Bachelor of Business Management (Hons)

INNOVATIVE AND CREATIVE SKILLS IN

BUSINESS

Building the innovative organization (Part 1)

(Week 5)

PowerPoint® Slides
by Harjinder Kaur

06/03/21
LEARNING OBJECTIVES

This week lesson will be on Building the innovative

organization (Part 1). Students will be taught on the
following:

• Components which are necessary and important to

create an innovative organization,
• Determine the component of shared vision, leadership
and the will to innovate and appropriate structure

March 6, 2021
LEARNING OUTCOMES

On successful completion of this topic students should

be able to:
• Describe the components that build an innovative

organization.
• Discuss the component of shared vision, leadership

and the will to innovate and appropriate structure.

March 6, 2021
Introduction

• Innovation has nothing to do with how many R&D dollars

you have…it’s not about money. It’s about the people
you have, how you’re led, and how much you get it.’
(Steve Jobs, interview with Fortune Magazine,1981)

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Introduction

• Innovation is increasingly about teamwork and the

creative combination of different disciplines and
perspectives.
• People are the most important assets which a firm
possesses.
• The management challenge is how to go about building
the kind of organizations in which such innovative
behavior can flourish.

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 COMPONENTS OF THE
INNOVATIVE ORGANIZATION

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 Components of the innovative organization

Component Key features

1. Shared vision, leadership Clearly articulated (express)
and the will to innovate and shared sense of purpose,
Stretching (broaden) strategic
intent (goal) &‘Top
management commitment’
2. Appropriate structure Organization design which
enables creativity, learning and
interaction. Key issue is finding
appropriate balance between
‘organic and mechanistic’
options for particular
contingencies.

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Components of the innovative organization

Component Key features

3. Key individuals Promoters, champion,
gatekeepers and other roles
which energize or facilitate
innovation
4. Effective team working Appropriate use of teams (at
local, cross-functional and
inter-organizational level) to
solve problems, requires
investment in team selection
and building
5. High-involvement innovation Participation in organization-
wide continuous improvement
activity
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Components of the innovative organization

Component Key features

6. Creative climate Positive approach to creative
ideas, supported by relevant
motivation systems
7. External focus
Extensive networking

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1. Shared vision, leadership and the will
to innovate

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Shared vision, leadership and the will to
innovate
• Innovation is essentially about learning and change
and is often disruptive (troublesome), risky and
costly.
• So, individuals and organizations develop many
different cognitive (thinking), behavioral and
structural ways of reinforce the innovation.

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Shared vision, leadership and the will to
innovate
• Changing mindset and refocusing (focusing)
organizational energies requires the articulation
(expression) of a new vision.

• Business vision:
• Express long term intention of the organization to
develop in a certain way.
• To create common vision which everyone should work
towards achieving.

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Shared vision, leadership and the will to
innovate
• ‘Top management commitment’ is a common
prescription associated with successful innovation; the
challenge is to translate the concept into reality by
finding mechanisms which demonstrate and
reinforce the sense of management involvement,
commitment, enthusiasm and support.

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Shared vision, leadership and the will to
innovate
• Top management of a firm should be willing to accept
risk.
• Innovation is inherently uncertain (and will involve
possible failures as well as successes/ there is no
innovation without obstacles around) .
• The inherent uncertainty in innovation should be
reduced where possible through the use of
information collection and research.

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Shared vision, leadership and the will to
innovate

Traits associate with leadership:

– Intelligence
• Have higher intelligence than the average
intelligence of his followers.

– Social maturity
• Emotionally stable and mature and have broad
interests and activities

– Inner motivation
Intense (strong) motivational drives of the
achievement type.

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Shared vision, leadership and the will to
innovate
• Other common characteristics of leader:
• Bright, alert and intelligent

• Seek responsibility and take charge

• Skillful in their task domain

• Administratively and socially competent

• Energetic, active and resilient (tough)

• Good communicators

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MECHANISTIC ORGANIZATION DEFINITION: According
to Black’s Law Dictionary, mechanistic organization is
“the organization is hierarchical and bureaucratic. It is
characterized by its (1) highly centralized authority, (2)
formalized procedures and practices, and (3)
specialized functions. Mechanistic organization is
relatively easier and simpler to organize, but rapid
change is very challenging. Contrast to organic
organization.”

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STRUCTURE: Companies in a mechanistic organization
structure typically hold tight control, over processes
and employees; .Rules are implemented and rarely
deviated from while there is also a very clear chain of
command to delegate responsibilities and power
throughout the organization. Again, it is manufacturing
companies that are well known for this type of structure
but there are other groups that benefit from mechanistic
organization; like universities.

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CHARACTERISTICS: Employees are often found
working in groups and share input on tasks. There
are usually teams that handle one task. Communication
is open between employees, managers and executives
though they are typically just known as ‘the owner’.
There is a greater scale of verbal communication
between parties. There is also more face-to-face time
within the hierarchy of power.

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 ORGANIC ORGANIZATION DEFINITION: According to
BusinessDictionary.com, organic organization is
characterized by Flatness: communications and
interactions are horizontal, Decentralization:
great deal of formal and
informal participation in decision making.”

