A Study on Financial Leverage within UK Innovational Industry

This report presents an in-depth analysis of financial leverage within the UK innovational industry, specifically examining the communication challenges that arise between innovators and investors. The research, framed as a business consultancy project, utilizes a qualitative approach and primary data collected through questionnaires from Rolls Royce employees. The study aims to evaluate the importance of innovation from an investor's perspective, understand the relationship between innovators and investors, assess the communication of innovation strategies, identify potential barriers to effective communication, and determine methods to rectify these issues. Findings highlight passive innovation resistance and ambiguity in strategy formulation as significant barriers, suggesting that improved investor engagement can foster mutual respect and trust, thereby resolving communication problems. The report includes a literature review, methodology, data analysis, and conclusions, providing a comprehensive overview of the research and its implications for the automotive industry, particularly Rolls Royce.

An Analysis into the extent of
Financial Leverage within UK
Innovational Industry

DECLARATION
Date (Month/Year) This dissertation is my original work and has not been submitted
elsewhere in fulfilment of the requirements of this or any other award. In accordance with
academic referencing conventions, due acknowledgement has been given to the work of others.
[word count]
Signature_____________________________________________ Date ____________

ABSTRACT
This research paper offers a detailed account regarding the identification of
communication problems between innovators and investors. Communication holds the key to
driving growth, performance and profitability within all organisations irrespective of their size,
nature and complexity. The research aims to provide a detailed account regarding what
communication problems arise innovators and investors. In order to facilitate a clear
understanding of the research aim, Rolls Royce has been taken into account. This business is a
part of automotive industry which is considered to be one of the most innovation-inducing
segment all around the world.
Research Objectives:
In order to conduct this research, the following research objectives have been identified:
 To evaluate the importance of innovation from investor's perspective;
 To understand the relationship between innovators and investors;
 To assess the importance of communicating innovation strategies to investors;
 To identify potential barriers that may disrupt communication between owners and
innovators;
 To determine the ways which may facilitate rectification of communication problems in a
significant manner.
Methods and Findings:
For the successful completion of this research, the research design is in the form of a
Business Consultancy project and is inclusive of qualitative approach which is widely based
upon the primary data. The sample has been chosen using Random Sampling technique and
includes 30 employees working full-time with Rolls Royce for which the primary data has been
collected by way of Questionnaire. Based on this the findings indicate that passive innovation
resistance and ambiguity present while formulating innovative strategy are two of the most
impactful barriers that hinder the communication between innovators and investors. It is also
discovered that there resolution is possible by improving investor engagement as it helps in
creation of an environment of mutual respect and trust between innovators and investors.

Table of Contents
DECLARATION.............................................................................................................................2
ABSTRACT.....................................................................................................................................3
TITLE..............................................................................................................................................1
CHAPTER 1: INTRODUCTION....................................................................................................1
OBJECTIVES..................................................................................................................................3
CHAPTER 2: LITERATURE REVIEW.........................................................................................5
Systematic Identification of Gaps from Literature Review Analysed above.......................14
PROPOSED CONSULTANCY APPROACH AND OUTPUT...................................................15
Proposed Approach..............................................................................................................15
Output...................................................................................................................................16
CHAPTER 3: RESEARCH METHODOLOGY...........................................................................18
Time Horizon........................................................................................................................18
Research Philosophy..............................................................................................................5
Research Approach.................................................................................................................6
Research nature......................................................................................................................6
Research Design.....................................................................................................................8
Data Collection.......................................................................................................................9
Data analysis ........................................................................................................................10
Research Ethics....................................................................................................................10
CHAPTER 4: DATA ANALYSIS AND FINDINGS...................................................................11
Limitations of the Study.......................................................................................................23
CHAPTER 5: CONCLUSION......................................................................................................24
REFERENCES..............................................................................................................................25
APPENDICES...............................................................................................................................28

