MGMT 2100 Chapter Notes - Chapter 7: International Telecommunication Union, Dominant Design, Critical Mass
Organizational Innovation: the successful implementation of creative ideas in organizations
Technology Cycle: a cycle that begins with the birth of a new technology and ends when that
technology reaches its limits and is replaced by a newer, substantially better technology
● Occurs whenever there is major advances or changes in the knowledge, tools, and
techniques of a field
● Ex. air conditioners replacing fans, car replaced horse-drawn carriages
S-curve Pattern of Innovation: a pattern of technological innovation characterized by slow
initial progress, then rapid progress, and then slow progress again as a technology matures and
reaches its limits
● Almost all technology cycles follow this pattern
● Early on there is much to learn about the new technology, so progress is slow
○ Flat slope indicates that increased effort brings only small improvements in
performance
● Later on, people figure out how to get better performance, so the productivity increases
(steeper slope)
○ Steeper slope indicates that small amounts of effort will result in significant
increases in performance
● The end of the s, the second flat part, indicates that the performance limits of that
particular technology are being reached
○ The flat slope indicates that further efforts to develop this particular technology
only brings small improvements in performance
● After the end of the S-curve, significant improvements in performance usually come from
radical new designs or new performance enhancing materials
● Eventually, the new technology will replace the old, a new cycle will begin
Innovation Streams
● Technological innovation can enable competitors to duplicate the benefits obtained from
a company's distinctive advantage
● Companies that want to sustain a competitive advantage need to protect themselves
from strategic threats of innovation
○ Best way to do this is to create a stream of its own innovative ideas and products
year after year
Innovation Streams: patterns of innovation over time that can create a sustainable competitive
advantage
1. Technological Discontinuity: the phase of an innovation stream in which a scientific
advance of unique combination of existing technologies creates a significant
breakthrough in performance or function
2. Discontinuous Change: the phase of a technology cycle characterized by technological
substitution and design competition
a. Technological Substitution: customers purchases of new technologies to
replace older ones
find more resources at oneclass.com
find more resources at oneclass.com
b. Design Competition: competition between old and new technologies to
establish a new technological standard or dominant design
i. Companies and consumers are reluctant to switch to new technology
during design competition because most new technology is not
compatible with old technology
ii. Older technology usually improves significantly because of the
competition from the new technology
3. Dominant Design: a new technological design or process that becomes the accepted
market standard
a. Ways it becomes a dominant design:
i. Critical mass
1. Most people use
2. The best technology doesn’t always become the dominant design
ii. Independent Standards Bodies
1. The ITU (International Telecommunication Union) standardized
equipment and technology enabling telegraph messages to flow
seamlessly from country to country
b. Indicates there are winners and losers
i. Technological innovation is both competence enhancing and destroying
c. Shows a shift from design experimentation and competition to incremental
change
i. Incremental Change: the phase of a technology cycle in which
companies innovate by lowering costs and improving the functioning and
performance of the dominant technological design
Technological Lockout: the inability of a company to competitively sell its products because it
relies on old technology or a non-dominant design
● Ex. when movie theatres use digital technology, small theatres may go out of business
because they can’t afford the cost to buy digital projectors
Managing Innovation
Managing Sources of Innovation
● Building Creative Work Environments
○ Workplace cultures in which workers perceive that new ideas are welcomed,
valued, and encouraged
○ 6 components that encourage creativity
■ Challenging work
● Work the requires effort, demands attention and focus, and is
perceived important by others in the organization
● Creates flow: a psychological state of effortlessness, in which you
become completely absorbed in what you’re doing and time
seems to pass quickly
● Have a balance between skills and task challenge
find more resources at oneclass.com
find more resources at oneclass.com
○ Workers become bored when they can do more than is
required and anxious when their skills aren’t sufficient
enough to accomplish a task
■ Organizational encouragement
● Management encourages risk taking and new ideas, supports and
fairly evaluates new ideas, rewards and recognizes creativity, and
encourages the sharing of new ideas throughout different parts of
the company
■ Supervisory encouragement
● Supervisors provide clear goals, encourage open interaction with
subordinates, and actively support development teams’ work and
ideas
■ Work group encouragement
● Group members have diverse experience, education, and
backgrounds and the group fosters mutual openness to ideas;
positive, constructive challenge to ideas; and shared commitment
to ideas
■ Freedom
● Having autonomy over one’s day-to-day work and a sense of
ownership and control over one’s ideas
■ Lack of organizational impediments
● Companies must remove impediments to creativity such as:
○ Internal conflict and power struggles
○ Rigid management structures
○ Conservative bias toward the status quo
Experiential Approach: Managing Innovation During Discontinuous Change
● Discontinuous change is when there is technological substitution and design competition
● Experiential Approach to Innovation: an approach to innovation that assumes
innovation is occurring within a highly uncertain environment and the key to fast product
innovation is to use intuition, flexible options, and hand-on experience to reduce
uncertainty and accelerate learning and understanding
○ Design Iteration: a cycle of repetition in which a company tests a prototype of a
new product or service, improves on that design, and then builds and tests the
improved prototype
■ Product Prototype: a full-scale, working model that is being tested for
design, function, and reliability
○ Testing: the systematic comparison of different product designs or design
iterations
■ The more prototypes you build, the more you learn what works and what
doesn’t
■ When you build multiple prototypes, you are less likely to fall in love with
one prototype
■ Speeds up and improves the innovation process
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Organizational innovation: the successful implementation of creative ideas in organizations. Technology cycle: a cycle that begins with the birth of a new technology and ends when that technology reaches its limits and is replaced by a newer, substantially better technology. Occurs whenever there is major advances or changes in the knowledge, tools, and techniques of a field. Ex. air conditioners replacing fans, car replaced horse-drawn carriages. S-curve pattern of innovation: a pattern of technological innovation characterized by slow initial progress, then rapid progress, and then slow progress again as a technology matures and reaches its limits. Almost all technology cycles follow this pattern. Early on there is much to learn about the new technology, so progress is slow. Flat slope indicates that increased effort brings only small improvements in performance. Later on, people figure out how to get better performance, so the productivity increases (steeper slope)
