The Role Of Finance As A Driver Of Innovation

Innovation may be linked to positive changes in efficiency, productivity, quality and competitiveness, among other factors. Benefits of innovation could be the improvement in the workforce. By improving the workforce an organisation will benefit from increased productivity and improved morale and lower staff turnover. Employees will feel more valued which therefore increases motivation. This is beneficial to employers because it provides the organisation with knowledgeable, reliable staff who will have a more positive contribution to the needs of the organisation. Staff are a valuable source of innovation, even if it is not expected as a major part of their job. An innovative work environment means being creative and try new techniques. As Albert Einstein said “if you always do what you’ve always done, you will get what you’ve always got.”

Financial Management is an important aspect of how a business operates efficiently. The way that the finances are controlled can determine how successful the company is. The finances of a business allows for the growth of the company. The five practices of financial management: capital structure decision, investment appraisal techniques, dividend policy, working capital management and financial performance assessment are critical when assessing a company. The performance of a company plays a key role on how successful the company is on meeting goals. There are different strategies and tools that a company can implement and if they are used to effectively the company can meet their goals. If a company has good finances, a good

There are various internal and external factors that can influence the development of innovations positively or negatively. External factors may include firm size, market structure, degree of industry concentration, and macroeconomic factors. Size of the firm tend to be more positive related to innovation in manufacturing and profit-making organizations as compared to non-profit making organization, and relationship that involves size and innovation will become stronger if a non-personnel or a long transformation measure of size has been applied, as compared to application of a personnel or a raw measure of size. Depending on the competition within the market for example a positive competition with favorable atmosphere, the firm will be successful in its kind of innovation. The way industries have been structured and how they change over time may have effect to the innovation among organizations. Their standards, the institutional setting and the process of liberalization and privatization also affect innovation.

Birkinshaw, Bessant, & Delbridge (2007) have found that innovation is one of the biggest achievements an organization can make in the presence of a stiff competition or highly uncertain

Bigliardi, B. (2013). The effect of innovation on financial performance: A research study involving SMEs. Innovation: Management Policy & Practice, 15(2): 245-256.

| Thomas, in regards to the line you comment on "innovative changes often originate from lower levels of the organization", I totally agree withthat statement due to the fact that those lower level employees are the ones who are working in the fields, in terms of having their hands on the equipment and having the full knowledge of what improvements are needed in the work field. Innovation often derive from insight and even frustration at times. Good post.

This research intends to explore innovation at an individual level, but in a context, where the roles and functions of an organization appear eminent either as a promoter or an inhibitor of innovation.

Technological change is a fundamental driver of economic development and performance, not only at the level of firms and industries but also economies. Innovation is the organizational process through which new

If we consider an organization as a car, finance resources plays the role of combustible material. So, each organization needs to the finance resources to move and these resources are energizing and turning on the engine of the organization finance factor in an organization has indices which represent the organization finance success. Obtaining proper finance results in the sports institutions and organizations is necessary for their development and survive and measuring and analyzing the finance results as an important result of en organization performance are considered as the necessities in the examination of organizations merits and weak

Prior to jumping to the competitiveness aspect of the question, one must understand the impacts innovation can have on firms. Furthermore no person can better describe such a relationship but the godfather of innovation Joseph Schumpeter, who believed that innovation can be seen as "creative destruction" waves that rebuild the entire business sector from the constant need to create something new; which results in the dismantle of the old. Schumpeter also argued that once an entrepreneur/ innovator comes up with a successful idea, he/ she will make some capital out of it, which he refers to as monopoly profit. However soon other entrepreneurs will begin to catch up and imitate the idea, until an equilibrium is reached; which creates a cycle of new

His research has been published in e.g. Organizations Studies, Organization and the Sloan Management Review. The authors show that there are significant gaps in knowledge and a great need for research on how service work can be designed, organized and led in order to promote the innovation potential of employees. Schilling and

2004) the innovation is not just about new ideas, but also it’s about the actions to make new product or improving producing process. There for, the procedure and results are not only concerned with the firm but also contains market and other external factors. The differences between innovation in SMEs and large firms, that the SMEs have more limited resources and limited innovative capability (Kanamori et al., 2006, Zhu et al., 2012). As the process of innovation is defined as the formation of new knowledge, innovation in SMEs is considered to be disadvantage compared to their large rivals who have greatly bigger knowledge base and human capability. Moreover innovation in its nature is risky and uncertain (Fagerberg, 2004), the barriers facing innovation in SMEs, the SMEs disadvantages are limitation in resources, informal structures, managerial capability and financial capacity, However SMEs have flexible and reactive in structure change and market dynamics. The main advantages of SMEs are flexibility and adaptability than large organization than larger organization. The flexibility and spongy capacity is conclusive for firm development (ERIKSSON, 2014). Small firms sometimes relay on innovating throw flexibility and time recognition to market dynamics in order to create and aid profitable market niche (CALOGHIROU, 2004). An analyzing of in manufacturing sector in china found that

Innovation can be defined as the introduction of a new product, process or market by an organization. According to Pearce & Robinson (2011), organizations are innovative when they succeed in turning ideas into revenues. However, Petkovska (2015), states that it takes more than ideas to be innovative, firms have to invest in their time, resources as well as technology in order to bring the ideas into fruition. Firms must decide which type of innovation to focus on as there are several types. The chosen innovation will determine if the firm would like to breakthrough the market with a new product, service or redesign existing product or services. This paper is going to analyze Alexander Mann Solution’s innovative strategy in relation to the competition.

Based on the articles and journals discussed above, complimentary relationship between organization and innovation was able to be identified. Innovation cannot happen in a vacuum, therefore an organization need to exploit new ideas in order for innovation to happen. The key drivers of innovation are people in an organization, who would then transform these ideas into something useful.

This chapter seeks to highlight the relevant theories that support innovativeness of manufacturing firms and an empirical review of factors that lead to a firms innovativeness. At the end of the chapter a theoretical framework is explained followed by a brief section of a review of the research philosophies.