Business Studies Paper on Innovation Improvement and Obstacles

Innovation Improvement and Obstacles


In most cases, the internal or external organizational environment pushes the management towards innovation. Innovative practices in any organization help in fostering value addition in terms of products and service delivery, and can be of great assistance in improving organizational competitive advantage. In a dynamic market environment, innovation is mandatory to keep any given business afloat. As such, businesses must invest in strategies to enhance innovation among the members in order to constantly maintain a competitive edge in the market. Innovation in any business can be driven by dynamic process needs, changes in the market structure and the industry at large and incongruities between expected outcomes and the actual outcomes of any given process and/ or product. When some unexpected occurrences happen, it may also be necessary for a business to be innovative to maintain or improve its position in the market. Innovation as a practice can be improved through various practices as discussed by different authors. The essay seeks to explore different strategies that can be used by organizations to improve innovation as well as the obstacles faced by businesses in their efforts to innovate.

How Businesses can Improve Innovation

Improving innovation in any business implies that the business has understood the external and internal business environments effectively enough to identify areas of short comings. Innovation comes in to solve a particular problem or to address a particular challenge in dealing with client preferences. According to Prisano (2015), innovation can be enhanced through clearing and promoting communication across all the organizational hierarchies. The ability of staff to share their personal ides and convictions through open communication channels enhances their willingness to participate in the innovation process as well as their efforts to enhance the industry activities of the business. Not only will employees communicate about the challenges of the industry and the market but they will also provide opinions about how they feel the challenge could be addressed. However, their capability to share their ideas will only be sustainable if the ideas they share can be evaluated openly and enacted if effective for the management of the specific challenge faced.

The need for openness can therefore only be sustained in cases where the organization gives the employees the freedom to engage in brainstorming activities. It is therefore necessary for any business desiring to improve innovation to be capable of enhancing autonomy in thought and practice. Individuals can only engage in effective innovation when they are not constrained by operational principles that tie them to the standard procedures that have been established before. A business desiring to improve innovation should therefore allow employees to be independent thinkers and thus to be capable of bringing in different ideas for problem solving at any given time. For this to happen effectively though, the business should also promote the culture of risk taking. In this regard, Fairholm (2009) emphasizes the need to distinguish between innovative risk taking and careless decision making. While innovative risk taking implies making decisions or taking actions that have not been done before yet have the potential of success. On the other hand, carelessness implies implementing any new proposal regardless of their potential impact on the business operations.  Risk taking can thus be a double edged sword if not followed up on effectively and should thus be allowed yet monitored closely to ensure that the decisions made do not jeopardize business performance. One way in which this can be achieved is through maintaining the organizational goals.

Another way of improving innovation is therefore to ensure that the organizational goals are unifying without constraining the work processes. Henri Fayol’s management theory indicates that one of the principles of effective management is the provision of unity of direction in the organization. Employees should understand that they are working towards achieving a specific set of organizational goals and objectives. Once this is done, they can be allowed to practice their roles independently, using creative and innovative work processes. In this way, a business can boost the confidence of the employees without having them lose direction. When this is put in place and boosted through encouragement from the supervisor’s it has the potential of resulting in greater innovative practices than they could have done.

In accordance with Prisano (2015) promoting innovation can be achieved through provision of a supporting work strategy as well as a supporting organizational culture. An organizational culture which provides a connection between the business strategy and the innovation process is recognized as one with great potential for improving innovation. Practices such as development of an innovation strategy can enhance the perception developed by the employees towards innovation. Subsequently it enables the employees to view innovation as a necessary part of the business process. Some companies have even built their reputation on the innovative culture. For instance Apple and IBM are recognized as giant innovators through their business practices and deli9verables. It is therefore clear that maintaining open channels for innovation boosts the innovative capacity of the employees and thus improves the overall organizational innovation. An innovation culture can be developed by ensuring that employees are free to air their ideas without the fear of retribution. They have to understand that the biggest risk with the business is to not try anything new (State Government of Victoria 2016). This can however only be understood if the organization makes it clear that the business can benefit from innovation in given ways.

Not only do organizational cultures and innovation strategies enhance innovation but also their application ensures that organizational values are respected. Developing a set of values that fosters and rewards innovation can also be an effective strategy towards improving innovation in a business setting. Values that improve innovation are those which influence the employees to be more than they already are by putting in place ideologies that have the potential of enhancing the business advantages in the industry. Fairholm (2009) adds that values should be those that trigger behaviors considered building towards innovative practices. The values should confer commitment, meaning and purpose on innovation and the organizational goals and objectives. Without such values, it may be difficult for the organizational culture to independently drive innovation. The organizational behaviors are guided by the values and the articulated organizational credo hence affects the potential of the employees to be innovative. In this regard, innovation is driven to a great extent by the values advocated for in the organization. Business managers can thus use the organizational values to instill in the employees a sense of innovation and the need for innovative practices in the business environment. The organizational culture and values may drive the employees towards attempting innovation but the acceptance level of their innovative ideas will also influence their willingness to share those ideas with the business management.

