MBA – II Semester

Management of Technology, Innovation and Change

Solution Set – 2013

Q.1 Give short answers for any Five of the following:

a.) What is technology life cycle? Explain the various stages of technology life cycle?

Ans: The technology life-cycle (TLC) describes the commercial gain of a product through the
expense of research and development phase, and the financial return during its "vital life". Some
technologies, such as steel, paper or cement manufacturing, have a long lifespan (with minor
variations in technology incorporated with time) whilst in other cases, such as electronic or
pharmaceutical products, the lifespan may be quite short. The technology life cycle is concerned
with the time and cost of developing the technology, the timeline of recovering cost, and modes
of making the technology yield a profit proportionate to the costs and risks involved.

The technology life cycle can be broken down into following distinct phases/stages:

Stage Technological Stage Features

I Technology Basic Technology

Development

II Technology Technology + Application

Application

III Application Launch Technology + Application + Product Launch

IV Application Growth Technology + Application + Rise in Product Sale

 V Technological Technology + Application + Fall in Product sales
Maturity

VI Degraded Minimal Product sales + Loss of application +

Technology Alternative Technology

Stage I: Basic technology is developed in the research & development centre.

Stage II: Various applications of new technology are explored & planned.

Stage III: Products, services & processes based on these applications are launched in the markets.
At this point of time, usually they are not fully developed. A number of alternate products,
services & process designs emerge & compete with each other.

Stage IV: Based on feedback & requirements of markets, market –oriented applications are
offered. This is the period of consolidation when the emphasis is on standardization,
manufacturing efficiencies &economies of scale of mass production. This leads to rise in product
sales.

Stage V: Technology reaches its maturity stage & rate of innovation slows down. While further
development slows down. While further development is affected by diminishing returns & rapid
increase in development costs, market become price competitive & growth begins to level out.

Stage VI: Many applications of the existing technology lose relevance due to arrival of some
alternative new technology. At this point of time, there are minimal sales of products/ services
based on remaining surviving applications considered somewhat useful by the markets.
b.) Why a firm should sell or purchase technology? Give reasons.

Ans: In this age of globalization, sale or purchase of technology is very common, and is
sometimes known as technology transfer. Acquisition and dissemination of technology and
knowledge involves the purchase of external knowledge and expertise with active co-operation
with the source. This external knowledge can be embodied in machinery, tools, equipments or
even hiring of employees who possess new knowledge or the use of contract research and
consulting services. Disembodied technology may also include other know-how, patents,
licenses, trademarks and software.

Reasons for technology sale/purchase may be listed as follows:

 To address basic needs and respond to competitive environment

 To acquire valuable knowledge based resources
 To reduce costs and development time i.e lead time in new product development
 To adopt latest most advanced technology in place of obsolete technology
 To find the best fit technology
 To possess greater scope for learning capabilities and building competencies
 To develop strategic options for improving efficiency
 To gain a competitive advantage by leveraging on the newly developed technology

c.) What are the external forces of technological change? Give suitable examples.

Ans: change is a way of life. Organizational change occurs due to a variety of factors, both
internal as well as external to the organization. External forces of change include those forces
which exist outside the boundaries of the organization and are not under the direct control of the
organizations or the management of the organizations.
Some of the external forces are:

 Economic Environment: Economic conditions, economic policies and the economic

system are the important external factors that constitute the economic environment of a
business. The economic conditions of a country, for example, the nature of the economy,
the stage of development of the economy, economic resources, the level of income, the
distribution of income and assets are among the very important determinants of business
strategies.
 Technological Environment: The rapid rate of change in the environment would seem to
indicate a short term flexible response, but inflexibility of their major tool, technology,
requires long term decisions. Technology also has to keep pace with the needs of
domestic demand, the competitiveness within and without national boundaries, the effect
on employment, the needs of capital and the local availability of the components of such
technology. Technological change occurs when the technological capacity is matched
with a need of society, be it for the individual as consumer (products and services), the
organization as an operation (equipment and processes) or society as a whole
(environmental protection, defence, health) through the causal linkages.
 Politico-legal Environment: Political and government environment has a close
relationship with the economic system and economic policy. Political stability of the
country is another factor which affects business activity. Business thrives where there is
political stability. The government of every country formulates and executes a set of
policies that are executed through legislation. These legislations and enactments, rules
and plans, statements and announcements, directives and guidelines by the government
constitute the politico-legal environment. Certain changes in government policies such as
the industrial policy, monetary policy, fiscal policy and trade policy may have profound
impact on business. Some policy developments create opportunities as well as threats.
 Socio-economic Environment: The socio-cultural fabric is an important environmental
factor that should be analyzed while formulating business strategies. The buying and
consumption habits of the people, their language, beliefs and values, customs and
traditions, tastes and preferences, education are all factors that affect business. For a
 business to be successful, its strategy should be the one that is appropriate in the socio-
cultural environment.
 Market changes: the market may undergo significant changes in terms of degree of
competition. The change in competition may force organizations to bring about changes
to survive.
 Increase in raw material costs
 Changes in operating or task environment i.e the environment or surroundings or the
industry in which the organization operates.

