CREATIVITY, INNOVATION AND CULTURE Learning objectives (i) Why do organizations need to change to sustain competitive advantage? (ii) What is meant by creativity and innovation? (iii) Innovation for competitive advantage. (iv) Change and innovation. (v) What is culture? (vi) Why is it important to have culture that supports innovation? (vii) Characteristics of an innovation culture.

Creativity and Innovation Creativity refer to the ability to combine ideas in unique way or to make unusual association between ideas. Innovation is the useful products, services or work methods resulting from the outcomes of the creative process.

Innovation for Competitive Avantage 4 importants factor from innovative activities, to gain competitive advantage (i) innovations to be hard to replicate; (ii) Innovations is response to the needs of the environment; (iii) Innovations by product or service leadership to exploit a particular industry's timing characteristic; (iv) Innovations to rely on capabilities and technologies readily accesible to the organization.

Change is to make or become different. Change and Innovation Change is to make or become different. Bartols et al. (2001), “puts it that all innovation implies changes but not all change implies innovation, since changes may not use new ideas or be major improvements.”

The Change Management and Innovation Process Managers as change agents should be motivated ti initiate change because it is their duty to improve organization's performance. Initiating change involves identify what organizational areas need to be changed and putting the change process in motion (Robbins and Coulter, 2006)

Stimulating and Burturing Innovation Inputs: Transformation Outputs Creative individuals, Creative environment; Innovative, Products, Process, Work Groups, Situation. Methods. Organization. ** Organization that stimulates creativity develops unique ways to work and the outcomes of the creative process are turned into useful products, services or work methods. ** Innovative organization is able to channel creativity into more useful outcomes.

STIMULATE INNOVATION Structural Variables Organic structure Abundant resources High inter-unit communication Minimal time pressure Work and non-work support Human Resource Variables High commitment to training High job security Creative people Cultural Variables Acceptance of ambiguity Tolerance of the impractical Low external controls Tolerance of risks Tolerance of conflicts Focus on ends Open-system focus Positive feedback

CULTURE Culture: defined as shared ways of thinking and doing things. Organization culture: basic pattern of shared assumptions, values and beliefs that govern bahaviour within a particular organization.

3 main function of Organizational culture: It is deeply embedded form of social control; It is also the ‘social glue’ that bonds people together and makes them feel part of the organizational experiences; Corporate culture helps employees make sense of the workplace.

Relationship of environment and strategy to corporate culture External Flexibility Stability Internal Adaptability culture Mission culture Strategic Process Bureaucratic culture Clan culture

CHARACTERISTICS OF AN INNOVATION ORGANIZATION Willing to accept uncertainty Tolerance of impractical Low external control Risk tolerance Conflict tolerant Focus on results instead of methods Open-system focus Positive feedback

Revision Question Why do organization need to be creative and innovative? What is an innovative culture? Discuss the characteristics of an innovative organization. Why it is important to have culture that supports innovations. Explain the differences between change and innovation. Explain 5 characteristics of an Innovative Organization.