Innovation and CSR: A Strategic Analysis of Samsung Electronics

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Innovation Report
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Contents
Introduction......................................................................................................................................3
Corporate social responsibility........................................................................................................4
Impact of ideas on the development of innovation and creative solution.......................................5
Strategic innovation model..............................................................................................................7
Leadership approach for innovation..............................................................................................12
Innovation implementation approach............................................................................................13
Conclusion.....................................................................................................................................15
References......................................................................................................................................16
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Introduction
Innovation is a crucial part of any growing economy. CSR and sustainability is the key to
innovations at the business level as well as inspiring overall business sector growth. Within the
organizations (private and public), innovation is the implementation of ideas that come from the
creative process. In current time, innovation and corporate social responsibility are the
foundation of business competencies. Improvements in the corporate social responsibility
process can be considered as the ‘social innovation'. In the present time, companies are involved
in CSR practices to manage business challenges (Chandler, 2016). The successful brands are
focused on managing the opportunities by innovation. This report proposes a leading edge,
strategic innovation for addressing the corporate challenges in the area of corporate social
responsibility and sustainability. The report focuses on the current approach of a company for
effective analysis. For the discussion, leading technology industry Samsung Electronics is
selected. Basically, the report defines the corporate social responsibility or sustainability in need
of innovation response. The report also explains how sources of ideas impact the development of
innovation and creative solution in the selected company. The innovation implementation
approach is also formulated for Tesla to achieve success and growth.
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Corporate social responsibility
According to World Business Council for Sustainable Development, corporate social
responsibility is the continuous commitment by the business or the organization to behave in an
ethical manner and contribute to the economic development while doing the business and
improving the work life of the employees as well as the local community at large. In current
time, corporate social responsibility is becoming one of the standard business practices of the
companies. Establishment of CSR practices and strategies is an important component of the
competitiveness of the company. It means CSR is all about having policies and processes related
to social, environmental, human rights and ethical and consumer concerns into the business
operations (Chen et al., 2016).
In the case of Samsung, the company has adopted CSR practices to deal with various challenges
in business operations. In the company, CSR is useful for enabling the innovation in the
company. CSR is helpful in realizing the needs and requirements of the stakeholders and
customers so that innovation can be done accordingly. Basically, CSR and innovation are
interrelated as Samsung is the leading company in the technology market that is aware of the role
and importance of technology in the society (Caplan, 2016). The company understands the
environment in which it is operating. In addition to this, the company also responds to the needs
of society and contributes to its development in a proper manner. The company is engaged in
CSR activities while focusing on innovation in technology products. So, effective CSR enables
the company to have the highest potential to receive high returns of innovation as CSR enables
the company to focus on the perfect innovation for the customers.
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Impact of ideas on the development of innovation and creative solution
While implementing the innovation and creative solution, there are various sources of ideas that
are required to be considered. Various sources of ideas have a significant impact on the
development of innovation and creative solution in Samsung. Basically, sources of ideas are
helpful for the company in understanding the different needs and requirements of the customers.
In the case of Samsung, the company is required to gather various ideas from its stakeholders
and potential customers in the market so that their needs related to the products can be identified.
The ideas can come from the employees, customers, vendors and investors. Basically, the
sources of various ideas have an important role in implementing innovation in the products and
services (Ratajczak, & Szutowski, 2016).
 In the process of successful innovation, the exploitation of new ideas is important for the
company as the sources of new ideas are able to improve the innovation processes,
increase the efficiency and enhance the profitability of the business. The role and
importance of various sources of ideas in the development of innovation are discussed
below:
 The new ideas are helpful in improving and replacing the business processes to enhance
productivity and efficiency. In addition to this, the ideas enable the company to extend
the range and quality of the existing products and innovate in new products for the
potential customers (Tavassolia and Karlsson, 2015).
 Sources of new ideas are also helpful in developing new and improved products and
services so that the changing needs of the customers can be met and the business
challenges can be managed.
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 New ideas are also helpful for the company in adding values in the existing products and
services to make them different from the rivals in the market. Innovation is a creative
process which can be successful by adopting and analyzing various sources of the ideas.
The ideas may come from two sources, i.e. inside the business and outside the business. Inside
the business, the ideas can come from managers, employees, and in-house research and
development work. On the other hand, in case of outside the business, customers, suppliers,
market research, media reports and other sources of new technologies can be the source of new
ideas. For the successful innovation in the product or service, it is important for the company to
filter those ideas and apply the relevant ideas in the innovation process.