For example: The Indian banking system which was manual is now completely automated.
Earlier the passbooks were written with hand whereas now banks have specialized printers
for printing of passbooks.

d.) What initiatives are required to develop culture for change in an organization?

Ans: Building culture for change is a time consuming exercise and involves lot of efforts.
Management, managers and senior executives of the organisation must manage the change in a
way that employees can cope with it. In order to build and develop a culture for change in any
organization, with adequate understanding, involvement, action and commitment from
employees, certain initiatives or measures are required:

 The change process should be described to all people involved and explain the reasons
why changes are occurring. The information should be complete, unbiased, reliable,
transparent and timely.

 Change programme should be designed to effectively implement the change while being
aligned with organisational objectives, employee perceptions and feelings.

 Change programme should provide support employees as they deal with the change and
wherever possible, involve the employees directly in the change process itself.

 The change should be consistently monitored and reviewed for effectiveness.

 ADKAR model given by Jeff Hiatt for individual change management can help to realise
change successfully with the five building blocks, namely awareness, desire, knowledge,
 ability and reinforcement. Thus, it is the management’s job to create an environment in
which people can go through these stages as quickly as possible.

 Building awareness as to why the change is needed.

 Creating desire to support and participate in the change.

 Developing knowledge as to how to change.

 Fostering ability to implement new skills and behaviours.

 Providing reinforcements to sustain the change.

e.) What is concurrent engineering? What are its advantages over traditional
approach?

Ans: the modern era is a period of fast changes including rapid technological changes. Time
available for development and commercialization of products or processes is limited. In
concurrent engineering approach, the product design proceeds at the same time as process
design with continuous interaction between two developments. Thus, Concurrent
engineering is a work methodology based on the parallelization of tasks (i.e. performing
tasks concurrently). It refers to an approach used in product development in which functions
of design engineering, manufacturing engineering and other functions are integrated to
reduce the elapsed time required to bring a new product to the market.

Concurrent Engineering is a long term business strategy, with long term benefits to
business. Though initial implementation can be challenging, the competitive advantage
means it is beneficial in the long term. It removes the need to have multiple design reworks,
by creating an environment for designing a product right the first time round.

Concurrent engineering provides many benefits over sequential engineering, including lower
manufacturing and production costs, improved quality of resulting end products and increased
accuracy in predicting and meeting project plans, schedules, timelines, and budgets. Because
the multidisciplinary teams working together early in the process can make informed
decisions about cost, quality, process and product issues, trade-offs can be made between
design features, part manufacturability, assembly requirements, material needs, reliability
issues, serviceability requirements, and cost and time constraints.

Any differences are usually reconciled early in the design process, leading to increased
efficiency and performance, higher reliability in the product development process, reduced
defect rate and ultimately a faster time to market which results in increased market share. This
also means faster reaction times in responding to the rapidly changing market, which in turn
fosters increased customer satisfaction and a higher return on investments due to the reduced
labour and resource requirements, improved inventory control and scheduling.

Improved communication between individuals and departments within the firm also
encourages cohesiveness, and a more pleasant working environment, which in turn can
positively affect productivity of the workforce.
 Concurrent engineering is an evolving process that requires continuous improvement and
refinement. This continuous improvement cycle consist of planning, implementing,
reviewing, and revising. The process must be updated and revised on a regular basis to
optimize the effectiveness and benefits in the concurrent engineering development process.

f.) Differentiate between creative thinking and lateral thinking. Give examples.

