The requirement of innovation is mandatory for contemporary business organizations owing to the diverse variations in market contexts and the changing preferences of customers. The evaluation of innovation performance of an organization could lead to identifying different implications of innovation audit such as the structure of the organization, HRM practices supporting innovation, identification of innovation challenges, coordination of innovation practices with external stakeholders and the management of uncertainty and failure (Atashfaraz & Abadi, 2016). The following assessment would focus on the case of Samsung and its innovation performance concerning eight core aspects of an innovation audit and present an illustration of a change programme for Samsung’s future innovation strategy. Finally, the assessment would present and evaluation of the innovation strategy of Samsung in an international context concerning the various multinational operations of the organization.
The primary substrate of the innovation audit of Samsung is the evaluation of the company’s innovative performance in the last five years. Samsung Electronics Co. Ltd. is a renowned name in the global context for innovative production and marketing in the domain of semiconductors, telecommunications, and consumer electronics.
The company has the reputation of accomplishing 36 Consumer Electronics Show (CES) Innovation Awards for 2015. The company acquired awards on the grounds of innovation competence and rewards for eco-friendly design. Samsung is a global leader in technology facilitating novel opportunities for people everywhere in the world and is dedicated to the transformation of the domain of smartphones, semiconductors, TVs, LED solutions and cameras (Samsung UK, 2018). The organization’s formidable human resource base is identified in 286,000 employees operating across 80 nations that contribute to the annual sales of $216.7 billion (Samsung UK, 2018).
The innovation of Samsung is explicitly observed in technological advancements such as Gear VR and Gear S which have redefined the utilization of smart wearable and VR technologies (Samsung UK, 2018). The mobile devices such as Galaxy Note 4 and Galaxy Note Edge have also indicated the commitment of Samsung to incremental innovation characterized by an emphasis on improving utility and value proposition for customers. The innovation in mobile devices is directed towards establishing new benchmarks in the domain of mobile devices such as Galaxy Note Edge which has introduced additional innovative functionality in the device to sustain in an increasingly competitive market.
The capability of Samsung to deliver innovation performance could be largely attributed to the incremental innovation strategy adopted by the organization. The company develops quantifiable and specific steps to accomplish business objectives. The company’s emphasis on the dynamic capabilities has been responsible for the company’s reputation as the leading smartphone manufacturer in the world accounting for a 32% market share. Apart from the sophistication of the R&D capabilities, Samsung’s dynamic capabilities such as internal co-opetition account for additional advantage to the organization to realize improvements in innovation performance (Barringer & Bluedorn, 1999).
The company’s business structure enables competition as well as co-operation in the internal context of the organization that drives business units to escalate their performance. The co-operation among the affiliated companies is responsible for resolving the primary concerns of acquiring components for manufacturing as well as incorporate the latest advancements in the domain of component technologies. Burgelman, Christensen & Wheelwright said that promotion of internal co-opetition is responsible for the development of formidable dynamic capabilities while the capabilities for dual sourcing in the organization have been accountable for involving the internal as well as external vendors in the process of new product development (Burgelman, Christensen & Wheelwright, 2004).
A parallel development is also included in the framework of the dynamic capabilities of Samsung required mandatorily for the identification of appropriate technologies for addressing opportunities of innovation. The outcomes of parallel development are explicitly directed towards serving the functions of a learning mechanism and providing necessary assistance in the transformation process (Crossan & Berdrow, 2003).
The necessity of shared vision and commitment of the senior management are crucial aspects intended for the creation of an innovative climate. The creation of an innovative atmosphere in an organization is dependent on the capabilities of leaders to develop a systematic and aligned representation of innovation in the organization. As per Drucker (2014), the role modeling of top management and the structuring of a business organization are considered as the prominent demarcation between innovative and non-innovative organizations (Drucker, 2014).
The structure of an organization enables employees to align their innovative efforts to accomplish the objectives of the business organization. The reforms in the management vision of Samsung towards the dedication of human resources and technology to the development of superior products and services and subsequently contributing to the formation of an improved global society. According to Gupta, Smith & Shalley (2006), as an innovative organization, Samsung has depicted the characteristics of organic structures comprising open and dynamic systems (Gupta, Smith & Shalley, 2006).
