Types of Innovation in Business

Cite this

Define innovation and give some examples of different types of innovation. How can managers promote innovation in large organizations? Give an example of an organization that is an innovator and describe how they support innovation. Give an example of an organization that has failed to innovate. Why do you think that failure happened?

On-Time Delivery!
Get your customized and 100% plagiarism-free paper done in as little as 3 hours
Let’s start
322 specialists online

Innovation is a very fundamental aspect of any organization and deals with creating and developing ideas, processes, products, and technologies that are effective and acceptable to the market. Innovation does not necessarily mean coming up with new ideas but mostly deals with making the existing ideas and methods better (Fonseca 44). Innovation involves some elements of creativity based on generating new and better ideas after identifying a problem in the existing systems. There are four major types of innovation and the innovator must choose which path to take in their search for new and better ideas. The first type of innovation is product innovation whose main objective is to develop new products as well as search for possible ways of improving the existing products to make them better.

The mobile phone industry is an example of industries that use product innovation to come up with new models of phones with more features. The second type of innovation is a process innovation that specifically deals with improving the existing processes to increase the quality and quantity and of products and services produced by an organization. Process innovation brings a lot of benefits to the organization by making work simpler and enjoyable (Fonseca 44). Process innovation goes hand in hand with product innovation because a new or improved product can not be produced using old systems and processes. The third type of innovation is referred to as positioning innovation that is widely applied in marketing. Innovators can reposition a particular product or service in the market to enhance the marketability of products and services in different contexts. The fourth type of innovation is referred to as paradigm innovation that is normally inspired by a shift in thought. Innovators aim at coming up with products and services that are convenient to consumers.

Innovation that focuses on improving existing methods and products is generally referred to as incremental innovation. Radical innovation is concerned with coming up with something that is completely new to the market and aims at eliminating the existing product, service, process, or method from the market (Fonseca 72). There is no way an organization can grow and remain competitive in the market without innovation and creativity. It is always a great challenge to promote innovation in an organization where people are used to the traditional way of doing things. It is difficult for an organization to run efficiently without innovation. It is therefore very essential for leaders within an organization to try all means possible to promote innovation in their organization. Innovation is meant to improve productivity and efficiency in an organization regardless of its size. There are various recommended ways through which a large organization can use to promote innovation within the organization.

To begin with, an organization aiming to promote innovation is to encourage a culture of openness. A transparent environment encourages employees to try out new ideas without ant fear (Fonseca 72). With an open culture, employees can freely share ideas with the management and colleagues which encourages contribution and positive criticism that can make the idea better. Employees should also be encouraged to be sensitive to any changes whether internal or external for them to react timely to external stimuli that might damage the organization. It is also very important to make employees accountable for each of their actions to instill a sense of ownership that is necessary for innovative thinking. Division of labor through decentralization makes employees look for ways of improving their areas of operation and in the process promoting innovation (Fonseca 103). In promoting innovation, it is necessary to encourage employees to always be updated with the latest technologies and methods. Learning new technologies enables employees to be in a better position to come up with innovations as a result of being updated with technological developments. Employees should also be encouraged to learn how to evaluate their ideas in terms of how innovation improves business. Critical analysis of ideas ensures that only viable ideas are implemented.

The other way of promoting innovation in a large organization is through rewarding and acknowledging employees that have come up with viable innovations (Fonseca 103). An organization with a reward scheme for innovation encourages its employees to try and come up with new ideas that can improve the company. Acknowledging employees that come up with new initiatives motivates them to continue searching for new ideas. Acknowledgment builds the confidence of employees because they feel that their contribution to the organization is very important. Large organizations to promote innovation must put in place training programs on innovation to equip employees with both theoretical and technical knowledge about innovation. A friendly workplace that promotes innovation without any barriers is ideal for innovation. The fruits of innovation can only be enjoyed if the company puts the ideas into action (West 120). The morale of employees is always affected when they come up with brilliant ideas but fail to get much-needed support from the company’s leadership. Employees will tend to be more passionate about innovation if the management is always willing to support them.

There are many companies in support of innovation since it is the key to success in the modern business world. Toyota is an example of a company that has an exemplary record of innovation. The company has remained competitive in the market due to its policies that support and foster innovation. It is estimated that Toyota Company comes with one million ideas every year and this is not a mean achievement. This is a clear indicator that Toyota Company supports innovation. Innovation has helped Toyota to remain among the most profitable companies across the world over the years. The company has a strong foundation based on innovation and elegance. One of the guiding principles at Toyota is to always try and do things in a better way compared to other industry players. The culture of innovation experienced at Toyota is driven by three fundamental principles aimed at creating elegant solutions to customer needs. The principle of ingenuity is the first principle which encourages creativity and resourcefulness among employees (West 120).

