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BU491 > C.5 Creating Worldwide Innovation and Learning > Flashcards

C.5 Creating Worldwide Innovation and Learning Flashcards

1
Q

What are the types of innovation

A
  1. Central innovation
  2. Local innovation
  3. Transnational innovation
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2
Q

What are the two classic processes for innovation

A
  1. Center-for-global

2. Local-for-local

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3
Q

Center-for-global innovation

A
  • New opportunity sensed in home country
  • Centralized resources brought to bear
  • Implemented globally
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4
Q

Local-for-local innovation

A

Subsidiary-based knowledge development, used primarily in local market

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5
Q

What are two emerging transnational processes for innovation

A
  1. Locally leveraged

2. Globally linked

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6
Q

Locally leveraged innovation

A

Unique capabilities of subsidiaries are shared on a worldwide basis.
e.g. Nokia: Indian ops became a source of global expertise in mobile phone retail

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7
Q

Globally linked innovation

A

Resources and capabilities or many ops pooled to jointly create and manage new activity
E.g. P&G: New laundry detergent used tech strengths from Europe, Japan, and U.S.

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8
Q

Disadvantages for center-for-global

A

Center-for-global:

  • Risk of market insensitivity
  • Imperialism
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9
Q

Disadvantages for local-for-local

A
  • Risk of duplication

- Reinventing the wheel

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10
Q

Disadvantages for locally leveraged innovation

A
  • Threatened by not-invented-here
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11
Q

Disadvantages for globally linked innovation

A
  • High coordination costs
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12
Q

Methods to improve cross-border innovation activity

A
  1. Make central innovation effective
  2. Make local innovations efficient
  3. Make transnational processes feasible
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13
Q

How to make central innovations more effective

A
  • Gain subsidiary input through creating multiple personal linkages
  • Respond to different national needs: give subsidiary units resources to influence how central R&D money is spent
  • Manage responsibility transfer by fostering cross-functional integration
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14
Q

Making local innovations more efficient

A
  • Empower local management by dispersing org assets and delegating authority
  • Link local managers to corporate decision-making processes e.g. by assigning expats
  • Integrate subsidiary functions by encouraging multi-level and cross-functional integration
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15
Q

The challenge in making transnational innovation feasible

A

Combine all four cross-border innovation and learning processes in one org

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16
Q

What assumptions have blocked progress with transnational processes

A
  • Assumption that subsidiaries are symmetrical
  • Assumption that HQ-subsidiary relationship is based on an unambiguous pattern of dependence/independence
  • Assumption that corporate management exercises decision-making and control uniformly
17
Q

How to overcome simplifying assumptions

A
  • From symmetry to differentiation
  • From dependence/independence to interdependence
  • From simple control to flexible coordination
18
Q

Symmetry to differentiation

A

Demands for integration and responsiveness need to be addressed separately for each product, function, and geographic region

19
Q

Dependence/Independence to Interdependence

A

Implementation of an integrated network and inter-unit integration mechanisms

20
Q

Simple Control to Flexible Coordination

A

Complex coordination of the flow of goods, resources, and knowledge: formalization, centralization, and socialization process

21
Q

Value creation from inter-unit collaboration

A
  • Cost savings through transfer of best practices
  • Better decision making
  • Increased revenues through sharing of expertise and products across subsidiaries
  • Innovation through combination of different ideas
  • Enhanced capacity for collective action
22
Q

Barriers to inter-unit collaboration

A
  • Unwillingness to seek input and learn from others
  • Inability to seek and find expertise
  • Unwillingness to help
  • Inability to work together and transfer knowledge
23
Q

What is reverse innovation

A

Develop product in emerging markets and sell in developed markets

24
Q

Why reverse innovation

A

Why:

  • Many emerging markets are no longer small
  • Have high growth rates
  • Potential local new entrants can enter developed markets with low cost alt
25
Q

How to perform reverse innovation

A
  1. Shift power where growth is
  2. Build new offerings from the ground up (zero-based innovation)
  3. Build LGTs (Local Growth Teams) from the ground up like new companies
  4. Customize objectives, targets, and metrics
  5. Have the LGT report to someone high in the org

BU491 (9 decks)

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