Ans: Creative thinking skills are not taught. They do not require intelligence or even experience,
although these qualities are needed to put creative ideas into practice. Creativity is the result of
right brain activity- intuition, insight, inspiration, which is not readily encouraged in the
education system. Indeed, such thought processes are often suppressed in favor of left brain
activities- logic, analysis and judgement.

Lateral thinking is a term coined by Edward de Bono it refers to solving problems through an
indirect and creative approach. Lateral thinking is about reasoning that is not immediately
obvious and about ideas that may not be obtainable by using only traditional step by step logic.
Creative thinking is primarily concerned with judging the true value of statements and seeking
errors. Lateral thinking is more concerned with the movement value of statements and ideas. A
person would use lateral thinking when they want to move from one known idea to creating new
ideas.

g.) Explain the terms giving examples: Discovery, Invention and Innovation

Ans:

Discovery: A new increment to knowledge. In this course we consider three types of knowledge
of physical, biological or social systems. Theoretical knowledge is increasingly expressed as a
mathematical model. Empirical knowledge is obtained from observations of new phenomenon or
observations deliberately taken to test a theoretical hypothesis. Last, but not least, is practical
knowledge. An important economic example is the practical knowledge acquired by a workforce
to make a new manufacturing plant operate efficiently. This knowledge is intuitive and
frequently very difficult to express as equations. Eg: Calculus by Issac Newton

Invention: A new device or process. To qualify for a patent an invention must pass a test of
originality--that is, be sufficiently different from previous inventions. Most inventions are minor
improvements on existing inventions which do not qualify for patents. Only a small percent of
patented inventions have any economic value. Eg: Spreadsheet software is an invention

Innovation: A better way of doing things. Innovations can occur in all goal-directed behavior
such as profit maximization, reelection politics and personal lifestyles. Thus an innovation
improves performance in goal directed behavior as measured by a criterion. An example of a
criterion would be profit maximization in business. The advanced material at the end of this
section presents a deeper development of innovation. Eg: . A new business application of
spreadsheets that increases profits is an innovation. An example of an innovation in government
is submitting tax returns to the IRS by E-mail instead of regular mail.

Q.2 a.) Explain the term “Technology”. List some important characteristics for describing
technology.

Ans: According to Oxford English Dictionary, “Technology is application of scientific

knowledge for practical purposes.” It is derived from the greek word Technologia, techno
meaning an art or skill and logia meaning to study. Thus, technology means systematic treatment
of art or skill. It is usage & knowledge of tools and crafts to control or adapt to the environment.
Technology is a process which, through an explicit or implicit phase of research and
development allows for commercial production of goods or services.

Technology is developed through an explicit or implicit research and development process, and
later does not necessarily need to be carried out within the firm that applies the technology.
Technologies competence can be bought and sold and in order to create competitive advantage a
company can combine in-house technologies with other technologies purchased from an outside
supplier.
Important Characteristics of technology may be listed down as follows:

• It involves purposive application of various fields of sciences and scientific knowledge.

• It is used to provide objects (like products, machinery, tools, services etc.) necessary for
human sustenance and comfort.
• It is not restricted to hardware, but also includes know-how and software.
• It has both public and private components. Its public component can be freely used by all;
whereas its private component provides specific advantage to the possessor/ owner.
• It is complex in nature. Complexity means that most modern tools are difficult to
understand. Some tools are relatively easy to use, but difficult to comprehend as to their
source and means of manufacture, such as a kitchen grinder and mixer.
• It is dependent on other technologies. Dependency refers to the fact that most modern
tools depend on other modern tools, which in turn, depend on still other modern tools for
their manufacture/ proper use. For Eg:- Motorcycles.
• It has high degree of variations which refers to a lot of types. Eg: different types and sizes
of scissors are available.

b.) Technology helps in growth of nations and creating wealth. Discuss the validity of
this statement giving suitable examples.

Ans: History of last 500 years of the world suggests that technological progress is crucial for
military strength of a nation and its survival as an entity. Not only military, it is crucial for
economic progress of nations as well. Due to technological progress, USA, Western Europe
and Japan are unable to ensure continued economic progress despite temporary ups and
downs.

