The creation and diffusion of innovation

Running head: MANAGEMENT
Management
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Author Note:

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BSBINN502 - BUILD AND SUSTAIN AN INNOVATIVE WORK ENVIRONMENT:
Activity 1.
Answer 2.
The following are the three examples of innovations which leaders might undertake:
Brainstorming:
The managers should encourage their subordinate employees to engage in forming
decisions. Oppong (2017) mentions that brainstorming encourages the employees participating in
particular decision making activities to express an array of ideas. This leads to generation of
ideas of different types including ‘out of the box’ ideas. This enables the managers to choose the
appropriate ideas expressed to form the business strategies.
Customer involvement:
Managers can adopt the innovative strategy of customer involvement while forming
business strategies. Cui and Wu (2017) mention that business organisations can involve their
customers in the process of product development. Here the customers here act as value co-
creators and co-develop the products. The managers should gain customer reviews and feedback
about products to identify the expectations of the customers from the products. The managers
should incorporate the feedbacks and suggestions gained from customers to form their product
strategies. This innovative NPD approach involving customers would ensure that the products of
the companies are more aligned to the needs and expectations of the customers. The products as
a result are able to ensure higher levels of customer satisfaction and generate higher revenue.
One can point out that this method of customer involvement in forming of product strategies are

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helpful for smaller firms with limited resources and business networks which prevent them from
carrying out open innovation to develop products (Kimita et al. 2016).
Local sourcing of finished goods:
The managers overseeing procurement of finished goods should source materials from
the local suppliers instead of sourcing finished goods from foreign companies. The procurement
managers should procure goods like food products, skincare products and apparel from local
producers which would enable the companies keep their procurement costs low. The companies
would also be able to support the local suppliers in generating revenue which would eventually
bring about economic development in the local community. The local suppliers would also
supply superior quality goods to the companies at lower rates, which would result in lowering the
procurement costs of the latter.
Answer 3.
It is important for managers and leaders to understand innovation in terms of systems
concept because operations of all the departments or systems are interrelated. For example, the
marketing departments gains customer feedbacks about their expectations from the companies in
terms of product innovation. The manufacturing department checks whether the raw materials
required to manufacture innovative products are in the stock. If it is found that the inventory
available with the companies are insufficient to process the orders, the manufacturing department
informs the procurement department about the amount of inventory which has to be procured.
The procurement department informs the finance departments to release funds to procure the
inventory. The procurement department then procures the inventory of raw materials which the
manufacturing department channelizes into manufacturing of the innovative goods. The
marketing department then delivers the finished innovative products to the customers and the

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revenue generated is once again received by the finance department. Thus, it can be established
on the basis of this discussion that the process of manufacturing of innovative products is
dependent of different systems/departments like marketing, procurement and finance which
points out to system concept.
Activity 2.
Answer 1.
Managers should encourage employees to give ideas, opinions and suggestions regarding
improvements and changes which would be beneficial to the business organisations due to the
following reasons:
Accurate decision making:
Generation of ideas and suggestions from employees results in innovation in the decision
making process. Woods et al. (2018) mention that generation of ideas in large numbers enables
in more creativity in decision making. For example, availability of large numbers of creative
ideas, suggestions and opinions enable the managers to consider an array of alternative strategies
which could be considered to achieve the business targets or overcome business challenges. They
are as a result able to make more accurate business decisions which ultimately leads to
improvement in the business.
Employee participation:
When managers encourage employees to express more opinions and ideas, employees are
encouraged to participate in the decision making processes. They feel a sense of belongingness
to the company which encourages them to proactively participate in the attainment of business
goals (Niesen et al. 2018).

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Answer 2.
 Encouraging the employee to analyse the suggestion which he wants to present and
provide a more detailed picture.
 Hold a meeting with all the employees (including the employee having the idea) to
discuss on the suggestion.
 Motivate the employee to be more innovative while putting forward ideas.
 Interact customers to a greater extent to develop his customer management skills.
 Arrange training sessions to further improve the skills, knowledge and competence of the
employee.
 Encourage the employee to express more ideas and suggestion in the subsequent team
huddles.
Activity 3.
Answer 1.
Innovation involves risks of different types. Bustinza et al. (2019) mention that carrying
out innovation has emerged as a necessity before the business organisations in order align their
business operations with the changing macroeconomic conditions. However, they do not always
guarantee positive returns on the capital invested which results in risks. For example, business
organisations invest immense amount of financial resources to introduce innovative products into
the market in order to ensure higher level of customer satisfaction. However, if a competitor firm
introduces a more innovative product which is more aligned to the customer preferences, the
former company fails to generate the target revenue and incurs losses. Thus, failed innovations
expose firms to immense amount of risks like revenue risks.

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Answer 2.
The risk which The General Confectionary Company would face owing to introduction of
the new product and recalling an existing product would be revenue risks. This because the new
product may not generate the target revenue in case it fails in the market. This would give rise to
revenue risks as the firm would lose revenue owing to failed NPD instead of gaining revenue
(Etriya et al. 2018). The firm can control this risk by promoting the new product aggressively in
the market in order to generate a strong demand among customers prior to launching the product.
The second risk which the confectionary company would face owing to the failed NPD
would be capital generation risks. This is because, if the company generate low amount of
revenue owing to failed NPD, it would not be able to give high ROI to investors. The investors
as a result would reduce their investments in the confectionary firm which would weaken its
operations. The confectionary firm can control this issue by ensuring that after successfully
tackling the revenue risk and generating high revenue, it should give high returns to the investors
(Grimpe et al. 2017).
Answer 3.
Contingency plans are alternate plans that are required to be implemented once the
original plan in the process fails to impress. These plans enable the business organisations to
manage challenging situations. For example, the companies in order to sustain in the market and
ensure that their products have minimum negative impacts on the environment, are compelled to
introduce products made from environment friendly raw materials which are usually more
expensive compared to their synthetic counterparts. Thus, one can point out that the firms in
order to bear this increase in the cost of procurement (Katsikeas, Leonidou and Zeriti 2016). One
can also point out that the firms may face shortage of raw materials which would capsize the