innovation in strategic management

This study focuses on three essential areas of innovation in strategic management: the resource view, change adoption, and process and planning. The market trends show a very dynamic state, necessitating the creation of fresh concepts to compete in the outside world. The foundation of the resource perspective is that an organization depends on resources that are particular to the distinct participants. It also emphasizes the necessity of matching human resources with pertinent tactics in order to achieve the intended goals. Efficient use of the resources depends on the innovative levels that can be acquired from within or without the organization. However, the variations in the applicability of external ideas may yield an undesirable result when the implementation process fails to consider the context of using new approaches. Secondly, adopting change involves the steps needed to implement new ideas as the core strategic management issue. Based on Lewis Theory, innovation is the principle that underpins management strategy. Change involves the transformation of a static plan that suits the business circumstances. Therefore, innovation determines the direction of change to leverage commodity competitiveness. The final section captures planning and process in the strategic management. Based on the Haye's model, strategic management rely on a change process that involves distinct stages that needs recognition, diagnosis, preparation, replacement, and sustenance. Notably, a transformation is the guiding principle in every phase of implementing change as required in the strategic management processes. Meanwhile, the planning process also faces leadership challenge and resistance that may impede the implementation of new ideas. The critical analysis reveals the role of modification in strategic management based on models with a focus on the challenges.

Table of Contents
Introduction 4
Resource View 4
Adopting Change 8
Process and Planning 13
Conclusion 15
Bibliography 17


The Role of Innovation in Strategic Management
Introduction
The business environment is becoming highly dynamic in this era whereby customer needs, demand, policies, and trends are continually changing. Camison and Lopez (2014, p. 2898) define innovation for organizations as the process of acquiring new ideas and developing methods for business management in a way that positively impact the external environment. On the other hand, Cummings and Daellenbach (2009, p. 239) attested that strategic management involves the interaction of three main factors that is processes, resources, and change (Nag et al., 2007, p.941). It implies that a firm's strategy is based on how the management organizes its resources in response to the desired changes. Therefore, innovation plays a significant role in outlining management strategy within an organization (Boons et al. 2013, p. 6). Notably, there are both negative and positive outcomes when firms develop innovative approaches in their management. It is on these grounds that this write-up will critically evaluate the role of innovation in strategic management.
Resource View
Strategic management requires proper use of resources by a firm to gain a competitive advantage (Chentall, Kallunki, and Silvola 2011, p. 99). Innovation enables an organization to fully exploit its resources to differentiate its products or services from those of the rivals. According to the Resource view Theory of innovation, a firm's inputs have specific characteristics which aid the exploitation of external opportunities through enhanced productivity. In this case, facilities can be tangible: they comprise machinery, building, and land or they can be in intangible form such as critical skills, brand reputation. Other heterogeneity is the assumption that organizations have varied resource base that makes them unique from competitors (Hair et al., 2012, p.329). The theory also outlines the fact that these factors such as intellectual skills, capital, land and another form of resources are immobile implying that they do not move from one firm to the other in the short run (Pisano 2015, n.p). The significant differences in the organizational performance fundamentally depend on the capability of the management to employ its innovative power efficiently. In most cases, managers utilize resources to meet the set objectives in a firm. Proper use of the existing resources that are both tangible and intangible aspects define the extents of productivity and level of performance.
Innovative approaches enable the alignment of the human capital with the desired business strategies (Pisano 2015, n.p). As a result, managers can pursue both internal and external opportunities and gain a competitive advantage in a market set up. Notable, availability of resources is not a guarantee of outstanding performance until the inputs are adequately organized through innovation to achieve the desired results. For instance, Samsung Electronics has a large pool of resources as part of its physical resource base (Pisano 2015, n.p). It also possesses a high brand recognition as an intangible resource, especially in tablets and smartphones. However, its rival with the resource capacity that is Apple Inc. has demonstrated its ability to sell its products at higher prices and gain higher profits margin in the same operational environment. It is a reflection of the strength of an enterprise to design its products through innovation and leverage itself above its peers. Transformation allows the business to use the available resources to generate new demand and position itself differently (Camison and Villar-Lopez 2014, p.2894). It is the human effort combined with the existing skill sets that an organization is capable of meeting the desired objectives. It implies innovation enables an organization to become competitive.