In domestic market, a nation and its firms, having better and advanced technology can enjoy
following advantages :

• Improved and efficient functioning of various organizations in the nation

• Technological progress and infusion brings major changes and improvements in the overall
functioning of organizations leading to transformations viz. transformation in Banking Sector,
Telecom Sector etc.
• Enhanced capability to fight foreign competition and thus retaining control over strategic
national economic assets

• Stability in sales and profits of business firms; stable growth of sales and profits

• Regular employment generation and high standards of living

• Lesser probability of occurrence of economic recession and lesser adverse impact of economic
recession if it occurs
• Relative stability in national income
• Growth of national economy

In external markets, a nation and its firms having better and advanced technology can enjoy
following advantages :
• Technological competitive advantage
• Boost to exports
• Forex earnings through exports
• Disposal of surplus to external markets thus maintaining stability in domestic prices
• Monopoly & high prices for hi-tech products in the international markets
• Earnings from external markets provide additional funds for supporting research &
development at home
• Globalisation of operations leading to benefits of economies of scale of mass production, and
cost reduction by procuring low cost resources / inputs from anywhere in the world.
• Facilitates outbound Foreign Direct Investment (FDI) by domestic firms leading to earnings
through captive exports, repatriation of profits, sale of machinery, sale of components and sub-
assemblies etc
• Earnings through technolgy transfer agreements
• Employment generation & high standards of livin
• Growth of national economy
 Wealth of Technological
Nations Advancement

Economic Efficient
Growth Working

Saves Time,
Cost &
Maximizes
Profit

Thus, if every firm within all industries makes use of advanced technology they can work
efficiently by reducing costs, lead time and maximizing their profits by achieving economies of
scale, thus contributing positively to the GDP of the nation, hence each firm contributes to
creating wealth of nations.

Q.3 a.) What is Technology Policy? Name the recently announced Technology Policy of
India. Why a country should have a Technology Policy? Explain.

Ans: Technology policy approaches science as the pursuit of verifiable or falsifiable hypotheses,
while science studies has a post-modern view whereby science is not thought to get at an
objective reality. Technology policy is rarely post-modern. Its goal is the improvement of policy
and organizations based on an understanding of the underlying scientific and technological
constraints and potential. The policy aims to lead interagency efforts to develop and implement
sound science and technology policies and budgets, and to work with the private sector, state and
local governments, the science and higher education communities, and other nations toward this
end.

The science, technology and innovation policy (STIP) 2013 was announced by the government at
the Indian Science Congress Centenary sessions held at Kolkata during 3 – 9 January
2013. Compared to Science and Technology Policy of 2003, STIP 2013 is a step forward in
attempting to forge the links between science, technology and innovation policy framework. 'The
guiding vision of aspiring Indian STI enterprise is to accelerate the pace of discovery and
delivery of science-led solutions for faster, sustainable and inclusive growth. A Stronge and
Viable Science Research and Innovation System for High Technology-led path for India
(SRISHTI) is the goal of the new STI policy'.

Each and every country should have a technology policy so that it can become self-reliant in
certain important areas, such that each country constantly strives to achieve self-reliance,
encourage innovations and nurture technology flow to industry for product excellence so that the
nation gains a competitive advantage.

Since technology directly influences success and growth of business enterprises, and economic
growth and wealth of nations; technological advancement is regarded as a key factor making a
contribution in continuous high economic development.

Technological advancement/ progress in domestic as well as external markets leads to growth of

national wealth. Technological advancement and superiority leads to:

Thus, not only developed but even developing countries seek for sustainable technological
development.

b.) Explain the following terms: Technology Adoption, Technology adaptation and
technology absorption using examples.

Ans: Technology Adoption: Technology Absorbed without changing the parameters of acquired
technology is called Technology Adoption. The process begins with awareness of technology
and processes through a series if steps that end in a appropriate and effective usage of
technology.

Technology Adaptation: Technology absorbed after changing the parameters is called

Technology Adaptation. Technology Adaptation may arise due to following reasons:

• Non availability of supporting infrastructure

• For meeting location / market specific needs

• To make it compatible with existing plant & machinery

• Non availability of ancillary units for components

• To meet legal requirements• Pressure from NGOs, environmentalist, human rights group
viz.example: Government insistence to not to use BVO in soft drinks, forced cola companies to
change their formulations.

