In turn, these subordinates depend on their superior for direction and "above all, to
define what the 'score' if for the entire organization, that is, what are standards and values,
performance and results."
Managing for Results
The only place where meaningful management results can be won is the outside world. Managing
for results is expansion of MBO into the marketplace. It is the theory and practice of how to produce
results on the outside, in the market and economy.
To achieve these results, you should develop a solid, sound, customer-focused, and entrepreneurial
strategy, aimed at market leadership, based on innovation, and tightly focused on decisive
opportunities.
Individual Responsibility
MBO creates a link between top management's strategic thinking and the implementation lower
down. Responsibility for objectives is passed from the organization to its individual members. It is
especially important for knowledge-based organizations where all members have to be able to
control their own work by feeding back from their results to their objectives.
Management by objectives is achieved through self-control, the tool of effectiveness. Today the
worker is a self-manager, whose decisions are of decisive importance for results.
In such an organization, management has to ask each employee three questions:
1. What should we hold you accountable for?
2. What information do you need?
3. What information do you owe the rest of us?

A.C.-3.2 Analyse risks and coats of ideas and innovations against benefits. Cost-benefit
analysis (CBA) is based on the simple idea that a project or
programme can be assessed in terms of the classes of benefits and costs
that are associated with it. These benefits and costs are put into a common
accounting framework by assigning monetary values to them. Then the
relative merits of different projects or programmes, or the overall efficiency of
a single option, can be assessed arithmetically. This simple idea requires a
number of rather complex and often contentious steps in order to put it
into practice:

(Ex post) measurement or (ex ante) estimation of the costs and benefits
this encounters the familiar problem of limitations in being able to account
for the complete range of costs and benefits (including unexpected
outcomes).
Assigning monetary values to these particular controversy has arisen
around (a) valuation of human health and life (attaching a money value to
an individual life can cause deep unease) and (b) valuation of
environmental sites and historical artifacts (where there may be
irretrievably change or destruction of assets whose value to future
generations is unpredictable).
Deciding how to deal with uncertainties - cost-benefit analyses have often
been conducted on the assumption that a most likely future is the only
future we can or should plan for.
Deciding how to deal with issues of equity and uneven distribution of costs
and benefits that are liable to arise there have been controversies as to
the unequal treatment of different people, for example the assumption in
cost-benefit analyses of transport programmes that the time of executives
should be assigned a higher value than that of housewives. Generally,
CBA does not attempt to assess impacts on different groups, assuming
that market valuations will provide sufficient information to encompass
overall societal impact. There could, however, be some assessment of
differential impacts built in, though other approaches are more often
applied to such issues.
Determining how to discount future costs and benefits while the standard
economic discount rates can be applied, these can lead to very small
importance being attached to long-term costs or benefits.

Cost-benefit approaches fit decision-making needs and routines so well that
they are deeply engrained in institutional practice. As long as they are not
seen as the complete answer (rather they are one of a number of approaches
to evaluation), and as long as there is adequate acknowledgement of
uncertainties and debatable assumptions (especially as regards
monetisation), they may prove helpful in evaluation. The main issue is
whether we can and indeed should attempt to reduce policy objectives and
decisions to monetary parameters.

A.C.-3.3 Recommend a course of action for an idea and innovation.
A.C.-3.4 Define a process that rewards the originators and developers of an idea and
innovation.

.

Bibliography

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Journal of Production Economics, 42(1), pp. 22-35.
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edn. London: Prentice-Hall International (UK) Limited.
4. Dobson, P., Starkey, K., Richards, J., (2004), Strategic Management: issues and cases,
Blackwell Publishing.
5. Johnson and Scholes, (2005) Exploring Corporate Strategy 7th Edition London Prentice hall
6. Mintzberg, H., Lempel, J. (1999), "Reflecting on the strategy process", Sloan Management
Review, Vol. 40 No.3, pp.21-30.
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McGraw-Hill
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McGraw-Hill
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http://findarticles.com/p/articles/mi_m0EUY/is_10_5/ai_54128674 burger Mexico
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http://ezinearticles.com/?McDonalds-Business-Analysis&id=687438 Accessed on 23 October
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Unit No: 6008 Managing ideas and innovation

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