Initially, the reduction of organizational layers and downsizing are implemented for cost control followed by support of information technologies such as an internal blog, shared data repository, and email. The mix of the vertical and lateral structure adopted in Samsung is responsible for improved flexibility, higher responsiveness to markets, reduced processes between the organizational divisions and business units and improved competitiveness (Hitt & Duane, 2002). The structural changes are also reflective of reforms in the decision making approaches. The advantage of delegating decision making privileges to the innovation team reduces the concerns of delays in decision making due to the requirement of approval from different layers of senior management. The reduction of the number of approval steps for new projects is accountable for improving the flexibility and sophistication of outcomes regarding the speed of conducting business.
Samsung is motivated to accomplish sustainable performance through its core values that are directed towards contributing the society’s welfare and improvement of functionality and utility of the devices for customers. The company is reputed for the quality and innovation in the products alongside the development of work that could help in obtaining acclaim among competitors.
The recruitment of people in Samsung is based on the alignment of their personal beliefs and values with that of the organization’s vision for innovation (Hornsby et al., 2002). The company perceives its human capital as the source of novel alternatives to address consumer concerns as well as the development of market-driven technologies. The development of the New Concept Development process and Project Innovation Team depicts the organization’s commitment to innovation in its products and comprehensiveness of the innovation process based on the underlying rationale for commercial benefits of innovation that can be leveraged by the organization.
The PIT is associated with frequent and direct working in unison with product planning groups in the various business units of the organization. The reward for innovation in Samsung is comprehensively based on the evaluation of the innovative concepts through a four-stage framework in the New Concept Development process. As per March (1991), the comprehensiveness of understanding the market research outcomes as well as a review of information and ideas to obtain a clear impression of the user’s perspective could be used to evaluate the competence of innovation.
The following stages in the New Concept Development Process such as the development of ideas through brainstorming, concept development and presentation of the concept as a business case are also subject to evaluation for obtaining rewards (March 1991). The reward mechanisms followed by Samsung for innovation are based on the contributions of employees to the individual stages of the innovation process. The implications of the recruitment and reward functions of Samsung for innovation are reflective of setbacks such as limitations on the capabilities for individual decision making. The New Concept Development Process enabled employees at various job roles in the organization to contribute to innovation in the production process. Therefore, the organization’s commitment to dedicate the human resources for the development of superior products for consumers has been responsible for the consistent improvement of Samsung’s innovation landscape.
As evident from the dynamic capabilities and New Concept Development process of Samsung, the support for innovation can be profoundly observed. The dynamic capabilities of parallel development, internal co-opetition, and dual sourcing are responsible for facilitating support for innovative practices in the context of the organization. According to Mosey, Noke & Kirkham (2017), the involvement of the teamwork aspects in development of innovative products such as the establishment of group of 30 businesses in the form of Create New Business (CNB) program that implied the necessity for discovery of long term technological and social opportunities leading to development of new product concepts that can address the emerging consumer demands (Mosey, Noke & Kirkham, 2017).
The long term commitment of Samsung to learning in innovation is observed in the process of training and development intended towards the expansion of innovation capability across the organization. Apart from the internal training programs, employees are also provided with international work placement as well as opportunities for postgraduate studies at renowned universities that are in collaboration with the organization. The barriers to innovation observed in the organizational processes at Samsung can be profoundly observed in the excessive emphasis on R&D and the influence of internal co-opetition in terms of redundancy of innovation. The company’s excessive emphasis on research and development is considered as a prominent factor that can lead to rejection of innovative ideas on the grounds of existing developments in progress.
This factor implies the emphasis on internal sources of value rather than focusing on external opportunities. Park said that while R&D activities are considered essential for deriving plausible inputs for the innovation process, it is essential for the innovation process i.e. NCD process to realize opportunities in the technological environment and work on addressing the issues rather than engaging in R&D on existing designs that can lead to potential patent conflicts (Park, 2015). Furthermore, the element of internal competition among the business units of Samsung could lead to the development of similar products thereby leading to ineffective use of resources despite the prolific communication framework of the organization. Another barrier in the internal processes for innovation could be identified in the form of requirements to align the functions of HR, marketing, sales, research, strategy and options and finance with the objectives of innovation.
