Innovation Culture and Roles Case Study Expert Answer

Case Study 1

Question 1:

The ability and willingness of organizations to engage in testing is rooted in the creation of a culture where experimentation is encouraged and valued. The concept of experimentation is associated with the idea that increasing an organization’s testing capacity can help overcome a plethora of barriers and help employees work towards shared values, beliefs and ideologies that deeply value brainstorming, feedback and open sharing of ideas (Thomke 2020, n. pag). In case of Shutterstock, the company is essentially empowering its employees to invest in their time in further expanding the product portfolio. The value of engaging lower level employees in this exercise is that it enables them to apply learning and experiences from customer interactions and craft solutions that are effective and achievable. As noted, these experimentations do not always generate successful results however, they have led to the creation of some of the most innovative and niche services offered by Google which includes, Adsense and Gmail. Both these products are heavily customer-centric and are a step ahead from traditional competing solutions that were available in the market.

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The primary success generated from including lower level employees in that from an intrinsic level, employees feel that they have been given a level of autonomy and empowerment as their ideas can change the direction of the business. The promise of this vision itself is a motivating factor. According to Baird, Su and Munir (2018, n. pag), when employees are granted control of a situation within the organization, the provision of this control has a positive impact on employee empowerment thereby, leading to improved organisational outcomes. A similar observation was noted in the research conducted by Idris, See and Coughlan (2018, n. pag), who stated that employees in the lower level of hierarchy reported experiencing reduced levels of employee empowerment because of the power-relations dynamics between the employee and employer. The research also indicated that employees who were involved in goal-sharing felt more empowered compared to those who were not (Idris, See and Coughlan 2008, n. pag). The implications of this research are applicable in the move taken by Shutterstock because it is including employees in a strategic discussion which is otherwise limited to the senior management.

At the same time, there are several limitations which are associated with lower level employees’ participation in discussions related to the company’s strategic direction. Most importantly, allotting a percentage of the employee’s time towards an endeavour in which they are not necessarily trained for or proficient in may take away from the tasks that need to be performed as a part of their job description. This can subsequently cause employees to lose focus of their own professional direction in a bid to pursue the opportunity of developing a new product. Zhang et al. (2018, 1873) note that employees who pursue innovative behaviours may start to value extrinsic goals such as money in comparison with intrinsic motivators as they pursue the desire to uncover the ‘next big thing’. This misguides the employees from their path of career progression and acts as a cause of conflict between the manager and the subordinate.

Question 2:

A major risk to the organisation which the implementation of this initiative may cause is that of failure. According to Thomke (2020, n. pag), when organisations run a series of small experiments, the likelihood of those experiments failing is higher in comparison with organizing a series of small experiments. An example of this failure rate is that of Booking.com, where only 10% of the experiments conducted by the organization turn out to be successful (Thomke 2020, n. pag). As noted by Thomke (2020, n. pag), one way of mitigating this risk is by running experiments in a large number because that would still generate a higher number of successes for the company. Moreover, as per the laws of probability it is possible that one of those experiments may cause a major breakthrough which can generate positive financial outcomes for the company.

The second risk that the organisation may face as a result of this initiative is pertinent to ethical considerations. According to Benbunan-Fich (2017, n. pag), many technology companies such as Facebook have previously engaged in online experiments where users were not informed beforehand that they were indeed a part of an experiment. Such practices have ethical implications because participants have not provided their consent beforehand to partake in the experiment. In order to mitigate this risk in case of Shutterstock, any experiments and innovations that involve the participation of users should be based on consent and should not be launched without informing the participants what they will embark upon. The executives at the company should establish clear protocols and guidelines which define how experiments involving online users should be conducted before giving an employee the permission to proceed. The guidelines should mention that users can expect their privacy to be protected in case they choose to take part in any experiments for Shutterstock.

Case Study 2

Question 1:

Following its rapid expansion in the post-World War 2 era, Coles adopted an expansion strategy whereby, the concept of the store transitioned from a full-service store to a self-service store where buyers could explore and purchase the products that they wanted. Owing to this transition, the organizational structure of Coles transformed because the company now had a different focus where it had to provide greater variety and options to customer. This strategy switched the focus of the store towards other departmental functions including warehousing, distribution and logistics.

