Key terminology weeks 1-5 Flashcards
(37 cards)
Technology
Refers to the use of tools, systems, and knowledge to enhance operational processes, productivity, and competitiveness.
- encompasses not only physical tools and machinery but also the know-how and organizational methods that contribute to the efficient allocation of resources and the creation of value.
Creativity
The ability to generate new and useful ideas.
Invention
The creation of a new product, process, system, or concept that has not existed before. It is the act of conceiving and developing something entirely new or original
Innovation
The act of introducing a new device, method, or material for application to commercial or practical objectives.
Solow Residual (or “total factor productivity (TFP)”
measures how much technological innovation affects producitivity growth.
It reflects the part of economic output that cannot be explained by increases in labor and capital alone.
e.g. If A increases = means economy is experiencing positive technological advancements/ efficiency gains - allowing it to produce more outouts with the same amount of inputs (such as labour and capital)
Externality (or “external effect”)
Costs (or benefits) that are borne (or reaped) by individuals other than those responsible for creating them. Thus, if a business emits pollutants in a community, it imposes a negative externality on the community members; if a business builds a park in a community, it creates a positive externality for community members.
The innovation funnel
A structured process that organizations use to transform initial ideas intosuccessful innovations, involving stages such as** idea generation, evaluation, development, testing, and implementation. **
The concept of the innovation funnel illustrates that numerous potential newproduct ideas enter at the wide end of the funnel, but only a select few successfully navigate the
rigorous development process to become market-ready innovations
“ Displacement” and “Reinstatement” effects
- The** “displacement effect”** is the phenomenon where the adoption of new technologies or automation leads to the replacement of workers from their jobs.
- This displacement occurs when the technology in question performs tasks that were previously done
by humans, which has a negative effect on employment. - The **“reinstatement effect” ** is the opposite of
the “displacement effect”. It refers to the fact that automation can create new tasks where humans have an advantage over capital, which has a positive effect on employment.
Productivity Effect
The phenomenon where technological adoption changes productivity level, which has an effect on employment and the demand for workers
E.G: Automation in manufacturing - Adoption: manufacturing company may introduce robots into the production line to streamline the process. –> prod. effect: higher effieciency; produces more goods in less time –> employment impact: demand for certain manual labour roles might decrease, and displacing workers
Competitive advantage
A firm’s ability to outperform its rivals OR a firm’s superiority in creating value for its stakeholders.
internal- comp adv
Resource-based view
- basically, it is the internal strengths of a company (and resources it possesses) that is has to gain a compeitive advanatge.
in short, the Resource-Based View theory says: “Hey, having special stuff inside your company, things that others can’t easily copy, is a big deal for staying successful in the long run.”
Resources and capabilities/competencies
Resources are the productive assets owned by the firm;
capabilities are what the firm can do.
On their own, individual resources do not confer competitive advantage; they must work together to create organizational capability.
Organizational capability, when applied through an appropriate strategy, creates competitive advantage
Core competencies
The unique and distinctive set of capabilities, knowledge, and resources that a company possesses and leverages to excel in its specific market, providing a competitive advantage and contributing significantly to its overall success and value creation.
Dynamic capabilities
a set of abilities that enable a firm to quickly reconfigure its organizational structure and routines in response to new opportunities, rather than focusing on specific tech/products.
- useful for a firm to have a set of core competencies in response change, esp in fast-changing industries
Routine
Patterns of coordinated activity through which an organization is able to perform tasks regularly and predictably.
Innovation trajectory
- the path a firm follows in introducing and evolving new technologies over time
- E.g. company might start with creating smartphones –> introduce new models with better camera or battery life –> go into smartwatches
Tacit
A capability or knowledge is said to be tacit when it is difficult to formalize, express, or transfer through written or verbal means, as it is deeply rooted in an ** individual’s personal experiences, insights, intuition, and skills, often acquired through practical, hands-on experience.**
Socially Complex
These types of competencies/ capabilities involve a blend of not just technical or individual expertise, but also the ability of an organization to effectively manage and leverage its social and interpersonal dynamics, such as collaboration, teamwork, leadership, and communication,
to achieve its strategic objectives.
It’s about how well a group of people, like a team or a whole company, can work together. These skills involve things like collaborating with others, being a good team player, leading effectively, and communicating well. So, when we say something is socially complex, we mean it requires not just individual talents but also the ability of the whole group to work together smoothly to reach its goals.
Causally ambiguous
The difficulty of diagnosing the sources of a firm’s competitive advantage. It means that potential rivals face the problem of uncertain imitability.
- unclear how the resource gives rise to value
- E.G: XYZ Innovations, a successful tech company, attributes its success to a unique organizational culture that fosters creativity and risk-taking. However, the cause-and-effect relationship between specific cultural aspects and innovation success is not easily identified.- The organizational culture is considered causally ambiguous because the direct connection between specific cultural elements and the company’s success is not straightforward, making it challenging for competitors to imitate and achieve the same level of success.
Creative Destruction
A concept introduced by economist Joseph Schumpeter, which refers to the process by which old technologies and the firms that do not adapt are swept away by the new, because they cannot compete in the market. In his view, the failure of unprofitable firms is creative because it releases labour and capital goods for use in new combinations.
- Creative destruction involves the simultaneous creation and destruction of economic value, as new ideas and businesses displace older ones, leading to progress and economic growth.
Radical Innovation
Products/services or processes that are extremely different from exisiting ones
Incremental Innovation
Improvements to existing products and processes that bring about marginal improvements in functionality or performance.
E.g: Apple
- 2015: iPhone 6 –> 6S = introduced 3D touch and improved camera
- 2018: iphone X –> XS = faster processor (A12 Bionic) and durable glass design
- 2020: 5G capability
obsolete
Competence-Destroying Innovation
Radical innovations that render obsolete the technical expertise
required in a product class
- renders exisiting knowledge/ skills/ capabiltiies obsolete
- It often comes down to the ability of a company to identify opportunities, pivot their strategies, and acquire or develop the necessary skills in response to the changing technological landscape.
e.g.: digital photography from film photography
Competence-Enhancing Innovation
Innovations that build on exisiting knowledge
- E.g. each gen of ipone builds on the knowledge/ capabilties of the previous one