The primary setback for manufacturing organizations in the existing business environment is characterized by formidable levels of competition as well as unstable economic context. Samsung faces notable competition from Apple and other emerging smartphone and consumer electronics manufacturers which indicates challenges for the organization from a diverse assortment of markets (Simon, 1996). The establishment of a group of 30 companies in the Create New Business (CNB) program is a prominent initiative by the organization in support of its philosophy of internal competition and co-operation among the individual business units of Samsung is considered as promising aspect for Samsung to obtain insights from various companies and individuals for submitting new proposals for innovation to the organization (Tarman, 2016). The identification of innovation challenges in the case of Samsung is vested in the process of market research to obtain insights into the opportunities for technological advancements in its products that can help in accomplishing the desired functionalities of customers in its products.
The engagement with external stakeholders is facilitated through the open innovation approach followed by Samsung which reflects on the implications of employing contests in which developers are encouraged to connect with the IoT platform of the organization to create as well as test and run the software applications on the platform (Chesbrough, 2006). As per Tidd, Bessant & Pavitt (2005), the interaction with external stakeholders through the open innovation partnership is significant for the development of bilateral relationships that assist in addressing ill-structured and complex projects in the common technological solution areas (Tidd, Bessant & Pavitt, 2005). Subsequently, the development of an open innovation community is responsible for inducing collaboration among different parties to address the concerns of joint problem-solving.
Source: (Chesbrough, 2006)
The common uncertainties which could arise from the discrepancies in the new product development process of Samsung could include the unfeasibility of the newly developed technology during the implementation or working in a different path other than the desired technical solutions. According to Viardot (2017), some of the other uncertainties are related to the extended time for technology development alongside limited possibilities of identifying investors for assuming risks and the limitations of the technological solution in practice as compared to the theoretical precedents (Viardot, 2017).
Therefore the management of uncertainty and failure in the context of Samsung is profoundly associated with measures to improve the breadth of the technology palette to address the technological uncertainties. This implies that the organization should consider a variety of solutions in the context of mobile devices, user interactions, and functionality and broaden their search for solutions thereby assisting innovation teams in determining the feasibility of solutions in the development stage.
The formidable advantage of Samsung in the context of learning and development is identified in the extensive lateral communication network across all business units of the company. The company has developed unique vision frameworks and HRM practices to ensure the alignment of employees to the overall objective of the organization in terms of innovation. The organization leverages the competences of developers and personnel to provide considerable benefits to problem-solving in terms of a transaction of explicit and tacit knowledge.
The competition in the consumer electronics market is reflective of profound challenges for the organization to define its learning approaches (Zahra & George, 2002). The exploitative learning implications are primarily vested in the R&D activities of the organization while explorative learning is profoundly associated with the references to data obtained from customers regarding desired functionalities in the devices as well as experimentation with the design of the devices. The integration of the exploitative and explorative learning approaches across the different strategic business units of the organization could be accomplished through contextual ambidexterity (Tidd, Bessant & Pavitt, 2005).
The assessment would also aim to present viable recommendations for the future innovation strategy based on the inferences derived from specific aspects of the innovation performance audit of the organization. The first aspect to be addressed in the recommendations in+ the development of its internal capabilities to cope with the external trends rather than focusing on internal flexibility and control. The existing dynamic capabilities of Samsung are responsible for complementing its innovation performance. However, the organization should focus on the acquisition of capabilities that can help in addressing diverse uncertainties such as demand uncertainty.
The dependence on parallel development to accomplish learning and development from projects in progress identified in the organization’s innovation framework could lead to pitfalls for leveraging the benefits of external opportunities of learning. Therefore, Gupta, Smith & Shalley said that the recommendation for capabilities would be directed towards partnership-based learning that would enable the employees to review the opportunities of learning in the external context thereby improving the feasibility of executing project innovation outcomes (Gupta, Smith & Shalley, 2006). The next aspect to be reviewed for addressing the future innovation strategy would be directed towards the structural modifications. It can be observed that the existing structural orientation of Samsung comprises a mix of lateral and vertical structures that facilitate flexibility in communication which is imperative for innovation. The delegation of decision making privileges to the innovation team could be accountable for reduced delivery and approval times. However, it is also essential to consider reforms in the organizational structure to reduce the conflicts that arise in the approval of innovative designs.
