Fundamentals of Management, 8th ed

radical innovations

A new product,

service, or

technology that

completely replaces

an existing one

incremental

innovations

A new product,

service, or

technology that

modifies an existing

one

Chapter 7: Organization Change and Innovation

2 1 1

Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).

Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

---

The implementation of robotics is a process innovation. The effect of product and

process innovations on economic return depends on the stage of the innovation process

that a new product or service occupies. At first, during development, application, and

launch, the physical attributes and capabilities of an innovation mostly affect organiza-

tional performance. Thus, product innovations are particularly important during these

beginning phases. Later, as an innovation enters the phases of growth, maturity, and

decline, an organization’s ability to develop process innovations, such as fine-tuning

manufacturing, increasing product quality, and improving product distribution, becomes

important to maintaining economic return.

Japanese organizations have often excelled at process innovation. The market for

SLR cameras was dominated by German and other European manufacturers when, in

the early 1960s, Japanese organizations such as Canon and Nikon began making

cameras. Some of these early Japanese products were not very successful, but these compa-

nies continued to invest in their process technology and eventually were able to increase

quality and decrease manufacturing costs. The Japanese organizations came to dominate

the worldwide market for SLR cameras, and the German companies, because they were

not able to maintain the same pace of process innovation, struggled to maintain market

share and profitability. And as film technology gave way to digital photography, the same

Japanese firms effectively transitioned to leadership in this market as well.