Managing Discontinuous Innovation

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					International Management Review                                                   Vol. 5 No. 1 2009

                           Managing Discontinuous Innovation
                                           Eddy Junarsin
                         Southern Illinois University at Carbondale, IL, USA

[Abstract] Management approaches to innovation are notably different between those for incremental
changes and those for disruptive ones. Disruptive innovation is deemed to be risky, uncertain, and
costly by academics and practitioners. Meanwhile, incremental innovation is characterized as more
predictable and corresponding with organizational context. Accordingly, the discontinuous innovation
is supposed to be conflicting with and threatening for the organizational structure, current
achievements, and ongoing procedures. However, it is the discontinuous change that a firm really
needs in order to gain competitive advantage in the turbulent business environment. Most companies
prefer to concentrate on incremental innovations, thereby being less effective in managing
discontinuous innovations. Organizational inertia, structured routines, and less absorptive capacity are
three among other hindrances to the discontinuous innovation. Hence, a company has to design and
implement different approaches, including strategic actions, industry context, organizational context,
technological context, and people context. In conclusion, the company has to promote discontinuous
innovations in this changing environment while maintaining the survival ability by managing
incremental innovations.
[Keywords] Product innovation, process innovation, incremental innovation, discontinuous innovation,
competitive advantage

                                            Introduction
As the world has shifted from the finance-based view of a firm in the 1970s to industry-based in the
1980s, resource-based in the 1990s, and knowledge-based views in the 2000s, the role of creativity
and management has become more dominant in building and enhancing a company’s competitive
advantage. By definition, innovation is the process of finding, making, and commercializing
something new (Tidd, Bessant, & Pavitt, 2005). Frequently, innovation is supposed to be similar to
creativity, since both of them are considered the sources of competitive advantage (Florida, 2002;
Tidd, et al., 2005). To differentiate the two, Bishop (2005) argues that creativity can be defined as
problem identification and idea generation, while innovation can be defined as idea selection,
development, and commercialization. Accordingly, creativity or invention is the beginning part of the
process that has to be shaped by development and commercialization in order to gain commercial
benefits from an innovation.
     Innovation can take two forms: (1) product innovation, which is the creation of new products and
(2) process innovation, which refers to finding new ways or methods of doing something.
Subsequently, based on the degree of the innovation novelty, two patterns of change can be defined: (1)
incremental innovation and (2) disruptive or discontinuous innovation (Tidd, et al., 2005). On the one
hand, incremental change refers to making or doing something that builds on the existing products. On
the other hand, in discontinuous innovation, something created or done is radically new. Some
companies realize the need for balancing the two kinds of innovation. However, management
approaches to each form are apparently different, proven by the failure by many companies of
managing discontinuous innovations, albeit their successes in incremental changes, and vice versa.
     In this paper, 
				
DOCUMENT INFO
Description: Management approaches to innovation are notably different between those for incremental changes and those for disruptive ones. Disruptive innovation is deemed to be risky, uncertain, and costly by academics and practitioners. Meanwhile, incremental innovation is characterized as more predictable and corresponding with organizational context. Accordingly, the discontinuous innovation is supposed to be conflicting with and threatening for the organizational structure, current achievements, and ongoing procedures. However, it is the discontinuous change that a firm really needs in order to gain competitive advantage in the turbulent business environment. Most companies prefer to concentrate on incremental innovations, thereby being less effective in managing discontinuous innovations. Organizational inertia, structured routines, and less absorptive capacity are three among other hindrances to the discontinuous innovation. Hence, a company has to design and implement different approaches, including strategic actions, industry context, organizational context, technological context, and people context. In conclusion, the company has to promote discontinuous innovations in this changing environment while maintaining the survival ability by managing incremental innovations. [PUBLICATION ABSTRACT]
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