The investigation into the impact of organisational culture on innovation and performance: A case study of Apple Inc.
Innovation and performance are important elements of organisational culture as they help with business growth and development. As a result, it is vital that all businesses adopt and create an innovative culture in order to be successful. How this can be attained is unclear, yet many organisations attempt to instil innovation into their companies through the creation of various programs.
or any similar topic only for you
Whether this works or not is a matter for debate, yet it is apparent that those organisations which lack innovation are unlikely to be as successful as those who have innovation. Apple Inc provides a good example as to how building an innovative culture and enabling internal systems to drive innovative behaviours leads to success.
The Proposed Plan of Work
The creation of new products is at the forefront of economic growth, which is why the focus on innovation and performance within small and large organisations has greatly increased over the years (Hall and Mairesse, 1995, pp. 263-293); (Klette and Kortum, 2002). It has been said, nonetheless, that innovation creates productivity (Loof and Heshmati, 2002, p. 21) because of the fact that the growth rate of productivity only grows when new innovations are introduced. In accordance with this, it seems as though innovation and productivity are simultaneous and that organisational culture has a lot to do with the degree of novelty the innovations possess. Organisational culture thus has a significant impact upon innovation and performance and helps to determine how new methods, ideas and products are to be created. If an organisation fails to create a corporate culture of innovation, it is unlikely that the business will grow and the performance of individuals will effectively be stifled. Establishing a corporate culture of innovation requires the creation of teams sharing the same horizontal positions of power so that each person within that team can play a theoretically equal role. This is in comparison to the more traditional hierarchical organisation, which does not place individuals on an equal footing and leads to a lack of incentive to innovate (Barone, 2010, p. 1). Apple Inc is one the biggest organisations that have developed an organisational culture of innovation and performance and has recognised that “creativity and innovation skills are critical to future success in life and work” (ACOT, 2012, p. 1).
The objective of this study is to determine the effects organisational culture has on innovation and performance. A case study on Apple Inc will thus be provided in order to establish whether the creation of an innovative culture within any organisation is one of the most important parts of a business’s organisational structure.
Is innovation an important part of any businesses organisational structure?
Can innovation be created?
What impact does organisational culture have on innovation and performance?
Is innovation what drives a business’s success?
Do innovation programs work?
How important is it to build an innovative culture within an organisation?
Is the success of Apple Inc the result of the innovative culture that has been established?
What advantages does innovation bring to an organisation?
What does the innovation process consist of?
Is there a difference between innovation and invention?
Does innovation affect performance?
Innovation and Invention
Secondary research will be used for this study so that existing data can be gathered and thereby analysed. This is the most appropriate form of research that is required for this study as the collection of primary data would be too costly and lengthy. In addition, it would be very difficult to collect data from large organisations such as Apple Inc and given the projects aims; it would be unwise to embark upon this type of study. Quantitative and qualitative research methods will be used so that the literature can provide a wider analysis of the subject matter. Quantitative research gathers information that is in numerical form, whilst qualitative research gathers information that is not in numerical form but which contains descriptive data. Whilst this type of data is a lot more difficult to analyse than quantitative data, a better evaluation of the topic in question can be made. The resources that will be used include text books, journal articles, online databases, government reports and applicable websites.
Chapter 1 – Innovation and Performance Overview
Innovation is defined as “the introduction of new methods, ideas or products” (Oxford Dictionaries, 2012, p. 390). In accordance with this it is thereby evident that innovation takes place when something new is introduced into the market which subsequently leads to economic growth. Because of how important economic growth is, it is vital that innovation is part of any organisations culture. This is because, a lack of innovation will significantly affect the success of the business and the businesses’ overall performance will be impaired. How an organisation can improve innovation and performance is difficult to determine because whilst businesses want to be successful, they do not necessarily want to be innovative. Nevertheless, as put by Ryan (2012, p. 1): “A successful organisation achieves the goals and objectives that it sets itself. Innovation is simply a lever that delivers success rather than an end in itself.” However, it was further made clear by Ryan that whilst levers that can be used as a means of delivering success, it is important that innovation is placed in context with the objectives and aims of the organisation in question. Arguably, this suggests that innovation is the most important lever of an organisation that helps to deliver its success. Innovation should therefore be at the forefront of any organisation’s structure and should be promoted throughout its life cycle.