The business management should strive to assure the employees that innovation is accepted as a reasonable practice, not through accepting all ideas but by using practical and merit based evaluation techniques to filter the ideas presented. Employees need to know that while their ideas may have been rejected by the management, there is a profound reason for the rejection. This can only be accomplished by laying down the rules and the merits that are required for any innovative idea brought to the table. The employees should know the bases for acceptance or rejection of their ideas and be assured that in cases where the developed ideas meet the requirements for the business growth and innovation, those ideas would be accepted and rewarded. The management should also strive to provide realistic timelines and deadlines for innovative ideas. For instance, innovation driven by market demands, process constraints and unexpected occurrences should be encouraged within short timelines as delays in this result in eminent loss of market shares. The employees ought to understand this and thus be ready to respond as per the innovation desired.

The state government of Victoria (2016) asserts that innovation can also be improved through effective hiring practices. When a business hires people with different experience and skill sets, it is inevitable that the perspectives from these people will also be different. As such, the employees are bound to have different perspectives. People with diverse capabilities, backgrounds and cultures can develop innovative ideas that reflect their diversity and eventually impact organizational performance positively. In addition to hiring differently capable people, businesses should also place the hired individuals efficiently to enable each person make maximum use of their capabilities. Matching people to jobs which suit their range of capabilities is one of the ways through which job satisfaction can be achieved. Furthermore, individuals working in areas they are passionate about are more likely to be committed and motivated in their roles, making them better at innovation. Under the encouragement of supervisors, innovation in such cases becomes even much easier compared to where the people are not suited to their placement roles. Once the placement has been confirmed, providing employees with effective means of work can also boost innovation.

Technological advances provide businesses with an excellent opportunity to boost the working capacities and productivity of their employees. Any business should therefore attempt to provide employees with sufficient working tools and thus enable them to implement their innovative practices. Taking advantage of the technological advancements requires a business to invest in research and development as a means of understanding the external business environment. Without this, it would be impossible for an organization to learn about new technologies and their impacts on the production processes and subsequently find ways in which those new technologies can be used to gain competitive advantage. Maintaining an in-depth understanding of the external environment would thus enable a business to understand customer needs and thus identify technologies that would result in better outcome for the organization. The business must also deal appropriately with the obstacles that present during the pursuit of innovation. Managing the opportunities and weakening the obstacles can push a business farther with respect to innovative practices.

Obstacles to Innovation

While a business may attempt to improve innovation among the employees as a way of improving the competitive advantage, businesses often face many obstacles in innovation. Understanding the obstacles can provide a business with the opportunity to take advantage of various situations as well as to know how to handle the obstacles when faced. Plotnikova, Korneva and Ustuizhanina (2015) describe some of the obstacles to innovation in any business. One of these obstacles is negative reception of new ideas. In the same manner that positive reception enhances innovation, negative reception makes employees to cower from presenting their ideas and opinions. Negative reception can be in terms of criticism and/ or ignoring ideas without any concrete or reasonable basis. Ina n organization where criticism of innovative ideas is common, the probability that employees will present any of their ideas to the management reduces. Similarly, the type of reception accorded to risk taking will also influence the innovative practices in a business. For any business with strong need for innovation, penalizing risk takers discourages people from engaging in innovation due to fear. Innovation can be successful or not and it requires some measure of risk to bring any idea to the table. As such, if the risk is seen to be more than the innovative effort and the source of innovation penalized, the other employees in the organization would not be willing to present their own ideas.

Discouraging risk taking can also be through frowning upon new ways of working and emphasizing the need to stick to the existing formal working procedures. This reduces opportunities for experimentation and thus presents an obstacle to innovation. Innovation requires putting in practice new working strategies that have the potential of improving outcome. When the ideas are available but the opportunities to put them into practice are absent, innovation is stifled and cannot be implemented effectively. Inhibiting open communication also hampers innovation. As explained previously, innovation is enhanced when everyone is free to communicate their thoughts and ideas both vertically and horizontally in the organizational hierarchy. Without such freedom of communication, it would be impossible to enhance innovation. Plotnikova et al (2015) extend the concept of communication blockage to the outside communication. Businesses only learn about the external business environment through communicate with the outside environment. The communication with the external sources of information is what enables businesses to acquire more knowledge about the external environment. In a business where interactions with the outside world are prohibited, innovation is hampered since it would be impossible to gain new knowledge from the outside.

