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[Abstract]
Management approaches to innovation are notably different between those for incremental changes and those for disruptive ones. Disruptive innovation is deemed to be risky, uncertain, and costly by academics and practitioners. Meanwhile, incremental innovation is characterized as more predictable and corresponding with organizational context. Accordingly, the discontinuous innovation is supposed to be conflicting with and threatening for the organizational structure, current achievements, and ongoing procedures. However, it is the discontinuous change that a firm really needs in order to gain competitive advantage in the turbulent business environment. Most companies prefer to concentrate on incremental innovations, thereby being less effective in managing discontinuous innovations. Organizational inertia, structured routines, and less absorptive capacity are three among other hindrances to the discontinuous innovation. Hence, a company has to design and implement different approaches, including strategic actions, industry context, organizational context, technological context, and people context. In conclusion, the company has to promote discontinuous innovations in this changing environment while maintaining the survival ability by managing incremental innovations.
[Keywords] Product innovation, process innovation, incremental innovation, discontinuous innovation, competitive advantage
Introduction
As the world has shifted from the finance-based view of a firm in the 1970s to industry-based in the 1980s, resource-based in the 1990s, and knowledge-based views in the 2000s, the role of creativity and management has become more dominant in building and enhancing a company's competitive advantage. By definition, innovation is the process of finding, making, and commercializing something new (Tidd, Bessant, & Pavitt, 2005). Frequently, innovation is supposed to be similar to creativity, since both of them are considered the sources of competitive advantage (Florida, 2002; Tidd, et al., 2005). To differentiate the two, Bishop (2005) argues that creativity can be defined as problem identification and idea generation, while innovation can be defined as idea selection, development, and commercialization. Accordingly, creativity or invention is the beginning part of the process that has to be shaped by development and commercialization in order to gain commercial benefits from an innovation.
Innovation can take two forms: (1) product innovation, which is the creation of new products and (2) process innovation, which refers to finding new ways or methods of doing something. Subsequently, based on the degree of the innovation novelty, two patterns of change can be defined:...