Chapter 2 – Organisational Culture and Innovation
Whilst it is vital for innovation to become part of an organisations culture, there has been much debate as to who drives innovation. It was traditionally argued by Schumpeter (1934, p. 65) that small businesses drive innovation, whilst large businesses simply dominate innovation by investing in its research and development. Not all agree with this, however, and instead it has been argued by Szirmai et al; (2011: p. 8) that innovation exists within the individual and that it does not matter whether the business is small or large. Regardless of this, small businesses are likely to be more innovative than large businesses simply because of the fact that small businesses have a greater desire and need to be successful. Essentially, small businesses are therefore more likely to embed innovation into their organisational structure by creating an innovative culture. However, as noted by MIT Sloan (2011, p. 8); “there are no quick fixes, panaceas or one size fits all solutions.” Not all businesses can successfully create innovation, but it is imperative that they make some attempt to create an innovation culture as innovative businesses generally yield high returns (Douhan and Henrekson, 2007: p. 2).
Chapter 3 – Apple Inc and Innovation
An innovative culture has certainly been created within Apple Inc., which is why this organisation has had so much success. Steve Jobs, the co-founder and CEO of Apple Inc, thus made it clear early on that innovation is what created his success: “innovation is what distinguishes between a leader and a follower” (Raup, 2012: 1). Although Jobs did not believe that innovation could be taught through innovative programs he did believe that it could be established by following his seven general principles (Gallo, 2010, pp. 15-209). He believed that the seven principles provided sufficient guidance to undertake innovative practices within any organisation and thus generate new ideas. This is because, it was felt by Jobs that innovation existed within all human beings. Conversely, innovation within an organisation could not be ascertained without the establishment of an organisational innovative culture. This is because; the whole of the organisation would need to possess an innovative mind, which would require a greater awareness and understanding of the innovative process: “Becoming innovative requires an organisational culture which nurtures innovation and is conducive to creativity” (Ahmed, 1998, p. 1).
Chapter 4 – Innovative process
The innovative process will depend entirely upon the organisational culture and climate that has been created. This is because, whilst innovation is present within all human beings it will depend upon the particular organisation as to whether the innovative attribute is to be triggered or not. The importance of “simultaneously introducing product and process innovations” was highlighted by Walker (2004, p. 1) when he made it clear that innovation plays a mediating role in the management-performance relationship of an organization. Nevertheless, whilst it became apparent just how important the creation of an innovative culture is, it could not be established how a strategy of organisational innovativeness should be pursued (Walker (2004, p. 1). Provided that businesses’ understand the innovative process; innovation will undoubtedly be created. In addition, as put by Brown and Frame (2003, p. 11); “in managing innovation, it is important for all groups to understand the subjectivity of each group’s value judgements.” If the subjectivity of each group’s value judgements is not fully understood, difficulties will ensue when trying to interact and integrate with each other and the growth of the business will be constrained.
Chapter 4 – Innovation and Performance Lessons from Apple Inc
Much can be learnt from the way Apple strives on innovation and performance within its company, which is clear from the fact that Apple has one of the most valuable empires of all time. Because innovation is the main driver of Apples organisational structure, it is apparent that innovation is the main attribute all businesses need if they want to be as successful. Nevertheless, “while experts remain optimistic about Apple’s future, they predict the strength of the Apple empire could be undermined by politically unrealistic growth expectations” (Bosker, 2012, p. 1). Whether this means that Apple’s future remains uncertain is questionable, but given the innovative nature of Apple’s business structure, it is unlikely that Apple’s success will fade as new products will continue to be introduced into the market. Thus, it does not matter that Steve Jobs is no longer with Apple since his innovative legacy will live on because of the innovative organisational culture that has been created. If innovation was not part of Apple’s business structure, it is likely that Apple would have been doomed from the start, which illustrates the importance of innovation. Consequently, as pointed out by Muller (1); “innovation and creativity have long been regarded as the lifeblood of organisational success.” In addition, it was also added that; “in the 21st century innovation practices and initiatives have become more important than ever due to a fast and unpredictably changing global business environment.” Essentially, innovation has never been more important and because of the continuous advances in society, it is vital that the principles of innovation management are being embraced by all. This is because, “organisations that do not innovate will not survive” (Swaim, 2010, p. 78).