Talegeta (2014) also discusses the organizational culture as a potential inhibitor of innovation in a business. In the previous section, one of the ways discussed for improving innovation was the use of a reasonable organizational culture. It therefore means that when the organizational culture and values are unsupportive of innovation, the practice of innovation is hampered. The organizational culture can prevent innovation in various ways. For instance, a culture that encourages the use of formal and traditional practices reduces the potential for innovation. Similarly, an organizational culture that does not encourage dynamism hampers innovation since innovation results from a bid to be different from the conventional businesses in the same industry. In addition to this, cooperation among the organizational stakeholders can also hamper innovation.

Talegeta (2014) posits that for innovation to be effective in any organization there has to be cooperation among different stakeholders. The objective of innovation is to provide value addition to either products or services. As such, all the stakeholders in a business have roles to play to ensure that innovative efforts accomplish their goals. The management has to provide approval and financing for innovations; the employees have to implement the actual innovations while the customers should be ready to purchase the innovative products. This explains the reason for customer- oriented approaches to innovation, whereby organizations focus on providing value that customers want. It is only in this way that innovations can accomplish their objectives. In cases where there is no cooperation among the stakeholders, the potential for organizational innovation is reduced significantly. At times, the government policies and regulations may also hinder cooperation and/ or innovation in a business (Talegeta 2014).

Government policies on financing as well as regulations in terms of wages and environmental practices could hinder innovation to a large extent. According to Talegeta (2014), the lack of supportive government policies has the potential of inhibiting innovation, particularly in the public service sector. In such cases, employees may not have the motivation to innovate due to absence of incentives and appreciation for the same. Other policies on intellectual property rights as well as patent issues may also affect the potential of employees to initiate and implement innovative ideas. In this regard, costs of undertaking intellectual property rights as well as the independence of the innovators within the organizational context may hinder them from innovative practices (Bergsland, Elle and Fosse 2014). In such cases, the potential innovators fear that they may have nothing to gain from their practices without the intellectual property rights.

Bergsland et al (2014) also describe research and development failures as inhibitors of innovation. As explained previously, organizational growth and innovation requires intensive consideration of the external business environment. Understanding the industry dynamics as well as obtaining feedback from customers can provide guidance to businesses on the directions they should take with regards to innovation. When the research and development department fails, it becomes impossible to obtain sufficient information that would enable innovative decision making to occur. Any innovations made in such instances can be either successful or fail. The market size also affects the potential for innovation to take place effectively. A wide market and deep penetration into the market result in greater opportunities for information collection as well as for innovation. Where the market size is small and there is low penetration into the market, innovation is hampered significantly.


Innovation plays a very crucial role in enhancing organizational competitive advantage. Many practices enhance innovation in the business contexts and encouraging such practices in effect improves innovation. On the other hand, there are factors that pose obstacles to the accomplishment of innovation in the organizational context. Some of factors that improve innovation in the organizational setting include: clear and open communication across the entire organizational hierarchy, encouragement of experimentation, provision of supporting cultures and values, the assignment of roles and responsibilities based on individual competencies and the emphasis of values that trigger innovative organizational behaviors. On the other hand, the factors that inhibit innovation include penalizing the potential for risk taking, criticism of the presented ideas, poor research and development and absence of stakeholder cooperation among others. It is therefore essential for organizations to make decisions best on detailed information of the external and internal environments.



Bergsland J, Elle OJ and Fosse E 2014. Barriers to medical device innovation. Auckland Journal of Medical Services, vol. 7, pp. 205- 209. Retrieved from

Fairholm MR 2009. Leadership and organizational strategy. The Innovation Journal: The Public Sector Innovation Journal, vol. 14, no. 1, pp. 1- 16. Retrieved from

Pisano G 2015. You need an innovation strategy. Harvard Business Review. Retrieved from

Plotnikova I, Korneva O and Ustuizhanina A 2015. Barriers to innovation in the implementation of the investment strategy: An empirical study. Procedia – Social and Behavioral Sciences, vol. 166, pp. 369- 377. Retrieved from

State Government of Victoria 2016. Improving innovation. Business Victoria. Retrieved from

Talegeta S 2014. Innovation and barriers to innovation: small and medium enterprises in Addis Ababa. Journal of Small Business and Entrepreneurship Development, vol. 2, no. 1, pp. 83- 106. Retrieved from