TITLE
“Identifying Potential Communication Problems between innovators and investors- A
case study on Rolls Royce”
CHAPTER 1: INTRODUCTION
Overview
This particular research is based on the analysis of extent to which financial leverage is
present within the UK Innovational industry. Financial Leverage can be defined as the level of
debt which a particular organisation has utilised in order to finance its assets. It is important to
note that this unit of measurement differs between companies (Clinton and Whisnant, 2019).
This is largely due to the fact that every firm has different anomalies which create a variation in
the degree of complexity and financing needs of the business. From investors' perspective, the
more investment they have in a given business, the more leverage they hold over the firm's
operations. This is due to the fact that when a business enterprise wants to undertake a capital
project or expansionary activity, it may require additional funds that may be sourced by it from
external organisations or investing parties. As a result, an entity providing more number of funds
to that particular enterprise would become an investor of the business which holds a considerable
amount of leverage over the operations as well as strategic decisions undertaken by the business.
On the other hand, innovation can be termed as the application of better solutions which
are generated through the introduction of new ideas or creative thoughts that help in the
achievement of new new requirements, uncommunicated or existing needs of the markets. In
UK, this phenomenon has become a hub for many aspirants, organisations and researchers. As a
result, innovation has become a key for this economy that contributes towards national growth in
a sustainable manner both in the past as well as in current-day scenario. Today, some of the most
prominent and active innovation industries found in the economy relate to automotive,
telecommunications, pharmaceutical, retail and electronic industries among others (Akhmetshin
and et.al., 2017). The present study entails the identification of potential communication
problems which arise between innovators and investors. Currently, almost every organisation has
identified the usefulness of innovation in terms of future growth and enhancement of corporate
performance as well as profitability. Although this is true, it is equally crucial for the
organisations to communicate such intentions to the investors as they are true owners of the
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business. Here, a problem may arise between the company and investors based on the difference
in perceptions. If the investor relations among businesses are not aligned in a manner that fosters
healthy communication among the two, a problem may arise between the company and investors
based on the difference in perceptions. This means that what an organisation may perceive as a
profitable investment may not be considered the same by its owners. As a result, communication
problems arise between innovators and investors.
Background
Rolls Royce is a luxury automotive manufacturer based out of Derby, England, United
Kingdom. The company was founded by Henry Royce in 1884 which mainly dealt in the
electrical and mechanical business. However, by 1960s the company's performance declined due
to mismanagement of its RB211 Jet Engine, thus, resulting in creation of heavy cost over-run
situations for the organisation. The company remained nationalised until 1987 and currently
operates as a subsidiary of Rolls Royce Holdings PLC. Rolls Royce envisions continuous
innovation of their products in order to facilitate best market solutions to their customers. Based
on this, its management believes that the following three trends are most crucial in the present
day scenario to successfully compete in the global automotive market:
 Increasing demand for cleaner, safer and improved competitive power;
 Electrification; and
 Digitalization.
The company's innovators aim to provide highly customized and tailor-made products to
their customers. However, the investors are of the view that excessive innovation may result in
erosion of competitive advantage which is usually found in the form of cheap labour. Also, there
seems to be a disagreement between the investors and innovators due to various reasons such as
misunderstanding of message and educational or intellectual differences among others
(Dickinson, Kassa and Schaberl, 2018).
Rationale
The rationale behind selecting Rolls Royce for this study is the fact that when it comes to
innovation, automotive sector as a whole is one of the most affected industries. In addition to
this, Rolls Royce has been known for differentiation. With high degree of exclusivity combined
with customization and innovation, this company is most suitable for the purpose of successfully
investigating the aims and objectives proposed under this study. Through its analysis, this
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research will be highly beneficial in determination of how communication problems between
such parties can be easily identified and what are the steps that may be taken so as to reduce the
gap between the two. This study will also enable the readers to recognise the issues which may
arise due to such communicative problems and help the users to derive valuable insights in
regards to the problem identified.
Research Aim:
“To identify the potential communication problems among innovators and investors”
OBJECTIVES
In order achieve the aforementioned research aim, it is crucial to understand the concept
of innovation from investors perspective so as to know what kind of expectations do these type
of stakeholders have from the businesses they invest in (Barile, Saviano and Simone, 2015).
Apart from this, the research aims to identify potential communication problems between
innovators and investors, for this purpose, the relationship shared between them is also of critical
value for this particular study. Once this is established, identification of potential communication
problems can be carried out effectively along with the ascertainment of possible ways to address
such problems. Keeping this flow in mind, the following objectives have been formulated to
successfully fulfil the Research Aim:
 To evaluate the importance of innovation from investor's perspective;
 To understand the relationship between innovators and investors;
 To assess the importance of communicating innovation strategies to investors;
 To identify potential barriers that may disrupt communication between owners and
innovators; To determine the ways which may facilitate rectification of communication problems in a
significant manner.
Research Questions
Based on the established objectives, the following Research Questions have been
formulated and addressed throughout this study:
 What is importance of innovation from investor's perspective?
 What kind of relationship exists between innovators and investors?
 Why it is important to communicate innovation strategies to investors?
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 What are the potential barriers that may disrupt communication between investors and
innovators?
 What ways which may facilitate rectification of communication problems in a significant
manner?
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CHAPTER 2: LITERATURE REVIEW
A Literature Review is one which comprises evaluation of secondary sources that are
available in the form of academic journals, articles and research papers among others. This
section of the given research study aims to analyse the literary works of previous scholars in
order to analyse the research objectives for the purpose of successfully completing this
investigation (Bozcuk, 2012). Through this, the earlier research of the given objectives is
analysed from different perspectives of previous authors, thus, enabling me to ascertain possible
solution to the established research problems of this study. Additionally, the chapter of
'Literature Review' also provides a justification of chosen sources as well as identifies five main
issues that are identified throughout scholarly articles, so as to gain insights upon the
communication problems arising between innovators and investors. As people have mostly used
deductive or hypotheses based analysis in their studies previously, I have undertaken an
Inductive reasoning approach as there is no postulation of hypothesis under this study.
The first research objective talks about the evaluation of importance of innovation from
investor's perspective. To begin with, an investor can be defined as an individual or business
entity who allocates capital with a motive to reap higher financial returns on their investments in
the future. Hence, one can affirm that such parties are risk bearers who identify as well as
approve of a certain window of opportunity and seize them to reap financial benefits. This has
been evidenced through the Article named 'Investor-Driven Financial Innovation' by Judge
(2018) which talks about how investors are the key facilitators of financial growth and
profitability for a given organisation. It also states that every company aims to improve their
levels of productivity and financial growth in a comprehensive manner. Thus, Judge (2018) aims
to provide a comprehensive account upon why investor behaviour plays a crucial role in
determining how the spread of investor-driven innovation is creating waves and transforming
structures as well as analysing the need to cover the innovating costs. In order to harness
innovation opportunities, it is crucial for the management to analyse all the focal points which
may enable the business enterprises to gain economies of scale along with higher revenue
development. For this purpose, innovation holds a special importance from investors' perspective
since backing such projects would enable them to retrieve higher return on investments not only
in current period but also in future.
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On the other hand, such an assertion is also confirmed by Aghion, Van Reenen and
Zingales (2013) who, in their paper named 'Innovation and Institutional Ownership' states that
greater institutional ownership is associated with increased level of innovation. The rationale
behind undertaking this paper was to determine how institutional ownership is affecting
innovation. Through the deductive reasoning, hypotheses have been analysed and a conclusion
has been drawn in regards to the same. This has aided in providing a quantifiable justification of
the topic of institutional ownership and innovation. According to paper, innovation is the catalyst
for growth and communicating to business' stakeholders about its ability to innovate and grow in
a sustainable manner. It is important to note that an investor may be an individual or an
institution. Thus, from investors' perspective, identification of an opportunity is one of the key
aspects or driving factor which determines whether an investment must be made or not. In a
nutshell, innovation can be equated to technological changes which impact various aspects of an
organisation such as operations, finances, profitability as well as growth. It is also determined
that competitiveness within the business environment infused with rapid diffusion of
technologies incentivise the innovators to pressurise the businesses to undertake innovation
activities on an extensive scale.
Hence, it can be asserted that innovation holds paramount importance for investors,
mainly due to the fact that through its employment, investors are able to reap higher benefits in
the form of financial returns. In addition to this, this phenomenon also drives productivity which
is a direct indicator of sustainable growth achieved by a particular business enterprise in the
long-run. Thus, enabling such parties to know whether or not a particular investment would lead
to long-run efficiency that would eventually increase investor returns. Therefore, innovation
holds significance in terms of key financial decisions taken by the business including Rolls
Royce which are directly related to the investors' interests too.
La Rocca and Snehota (2014) agree that business relationships are important for
building a strong knowledge base that is highly important from innovation perspective. For an
innovator and investor it is important to have coherent environment that induces the business
enterprise such as Rolls Royce to develop a distributed knowledge system that is largely external
to the company. Doing this would not only help in development of innovative ideas in a
sustainable manner but also help the innovators and investors to have relationship which is
mainly built on executor and supporter premise rather than provider and reaper of benefits.
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While analysing the literature related to the identification of the relationship between the
innovators and investors, this article helps in establishing premise for further investigation in this
regards.
While the role of investors has been identified previously in this chapter, an innovator
can be defined as an individual or business enterprise who undertakes the activity of researching
and developing innovation as well as implementing them. This is evidenced in the article named
'Creating innovators: The making of young people who will change the world' written by
Wagner and Compton (2012) which states that an innovator consistently acts different to think
different which refuels them to generate innovative ideas on a continuous basis. Analysing this
paper, one can differentiate between innovators and investors on the grounds that the former are
mostly concerned with inventing solutions to address a particular problem. Whereas investors are
a group who are concerned with the derivation of financial returns by investing in those projects
or opportunities which, in their eyes, has the potential to reap such benefits in the near future.
Since it is important to understand the meaning of innovator and investor before determining
their relationship, Wagner and Compton's paper provides a premise for undertaking further
investigation. From the paper it can also be inferred that no business organisation can remain
static, it needs to continually grow so as to survive in current as well as future business
environment. Wagner and Compton (2012) assert that employees are one of the key business
assets that investors look at while valuing a business. This is due to the fact that such employees
of an organisation including Rolls Royce are critical to the success of these enterprises as they
are solely responsible for coming up with new ideas that provide the management with
opportunities to venture into new fields. It is worthy to keep in mind that such a group of
innovators is what makes an organisation innovative at the end of the day. One can say that while
innovators are the ones responsible for executing innovation, investors are the ones who provide
financial support to their ideation.
Another evidence is found in the writings of Mazzocchi (2018) who asserts, in their
paper named 'The Process for Innovators/Founders to Raise Capital to Start a Company', that
innovations are a type of investments which require incurring of research and development costs
heavily along with employee dedication. From an investor's perspective, if such a group is
convinced that introducing a particular innovation would bring about financial growth to the firm
and returns to them, they are ready to undertake such risks. This is an important revelation as it
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depicts the role of investors and innovators aptly which mainly paints the relationship between
the two parties as that of a loan seeker and loan giver. Wherein, the loan seeker is innovator who
has the idea and ways to execute such an idea in reality whereas the loan provider is the investor
who has provided the resources to the innovator with an expectation that such an idea would not
result in defaulting on the financial capital provided by them to the innovator. Apart from this,
the paper also throws light upon the power of investor to determine which investment
opportunities must be pursued by the innovators while discarding others by pointing out the fact
that an investor is able to assess the key projects in the capacity of acting as the provisioner of
finance to the company.
Reypens, Lievens and Blazevic (2016), in their article, observe that in order to develop
innovative solutions that address complex societal and scientific challenges, it is important for
investors and the innovators to be collaborative in nature. The rationale behind choosing this
article is that it explores the theme of value capture through innovation which is not only
concerned with the strategic planning activities undertaken by innovators but also their impact
upon investors. It states that every organisation including Rolls Royce requires to identify and
develop a strategy which captures value creation in a significant manner, as a result, it becomes
all the more important to include stakeholders, specifically investors, while undertaking those
activities which result in the co-creation of innovative value. This would not only help the
innovators to better network themselves in the increasingly competitive business environment
but also result in improving the individual value share for investors. Thus, enabling innovators
and investors to be more conducive to each other helps in strengthening their relationship in a
greater manner. Such an analysis is crucial in relation to the research objective of this study as it
provides supportive evidence to empirical findings of Mazzochi (2018) which indicate that
assessment of investment opportunities by investors helps in growing innovative capabilities of a
business.
As far as communication of innovation strategies is concerned, it is crucial for the
stakeholders to know what value does a particular innovation holds for them. Thus, making it
important for these type of stakeholders to be aware of the strategies relating to such innovations.
In their paper, Harrison and Wicks (2013) emphasize that the stakeholders play a key role in
increasing value as well as directing firm performance in a significant manner. Thus, providing a
sufficient amount of evidence in regards to the impact strategy communication has over the
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company as well as its investors. They conclude that firms which provide more utility to their
stakeholder base are able to better retain their interests, participation as well as support. This
enables the business entities to better understand the concept of value creation which is
paramount for them to remain a vibrant business in the future. This is further explored in a report
of Royal Academy of Engineering (2015) which states that innovation is an inherently risky
process whose benefits only materialise over long timescales, thus, resulting in the accrual of a
small proportion of overall benefit for the innovator to thrive on (Investing in Innovation, 2015).
By analysing the two sources, it is also determined that undertaking any type of innovation
activity requires a critical analysis, not only on the part of in-firm management but also on the
part of its stakeholders. As one of the key themes of this report focuses upon the fact that the
benefits derived through the employment of innovation are shared, the two literature sources
assert that risk must be shared between the investors and innovators so as to harness the benefit
of sustainable growth.
From this perspective, it can be inferred that communication of innovating strategies is
important for the business entities or innovators to their investors as the former is exposed to the
risk of failure as the company itself in case they adopt an opportunity which does not create
much value for both. Also, investors are the key stakeholders who provide necessary funds to the
business (Golić, 2014). These may be in the form of government, public (or private) sector
enterprises, individuals or financial institutions such as banks. In any case, what matters is the
fact that stimulating innovation requires a clear vision, set of objectives as well as stable and
coherent policy framework that effectively communicates such strategies to these type of
investors. If they are unable to achieve proper communication and positive feedback from such
investors, the chances of losing competencies in the external business environment become
unavoidable.
It is also to be kept in mind that innovation comes in different forms just like an investor's
perspective. Hence, it becomes crucial for the investors as well as the innovators to be sensitive
towards the communication channels undertaken by them to present such strategies to their
investing group. As per Luo and Du (2015), communicating innovation strategies as well as
actions related to Corporate Social Responsibility help in deepening the relationship networks
between the firm (innovator) and investor (stakeholders). The empirical results also indicate that
companies with an intensive corporate social action history proves to exhibit higher capabilities
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when it comes innovativeness as compared to others. Thus, enabling them to launch new
products more frequently and sustain their competitive edge in the external business
environment.
From financial perspective, Kerr and Nanda (2015) review that for financing
innovation, innovative businesses such as Rolls Royce allocate a definite part of their total
working capital into Research and Development activities. Thus, constraints regarding
accumulation of funds has the ability to shape both the rate and the trajectory of innovation.
Thus, making it crucial for the innovators to take into account the opinions of investors while
deciding upon undertaking a particular strategy related to innovation. Any clash between the
school of thought for both innovators and investors would result in hindering the progress of the
company in relation to the achievement of goals or objectives that fosters growth as well as helps
in gaining strategic direction sustainably.
It is important to remember that investors have a considerable stake in the businesses
which gives a considerable amount of financial leverage over the functions of the enterprise. As
an innovator, communicating innovative strategies to these group of stakeholders can help in
gaining insights from them. This is due to the fact that investors' experience and networking can
help innovators grow in a manner which would have taken longer in their absence.
If the communication between investors and innovators does not lead to accountability,
encourages ongoing evaluation of the enterprise, build stronger investor relationships, enable
corporate performance that attracts new investors and does not foster a system of reporting
within the infrastructure of the entity, then, one can assert that there is a gap between innovators
and owners.
It is attested by Mugharbil (2016) that innovation is considered to be the key driver to
attain corporate growth as well as competencies in a substantial yet sustained manner. An
innovation may be in the terms of product, process, marketing or organisation. The author also
observed that communication of innovative strategies in the right manner can enhance overall
corporate performance along with confidence to undertake a given innovation project. Thus,
reducing ambiguity regarding the same and making it a relevant topic to be explored in terms of
this study.
Issue 1: Passive Innovation Resistance
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According to Heidenreich and Kraemer (2016) most of the innovation projects fail as
there is too much resistance regarding the proposed strategy from the various stakeholders such
as investors and customers among others. The authors identified that passive innovation
resistance is one of the key barriers which disrupts the effective communication between owners
and innovators. The main reason behind this plausibility is the fact that each and every individual
has a different perception. Thus, what one may feel fit for the benefit of the business may not be
the same case for another. As a result, gaps in communication are formed which cause disruption
in putting forward the views of innovators in front of the investors in a clear and concise manner.
Additionally, a group of investors may want to stick to a plan of action which has been a
successful formula for the innovator in the past years. As a result, resistance towards
experimentation or alteration of existing business methodologies also poses as a possible
disruption in communication of innovative strategies between the businesses (innovators) and
investors (owners). Nanda and Rhodes-Kropf (2016) found that one of the main driving forces
behind resistance here can be attributed to the higher financing risks involved with funding of
such projects. As a result, investors tend to respond such risks by focusing on those projects that
have no or minimal possibility of financial failures associated with them by shifting their focus
from such strategies to non-innovative ones. Due to this reason, communication barriers develop
between the investors and innovators who are, in such cases, at the two opposite ends of one
scale.
Issue 2: Inability of innovators to clearly outline the innovating strategies to the investors
Forbes (2018) identifies another potential barrier that can be cited as the factor
maximizing the communication gap between innovators and owners is related to the inability of
the former to formulate a clear innovative strategy that unambiguously states the benefits of the
proposed ideation (Measuring and Communicating Innovation, 2018). Usually, investors are
attracted towards those proposals whose success can be clearly validated in the form of small
milestones and financial results. It is important to note that these two metrics increase investor
engagement and helps such type of stakeholders to become more attracted towards the idea
proposed by the innovators. For an automotive business such as Rolls Royce, investor relations
play a key role in determining what innovation strategy must be implemented and in what
manner. Hence, miscommunication of such a strategy can result in impairing investor confidence
regarding the innovator or the business enterprise.
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Issue 3: Stakeholders' personal interests hindering them to make fair judgements
On the part of investors, another barrier can be identified which talks about how these
type of stakeholders' personal interests hinder them to make fair judgements regarding a
particular strategy proposed by the innovator. It is an undeniable fact that communication
includes the rare art of listening. Alex Goryachev in his article in Forbes (2018) states that
people mostly listen to respond rather than understand. This is an important statement to look at
because it indicates a potential ground for developing a barrier of communication between
investors and innovators (Reasons to Communicate Innovation, 2018). Mostly, due to the fact
that while the prospect of innovation may be attractive, an investor may not completely grasp the
idea of implementing such a strategy that can cause them to accept or decline a proposed ideation
on the grounds of whether or not their personal interests are being well-met or not.
In order to rectify the above identified issues, the following solutions have also been
taken into account that are largely drawn from the empirical findings of research that was
undertaken by scholars previously in the related field:
Identified Resolution strategies of Issue 1:
Heidenreich and Kraemer (2016) identify Passive Innovation resistance as one of the
chief barrier to communicate the innovative strategy between innovators and their investors. In
order to rectify it, the empirical results indicated in their study state that there is a substantial gap
in its identification and rectification that needs to be first minimised for any remedial activity to
be adopted on the part of innovators. One of the main rectifiers of this communication problem
indicate that mental simulation can be the most effective instrument in the case of cognitive
passive resistance to innovation. Whereas benefit comparison was considered to be the most
efficient in the cases wherein a situational passive resistance to innovation was found. Similar to
consumer behaviour, investors too may show a significant amount of resistance towards a given
innovative strategy. In such a case, a Mental Simulation can be worthy of implementation.
Essentially, it can be defined as an activity which facilitates imagination by way of showcasing
how anticipated results will be achieved. This helps the investors to have a view of what the
innovators are thinking and in which strategic innovation will be achieved in alignment of
strategic goals or objectives set by the business for the near as well as in long-term future. On the
other hand, Benefit comparison enables the investors to recognize the hidden potential of the
proposed innovative strategies by comparing the given scenario using a “before-and-after”
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approach. This way the innovator such as Rolls Royce could help the investors to gain a clarity
on what possible rewards could be gained by these stakeholders and how the company's overall
competitive advantage can be enhanced in the future.
Identified Resolution strategies of Issue 2:
Investor communications are best delivered when they are in writing. Sull, Turconi and
Sull (2018) state that communication of key strategies, whether innovative or not, facilitates the
company to signal their intended strategic direction to the investors. Hence, if the innovation
strategy proposed to the investors is clear in its objectives, it will attract potential investors,
employees or external partners to buy into that strategy with a willingness to take risk for its
successful execution. They also observed that 71% of S&P 500 Companies reported their
strategic priorities. Apart from this, the authors also list out certain steps which help in
rectification of communication problems that arise between innovators and investors. These
include identifying strategies that are a priority for a business and communicating them to the
investors in a manner which is clear, concise and elaborative in nature. As a result, innovative
strategies to be communicated to the investors of a business enterprise as big as Rolls Royce
must not be in the form of “innovation to increase revenue”. The management of the businesses
must elaborate upon the innovative strategy that have been recognized by the management so as
to give a clear picture regarding the resources and how they integrate with the overall business
strategy of the company. This would help the investors to understand how and why such an
innovative strategy has been taken into account and recognized as a priority by the innovating
enterprise.
As per a report provided in IN2Summit (2019), 80% of executives fear of being
disrupted due to the rapid advent of technological innovation while more than 90% of new
products and innovations tend to fail at the same time. One of the main cause of this can be
attributed to the manner in which such anomalies are developed in the form of a strategy which
are then communicated to various stakeholders, mainly, investors. On evaluation of these
failures, it is ascertained that brainstorming ideas helps in developing a creative atmosphere
which is crucial for both investors and innovators to explore. By communicating on a continual
basis, these type of stakeholders might warm up to the idea of innovation that is proposed by the
innovator which can lead to the change of impression or perception towards looking at it (Gunn,
2014). This can be done by way of educating investors wherein undertaking leadership activities
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by the innovator will facilitate a diverse group of stakeholders to gain confidence in the actions
of the enterprises. This is true due to the fact that communicating future course of actions not
only reduces uncertainty but also prepares investors to be prepared regarding a particular strategy
that has the potential to foster change on an organisational level or the enterprise as a whole.
Also, by undertaking effective communication on the part of innovator, the investors also
provide feedback in the form of constructive criticism which would ensure that at any stage of
implementation of such innovative strategy there is no overlooking of purpose or values as these
types of stakeholders would be central to the communicating benefits of innovation.
Identified Resolution strategies of Issue 3:
Tschimmel (2012) states that a way to rectify communication channels and reduce the
gap between the information flow between investors and innovators is to develop design
thinking. As per this concept, a complex thinking process is undertaken by the business
managers of innovative enterprises that enable them to conceive new realities and utilised as a
toolkit to enable co-creation of value between the investors and innovators. Through open and
easy platforms for both the parties to communicate, innovators and investors are able to
minimise misunderstandings that may result in causing hindrance towards the progress of
innovation strategies in the business. For automotive businesses such as Rolls Royce this is a
crucial aspect as they are forced to come up with ideas which are not only creative but also boast
of differentiation among its competitors. Utilising this concept to design and communicate their
future innovation prospects in an easily understandable way would lead to the increased
coherence between innovators and investors as a whole.
Systematic Identification of Gaps from Literature Review Analysed above
Looking at the literature review, it can be affirmed that there is a limited amount of
sources available in regards to the identification of communication problems arising between
innovators and investors. However some of the gaps identified through the analysis of literature
review above have been established on the basis of models or relevant theories applied by such
scholars within their papers. This helps in ascertaining similarities and differences in the
viewpoints regarding the research problem. For instance, Aghion, Van Reenen and Zingales
(2013) postulates a theorem based on econometric innovation strategy wherein it contradicts that
institutional ownership induces short-term focus in managers by stating that such ownership also
boosts innovation within the organisation. On the other hand, it is also corroborated by Reypens,
14