Technology Absorption: It refers to the acquisition, development, assimilation & utilization of

technological knowledge and capability by a firm or some macro entity. It means putting the
acquired technology to further development, assimilation & utilization. Dimensions of
technology absorption are:

1. Absorbing information about physical phenomena, equipment, machines, operating

techniques etc.
2. Regarding feelings, attitudes, understanding required between two parties to be
successful in passing know-how from one to another.

Q.4 a.) What is the importance of technology forecast? Contrast between exploratory and
normative approaches for technology forecasting.

Ans: Technology forecasting helps in predicting the future characteristics of useful

technological machines, procedures or techniques.

Importance of technology forecasting:

Since the 1990’s the rate of technological change has increased. Individuals as well as
organizations are affected by technological change, thus technology forecast is no more
avoidable.

 It helps to maximize gain from events external to an organization.

 To minimize loss associated with uncontrollable events external to the organization
 To offset the actions of hostile or competitive organizations.
 To forecast demand and ensure adequate staffing.
 To develop policies and plans internal to the organization.
 To forecast demand for facilities and capital planning.

An exploratory forecast starts with the past and present conditions and projects these to
estimate future conditions. It is based on technology push and is opportunity oriented i.e
searching for future opportunities. Exploratory methods are "outward bound". They begin
with the present as the starting point, and move forward to the future, either on the basis
of extrapolating past trends or causal dynamics, or else by asking "what if?" questions
about the implications of possible developments or events that may lie outside of these
familiar trends. Trend, impact, and cross-impact analyses, conventional Delphi, and some
applications of models are among the tools used here.

Whereas a normative forecast starts with future needs and identifies the technological
performance necessary to meet these required needs. It is based on market pull and is
mission oriented. Normative methods are, by contrast, "inward bound". They start with a
preliminary view of a possible (often a desirable) future or set of futures that are of
particular interest. They then work backwards to see if and how these might futures might
or might not grow out of the present. The tools used here include various techniques
developed in planning and related activities, such as morphological analyses and
relevance trees, together with some uses of models and some less conventional uses of
Delphi such as "goals Delphi" methods. A fairly recent development is the use of
"success scenarios" and "aspirational scenario workshops", where participants try to
establish a shared vision of a future that is both desirable and credible, and to identify the
ways in which this might be achieved.
b.) What are joint ventures? How are they different from collaboration? Explain using
example.

Ans: A joint venture (JV) is a business agreement in which the parties agree to develop, for a
finite time, a new entity and new assets by contributing equity. They exercise control over the
enterprise and consequently share revenues, expenses and assets. A joint venture takes place
when two parties come together to take on one project. In a joint venture, both parties are equally
invested in the project in terms of money, time, and effort to build on the original concept. While
joint ventures are generally small projects, major corporations also use this method in order to
diversify. A joint venture can ensure the success of smaller projects for those that are just starting
in the business world or for established corporations. Since the cost of starting new projects is
generally high, a joint venture allows both parties to share the burden of the project, as well as
the resulting profits.

Since money is involved in a joint venture, it is necessary to have a strategic plan in place. In
short, both parties must be committed to focusing on the future of the partnership, rather than just
the immediate returns. Ultimately, short term and long term successes are both important. In
order to achieve this success, honesty, integrity, and communication within the joint venture are
necessary.

A joint venture is a strategic alliance where two or more parties, usually businesses, form a
partnership to share markets, intellectual property, assets, knowledge, and, of course, profits. A
joint venture differs from a merger in the sense that there is no transfer of ownership in the deal.
The construction of a joint venture agreement offers wide scope for the exercise of negotiating
skill, and when it is between partners from different countries it can be one of the most
worthwhile contributions marketing executives can make to international relations. The essential
qualities, in addition to experience and subtlety in this type of bargaining, are the ability to
remain unruffled, to be resilient and to be tolerant without being weak. Perhaps, above all,
toughness is needed, for the long-term implications of a joint venture mean that a negotiator is
committing his company to a future in which its position must be strong from the outset.

(Reuters) - Britain's Tesco (TSCO.L) has sealed a joint venture agreement with a unit of Tata
Group that will see it invest $140 million and become the first foreign supermarket to enter the
country's $500 billion pounds retail sector.

Tesco said on Friday that following receipt of approval from the Indian Foreign Investment
Promotion Board, it has entered into a deal with Trent Limited (TREN.NS) to form a 50:50 joint
venture with the operator of the Star Bazaar retail business, Trent Hypermarket Limited (THL).