The influence of recruitment and reward implications in the case of Samsung could be aptly aligned with the concerns of innovation. As per Mosey, Noke & Kirkham (2017), the selection of candidates with a vision for effective innovation aligned with that of the organization is a prolific measure involved in the existing innovation strategy of Samsung (Mosey, Noke & Kirkham, 2017). However, the possible intervention that can be applied in this case reflects on the changes in the recruitment and selection process especially in the case of external recruitment. Samsung should focus on obtaining candidates with basic talent that can be tailored to the interests of the organization through training and development which can lead to the improvement of a competent workforce of Samsung. This factor could also contribute to the shared knowledge base of the organization as well as accomplish novel insights about product development and innovation ideas.
The reward management of Samsung is based on the comprehensive evaluation of employee contribution in the individual stages of the New Concept Development process and the contests employed in accordance with the open innovation framework. The future innovation strategy of Samsung should also comprise of encouraging employees to participate in contests for deriving innovative technological solutions for identified technological opportunities. The implications of interaction with external stakeholders should be considered in this case as it would improve the organization’s capabilities to address the concerns of deadlocks in various projects in progress.
The existing partnership of the organization with the Russian Academy of Science and other universities for rewarding employees should be applied for new recruits in order to supplement the talent management practices thereby ensuring suitable levels of competence in the employees to address the concerns of innovation performance (Tidd, Bessant & Pavitt, 2005).
The future innovation strategy for Samsung would also have to emphasize the reduction of barriers to innovation in the organizational processes which are profoundly noted in the excessive emphasis on R&D. First of all, the organization’s function in R&D could be open-sourced in order to accomplish productive insights into the technological opportunities for product development. This could be accomplished by integrating R&D and market research thereby leading to the development of relevant technological solutions that could fulfill customer requisites. Innovation management is associated with profound risks in the form of internal competition among the business units that could be addressed through the establishment of relevant objectives to different SBUs rather than employing an enterprise-wide assortment of innovation objectives (Crossan & Berdrow, 2003).
The identification of challenges for innovation in the case of Samsung should be supplemented by the observation of comprehensive data from market research through social media and user interaction in order to refine the inputs required for the innovation process. Samsung’s future innovation strategy should also be aligned with the comprehensive evaluation of the sources of uncertainty in technological developments. The aspects that should be addressed by the company to resolve uncertainties include references to costs of development, market demands, time for development, performance value and quality of the technological solution as well as intended market payoffs of the solution (Burgelman, Christensen & Wheelwright, 2004).
The final recommendation for Samsung’s future innovation strategy would be inclined towards reforming the learning approaches of the organization from an ambidextrous approach to contextual ambidexterity. This would imply that Samsung would have to focus on exploitative learning only for establishing the precedents of innovation outcomes while emphasizing largely on explorative learning in order to address the challenges of product development in accordance with the trends of customer preferences and competitive intensity. The focus on exploitative learning could not assure sustainability owing to the drastic reforms in the design of consumer electronics and mobile device products as well as drastic transformations in the demands of customers. Therefore, explorative learning could enable Samsung to search and experiment with novel ideas to address technological solutions for customers alongside leveraging the benefits of flexibility, variation, and discovery. Despite the high levels of uncertainty in case of the knowledge created through explorative learning, the long term beneficial implications of the same imply the necessity for adhering to explorative learning in the case of the future innovation strategy of Samsung while considering the frequent changes in market trends (Mosey, Noke & Kirkham, 2017).
The multinational operations of Samsung are evident and thereby imply the necessity for reframing the innovation strategy in specific international contexts. Despite the compliance of the organization’s innovation framework to an enterprise-wide system, it is essential for Samsung to consider the context of international markets in order to tailor various aspects of its innovation strategy to the corporate objectives as well as trends in the international market. The constants in the innovation strategy of Samsung in international contexts would be identified in the organizational structure, identification of challenges and internal processes such as the NCD process. However, the foremost aspect that is diversified in the context of an international market would be the learning and development implications. Samsung focuses on diverse learning and development frameworks in its various business units and is emphasized on the challenges of knowledge discovery and sharing.