Lievens and Blazevic (2016) who recognises the fact that leveraging value in innovations by
way of multi-stakeholder collaborations ensures that the organisations create a process of co-
creation of value as well as its capture since the ideation phase. Hence, to a certain extent there
exists a similarities among the literary works found in relation to this field. On the contrary, the
two authors opinion differs on the grounds that higher institutionalisation of ownership results in
creating a disciplinary effect and states that its relationship with innovation is causal. Whereas
the works of Reypens state that innovation capabilities and stakeholder participation are more
collaborative as well as in synchronization with each other. By undertaking this research,
primary investigation can enable in derivation of inferences which can help in bridging such gaps
to a significant extent as this research study would take into account a holistic view from two
standpoints viz. innovators and investors. As a result, different perceptions can be created and
detailed insights can be gained regarding this particular area of investigation.
PROPOSED CONSULTANCY APPROACH AND OUTPUT
This section presents, discusses and justifies the consultancy approach and choices made
in relevance to the investigation undertaken. The discussion made here is well-scoped with
robust theoretical underpinning that enables to derive a proposed consultancy approach to be
employed under this research along with the prediction of output to be generated thereof.
Proposed Approach
Essentially, the Consultancy Approaches available for a consultant includes engaging
with the client to derive meaningful conclusions in the form of results or solutions. From
research perspective, the most suitable consultancy approach proposed for this particular study
relates to the 'Emergent' approach (Hall, Bachor and Matos, 2014). In the language of consulting,
this model relates to the situation wherein an open, evolving process of discovering and shaping
it in the form of an ongoing issue to be related in real case scenario ensues. Under this model, the
internal or external influences are constantly as well as continually recognised that further help in
shaping and analysing the issues into an ever-evolving pattern.
Through this, a business manager is able to recognise the critical focal points that are
responsible for maintaining stability and enhancing productivity for the enterprise. Essentially,
the emergent approach has two elements that are taken into account viz. Chaos Theory and
Complex Adaptive Systems (Approaches to Consultation, 2012). The Chaos Theory enables the
15

