Managing Innovation in Organizations: Case of Wesfarmers

This article discusses how Wesfarmers, one of Australia's leading retail companies, manages innovation to enhance market sustainability and growth. The article highlights the company's innovative culture, specialization approach, and resource investment. The management inspires innovation to fine-tune and integrate employees into the organization's culture. The company has established a conducive working environment in which employees undertake their mandates and duties in peace. The article also mentions the importance of division of labor and the right resources in managing innovation.

Running head: MANAGING INNOVATIONS 1
Managing Innovation in Organizations: Case of Wesfarmers
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Encouraging innovation in a conglomerate the size of Wesfarmers is no small feat. The
major innovations at Wesfarmers are the product, process, service, technological innovations. As
organizations get bigger, they become less entrepreneurial and less creative due to increased
bureaucracies as the investors become more risk-averse. This was an observation by
Wesfarmers’ managing director- Richard Goyder. Wesfarmers is among Australia’s leading
retail companies and this success is attributed to proper innovation management. Today, the
company owns Australia's largest retailers namely Target, Coles, Kmart, Burnings, and
Officeworks. According to Wesfarmers managing director, innovation is more than just
invention; it entails finding out the best ways of serving customers and improving operational
efficiency within a company.
Being a large conglomerate, Wesfarmers effectively manages innovation. According to
Richard Goyder, the company has established excellent systems and processed that are
developed through innovation from one period to another. The reporting systems in which
innovative ideas are recorded and kept is very good. Along with good systems, the company has
an excellent innovative culture that values all innovative ideas by the employees (Murray, 2013).
Since all ideas are practically proved on their impact on the overall retail activities of the
company, all employees feel encouraged and motivated to innovate better ideas that enhance
productivity, sales, and product quality.
The management seeks to encourage creativity and innovation of employees in order to
enhance market sustainability and growth. Led by the managing director, Wesfarmers inspire
employees' innovative behavior by providing the personnel with a sense of ownership in the
enterprise. The management inspires innovation to fine-tune and integrate employees into the
organization's culture. The company has established a conducive working environment in which

MANAGING INNOVATIONS 3
employees undertake their mandates and duties in peace (Vaccaro et al., 2012). There are
excellent communication channels established by the management that govern the flow of
information from top management to the subordinates.
Further, the management of Wesfarmers adopts specialization and division of labor
which encourages creativity and innovativeness by employees. Specialization approach is used to
ensure that all personnel works in their area of expertise and this promotes creativity. On the
other hand, division of labor ensures that all teams are working on a single line of activities in
which they gain expertise hence easily come up with innovative ideas (Christensen, Raynor, &
McDonald, 2015). The management of Wesfarmers understands that a large number of
employees recruited in the company have great potentials to innovate good retail sector ideas.
Hence, the management uses specialization and division of labor as a tool for managing
innovation in the company.
Finally, the management of Wesfarmers uses the right resources in managing innovation
and creativity. The management is guided by the principle that innovations involve resources
investment by the company so as to see the output of the whole process. Being a retail company,
Wesfarmers is focused on hiring high-quality staff in terms of knowledge, competence, skills,
and expertise. To ensure that these employees invent new ideas, the management provides the
right equipment and technologies (Biddle, 2016). Its organizational culture is aligned with its
innovation goals; and resources. Currently, the company is investing a lot of resources in new
technologies something which promotes employees creativity.

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References
Biddle, I. (2016). The Wesfarmers/Woolworths duopoly war: The Bunnings vs. Masters
battle. Busidate, 24(3), 3.
Christensen, C. M., Raynor, M. E., & McDonald, R. (2015). What is disruptive
innovation. Harvard Business Review, 93(12), 44-53.
Murray, B. (2013). Creating a Culture for Innovation. Effective Executive, 16(1), 55.
Vaccaro, I. G., Jansen, J. J., Van Den Bosch, F. A., & Volberda, H. W. (2012). Management
innovation and leadership: The moderating role of organizational size. Journal of
Management Studies, 49(1), 28-51.