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 CHARACTERISTICS: Employees are often found
working in groups and share input on tasks. There
are usually teams that handle one task. Communication
is open between employees, managers and executives
though they are typically just known as ‘the owner’.
There is a greater scale of verbal communication
between parties. There is also more face-to-face time
within the hierarchy of power.

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 STRUCTURE: Companies in an organic organization
structure typically have a more open communication
and contribution to tasks at hand. The structure of the
business is more adaptable and flexible to changes. The
environment is unpredictable but because of the freedom
afforded the employees and management it is better
maintained. Good examples of this type of structure
would be Google and the coveted (popular) positions
that lie within the Facebook Corporation. Organic
organizations have quickly realized that a happy
workplace makes for a happy employee.

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1. Simple Structure (also known as
mechanistic)

• A simple organizational structure usually consists of an

owner delegating tasks to individual employees who
report to him. As the company grows, staff members
begin to specialize, with the owner giving Bob all of the
company’s marketing tasks, Lisa office management
responsibilities and Dave the job of keeping the
business’s computers up and running.

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 1. Simple Structure

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 2. Simple Structure

• The strength of a simple organizational structure is that it

allows a business owner tight control over her
company’s operation. No decisions are made without
her approval, and she is aware of every important
decision made. There is no hesitation on the part of
employees in a simple structure, because their orders
come directly from the top, not a department head or
mid-level manager a subordinate might question.
Companies make decisions quicker with a simple
structure, because there are no layers of management
that ideas or requests need to climb before approval.

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2. Simple Structure

• The weakness: many of the problems of using a simple

organizational structure revolve around the workload of
the owner, or person at the top. An owner might become
swamped (flooded) with work if he has to approve every
decision at a company. If an owner is sick, in a meeting
or on a business trip, the entire company can become
paralyzed, because no on can move forward to take
advantage of an opportunity or solve a problem until the
owner is available again.

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 2. Divisionalized form

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2. Divisionalized form (also known as organic)

• A divisionalized organization is one in which

leadership partitions (divide) strategic functions
into departments and divisions. The company
distributes all the organizational work between
the divisions. These divisions accomplish their
share of the work and work towards achieving
organizational objectives.

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 2. Divisionalized form

Features
• In a divisionalized organization, divided

departments include production, marketing,

finance, IT, accounts and sales. A manager
supervises and administers all the employees in his
division. These department managers report to top
management.

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2. Divisionalized form

Significance
• By segregating work and responsibility, the company

can evaluate the role and importance of each

division in the organizational scheme of affairs.
Leadership can clearly understand the strengths and
weaknesses of each department. The company can
take corrective actions and measures accordingly.

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 2. Divisionalized form

Benefits
• Using this structure, the organization can clearly

define its authority and responsibility frameworks.

Employees know who reports to them and to
whom they must report. This structure accentuate
(emphasize) communication and workflows. Each
division works distinctly and on its own; at the end,
all the work combines for a completed initiative.

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Supplementary Materials/Extra Reading

https://www.ordoro.com/blog/2012/07/15/mechanistic-organ
ization/

http://www.referenceforbusiness.com/management/Mar-No
/Mechanistic-Organizations.html

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Components of the innovative organization

The following components of the innovative organization

will be continue during the next lecture:
• 3. Key individuals
• 4. Effective team working
• 5. High involvement innovation
• 6. Creative climate
• 7. External focus

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Conclusions

• Shared vision, leadership and the will to innovate – Key

features:
• Clearly articulated and shared sense of purpose

• Stretching strategic intent ‘Top management

commitment’
• Appropriate structure – Key features:
• Organization design which enables creativity, learning

and interaction. Key issue is finding appropriate

balance between ‘organic and mechanistic’ options for
particular contingencies.

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REFERENCES
 Tidd, Bessant (2013), Managing Innovation - Integrating
Technological Market & Organisational Change, 5th
edition, Wiley.
 Byrd, Brown (2002), The innovation equation: Building
Creativity & Risk-taking in Your Organization, Wiley.
 Zimmerer, Scarborough (2008), Essentials of
Entrepreneurship and Small Business Management, 5th
edition, FT Prentice Hall.
• Smith, David (2010), Exploring Innovation, 2nd edition,
McGraw Hill.

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Key Terms

KEYTERMS DEFINITION
A combination of individuals who come together or who
Team have been brought together for a common purpose or
goal in their organization.
Recurring patterns of behavior, attitudes and feelings
Climate
that characterize life in the organization.
Collecting information from various sources and
Technological
passing it on to the relevant people who will be best
gatekeeper
able or most interested to use it.

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Key Terms
KEYTERMS DEFINITION
Express long term intention of the organization to
Vision
develop in a certain way.
Organizations change their structures, roles, and
Organic structure processes to respond and adapt to their environments.
Hierarchical, bureaucratic, organization-structure
characterized by centralization of authority,
Mechanistic structure formalization of procedures and practices, and
specialization of functions.

Rely on one individual to make decisions and provide

Centralized structure direction for the company
Often have several individuals responsible for making
Decentralized structure business decisions and running the business

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THE END

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