consultant to find out differences in initial conditions which result in yielding widely divergent
outcomes by studying the behaviour of a set of dynamic systems that are highly sensitive to such
conditions. Thus, resulting in causing a Butterfly Effect within an organisation. Also, this theory
entails the concept of 'strange attractors' which states that a set of unidentified patterns are
generated over time which will eventually turn into influencing patterns having a predetermined
boundary or limit of the initial determinates or conditions. By employing the Emergent Model of
Consultancy, one is able to quickly identify these patterns at earlier stages and help the enterprise
management to resolve such issues in their nascent phase.
Another element of this approach relates to Complex Adaptive Systems that can be
defined as a network which is largely influenced by internal and external factors in a systematic
manner and who constantly evolve in a dynamic, changeable, disorganized and entwined
environments. For the purpose of successful completion of this research, this dissertation takes
form of a Business Consultancy Project which is chiefly primary-data based study (Hoffmann
and Fieseler, 2012). The rationale behind assuming this research to be an consultancy project is
due to the fact that innovation has gained immense importance in recent years and still continues
to grow. Hence, a business needs to utilise its resources in a manner which would enable them to
maintain, enhance and sustain existing as well as new innovation competencies in the
forthcoming years. Analysing historical trends, literature review by way of conducting a survey
in the form of questionnaires and interviewing respondents related to innovation would facilitate
in the determination of problems that arose between innovators and investors in the past and
enable in investigating their implications in a much more detailed manner for present as well as
future reference (Richter, Jackson and Schildhauer, 2018). Again, the analysis of such an issue is
crucial due to the fact that
Output
The research aim of this study is to identify potential communication problems arising
between innovators and investors. By applying the Emergent Consultancy Approach, the
investigation would become more of a primary data driven study which engages in identifying as
well as defining elements that cause communication barriers between the innovators and
investors (Hulme, 2014). The rationale behind using this particular consultancy approach is that,
here, the internal factor includes the innovator while the external variable is investor who is a
stakeholder of the business yet is not aware of the innovative strategies in a detailed manner on a
16

continual basis. Thus, the innovators, here Rolls Royce, are required to regularly inform these
type of stakeholders about the ongoing activities which further enables them to check for
themselves that whether or not the business is moving towards the achievement of their short-
term as well as long-term strategic goals in an effective manner or not.
In order to determine the factors which cause a gap in communicating innovative
strategies between the two parties, the emergent model would engage in analysing the
information flow systems that would enable one to understand the underlying variables which
result in creation of such barriers. Hence, the proposed output of this research by employing the
proposed consultancy approach would be to identify those barriers which cause a gap between
investors and innovators while communicating innovation or strategies modelled thereof (Hung,
Yen and Ou, 2012). Through its ascertainment, further rectification strategies can be developed
that enable the resource utilisation to be more effective and efficient while adopting innovation.
17

