Innovation Management and Business Agility

Innovation Management and Business Agility

Natalie Jagsaran

Pennsylvania State University

Dr. Jeff Tsai

June 20, 2016

Abstract 

Innovation management and business agility are recognized as essential approaches for increasing the competitiveness of the organizations. Studies have confirmed that there is a link between innovation management and business agility that directly affects the performance of the firm. Research has established that agility, being a dynamic capability, reinforces the firms’ social capital and leads to social, economic and environmental sustainability in the business processes. In addition, studies have also confirmed that in order to increase return on investments and be competitive, the businesses must be agile and prepared with upcoming technologies. The effects of this positive association between innovation management and business agility are the potential strategies for development and sustainability for the organizations which results in a stronger economy.

Introduction

Today’s global and increasingly competitive marketplace requires business agility to capture the opportunities in the market and drive the competitive advantages. Competition amongst organizations is getting harder every day because of numerous environmental and organizational reasons like, deregulation, globalization increasing international and local competition, and new technologies (Hugos, 2009). Innovation is identified as the main success factor in this increasingly competitive complex environment. Innovation can help companies capture substantial market share and/or establish an entirely new opportunity within the market that allows the firm to reap exaggerated profits. This paper presents and illustrates that there is a positive association between business agility and innovation management and their relationship with business survivability, performance, and the sustainable competitive advantages for the firm.

Fundamentally, the agile business might move quickly, efficiently, and decisively in starting, anticipating, and taking advantage of the variations. As the necessities for agility go down the management chain and to functional units, it might manifest itself in different ways. At the level of the individual contributor, agility is created by the ability to quickly resolve the day to day issues in business, to recognize the new approaches and the outlines for the delivery speed, to cross global and functional lines with no hesitation, and accepting, reacting to, and initiating the changes. The employees that might identify the chances, adapt, and thrive in the changing realities have the tendency of being great performers (Chew & Gottschalk, 2013). Given the correct learning investments and resources, these tenets are attainable across the whole organization. The paper creates a robust foundation for the continued studies of the association between business agility and diffusion of innovation into the organizational contexts.

Agility is triggered by technology based on enhancing relationships with customers, sensing the threats or opportunities, and establishing, delivering and backing the solution to a threat or opportunity. For instance, an ICT solution might arise out of the need to promptly add functionality to the critical IT applications founded on the requests of the local end-user. Executives are often under immense pressure to build their organizations to be increasingly agile through the use of technology. Part of the weight originates from the local business units that take the face value expectations and usually accompany the new technology investments. Therefore, the local business units end up putting pressure on the IT groups to utilize the most modern technology to promptly develop the new services and products specific to their clients in specific geographic areas. While the IT groups desire drawing on the modern and most vital technology to promptly develop the solutions to the local demands, they also prevent the repeating of previous mistakes like establishing “infrastructure spaghetti” that could result in heightened project failure rates. This helps an organization to survive.

 Furthermore, to maximize the business agility, information technology is regarded as a part of the business strategy that is driven nowadays, numerous researches backed that information technology has the capacity to maximize the agility to fasten decision making, ease communication between the organization’s department and react quickly to the fast changing situations. The strategic significance of building a capable IT infrastructure is recognized as a vital tool for management (Rigby & Bilodeau, 2015). The infrastructure of the firm could allow strategic innovation within the processes of business, which is a characteristic that the competitors' infrastructures might restrict them from emulating the innovations faster. Therefore, strategic business agility requires the capabilities of IT infrastructure as the main part of their plan, as it leads to business value and maintains the competitive advantage.

The agile corporate environment utilizes a diverse approach. There tends to be no impulsive reactions to fire alarms, no rescue and escape plans that are already prepared. It is not the after-effect responses to the business events. In the current climate, agility is entirely integrated into the culture of the business. It is the quiet but influential force that is behind the capacity to quickly change, because the managers and leaders identify the symptoms of change. Agility observes and responds. It anticipates and plans. It has a sense then reacts (Sushil & Chroust, 2015).

Literature Review 

Background

Business agility is the concept in which the organizations seek to perform their operations in a flexible manner.  It enables the organizations to rapidly change to the changing market circumstances, capitalize on the emergent opportunities in business, adopt the new distribution channels or the supply chains and minimize costs or maximize revenue streams in the process. Many emerging technologies are vital to endorsing the business agility. For instance, cloud computing enables scalability. The mobile devices allow the employees to operate conveniently away from the traditional office environments and social media allows real-time interactions with the clients, establishing a regular feedback loop to driving the business agility efforts.

Business Agility

In today’s unsettled environment, the accepted norms and rules that governed the business conduct seem to be undefined and unstable. With such conditions, the capacity to sense the market changes and react quickly to such changes is vital to the company’s success and the possible enabler to the competitiveness of the firm (Heisterberg & Verma, 2014). The model of traditional planning, which assumed products and markets as moving through their life cycles in a consecutive, orderly way has been overlooked and replaced by requirement for the agile strategic thinking. The fast-changing markets need the capacity to reconfigure the organization’s asset structure and achieve the necessary external and internal transformation. Schaltegger, Lüdeke-Freund, and Hansen (2012) distinguish the three interrelated agility capabilities: customer agility, operational agility, and the partnering agility. For every capability, they define the roles and effects of the IT. The distinction is often in line with the types of the strategic agility as described by Oosterhout, Waarts, Heck, and Hillegersberg (2006), who make the distinction between the business initiatives directed at increasing the strategic agility centered on their position at the value net: the customer agility, partnering agility and the internally focused initiatives.