In most cases, innovation is based on research and development efforts within an organization (Ostendorf et al., 2014, p.508). Typically, it is the primary source of ideas that are integrated into strategic management to enhance performance. In this case, the managers can acquire external ideas on how to utilize their human and capital resources to improve success. In most cases, outside innovation requires the involvement of a specialist to ensure the resource alignment to ensure that the targets are met. Also, research and development practices within an organization can be the principal source of innovative products, services or systems (Watson and Wixon 2007, p.9). It implies that an enterprise can develop strategies that aim at saving costs, use of new techniques, and employing new programs that aim at restructuring to efficiently explore the resources that are internally available. The purpose of strategic management relies on the efficient use of resources that can be domestically acquired or externally adopted. In this case, it will take various forms that are administrative, product or service-based (Samad 2012, p.488). Irrespective of whether it is internally developed or externally acquired, innovation enables practical use of resources in strategic management.
Innovation also determines the capability displayed in strategic management as a critical success factor (Jarzabkowski and Pee 2009, p.90). Every business organization depends on the availability of tangible and intangible resources to adequately function. It is through the resource reconfiguration that extents of success in the achievement of strategic goals vary across organizations. In this case, institutions require relevant, innovative approaches to fully exploit the available resources. The failure to utilize the existing resources concerning capability of the human capital and the finances are a significant step in strategic management (Cummings and Daellenbach 2009, p.2892). Without relevant application of technological approaches, strategic goals remain mostly unmet. Innovation is needful to exploit the capabilities toward the achievement of set objectives (Richardson 2008, p.142). Notably, strategic management primarily focuses on the appropriate use of resources within the organization through proper structures and systems to enhance performance and productivity.
Innovation also plays a significant role in yielding undesirable outcomes when implementing strategies (Teece 2010, p.180). In cases when the innovative ideas are outsourced from more advanced organizations, variations in contextual application results into failures. The business designs are company specific. Therefore, aping other systems is cited as the primary source of conflicting priorities. The common forms of innovations that is discontinuous, continuous and dynamically continuous have noticeable impacts on management strategy. In most cases, abrupt changes in service delivery or product feature negatively impact the client base (Todorova and Dursin 2007, p.780). However, there are several instances when organizations acquire external innovation which is not appropriate for its resource base. In such cases, the strategic goals are rarely achieved.
Proper use of resources as stated is part of the management strategy which is essential for improvement and increased performance. However, the applicability of the resource-based view must be in context if an organization is to realize tangible outcomes. Moreover, acquisition of transformation idea is an expensive process. According to West and Bogers 2014, p.825, in external change approaches, the management relies on outsourcing especially specialists to assist in the implementation processes. It involves financial costs to train the employee as well as other related charges (Pisano 2015, n.p). In the case of internal research and development, significant costs are incurred to implement new service and product approaches within the firm.
Adopting Change
Effecting change through innovation is at the core of strategic management. Rouleau and Balogun (2010, p.954) noted that middle managers engage in change related task as part of the strategic management. Notably, the globalized world presents significant challenges and hazards to businesses which must employ relevant strategies to remain competitive and exploit the opportunities as they unfold. Prevailing economic conditions have impacts on customer base chiefly through alterations in the demand and supply of products. They also impact the way organizations are structured, processes of management as well as cultural behavior among others. Notably, strategic management involves using innovative approaches to implement changes that will improve the overall performance amidst these challenges.
Different theories of innovation and change point out the need for support among stakeholders. According to Bucciarelli (2015, p.37), Lewis outlined three main stages that are necessary for implementing change. In the first step of unfreezing, the organization focuses on the shift in attitude among stakeholders to enable the institution of reform. In unfreezing, there is an urgent need for a new design which must be delivered through the provision of information to ensure there is the positive reception of the anticipated adjustments (Watson and Wixon 2007, p.9). The second phase involves shaping whereby the implementers establish the balance between the driving force for change and the restraining to promote participation. Finally, the refreezing stage requires the creation and maintenance of the new conditions.
The Lewis theory provides critical insights on how innovation enhances change in the case of strategic management. Systematic execution of a change strategy enables the transformation and coordination of activities with the aim of meeting the business objectives. The unfreezing step allows the stakeholders to establish the need for change while shaping creates equilibrium between restraining driving forces. Innovation is the guiding principle that underpins the decision on what changes are suitable for a particular organization in the whole process. Viki (2017, n.p) pointed out that the business world undergoes rapid changes subjecting employees, managers, and executives to necessary adjustment to remain popular and competitive in the market. He noted that strategic management that is based on innovative approaches created positive rewards such as positive capital flow and increased profit margins (Viki 2017, n.p). In as much as technology may be viewed as, an essential factor in developing new ways to match the existing trends and emerging consumer preferences, it is no longer the key driver for success. It implies that innovative business models are needful for growth sustenance in the dynamic business environment.