CHAPTER 3: RESEARCH METHODOLOGY
This section of the research study relates to the discussion of broad philosophical
underpinnings on which the entire research is established. It describes the research methods,
approaches and designs which enable the reader as well as the investigator to highlight the
findings in the most justifiable manner. The researcher has undertaken to analyse different
aspects of the business which result in causing communication gaps between the innovators and
investors. For this reason, the investigator requires to have the complete knowledge regarding the
techniques and methodologies that would ensure accurate, reliable and authentic results in
regards to the relevant study. Hence, the purpose of this section is to outline the research
question and objectives that were defined in the Introduction Section of this study. Apart from
this, it also aims to:
 formulate and discuss research philosophy;
 elaborate research strategy; and
 introduce research instruments developed and utilised in fulfilling the goal of this
investigation.
Time Horizon
18

Duration Activity Description
1 July- 4July Aims and objectives I undertook the activity of outlining aims and
objectives of finding reasons of communication
issues among investors and innovators through
literature review and research conducted.
5 July- 13 July Literature Review Between this time duration, I undertook the
activity of reviewing the literature of previous
scholars in order to form a premise regarding the
research aim and objectives identified and
formulated previously. I have analysed the Case
Studies with another, specifically in terms of the
methods used by them. On this basis, I have
justified the rationale behind taking a particular
research method.
14 July – 18 July Proposed Consultancy
Approach and Output
Between this duration, I have developed the
proposed consultancy approach and output
which mainly draws upon the robust theoretical
underpinning of consultancy approaches and
provides the selection of one suitable method
that is appropriate for the successful completion
of this particular study.
19 July-25 July Research
methodology
Under this step research philosophy are
considered with various approach of research.
Nature of research and how it is designed to
resolve various issues is done.
26 July-15 August Data Collection For the purpose of collecting sample, I choose a
sample of 30 employees of Rolls Royce
randomly. The selection criteria involved the
determination of whether the employee was

associated with the company were full-time or
not. If they were part-time working at the
organisation, they were excluded from this
study.
2

16 July- 24 August Data Analysis and
Findings
In this period data collected through various
sources is done and all the information collected
is critically analysed to check the viability of the
information.
3

25 August-29 August Conclusion and
recommendation
Communication issue leads to various conflicts
among investors and innovators and this leads to
hinder business at large level. All the required
resolution methods should to build a effective
communication channel among them.
31/08/19 Submission A report that specifies all the issues with
reasons for this and how these all can be
resolved is submitted. This issue should be
undertaken seriously to resolve.
4

5

Research Philosophy
One can define Research Philosophy as a belief that outlines the manner in which data
relating to a particular phenomenon or hypotheses must be obtained so as to critically analyse
information derived and utilise it for further business research purposes by the investigator. In
essence, this concept requires to undertake a comprehensive analysis on relationship between
investors, innovators in relation to a particular organisation based on the beliefs and assumptions
formulated by the investigator (Novikov and Novikov, 2013). Selection of correct philosophy is
of paramount importance as it will underpin rest of the investigation through the assumptions
made and methodology chosen while formulating the research strategy. The research philosophy
reflects upon these assumptions and can be mainly classified into various formats. In the context
of this particular investigation, the research aim is to identify the problems that are faced while
communicating a strategy, mainly innovative, between the investors and innovators of Rolls
Royce (Serebryakova and et.al., 2015). For the purpose of addressing this problem,
Interpretivism is most suitable research philosophy as it would help in answering questions
related to what people think and do?; What kind of problems they are confronted with?; and how
they deal with them? in a successful manner.
As per this philosophical train of thought, it is believed by the interpretivists that studying
a phenomenon in their natural environment enables in achieving valuable insights that are crucial
for the successful conclusion of the investigation undertaken by the researcher. In contrast of
Positivism Philosophy, this approach utilises naturalistic methods for data collection such as
Interviews and Observations among others. Apart from this, secondary-data is also given due
importance under this school of research philosophy. Hence, the concept of Interpretivism gives
due importance to qualitative analysis over quantitative one (Chowdhury, 2014). The nature of
reality under this construct is social as well as multiple in nature with less room for prediction.
The main focus of interest given here is to address the questions in a specific manner. Thus,
generalisation of the population is minimal under this type of research philosophy. Through the
6

utilisation of this concept, relative meaning of the research problem being investigated are
achieved.
Research Approach
A research approach can be referred to as those set of plans and procedures which outline
the steps that are mainly derived from broad assumptions to detail out the methods used for the
purpose of data collection, analysis and interpretation. Based on this premise, these can be
classified in following categories:
 Inductive Reasoning: This type of research approach entails the investigation initiates
with the observation and moves towards broad generalisation. Such a tool is suitable
when there is inadequate amount of existing literature available regarding a particular
topic (Ketokivi, M. and Choi, 2014). Hence, it helps in generation of meaning from the
collected data set so as to recognise repeated patterns that enable in the postulation of a
new theory(s). It provides highest utility, in terms of accuracy and reliability, when used
with qualitative research design.
 Deductive Reasoning: Contrary to Inductive Approach, Deductive Reasoning is
concerned with hypotheses development which is usually based upon an existing theory
(Evans and Over, 2013). One important point of distinction between the two research
designs is that there is substantial amount of literature available under Deductive
Approach. Under this type of research approach, quantification of data and results
derived thereof is possible.
In the context of the research undertaken, inductive reasoning is most suitable as there is
no hypotheses being formulated. In addition to this, a qualitative research design is much more
effective when the premise of investigation approach based upon Inductive Reasoning.
Research nature
Essentially, an investigation can be defined as the utilisation of a systematic approach by
a researcher to address a particular research problem or conclude the acceptance or rejection of a
set of hypotheses established by the researcher. It may be of different types largely depending
upon the nature, size and scope of the study taken into consideration by the researcher (Bryman,
2017). They can be bifurcated in the following manner:
 Quantitative: This type of research aims to establish general laws of behaviour that are
mainly derived from the analysis of a particular phenomenon by isolating it and then
7

recording its reaction within different settings or contexts. Usually, a hypotheses testing
is found to be employed under this type of investigation wherein a hypothesis relating to
a particular research problem is either accepted or rejected. For this purpose, the
information taken into account is extensively factual based and in numerical format.
Largely, statistical techniques are employed by the investigator in order to turn collected
quantitative data into a piece of meaningful information. These methodologies enable the
researcher to summarise data, identify patterns, relationships in either descriptive or
inferential manner (Yilmaz, 2013). It is important to note that, unlike qualitative research,
the design of the study is mainly predefined even before the actual process of
investigation initiates. One of the key strengths of this type of investigation is that the
utilisation of mathematical tools helps in gaining insights which are accurate and rational
with evidenced validity through the scientific principles supporting them.
 Qualitative: It is primarily an exploratory type of investigation wherein a researcher
examines the underlying trends in thoughts and opinions so as to gain an in-depth
understanding of how a certain phenomenon occurs. This type of investigation takes into
account human elements of social and natural sciences. It is more suitable to employ this
methodology in research when the investigator is attempting to gain inferences in relation
to experience, meaning and perspective, mostly from informant's viewpoint. Hence, the
methodological way to achieve reliable information under this investigation is to collect
data on the basis of participant observation, open-ended questionnaires as well as
conducting interviews among others (Stewart, Stirman and Chambless, 2012). With a
large amount of human elements present under this investigation, qualitative research
enables the identification of those issues which are often missed by Quantitative approach
too.
In the context of this particular research, a qualitative research would be more suitable as
communication problems are more of a behaviour based issue that is largely driven on the basis
of personal opinions, interests and thoughts of a particular person. Thus, undertaking this
research as a qualitative investigation would help in identification of how human elements react
and perceive a particular incident in relation to the innovative strategies put forward by the
innovators to their investing groups. An informant's viewpoint would enable in painting a clearer
picture for this particular study and help the investigation gain the necessary degree of
8