The lack of appropriate knowledge management could lead to conflicts between desired and actual innovation outcomes (Tidd, Bessant & Pavitt, 2005). The learning and innovation approaches in the strategy of Samsung for international contexts should be aligned with the anticipation of local consumer needs and preferences rather than addressing the scope of product standardization. This would enable the employees in international business units of the organization to develop products that can suit the needs of customers thereby facilitating the reduction of uncertainties. For example, some international contexts could be characterized by demands for cost-effective consumer electronics solutions while other international markets could imply references to customers’ demand for sophisticated functionality in the products. The innovation framework for the New Concept Development process would have to be tailored to the implications of the international context in order to accomplish a product innovation strategy.
The initial stage of innovation in the form of brainstorming has to be supplemented with references to the comprehensiveness of the information exchange approach. The exchange of information has to ensure that the business units of Samsung in international contexts are able to communicate with the other business units especially the headquarters through information and communication technologies in order to accomplish prolific outcomes from the innovation process (Zahra & George, 2002). The learning and development concerns for the innovation strategy of Samsung in international contexts could be supported by improving the comprehensiveness and utility of the enterprise-wide internal blog that can expedite the process of knowledge discovery and sharing. The learning and development facets of the innovation strategy of Samsung should also involve integration with the external stakeholders through the open innovation model and partnerships such as Create New Business (CNB) program and with the Russian Academy of Science as well as collaborating universities.
The innovation strategy for Samsung in the international context would have to be associated with references to the standardization of the New Concept Development process. The standardization of the concept development process would imply notable insights into the flexibility for acquiring and interpretation of information from the different business units by the central decision making authority of Samsung regarding product development. The standardization is also responsible for obtaining productive insights at different stages of the product development from diverse sources within the internal value chain of Samsung as well as opportunities for insights from external stakeholders and community. The decentralization of the innovation strategy of Samsung could be associated with consideration of centralized coordination of the global requirements of the organization (Gupta, Smith & Shalley, 2006).
This factor can be identified in the centralization of R&D functions of Samsung albeit with higher specialization and economic scale variations as decentralized aspects in international markets. Another notable aspect that should be addressed with respect to the innovation strategy of Samsung for international contexts is identified in the consideration of human capital as a core competence of the organization thereby implying their significance in addressing the uncertainties in the business environment. The innovation strategy of Samsung should imply a profound emphasis on the provision of opportunities to human resources in order to assist them in achieving promising levels of dedication and optimal levels of potential in order to accomplish improvements in productivity. The implications of engagement with external stakeholders are also diverse in the case of international contexts especially arising in the form of requirements for social and environmental responsibilities of Samsung. Therefore, the role of Samsung as a corporate citizen has also implied in the global innovation strategy wherein the organization commits to sustainable consumption of resources and implementing innovation in deriving eco-friendly solutions. The significance of referring to the innovation strategy of Samsung in a global context could also be reflective of indications towards the management of uncertainty that are different in varying jurisdictions.
The uncertainties in international contexts are profoundly dependent on external factors such as political stability, economic aspects, social variations, favourability for technological development and positive legal opportunities. Therefore, the imperatives of innovation should be aligned with references to market research and their integration with the innovation process especially in the development and ideation stage (Burgelman, Christensen & Wheelwright, 2004). This would help in obtaining a clear impression of the possibilities of success of the technological solution in the international context in the initial stages thereby reducing the concerns for redundancy and ineffective use of resources. Finally, it would be appropriate to recommend the focus on explorative learning for the innovation strategy of Samsung in international contexts in order to focus on risk-taking and variations as significant aspects of innovation thereby leading to productive outcomes for the organization by accomplishing the corporate objectives and addressing the interests of customers.
The assessment focused on review of the innovation performance of Samsung with respect to core aspects of innovation audit and the suitable recommendations for long term innovation strategy for Samsung. The report also emphasized on the evaluation of innovation strategy of Samsung in an international context with an illustration of the differences.
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