Yes, we can!
Our experts can deliver a custom Types of Innovation in Business paper for only $13.00 $11/page
Learn More
322 specialists online

The principle of ingenuity is important in the sense that it helps the innovators at Toyota to manage the risks involved in developing new ideas in competitive environments. Employees at Toyota are always researching for better and efficient ways of doing things. Toyota Company has got efficient management strategies that promote and support the development of new methods and ideas. The employees at Toyota have the challenge of coming up with innovations that are high above their competitors. The ingenuity principle has led to the development of new models such as RAV4 which has been very successful in the market. The principle of perfection is highly emphasized at Toyota. The organizational structure and culture at Toyota relentlessly emphasize perfection by always developing optimal solutions to problems. The design, performance, and functions of cars manufactured at Toyota always epitomize perfection in all ways. Customer satisfaction is guaranteed when a product functions perfectly according to their needs.

The fit rhythm is another fundamental principle adopted by Toyota to ensure that innovation is continuously sustained within the organization. Any innovation is supposed to fit in the larger system. The new ideas must be relevant to the current times. The innovations must also be environmentally friendly as well as economical. Cars manufactured by Toyota always reflect the current trends in terms of environmental conservation and the cost of fuel. The principles of innovation are embedded in the company structure and culture and all employees must adhere to the principles (West 125). The management at Toyota is always working around the clock to ensure that the barriers to successful business innovation are completely avoided. The other aspect that has made Toyota successful in innovation is the company’s policy to only focus on the innate customer needs rather than producing products that are too complex. The company has also given the employees enough space to share ideas that can help the company better its products and services. Toyota allocates a substantial amount of its annual budget to innovation activities which just shows how serious the leadership of the company is in supporting and promoting innovation. Emphasis on innovation has made Toyota continue developing new car models that always meet the market needs (West 125).

There are a lot of companies that have experienced failure in innovation despite giving it a try. Sony is an example of companies that have been experiencing failure in its innovations for the last two decades. Being a pioneer player in producing electronic products, Sony has in the recent past lost spark in innovation and is being displaced from the market by companies such as Samsung. An example of its recent innovations that failed is the play station project. Failure in innovation at Sony is caused by quite a several factors that must be addressed by the organization for it to experience some breakthrough in innovation. Many organizations try to adopt innovation but there are only a few of them that succeed. If the employees of an organization are always resistant to change, then there is no way that the company can have innovation. Failure to innovate is caused by a skeptical attitude towards change by the employees and not necessarily the problem of resources (West 125). Innovation initiatives can not thrive in an environment where old habits and conservative traditions reign. Organizations, where people are ignorant about change and innovation, will automatically fail to innovate since the employees will tend to oppose and criticize things that they know nothing about. The ignorance problem makes those employees with ideas that can help the organization fear to share because other employees will ridicule and criticize them. Some organizations have a structure and policies that are very rigid making it very difficult for innovation activities to thrive (West 128). Employees are forced to stick by the company rules and as result inhibiting innovation and creativity. These are some of the issues that have made Sony experience failure in innovation in some of its recent innovations.

Works Cited

Fonseca Jose. Complexity and Innovation in Organizations. New York: Routledge, 2002. Print.

West, Michael. Innovation in Organizations. New York: Psychology Press, 1996. Print.

Cite this paper

Select style


BusinessEssay. (2022, October 22). Types of Innovation in Business. Retrieved from https://business-essay.com/types-of-innovation-in-business/


BusinessEssay. (2022, October 22). Types of Innovation in Business. https://business-essay.com/types-of-innovation-in-business/

Work Cited

"Types of Innovation in Business." BusinessEssay, 22 Oct. 2022, business-essay.com/types-of-innovation-in-business/.


BusinessEssay. (2022) 'Types of Innovation in Business'. 22 October.


BusinessEssay. 2022. "Types of Innovation in Business." October 22, 2022. https://business-essay.com/types-of-innovation-in-business/.

1. BusinessEssay. "Types of Innovation in Business." October 22, 2022. https://business-essay.com/types-of-innovation-in-business/.


BusinessEssay. "Types of Innovation in Business." October 22, 2022. https://business-essay.com/types-of-innovation-in-business/.