authenticity, viability and reliability in identifying various problems of communication arriving
between innovators and investors of Rolls Royce. Thus, enabling one to ascertain the key areas
which indicate potential communication issues between such parties to a business enterprise.
Research Design
A research design is essentially referred to that plan of action that facilitates the
addressing of a particular research question or problem. Hence, it entails integration of various
elements of research which gives a logical meaning to the problem being investigated in a
coherent manner (Maxwell, 2012). The key characteristics of a research design includes
neutrality, reliability, validity and generalisation. Through the inculcation of these features
within the research design accurate and authentic results can be derived through the investigation
being undertaken. Largely, these designs may be segregated in the following formats:
 Descriptive: As per this method, a researcher undertakes a scientific route to describe a
particular situation, behaviour or phenomenon that facilitates in addressing the questions
of who, what, when, where and how components of a particular research. For this
purpose, statistical techniques are, mainly, employed so as to derive quantifiable
information regarding a particular object under scrutiny. This method is also helpful in
gaining valuable insights regarding a particular research problem where it is not possible
to test and measure large number of samples (Lambert, V. A. and Lambert, C. E., 2012).
It is worthy note here that despite of the quantifiable factor, the data collected may be of
quantitative, qualitative nature or both. Here, the former is depicted in the form of
descriptive statistics whereas the latter type of data collected is showcased in form of
patterns that may emerge after conducting an in-depth analysis of such data.
 Experimental: This type of research design is utilised wherein a definite set of variables
are assumed to be constant while other set of variables are scrutinised as the subject of
the overall experimental study. Hence, one of the key characteristics of this research
design is that there are certain scientific conditions that are deemed to be acceptable
before undertaking investigation. As a result, an experimental research design is said to
be successful when any change recorded in the dependent variable is in direct relation of
the change recorded in the independent variable which is usually done through
manipulation of the latter. Thus, it is to be kept in mind that while opting for this type of
research design, a cause and effect relationship must be established between the
9

independent and dependent variables relating to a particular phenomenon. Due to this,
one of the key strengths of this design is that the results derived under this type of
research design are chiefly specific and enables the researcher to analyse the components
in greater detail (Campbell and Stanley, 2015).
 Exploratory: Unlike Descriptive and Experimental research design, this method is
undertaken by an investigator wherein complete information is not available regarding a
particular research. Hence, this research design is most suitable for those research
problems which have not been clearly defined yet. Through this methodology, nature of
the problem can be determined accurately however it is not sustainable to provide a
strong conclusive evidence regarding the same. Thus, it is usually considered as a
foundation on the basis of which a more detailed and in-depth investigation is based
upon. Under this type of research design, unstructured interviews are conducted as they
enable the researcher to obtain as much information, mainly primary data, as possible
(Malhotra and Malhotra, 2012).
While considering this particular research study, the most suitable research design taken
into consideration is Descriptive Research Design as it entails the quantification of qualitative
data which enables the investigator to derive results in an accurate manner. Not only this,
forming this research design as descriptive would also enable the investigator to ascertain results
by considering the phenomenon without influencing it in any way. Hence, a true picture
regarding the communication problems arising between investors and innovators of Rolls Royce
can be obtained reliably with its validity being supported by strong evidence.
Data Collection
It is important to keep in mind that the research design is based upon a Qualitative premise.
As a result, there is no attempt to generalise the observations and data collected to a wider set of
population. One of the main purpose of undertaking this investigation is to dive into the thought
process of both investors and innovators to gain insights regarding their feelings, opinions, level
of interest within the business and their attitude towards the very idea of innovation.
 Primary Resources: This type of data collection method utilises the tools of survey in
the form questionnaire, interviews or experiments. In order to identify the potential
communication barriers that arise between Innovators and investors, the research strategy
10

undertaken is Questionnaire (Quinlan and et.al., 2019). Currently, Rolls Royce Motor
Cars has more than 1300 employees. Out of which a sample of 30 mainly has been
extracted using a Simple Random Sampling technique.
 Secondary Resources: This type of data collection method utilises the existing
information sources such as websites, articles, published papers and publications among
others. In the context of this particular investigation, existing scholarly articles, papers
and literature has been taken into account which has then be reviewed so as to gain
valuable insights regarding the research objectives developed (Naoum, S., 2012).
In the context of this particular research, primary source includes a development of a
questionnaire with a sample size of 30 participants who are currently working as full-time
employees at Rolls Royce Motor Cars. On the other hand, the secondary data collected has been
analysed in the Literature Review Section of this investigation wherein research objectives
formulated under this study have been reviewed and corroborated with evidences found in the
scholarly articles of previous researchers and theorists. The questionnaire utilised for this
purpose has been enclosed in the Appendices Section.
Data analysis
Specifically, there are mainly two techniques which can be undertake n by the scholar for
analysing gathered data set such as SPSS and thematic perception test technique. In the present
study, for determining suitable solution from the research issue thematic perception test
technique has been used. In accordance with this, several themes have been prepared referring
Research Ethics
Ethical considerations in research ensure that the investigation taken into account is
executed in a proper manner by conforming to a set of standards or code of conduct. The ethical
considerations enable the researcher to distinguish right from wrong. Conducting a research by
upholding an ethical behaviour can enable the investigator to create an environment of trust,
accountability and mutual respect. In the context of given research, following ethical
considerations have been taken into account:
 Anonymity and Confidentiality: These two factors ensure that the responses collected
through a particular research do not attack the identity of the participant. Thus, ensuring
that bias is eliminated from the data collected and analysed (Gibson, Benson and Brand,
11

2013). While carrying out this particular investigation, anonymity and confidentiality of
the participants was preserved at all stages.
 Informed Consent and Voluntary Participation: It is important for the researcher to be
open about all the aspects of the investigation with the participant. This includes
intimation of research, its purpose, the reason behind collection of information through
their participation and in what manner would their responses would be used. This
provides complete freedom to the participant to either accept or decline invitation to take
part in the research process (Mandava and et.al., 2012). In the context of this particular
study, all participants were required to furnish a written informed consent that stated their
voluntary participation in the study.
 Reliability and Validity: Reliability implies consistency whereas Validity implies its
corroboration or authenticity. It is one of the most important criteria to consider while
conducting a research since without the data collected being reliable and validated, the
results furnished through its analysis cannot be justified. This would eventually leads to
lack of dependency of such a research altogether. In this context, the study undertaken
has been based upon completely reliable and validated responses accumulated from the
participants in the form of Primary Data (Nardi, 2018).
CHAPTER 4: DATA ANALYSIS AND FINDINGS
This section presents, discusses and justifies the findings of data in relation to the defined
research aim, objectives and related implications of research thereof. In the context of the given
research, the data presented hereunder includes the responses of 30 employees of Rolls Royce
that were collected by way of conducting a survey under which a questionnaire was filled by the
participants (Tisenkopfs, Kunda and Šūmane, 2014). These responses and their analysis has been
enclosed hereunder:
Data Analysis
Theme 1: Evaluation of Importance of Innovation from Investor's Perspective
Q1. During the last year, has Rolls Royce undertaken any new investment or
incurred expenditure in regards to innovation? Frequency
A. Yes 24
B. No 6
12

80%
20%
New Investments or Expenditure Undertaken
A. Yes
B. No
As per the above graph, it can be ascertained that Rolls Royce has been innovative in
recent years. 80% of the respondents agreed that within a span of one year, there have been such
investments or incurred expenditure which have directly related to Innovation. It is only sensible
to say that with the rapid advent of technology and differentiation of most of its products, the
company would like to expand its innovative horizon so as to remain competitive and a market
leader in the ultra-luxury car segment of the Global Automotive Market.
Q2. How does Rolls Royce procure finance for investments or expenditures
in regards to innovation? Frequency
A. Equity Financing 16
B. Debt Financing 9
C. Both 5
D. None of the above 0
13

