Why Entrepreneurial Organizations Seek Opportunities for Innovation
Introduction
An entrepreneurial organization signifies a functional business structure. It encourages employees to come up with creative and innovative ideas while facilitating the accommodation and integration of those ideas with the existing organizational processes (Burger-Helmchen, 2013). This approach is proven effective in ensuring a business’s growth and existence in the contemporary highly competitive business endeavor. Today’s business giants like Amazon, Tesla, Meta, Google, etc. are substantially using this organizational strategy to expand their business reach and ensure growth.
The concept of “innovation is the key to a business’s success” is not new, but innovation was one of the foundational criteria for introducing business on this planet. Given the historical significance of innovation in business success, the need for it is now far greater than it was previously.
At present, companies that can come up with different, reliable, and more efficient ways to solve customers’ problems are successful in enhancing their reputation, revenue, and overall growth. Considering the beneficial context of innovation in an organization, this paper explores four primary reasons that demand businesses to cultivate an innovative culture and use the associated opportunities.
The reasons are described below.
Related: Top Reasons for MNC Failures Worldwide.
Fulfilling Customers’ Needs
The development and progress of human civilization are very based on continuous and consistent transpositions in life. Following this, people’s needs change on a regular basis. Innovation allows entrepreneurial organizations to address those changes more efficiently. Idealistically, it is the organizations’ responsibility to respond to those changes by analyzing the patterns and innovating solutions suitable to meet the change (Bozpolat and Seyhan, 2020). Being a highly responsible organization is only possible if it nurtures an innovative culture and keeps the practices and processes up-to-date all the time. By doing so, an organization can attract more customers and ensure loyal customers retention.
Increased Competitive Advantage
The modern marketplace is crowded; numerous companies are offering products and services to meet the same needs of the customers. To survive and grow, businesses must offer more efficient, cost-effective, and easy-to-use products or services (Lee and Yoo, 2019). Only innovation can enable such allowing businesses to stand strong in the crowd. In short, innovation increases the competitive advantages of an organization, which results in generating more revenue and increasing brand recognition.
Assists to Grow
While large and established businesses can use various strategies along with innovation, small and new startups are vitally dependent on innovation for their growth. They seek opportunities for innovation to come up with different solutions and approaches to addressing customers’ needs. Simply put, innovation allows new or small businesses to expand their reach. By integrating innovation into organizational practices and processes, these businesses can introduce new product solutions while adding value to their existing offerings as well.
Increased Employees Retention Rate
For talented and skilled employees, their financial gains are not enough to keep them motivated. They always look for such organizations that allow and encourage the generation of new ideas by their employees. Entrepreneurial organizations seek opportunities for innovation to enable such a workplace environment. By promoting and supporting innovation in the workplace, organizations not only ensure employee retention but also attract highly talented professionals.
Conclusion
Finding opportunities for innovation and using those allows a company to be unique in the crowded market. Innovative businesses are successful in attracting and motivating a highly skilled workforce to meet the ever-changing needs of their customers by developing new and more effective product solutions. Nurturing innovation in an organization is also beneficial to enhance competitive advantages, which boosts stakeholders’ interest in participation and collaboration.
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References
Bozpolat, C., and Seyhan, H. (2020). Impact of Market Orientation on Innovation. In book: Innovation: Principles and Practices (pp. 269–290). Gazi Kitabevi. ISBN: 978–625–7911–12–2
Burger-Helmchen, T. (2013). Entrepreneurial Organizations. In: Carayannis, E.G. (eds). Encyclopedia of Creativity, Invention, Innovation and Entrepreneurship. Springer. https://doi.org/10.1007/978-1-4614-3858-8_208
Lee, K., & Yoo, J. (2019). How does open innovation lead competitive advantage? A dynamic capability view perspective. PLOS ONE, 14(11), e0223405. https://doi.org/10.1371/journal.pone.0223405