Overall, it is evident from the above findings that innovation and performance are integral attributes of a business’s structure. This is because; businesses that do not create an innovative organisational culture will not be successful since innovation is the lifeblood of any organisation within today’s society. Because advances in technology are continuously being made, new products need to be introduced into the market on a continual basis in order to satisfy consumers. Therefore, organisations that fail to introduce new things will ultimately fail since they will not be deemed relevant in the 21st century. Whilst innovation cannot be created, however, it can in fact be instigated by following the seven general principles of innovation as laid down by Jobs. Provided that these principles are followed, all businesses will most likely be successful which is evident from the success of Apple Inc. Innovation was the main attribute of Apple and because of this, the Apple empire will continue to live on. How innovation can be effectively managed is open to debate but given that the general principles are followed, an innovation culture will be created.
Ahmed, P. K. (1998) Culture and Climate for Innovation, Emereld 1.
Gallo, C. (2010) The Innovation Secrets of Steve Jobs: Insanely Different Principles for Breakthrough Success, MgGraw-Hill, 1st Edition.
Muller, C. (2011) Apple’s Approach Towards Innovation and Creativity: How Apple, the Most Innovative Company in the World, Manages Innovation and Creativity, GRIN Verlag.
Oxford Dictionaries. (2012) Paperback Oxford English Dictionary. OUP Oxford. 7th Edition.
Schumpeter, J. A. (1934) The Theory of Economic Development, Cambridge MA, Harvard University Press.
Swaim, R. (2010) The Strategic Drucker, Singapore: Saik Wah, Press Pte Ltd.
ACOT. (2012) Culture of Innovation and Creativity, Apple Classrooms of Today – Tomorrow, [Online] Available: http://education.apple.com/acot2/innovation/ [30 December 2012].
Barone, L. (2010) How to Create A Corporate Culture of Innovation, [Online] Available: http://www.businessinsider.com/how-to-create-a-corporate-culture-of-innovation-2010-6?op=1 [30 December 2012].
Bosker, B. (2012) Will Apple’s Empire Decline Like Microsoft’s, [Online] Available: http://www.huffingtonpost.com/2012/08/21/apple-valuation_n_1819316.html [31 December 2012].
Brown, C. and Frame, J. (2003) Small Business Innovation Management, [Online] Available: www2.warwick.ac.uk/fac/soc/wbs/conf/olkc/…/brown__frame.pdf [30 December 2012].
Douhan, R. and Henrekson, M. (2007) The Political Economy of Entrepreneurship, 2nd Draft, Prepared for ISNIE Conference in Reykjavik.
Hall, B. H. and Mairesse, J. (1995) Exploring the Relationship Between R&D and Productivity in French Manufacturing Firms, Journal of Econometrics 65(1).
Klette, T. J., and Kortum, S. (2002) Innovating Firms and Aggregate Innovation, NBER, Working Paper No 9919.
Loof, H. and Heshmati, A. (2001) On the Relationship Between Innovation and Performance: A Sensitivity Analysis, Royal Institute of Technology, Industrial Economics and Management, [Online] Available: elsa.berkeley.edu/~bhhall/EINT/Loof_Heshmati.pdf [29 December 2012].
MIT Sloan. (2011) Top 10 Lessons on the New Business of Innovation, A Special Collection of Innovation and Management Insights from MIT Sloan Management Review, Massachusetts Institute of Technology.
Raup, M. R. (2012) Innovation Distinguishes Between a Leader and a Follower – Steve Jobs, PSEL, [Online] Available: http://www.personal.psu.edu/mrr18/blogs/psel/2012/06/innovation-distinguishes-between-a-leader-and-a-follower—steve-jobs.html [30 December 2012].
Ryan, A. (2012) Innovation Performance, Managed Innovation, [Online] Available: www.managedinnovation.com/Text/…/1150260519468-4125.pdf [30 December 2012].
Szirmai, A. Naude, W. and Goedhuys, M. (2011) Entrepreneurship, Innovation and Economic Development, Oxford University Press.
Walker, R. M. (2004) Innovation and Organisational Performance: Evidence and a Research Agenda, AIM Research, [Online] Available: http://www.aimresearch.org/Publications/working-papers/working-papers-1—10/wp-002—innovation-and-organizational [30 December 2012].