Innovation as a positive change in business organizations


Problem:

Innovation as a positive change in business organizations. You may be interested to learn from an interesting article in Bloomberg Businessweek, where Bruce Nussbaum talks about how companies are funding innovation (or R&D). Typically, firms have used R&D spending as a percentage of sales to measure the cost of innovation. However, since innovation is a function of how people work, scaling R&D simply to match sales could be futile and possibly harmful as an organizational development change. Just because accounting usually measures R&D as a percentage of sales doesn't mean it should be managed that way, says Nussbaum.

He also mentions how companies---like Apple---are learning how to be more innovative with less money, e.g. through management innovation that ultimately leads to other kinds of innovation. Doing more (sales) with less (R&D investment) must be a good thing.

The comparison to other companies in Apple's industry is a good idea, but the comparison is restricted to R&D as a percentage of sales. It ignores the effectiveness of that R&D investment vs. other factors and the directionality of the R&D-to-sales relationship.

Solution Preview :

Prepared by a verified Expert
Strategic Management: Innovation as a positive change in business organizations
Reference No:- TGS01845420

Now Priced at $30 (50% Discount)

Recommended (98%)

Rated (4.3/5)