53%
30%
17%
Financing new investment
A. Equity Financing
B. Debt Financing
C. Both
D. None of the above
In relation to the financing component of any investment or capital expenditure incurred
by Rolls Royce as an innovator, Equity Financing is given utmost importance with 53% of the
investments being done through this mode. Even though, it may result in the dilution of
ownership to a great extent, it shows that investors of the business chiefly includes those
individuals or parties to whom innovation is an important component. Also, 17% of the
investments are financed through leverage as well as equity. This is a critical aspect as pointed
out by Judge (2018) who states that investors are the key facilitators of financial growth.
Q3. Did the company inform their investors prior to undertaking such an
investment or after? Frequency
A. Before 16
B. After 14
C. Don't know 0
14

A. Before
B. After
13 13.5 14 14.5 15 15.5 16
16
14
Communication of new investments to investors
Number of Employees
The aforementioned graph facilitates in determining the manner in which communication
of new investments is done to the investors. This is an important criteria to consider as it
provides a preview of the relationship shared between Rolls Royce as an innovator with their
investing group. It can be observed that 53.33% of the total participants agreed that intimation of
any future opportunity to investors, especially Innovation related, is done prior to their adoption
by Rolls Royce. Again, this provides a preview of how frequently Rolls Royce engages their
investors to participate in the financial decision making process. As reviewed in the literature,
Harrison and Wicks (2013) emphasize that the stakeholders play a key role in increasing value as
well as directing firm performance in a significant manner. This is duly evidenced in case of
Rolls Royce through this response.
Theme 1 is defined by Questions 1 to 3 and they aim to evaluate the importance of
innovation from investor's perspective. While Question 1 and 2 provide a premise regarding the
role of investors regarding the financial decision-making practices undertaken by Rolls Royce,
Question 3 aims to provide a complete picture regarding the participation of investors in the
given function. For instance, Question 3 asks about whether or not the company informs the
undertaking of new investments to such parties. These questions enable the investigator to know
that the keenness of investors regarding Rolls Royce investment decisions is quite high. As a
result, their view of innovation is high and they tend to prioritise such decisions seriously.
Theme 2: Determining the relationship between innovators and its investors
Q4. What kind of relationship does the employees of Rolls Royce and its Frequency
15

investors share?
A. Very Good 14
B. Good 8
C. Neutral 8
D. Bad 0
E. Very Bad 0
A. Very Good
B. Good
C. Neutral
0 2 4 6 8 10 12 14
14
10
6
Relationship between Rolls Royce and its investors
Number of Employees
The above bar chart indicates the relationship shared by Rolls Royce with its investors. It
is observed that 46.67% of the participants agree that the relationship shared between the two is
very good. Whereas 33.33% agreed that it was strong enough. In both cases, 80% (=46.67%
+33.33%) of the participants agree that as an innovator, Rolls Royce places immense importance
on investor relations and their engagement in the decisions related to the operations of the
business.
Theme 2 is defined by Question 4. This question asks about the type of relationship
shared between the innovators and investors. Insights gained on this are valuable in achieving the
second research objective formulated in the Introduction Section of this research. The results
entail that the relationship is strong. Such a result is in accordance with the literature reviewed
mainly because the overall investigation draws upon finding out the potential communication
16

barriers between innovators and investors. Hence, it is important to identify the true relationship
share between the innovator, that is Rolls Royce and investors.
Theme 3: Evaluating the communication of innovation strategies to investors
Q5. Do you think that communication of innovation to investors is
important? Frequency
A. Yes 28
B. No 2
A. Yes B. No
0
5
10
15
20
25
30 28
2
Importance of communicating Innovation
Number of Employees
The above graph showcases the viewpoints of the respondents in regards to how
important it is to communicate innovative strategies to the investors. Out of 30 employees,
93.33% agreed with this statement. As evidenced through the works of Luo and Du (2015),
undertaking such an activity does deepen the relationship between the business and their
investors. This is also corroborated with previous results that indicate high level of investor
engagement prevalent across all levels of Rolls Royce.
Q6. In what manner, Rolls Royce's propose/ communicate their innovative
strategies to their investors? Frequency
A. Live and Virtual Events 2
17

B. Briefings and Conferences 8
C. Webinars and Webcasts 5
D. Annual Reports 15
A. Live and Virtual Events
B. Briefings and Conferences
C. Webinars and Webcasts
D. Annual Reports
0 2 4 6 8 10 12 14 16
2
8
5
15
Communication Channels
Number of Employees
The above graph showcases the viewpoints of the respondents in regards to what
communication channels are utilised to inform about Rolls' innovative strategies to the investors.
It is clearly evident that the most frequent channel used by the business is by way of Annual
Reports which is followed by Briefings and Conferences held by the company from time to time.
Being at the forefront of ultra-luxury segment cars in the world, the company requires proper
communication of its affairs to such parties in a proper setting. However, the use of webinars,
webcasts, live and virtual events is still nascent in usage for the innovator.
Theme 3 is defined by Question 5 to 6. While Question 5 provides a premise regarding
why the communication of innovation related strategies to investors is important, Question 6
attempts to analyse the mechanism undertaken by Rolls Royce to their investors. These questions
enable the investigator to know that this is mainly done through their annual reports, briefings
and conferences. Such a result enables in answering the research question related to “why it is
important to communicate innovation strategies to investors?” by stating that investor
engagement results in effective allocation of financial resources among different investments.
18

Apart from this, it is also important to note that Equity Financing is one of the main source of
Finance by Rolls Royce. Thus, making communication of such strategies all the more important
as adoption and implementation of certain innovation related projects without the consultation of
Rolls' investors could be taken as ignorant move in the eyes of such external parties.
Theme 4: To identify potential barriers that may disrupt communication between owners and
innovators
Q7. Do you agree that there are various barriers in intimation process
between the company and investor? Frequency
A. Strongly Agree 4
B. Agree 14
C. Neutral 6
D. Disagree 4
E. Strongly Disagree 2
A. Strongly Agree
B. Agree
C. Neutral
D. Disagree
E. Strongly Disagree
0 2 4 6 8 10 12 14
4
14
6
4
2
Determination of prevalence of Communication Barriers
Number of Employees
The above graph showcases the viewpoints of the respondents in regards to whether or
not there is a certain degree of communication barriers present in the current business
environment of Rolls Royce. In relation to this, it is observed that 46.67% agree that there are
certain areas which result in creating communication barriers while informing their investors
19

regarding their innovative strategies while 20% of the total participants were neutral to its
presence within the business. The response for this particular statement helps in establishing the
overall premise of the research. Thus, making the results derived to be of paramount importance.
Q8. What are the barriers that are usually faced while communicating such
innovative strategies to investor groups of Rolls Royce? Frequency
A. Resistance towards innovation 18
B. Ambiguous Innovation Strategy 7
C. Semantic problems 5
D. Other (please specify) 0
A. Resistance towards innovation
B. Ambiguous Innovation Strategy
C. Semantic problems
0 2 4 6 8 10 12 14 16 18
18
7
5
Barriers to Communication Identified
Number of Employees
In the Literature Review Section, it is observed that some of the critical barriers to
communication between Investors and Innovators arise either due to ambiguity prevalent in the
innovative strategy, resistance experienced towards innovation on the part of investors or
semantic problems (Thune and Mina, 2016). The results derived state that the maximum amount
of barrier caused is due to the resistance towards innovation from investors of Rolls Royce. As a
company, the business has always been high in its brand equity which boasts of tradition and its
preservation. Hence, it is possible that undertaking innovation aggressively by this business has
20