The organisational structure which best describes the structure of the company is that of the functional structure. In this type of an organisational structure, the company assembles its activities in accordance with the key functions (Daft, Murphy and Willmott 2010, p. 107). This implies that employees who serve a similar function, such as warehouse assistants, are grouped together in the warehousing department while employees that are engaged in marketing and advertising are a part of the marketing department. This type of a structure operates under a vertical hierarchy where instructions are disseminated through a top-down approach. This type of an organisational structure was particularly popular during the early 90s because it granted companies with the autonomy to make sure that each department worked together to achieve the same goal (Shan-Ling 2015, p. 22).

As Coles was consistently expanding in the post-World War 2 era it still had to ensure that each function of the organisation operated towards achieving the same goal and mission therefore, having this organisational structure was an appropriate option because it enabled the management to exercise complete control over the divisions while ensuring that personnel with the same expertise were working together. The structure also enabled the management to measure the performance of each department individually and identify those divisions that were lacking. By adhering to this structure, Coles was able to transition into a rapid expansion phase and transform into a self-service store where the functions of logistics, distribution and warehousing became of a critical nature compared to before when it was a full-service store.

Question 2:

Since its inception, Coles adhered to a strategy of constant innovation while continually introducing technologies in its wider business framework. In the period following 1993, Coles introduced range of initiatives which reflected this strategy of the organisation and allowed it to create more value for the business. This came in form of introducing the flybuys program, transitioning into online shopping and eventually diversifying into a new industry by opening up petrol stations.

The organisational structure which best describes the operations of Coles during this period is that of the market-based organisational structure. This structure is implemented when a business divides its organisation in accordance with factors such as customers and output (Närman, Johnson and Gingnell 2015, p. 530) or other elements that are linked with the market such as type of industry. In alignment with this description, Coles’ diversification into petrol stations is reflective of its entry into a new industry and a diversification of its product and services portfolio. A market-based organisational structure is further divided into functional segments such as a marketing, finance and human resources department for the petrol station and the self-service business. In this type of structure, decision-making is decentralized (Mohr, Sengupta, S. and Slater, 2010) which means that each structure has its own lead who takes decisions about where the departments for each type of market, industry or customer type are headed.

This organisational structure is applicable to Coles because it accounts for the varied decisions that need to be undertaken for driving diverse market-based services and products. A centralized authority cannot take effective decisions to drive the company forward because it does not have the necessary vision about the strategy of each type of business. For example, internal and external factors that affect the performance of a petrol station are different from that of an online retail division. Using this structure, gives the business an opportunity to manage each type of business line autonomously and have its own unique set of goals to drive the company forward.

References:

Baird, K., Su, S. and Munir, R., 2018. The relationship between the enabling use of controls, employee empowerment, and performance. Personnel Review.

Benbunan-Fich, R., 2017. The ethics of online research with unsuspecting users: From A/B testing to C/D experimentation. Research Ethics, 13(3-4), pp.200-218.

Daft, R.L., Murphy, J. and Willmott, H., 2010. Organization theory and design. Cengage learning EMEA.

Idris, A., See, D. and Coughlan, P., 2018. Employee empowerment and job satisfaction in urban Malaysia. Journal of Organizational Change Management.

Mohr, J.J., Sengupta, S. and Slater, S.F., 2010. Marketing of high-technology products and innovations. Pearson Prentice Hall.

Närman, P., Johnson, P. and Gingnell, L., 2016. Using enterprise architecture to analyse how organisational structure impact motivation and learning. Enterprise Information Systems, 10(5), pp.523-562.

Shan-ling, P. ed., 2015. Managing Organizational Complexities with Digital Enablement in China: A Casebook (Vol. 13). World Scientific.

Thomke, S., 2020. Building a Culture of Experimentation. Harvard Business Review. March – April, 2020.

Zhang, Y., Zhang, J., Forest, J. and Chen, C., 2018. The negative and positive aspects of employees’ innovative behavior: role of goals of employees and supervisors. Frontiers in psychology, 9, p.1871.

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