Essay on Innovation And Its Impact On Business Strategy

1639 Words Nov 30th, 2015 7 Pages
Innovation is generally recognized as an important element in a firm’s competitiveness (Galia and Legros, 2004; Tourigny and Le, 2004; Storey, 2000). It is especially so when it involves small-scale businesses, who rely on innovation to succeed. Studies have shown that small firms who adopt innovation into their business strategy have an increased productivity, survivability, and growth potential (Cefis and Marsili 2006; Heunks 1998; Geroski, Machin, and Van Reenen 1993). Innovation has also been defined as the changing or creating new processes, products, or services that would enhance the effectiveness of the business (Businnes.gov.au, n.d.). To put it simply, innovation can be seen as either a process or outcome (Amarakoon, Weerawardena and Verreynee, 2013). With that said, innovation is an ideal factor for any company to have. However, innovation may cause undesirable effects to the company both internally and externally. This is so because the act of innovation is to leave the comfort zone and overcome obstacles to achieve change.

Human resource (HR) innovation has been described to be a form of HR management activity adopted by a company that is new and value creating to that company (Amarakoon, Weerawardena and Verreynee, 2013). An example of an HR management activity is Google’s initiative called the 20% Project, where their engineers are allowed to spend one working day’s worth of time to work on their own projects (D’Onfro, 2015). This project has since led to the…

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