The world's third-largest retailer, which since 2008 has had a franchise agreement to provide
support to Star Bazaar, had made the application to India's FIPB in December.

On completion of the transaction THL will operate 12 stores retailing a range of merchandise
including food and grocery, personal and home care products, home and kitchen, fashion and
accessories.

The stores are operated under the 'Star Bazaar' and 'Star Daily' banners, and spread across the
southern and western regions of India.

A collaboration is a layman's term and is not part of any accounting std. It just means the coming
together of 2 or more parties for the purpose of brainstorming and sharing of expertise.
Collaboration is best exemplified in the area of trade where two countries benefit by
collaborating with each other as their citizens get products that are not naturally produced in their
countries. Collaboration started as soon as people started to communicate with each other
through words or written language. Collaboration is a generic term that describes coming
together of two or more entities for mutual benefit.
Collaboration is a working practice whereby individuals work together to a common purpose to
achieve business benefit. Key features of collaboration tools are:

 Synchronous collaboration such as online meetings and instant messaging

 Asynchronous collaboration such as shared work spaces and annotations

Many organizations are also looking at Free-form Collaboration tools to improve collaboration
and reduce the number of emails used for collaboration.

Q.5 a.) Give a diagrammatic representation of the “Technological Change Process” in an

organization.

Ans: Technological change (TC) is a term that is used to describe the overall process of
invention, innovation and diffusion of technology or processes. The term is synonymous with
technological development, technological achievement, and technological progress. In essence
TC is the invention of a technology (or a process), the continuous process of improving a
technology (in which it often becomes cheaper) and its diffusion throughout industry or society.
In short, technological change is based on both better and more technology.

In its earlier days, technological change was illustrated with the 'Linear Model of Innovation',
which has now been largely discarded to be replaced with a model of technological change that
involves innovation at all stages of research, development, diffusion and use. When spoken about
"modeling technological change" often the process of innovation is meant.
Invention: The creation of something new, or a "breakthrough" technology. For example, a
personal computer.

Diffusion: The spread of a technology through a society or industry. The diffusion of a

technology generally follows an S-shaped curve as early versions of technology are rather
unsuccessful, followed by a period of successful innovation with high levels of adoption, and
finally a dropping off in adoption as a technology reaches its maximum potential in a market. In
the case of a personal computer, it has made way beyond homes and into business settings, such
as office workstations and server machines to host websites.

b.) Discuss how a leader can nurture the culture for innovation and change in an
organization.

Ans : Change management is one of the most crucial aspect of successful functioning or
working of an organization. In most organizations, innovation is a team effort. The trick is
teaching people how to think differently and then creating a culture that encourages and supports
out-of-the-box thinking. Change takes place in an organization continuously. Creativity,
Innovation and Continuous improvement involve ideas, and ideas are about change. When
someone has an idea, thinking changes; when that idea is implemented, things change.

However, change and innovation can be developed and nurtured in an organization effectively if
there exist strong leadership in the organization such that the leader plays a significant role in the
process of bringing about a change or creating an innovative firm.

A leader is one who can take a group of people to a place they don’t think they can go. A good
leader as the head of multifunctional teams can help in:

 Proper and successful management of new product development and its innovation
 Attainment of quality leadership
 Encouraging creativity
 Improving communication
  Encouraging quality standards
 Reduction of lead time
 Encouraging teamwork
 In creating proper culture for improvement, problem solving etc.
 Reducing conflicts
 Encouraging training and development
 Creating an environment tolerant to mistakes and failures

Q.6 a.) “Innovative firms have dissimilar cultures.” Comment upon the statement.

Ans: The greatest innovations are the ones we take for granted, like light bulbs, refrigeration and
penicillin.

Nurturing a culture that allows for innovation is the key for Google’s success. Following the
eight pillars of innovation is what keeps Google growing exponentially year on year. The eight
pillars include: Have a mission that matters, think big but start small, strive for continual
innovation, not instant perfection, look for ideas, share everything, be a platform, spark with
imagination fuel with data, never fail to fail. Thus, growing Google workforce comes from all
over the world, bringing with them vastly different experiences and backgrounds. A set of strong
common principles for a company makes it possible for all its employees to work as one and
move forward together. They focus on the need to continue to say ‘yes’ and resist a culture of
‘no’, accept the inevitability of failures, and continue iterating until they get things right.