Moreover, a substantial investment in research and development across companies reflect the role of innovation in determining market demand and identifying potential opportunities as basic management strategies (Grissemann et al., 2013, p.350). In as much as several players in the various industries compete in the similar market. The difference on the organizational performance is a reflection of innovative efforts and approaches that vary depending on the strategic options. For instance, in the electronics industry, Apple has successfully embarked on customer needs to inform its product design. As a result, it continues to excel in an environment with other significant competitors. Samsung on the other hand, employ the market reading strategy with the aim of improving the already tested products to create more value for clients. Other institutions depend on technology to develop and enhance their products and services (Yoo 2013, p.227). For example, Google uses ideas to improve value for its customers in providing online services. Irrespective of the modification strategy approach, there is a need for alignment with the existing business strategy to achieve the anticipated benefits. Rouleau and Balogun (2010, p.955) pointed out that internal transformation requires sense-making among middle managers as a strategy to promote positive change in the organization. It implies that strategic management relies on the innovation outcomes for both the future and current circumstances.
Strategic management is also considered as the transformation of the static plan into a system that suits the changing business circumstances (Petrou, Demerouti, and Schoufeli 2016, n.p). Innovation aids the processes that lead to change and allow for the use of feedback in making decisions that promote sustainable growth within the organization. A mere focus on the established plans without concern for the changes within the external business environment is not appropriate for business growth. The changes in technology, consumer demands, demographic characteristics as well as policy framework have direct impacts on the business activities. Some of the trends are positive such as increasing population which enlarges the market base and favourable regulations which encourage economic activities within a state or region. However, some changes in the external environment are harmful to the success. An instance is a disruptive technology which alters the competitive landscape in an industry subjecting the existing firms into significant costs. It implies that strategic management will rely on transformation for constant adjustments of the plans to meet the prevailing circumstances in the market. Different modification strategies are suitably applicable to the various organizations once there is an alignment with the management strategy (Viki 2017, n.p). It implies that innovation is a significant part of the continuous planning process that enables products and services to meet market demands in a dynamic environment.
Innovation also determines the direction of change in strategic management (Buchanan 2008, p.52). Change may take different forms within an organization. For instance, venturing into a new business activity to create or satisfy new demands. In this case, the innovation approach can be considered as being discontinuous with complete alteration in the business model. It exposes the business to new forms of competition which require more financial resources for promotion and development of brand recognition. On the other hand, the prevailing condition may require a change in management structure. Notably, strategies depend on the understanding of both external and internal factors, formulation of relevant approaches, and sustainment.
Organizational structure plays a vital role in enhancing communication to enhance performance. Adjustments results into appropriate arrangements that can get rid of bureaucracy which is the primary source of inefficiencies in the organizational operations. Managers need to identify and prioritize change based on the firms' capacity to undertake modification in line with the available resources as well as business needs. Therefore, outstanding capability within an organization to implement change based on innovation provides several strategic options and creates more room diversity in the industry. Without adequate innovative capacity in an organization, the resources cannot be utilized efficiently to enhance the attainment of the set objectives (Aragon-Correa, García-Morales, and Cordón-Pozo 2007, p.350) In case they are achieved; the organization remains highly vulnerable to competition and failures in the long run.
In as much as the adoption of change is a central theme in strategic management, there are significant obstacles that render the planning and execution of new designs within an organization void (Dibrell et al., 2014, p.2005). In most cases, new changes attract resistance among the stakeholders especially employee who may have parochial self-interest, misunderstanding or just lack of trust. For instance, to form mergers between companies, the company owners may focus on anticipated benefits such as reduced cost of operation, increased market base, and economies of scale. Meanwhile, the employees suffer termination of contracts, change in their location of work, and unfavorable terms of employment. In such cases, ineffective communication creates a misunderstanding which results in various types of resistance. For instance, employees may refuse to use the new IT system or channel their grievances to the unions and conduct a strike. Due to the fear of threat, stakeholders may also resort to unauthorized methods such as blackmail to resist the changes (Ford, Ford, and D'Melio 2008, p.370). Resistance is a significant blow to strategic management since it results in operational inefficiencies. The innovation efforts remain mostly frustrated and little success is realized.
As stated, innovation strategy aims at leveraging a competitive advantage. However, strategic management may focus on the use of new technology which is susceptible to adoption by competitors (Viki 2017, n.p). In this case, the strategic investment by the management fails to meet the set objectives due to replication by other businesses. A similar innovation across competing corporations especially when there is no legal protection often subject companies to more risks. Additionally, the commercial returns are only speculative when managers take certain strategic decisions. Innovations that necessitate changes are risky ventures that sometimes fail to generate forecasted profits. When losses occur mainly in the initial stages of implementation or the adjustment processes, the fear of uncertainty among the stakeholders may lead to higher resistance. Finally, adopting innovative change as part of strategic management is an expensive undertaking. The research and development processes require an investment of huge finances which may not be readily available (Yoo 2013, p.227). Therefore, the process of adopting strategic change through innovation is affected by both internal and external forces.