resulted in increase in resistance towards it. On the other hand, ambiguity has also posed to be a
barrier with 23.33% of respondents agreeing with this option.
Theme 4 is defined by Question 8. This question enables the investigator to identify the
potential barriers to communication that arise between innovators and investors. As identified in
the literature review too, some of the main issues related to communication between such parties
is passive resistance towards innovation, ambiguity in regards to the outlining of innovative
strategies to the investors on the part of innovators as well as semantic problems.
Theme 5: To determine the ways which may facilitate rectification of communication
problems in a significant manner.
Q9. Do you think that existing communication process between innovator and
investor of Rolls Royce needs to be improved? Frequency
A. Yes 24
B. No 6
A. Yes B. No
0
5
10
15
20
25
24
6
Need of Improvement within existing communication process
Number of Employees
It is true that any process has always remove for improvement no matter how effective it
is in the current scenario for a particular business. On investigating whether or not the existing
communication process followed by Rolls Royce to intimate its investors regarding innovation
needs to be improved, it was observed that 80% of the respondents were in agreement. This
21

shows that the barriers such as Resistance towards innovating and ambiguity regarding
innovative strategies has had a considerable amount of impact on its investing activity.
Q10. If yes, in what ways can the barriers be removed to improve the overall
communication process between the company and investors? Frequency
A. Increasing Investor Engagement 18
B. Elimination of unnecessary information 6
C. Selection of Proper Channel 2
D. Flexibility 4
A. Increasing Investor Engagement
B. Elimination of unnecessary information
C. Selection of Proper Channel
D. Flexibility
0 2 4 6 8 10 12 14 16 18 20
18
6
2
4
Alternatives to Overcome Communication Barriers
Number of Employees
The above graph showcases the most preferred alternatives in the eyes of respondents. As
per the results presented, it can be observed that increasing investor engagement was considered
one of the most valuable option with a support of 60% employees agreeing to it. While Selection
of Proper Channel was least preferred alternative for overcoming the communication barriers
identified for Rolls Royce and its investors.
Theme 5 under question 9 and 10, it is evaluated that existing communication process
between innovator and investor of Rolls Royce needs improvement because there are 24
employees agree for the improvement. Along with this, 6 employees think that improvement
22

does not required. In result, improvement required and there are various ways which can helps in
removing those barriers to enhance overall communication process among investors and
company. Organization need to increase investors engagements which helps the business to
maintain proper communication flow. Sharing information will create interest in the
organizational activities.
Findings
Based on the findings and discussions, the received information from both primary
(questionnaire) as well as secondary (literature review) sources, as per this investigation, states
that there are possible communication barriers which can arise between innovators and investors.
Firstly, in the context of Rolls Royce, secondary sources indicate that it is important for the
perspectives of both innovators and investors to be in alignment in regards to innovation as it
forms an inherent part of the strategic planning practices of Rolls Royce. These practices are, in
turn, largely funded by investors who are considered as the key facilitators of financiTo identify
potential barriers that may disrupt communication between owners and innovators;
To determine the ways which may facilitate rectification of communication problems in a
significant manner.al growth and profitability for the company. On the other hand, this is
corroborated through the primary sources which show that Rolls Royce undertakes new
investments related to innovation on a regular basis with majority of it financed through Equity.
Prior to this, the company also informs its investing parties regarding such actions. Thus,
indicating that investors perspective is highly prioritised by Rolls Royce as far as its investment
decision-making practices are concerned. Secondly, the relationship between innovators and
investors is largely emphasized upon by a variety of scholarly articles. It is a widely accepted
fact that innovations are a type of investment which demand heavy investment in Research and
Development. This is only possible through the financial backing of Rolls' investors towards the
company. Primary findings also evident this by pointing out that the company's staff chiefly
agrees upon the fact that the relationship between the company and its investors is strong.
Thirdly, through the presentation of such investment related information in Rolls' Annual
Reports, Briefings and conferences, there is a well-established communication framework
prevalent between the innovators and investors. The findings also corroborate that the staff
agrees upon communication of innovation strategies to investors is important. This is also largely
emphasized by secondary sources which assert that communication provides a platform for both
23

innovators and investors to deepen their relationships. Apart from this, investor agreeableness in
regards to innovation strategies suggested by the innovator also enable the latter to sustain
competencies in their external business environment.
Lastly, the findings also indicate that Rolls Royce staff is aware of the fact that there are
certain barriers which may disrupt communication between owners and innovators. This helps in
providing an overall premise of the research. Findings from the questionnaire survey also signal
that the chief barrier to the communication between owners and innovators is the resistant
tendencies showcased by investor groups towards innovation. Whereas the treatment option most
agreed upon through the overall analysis conforms to increasing the degree of investor
engagement by Rolls Royce. Thus, both primary and secondary sources corroborate each other in
regards to the communication barriers found and their importance in relation to the
implementation of innovation as well as such strategies within the organisational context. As a
result, it can be said that communication barriers among investors and innovators do interrupt
innovation which is crucial for the latter so as to remain competitive and relevant in an ever-
evolving business environment.
Limitations of the Study
Although the research has been carried out using a proper methodology and considering
ethical principles related to research, there are certain limitations to the study that were by by the
investigator faced while undertaking this particular research (Vasilescu, 2014). These have been
are enumerated as under:
 Time Constraints: With limited time, it is possible that the study does not provide a
comprehensive view of the situation of Rolls Royce in regards to its communication
process.
 Scope of discussions: While the study was conducted in an extensive manner, the scope
of discussions is limited to the sample size taken into account for this purpose. Thus, it is
possible that with a larger sample size, other underlying variables may also be
ascertained.
24

CHAPTER 5: CONCLUSION
From the research undertaken as well as findings presented and discussed, it can be
concluded that communication barriers identified between innovators and investors mainly relate
to semantic problems, ambiguous innovative strategies and resistance towards innovation
depicted by the investors. Out of which, passive innovation resistance tends to be the critical
driver of developing barriers in the overall communication process for Rolls Royce and its
investors. This is also corroborated with the findings of Heidenreich and Kraemer (2016) who
also identify resistance towards innovation to be one of the driving forces. On the other hand,
ambiguity within innovative strategies put forward by the innovators in order to be reviewed by
investors holds a substantial amount of importance. It is also determined that one of the most
effective and preferred alternative to overcome such bottlenecks within the intimation process
between innovators and investors relates to the improvement of investor engagement activities.
This is crucial due to the fact that financial leverage held by investors is critical to the overall
corporate performance and growth of a business. Hence, increasing investor engagement can
ensure strengthening the relationship between innovators and investors as well as create an
environment of trust and mutual respect for one another.
25

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28

APPENDICES
QUESTIONNAIRE
Name______________ Designation_________________
Age:_______________ Gender_____________________
Date:
Email:
Q1. During the last year, has Rolls Royce undertaken any new investment or incurred
expenditure in regards to innovation?
A. Yes
B. No
Q2. How does Rolls Royce procure finance for investments or expenditures in regards to
innovation?
A. Equity Financing
B. Debt Financing
C. Both
D. None of the above
Q3. Did the company inform their investors prior to undertaking such an investment or
after?
A. Before
B. After
C. Don't know
Q4. What kind of relationship does the employees of Rolls Royce and its investors share?
A. Very Good
B. Good
C. Neutral
D. Bad
E. Very Bad
29

Q5. Do you think that communication of innovation to investors is important?
A. Yes
B. No
Q6. In what manner, Rolls Royce's propose/ communicate their innovative strategies to
their investors?
A. Live and Virtual Events
B. Briefings and Conferences
C. Webinars and Webcasts
D. Annual Reports
Q7. Do you agree that there are various barriers in intimation process between the
company and investor?
A. Strongly Agree
B. Agree
C. Neutral
D. Disagree
E. Strongly Disagree
Q8. What are the barriers that are usually faced while communicating such innovative
strategies to investor groups of Rolls Royce?
A. Resistance towards innovation
B. Ambiguous Innovation Strategy
C. Semantic problems
D. Other (please specify)
__________________________________________________________________________
Q9. Do you think that existing communication process between innovator and investor of
Rolls Royce needs to be improved?
A. Yes
30

B. No
Q10. If yes, in what ways can the barriers be removed to improve the overall
communication process between the company and investors?
A. Increasing Investor Engagement
B. Elimination of unnecessary information
C. Selection of Proper Channel
D. Flexibility
Q11. Any Recommendations regarding how the barriers to communication between Rolls
Royce and its investors can be improved:
____________________________________________________________________________
31