On the other hand, the innovative culture at Apple follows different strategies as outlined by the
CEO “"it's never been stronger. Innovation is so deeply embedded in Apple's culture. The
boldness, ambition, belief there aren't limits, a desire to make the very best products in the world.
It's the strongest ever. It's in the DNA of the company.""If you look at some essentials, there's no
formula. If there was a formula, a lot of companies would have bought their ability to innovate"

"If you look at skills, Apple is in a unique and unrivaled position. Apple has skills in software, in
hardware, and in services." "The real magic happens at the intersection of these, and Apple has
the ability on all three of these spheres to innovate like crazy and really cause magic. These
skills, this isn't something you can just go write a check for. This is decades of experience."

Thus, from the above cited examples it can be seen that innovative firms do have dissimilar
cultures.

b.) Distinguish between the following innovations with the help of an example:

 Incremental
 Modular
 Architectural
 Radical

Ans: Incremental innovations: These do not provide new inputs, but the existing collections of
inputs are re-configured to achieve higher output. Thus these innovations improve something
that already exists, or re-configure an existing form or technology to serve some other purpose.
These are generally sustaining in nature. They are sometimes regarded as evolutionary also.eg:
improvement from Pentium III to Pentium IV.

Radical innovations: these lead to something new and thus result in departure from existing
technologies or methods. It is entirely new set of performance features, significant reduction in
costs. Altering innovations are also radical innovations which introduce important alterations at
enterprises. Eg: personal computers.

Modular innovations: they do not alter the overall product structure, but the change can occur
within the component technology viz, change in engine technology without changing the car’s
structure.

Architectural innovations: there is a change of product structure with no significant effect on

component technologies viz. change in shape or structure of the car without changing its
components.
Q.7 a.) Contrast between Product and Process Innovation. Give examples to support your
answer.

Ans: Product Innovation - Development of a totally new product or improved product or

services. The product innovation is limited to the outcome of a process, which is a product. eg-
Nintendo Wii. It is development of new products, changes in design of established products, or
use of new materials or components in manufacture of established products. In other words,
anything which is new to the business and its product range is counted as innovation, even if
similar products are available elsewhere or if the change is an incremental one. Product
innovation is the creation and subsequent introduction of a good or service that is either new, or
improved on previous goods or services. This is broader than the normally accepted definition of
innovation to include invention of new products which, in this context, are still considered
innovative. Thus product innovation can be divided into two categories of innovation:
development of new products, and improvement of existing products.

Process Innovation - Finding a novel way of achieving an output which was traditionally done
in a different way. In the process innovation, the final product is not touched, but the method of
bringing out the product is improved. The improvement could be due to use of new techniques,
equipment etc
eg - The Pilkington glass method

Process innovations involving the logistics include the factory to customer delivery of custom-
built computers by Dell Corporation; the use of barcodes, scanners and the Internet that allows
customers to track parcels in real time as couriers are transporting them; and the innovation
process used by organizations to arrive at the best ideas for commercialization.

It also includes Minor changes or improvements, an increase in production or service capabilities

through the addition of manufacturing or logistical systems which are very similar to those
already in use, ceasing to use a process, simple capital replacement or extension, changes
resulting purely from changes in factor prices, customisation, regular seasonal and other cyclical
changes, trading of new or significantly improved products are not considered innovations."
b.) Discuss the major types on Innovation strategies generally adopted by organizations.

Ans: Innovation strategies of an organization depend upon following factors:

• Government support and policies for technology and innovation

• Risk taking abilities of the organization

• Risk taking attitude of Top Management

• Organizational goals & policies

• Degree of technological changes

• Degre of competition

• Availabilty of funds / budgetory support for innovation process

• Age of organiztion viz new vs old organization

Types of Innovation Strategies:

• Innovation Leader- Under this strategy, a firm seeks to be the first to introduce innovations and
aims at tapping first mover advantages like increased reputation, pre-empting competition, early
profits, new sales etc. Such strategies focus on radical, open, non-linear, flexible innovation
process.
• Innovation Follower – A conscious & active strategy, by which a firm chooses not to be first on
innovations and aims at learning from the experiences of innovation leader, by low cost
imitation, by bringing better products or services through improvement. etc. Such strategies
focus on incremental , closed, linear innovation process.
• Competition vs Collaboration Strategies: Whether to go for competitive development of
innovation or to go for collaborative development of innovation??