Process and Planning
Strategic management is continuous as it involves planning on a regular basis to ascertain the effectiveness of implementation processes (Wolf and Floyd 2017, p.1781). The evaluation or assessment of the internal and external conditions reveals vital areas that require new approaches and suggest the necessary replacements. The role of innovation, in this case, is to create new designs or procedures that can be used in the alternatives to redefine the direction in accordance with the trends in the environment. Scholars attribute change processes to follow distinct steps in the realignment of organizational assets to yield success. According to Bucciarelli (2015, p.37), Hayes' five-stage model reveals the recognition of the needed change that is deduced from the results of the analysis. Secondly, the diagnosis stage examines the general reception of the new venture among the members of the organization. In the third stage involving preparation and planning, key stakeholders are engaged and timeframes set to initiate the change process. Moreover, there is need to review the outcomes and create other interventions for replacement and adjustment purposes. Finally, the fifth stage involves sustenance whereby the new behavior is instituted as part of the organizational culture. The whole process demonstrated in the Hayes' theory points to the significance of innovation in strategic management.
The innovative capability informs the adjustment decisions in the process of planning. Innovation enables an increased value creation within an organization (Casadesus-Masanell and Ricart, 2009, p.1). As demonstrated above, there is a need for new interventions in the process of executing strategic plans. Notably, overall planning may overlook specific changes in the business environment. For instance, policy frameworks may bar business operations leading to limited investment options within the strategic plan. Business models can also be developed with an excessive focus on the desired success thus disregarding relevance to the organization or resource availability. Innovation present succinct methods of adjusting the business models to maintain focus on the strategic objectives. Notably, the highly dynamic environment needs diverse approaches to issues to meet the existing challenges with adequate readiness and preparation (Dibrell et al., 2014, p.2005). The planning process cannot be considered complete unless there are alternative approaches which can only be developed through innovation. In as much as the strategic management plan may be effective, it will need adjustment that differently positions from its competitors.
Moreover, strategic management is a process that requires a time-space. It is during planning and execution that restraining forces can build up and frustrate the change process (Appelbaum et al., 2012, p.771). Therefore, innovation supports the balance between the restraining and the driving forces. For instance, an organization may suffer from strict policies that prevent the launch of a new product in an already flooded market. Due to innovation, e-business approaches enable accessibility to a broad market base which generates more income for future investments. The time-space is also characterized by changes in preference, increased competition due to new entrants, and the introduction of new technology. It is through the innovative capability that an organizational strategy can yield both short-term and long-term wins within the dynamic environment. Strategic management focuses on overcoming these obstacles by redirecting resources toward the desired end (Hair et al., 2012, p.341). The success of planning and execution of the intended designs rely on the levels of creativity to harmonize the various functional areas.
Conversely, innovation in the planning process also faces noticeable obstacles primarily based on the concept of leadership and constant need for change (Demil and Lecocq, 2010, p.231). Strategic management requires an effective leadership backed up with efficient communication and adequate resources. Every new venture whether it is based on the process, product or structure rely on proper coordination of its activities. Most innovation strategies failures results from lack of adequate leadership to spearhead the process of planning and execution. New designs in an organization face resistance for different reasons cited previously. It is the role of leadership to device relevant ways of overcoming the restraining forces and building on the driving factors. Casadesus-Masanell and Ricart (2009, p.1) noted the efforts of top administration in innovating new business models. They cite IBM'S study report of the year 2008 as a reflection of such attempts to capture and improve value for business and the customers. When organization lack management with a dedication to innovation and quest for change, it will dread taking risks which have both short term and long term wins. Therefore, the existing leadership capability defines the role innovation will play in the strategic management (Carter et al., 2013, p.952). Transformational leadership is considered as being open to new changes and more accommodative to innovation strategies that are inclusive and suitably serves the interest of stakeholders within an organization.
Conclusion
Apparently, innovation plays significant roles in strategic management and can be considered as the basis of improved performance, increased productivity as well as successful attainment of the set objectives. Regarding the use of resources, modification strategies are necessary for the alignment of human capital to maximize their exploitation for the benefits of the organization. It also promotes relevant decision on how the management can leverage the business competitiveness in through the implementation of appropriate strategies. However, externally acquired ideas are sometimes unsuitable for another organization. Adopting change is a core concern in strategic management. Innovation guides the change process to promote the desired outcomes. On the contrary, there are significant obstacles in the attempt to implement new changes within the organization. Finally, change aids the planning processes and execution of strategies. Lack of adequate leadership can also cripple the success of innovative approaches.

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