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Strategic innovation model
In the business, Samsung manages innovation in the technology industry. In the case of strategic
innovation model, there are four components that are involved in the innovation strategy of
Samsung. Those components are strategy, resources, capabilities and processes. On the basis of
the model, innovation can be described as the process of developing and deploying the resources,
processes and capabilities to meet the corporate objectives in an effective manner.
Figure 1: Strategic Innovation Model
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Innovation strategy
In the case of the product range of Samsung, the company has a wide range of products including
smartphones, 4G phones, printers, computers and telecommunication systems. Due to economic
recessions, there are major changes in the IT industry. As a result, Samsung has improved its soft
power capacity by nurturing new business ideas for becoming a new leader in the IT sector. By
this, the company took a new move to establish its excellence in the manufacturing field. The
strategic innovation of Samsung includes creativity, partnership and talent. In order to maintain a
sustainable business, the company diversified its portfolio so that the needs of the customers can
be reflected in the innovation of the products (Woerter, 2014). The company is focused on
inspiring the world and creating a sustainable environment for the future. In this manner, the
company always listens to the customers in terms of concerns related to the environment. The
innovation strategy of the company includes creating Eco-Management plan for the future. This
plan is all about minimizing greenhouse gas emissions from the manufacturing processes by 50%
and reduce indirect greenhouse gas emissions from the products by 84 million tons over 5 years.
Innovative capabilities
In Samsung, some of the factors are included in the innovative capabilities. Those factors are
discussed below:
The competitive supply chain- Basically, Samsung is much more than a Smartphone-maker.
This is a manufacturer, conglomerate and chip-maker also. The supply chain of the company is
the combination of in-house production and outsourcing. More than 90% of the products of
Samsung are manufactured internally, and the company only relies on contractors for some of
the peripheral products, i.e. feature phones, handset cases and other components. Buy this; the
company is able to adapt the changing market conditions quickly. The company had adopted
vertical integration for sustainable business operations (Bailey, 2014).
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Analysis of changing market- Samsung has adopted various new ideas and implemented the
innovation in an effective manner. The company aggressively moved towards Smartphone. The
company analyzed the needs of potential customers and did innovations accordingly.
Vertical integration- The successful innovation in Samsung depends upon the vertical
integration. The company has the capability to manufacture most of the product in-house by
which it is able to meet the requirements in the market changes in an effective manner. By this,
the company is also able to operate the business in a sustainable manner and focus on innovation
in the product.
Resources for innovation
Samsung has used effective resources for implementing the innovation in the products and
services. Some of the resources for innovation are as follows:
Mobile technology patents- In the mobile market, Samsung is known as a giant due to its well
established innovative reputation. This is possible for the company due to having the number of
mobile patents as compared to other companies in the market. The company has held its
dominance in terms of a number of patents in the market, and it is estimated that company would
remain in top five in terms of the rise of patents outputs as compared to rivals (Kim et al., 2015).
Participation with other companies- With innovative ideas, Samsung has done the partnership
with various automotive companies, i.e. Honda, Toyota, Hyundai etc. The objective is to drive
global innovation for in-vehicle connectivity solutions for the customers. By this, the company
enables customers and Smartphone users to use their phone in cars. The innovation is done to
become a dominant hub for in-vehicle connectivity and infotainment.
Innovation processes
Samsung has improved its soft power capacity by nurturing new business ideas for becoming the
new leader in the IT sector. By this, the company took a new move to establish its excellence in
the manufacturing field. Samsung has a top position in terms of sales of , and this result has
come from the fact that the company is focused on earning market share, not sales margin. In this
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manner, the company has adopted an effective marketing strategy, i.e. multiple devices and low
pricing. The competency of the company is to produce quickly and come out with a wide range
of devices. In addition to this, the company has done market research in a proper manner so that
the needs and requirements of the customers can be identified and innovations can be done
accordingly (Mishra, 2017).
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Leadership approach for innovation
In the process of innovation, an innovative approach is required in leadership. It is required for
the leader to create an organizational environment in which others can apply innovative thinking
to develop new products and services. In leadership, the two-tiered approach is essential to
generate the innovation in the company. In the case of Samsung, the authoritative leadership
approach is appropriate for successful innovation as this leadership approach focuses on setting
and achieving the objectives. Having the focus on the common vision and objective, the
authoritative leadership approach is helpful in building the team of individuals who can execute
quality work. In the case of innovation, the authoritative leadership approach can provide
direction and shape the success in the innovation. The authoritative leadership approach is
appropriate because:
 This leadership style is helpful in changing the employees into high performers to
implement the innovation in an effective manner.
 By authoritative leadership, individuals can have a strong mentor so that they can feel
motivated and confident in implementing innovation.
 Next, this leadership approach is crucial in creating success-culture within the company.
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