It is very likely that a firm may like to change its innovation strategies at some point of time. A
firm pursuing incremental innovation can shift to / transform to radical innovation by using some
of following tools:
• Strategic Framing
• Scouting R&D
• Idea Portfolio
• High Impact Research
• Target Selection
• Rapid Product Development
• Rapid Commercialization

Similarly a firm pursuing radical innovation can shift to / transform to incremental innovation by
taking some of following steps:
 Installing more gatekeepers at various stages
 Spreading budgetory support over longer period
 Carrying out rigorous progress reviews Using more controls etc.

Q.8 a.) Explain the “thinking hat framework” for managing creative thinking.

Ans: Developed by Dr. Edward de Bono, the “Six Thinking Hats” technique is a framework
designed to promote holistic and lateral thinking in decision-making and evaluation. Conducted
alone or in group meetings, participants – project members, key decision-makers and
stakeholders – are encouraged to cycle through different modalities of thinking using the
metaphor of wearing different conceptual “hats”.

This approach seeks to combine the strengths of a range of different mental “states” which
individuals instinctively tend towards – from rational and positive perspectives to emotional and
intuitive, or from optimistic to pessimistic - by prompting participants to consider the same
problem through a full spectrum of thinking styles in coming to common agreement on a
decision or shared purpose.

Many successful people think from a very rational, positive viewpoint. This is part of the reason
that they are successful. Often, though, they may fail to look at a problem from an emotional,
intuitive, creative or negative viewpoint. This can mean that they underestimate resistance to
plans, fail to make creative leaps and do not make essential contingency plans.
Similarly, pessimists may be excessively defensive, and more emotional people may fail to look
at decisions calmly and rationally.

Six “hats” are available to use, each identified by a different colour symbolic of a different style
of thinking, and each dictating a unique mode of analysis. These include:

 Managing (Blue) - what is the subject? what are we thinking about? what is the goal?
 Information (White) - considering purely what information is available, what are the
facts?
 Emotions (Red) - intuitive or instinctive gut reactions or statements of emotional feeling
(but not any justification)
 Discernment (Black) - logic applied to identifying reasons to be cautious and
conservative
 Optimistic response (Yellow) - logic applied to identifying benefits, seeking harmony
 Creativity (Green) - statements of provocation and investigation, seeing where a thought
goes
b.) List and explain the distinguishing characteristics of highly creative people.

Ans: Creative people make more use of their mental raw material and practice less intellectual
regulation. Some of the common characteristics of creative people are:

1. Display a great deal of curiosity about many things; are constantly asking questions about
anything and everything; may have broad interests in many unrelated areas. May devise
collections based on unusual things and interests.

2. Generate a large number of ideas or solutions to problems and questions; often offer unusual
(“way out”), unique, clever responses.

3. Are often uninhibited in expressions of opinion; are sometimes radical and spirited in
disagreement; are unusually tenacious or persistent — fixating on an idea or project.
4. Are willing to take risks, are often people who are described as a “high risk taker, or
adventurous, or speculative.”

5. Display a good deal of intellectual playfulness; may frequently be caught fantasizing,

daydreaming or imagining. Often wonder out loud and might be heard saying, “I wonder what
would happen if. . .”; or “What if we change . . ..” Can manipulate ideas by easily changing,
elaborating, adapting, improving, or modifying the original idea or the ideas of others.” Are often
concerned improving the conceptual frameworks of institutions, objects, and systems.

6. Display keen senses of humor and see humor in situations that may not appear to be humorous
to others. Sometimes their humor may appear bizarre, inappropriate, or irreverent to others.

7. Are unusually aware of his or her impulses and are often more open to the irrational within
him or herself. May freely display opposite gender characteristics – may be androgynous (freer
expression of feminine interests in boys or as males they are considered ultra sensitive, or greater
than usual amount of independence or assertiveness for girls).

8. Exhibit heightened emotional sensitivity. May be very sensitive to beauty, and visibly moved
by aesthetic experiences.

9. Are frequently perceived as nonconforming; accept disordered of chaotic environments or

situations; are frequently not interested in details, are described as individualistic; or do not fear
being classified as “different.”

10. Criticize constructively, and are unwilling to accept authoritarian pronouncements without
overly critical self-examination.