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Barriers to innovation in corporate entrepreneurship

Companies have barriers to innovation, brilliant ideas, and creativity in corporate entrepreneurship. These barriers arise from the perceptions and attitudes of leaders, but some obstacles arise from inconsistent organizational structures. This limits the growth potential of the variable crate. Companies need to survive and grow in a competitive arena, which can only be done with a new approach. Resistance to creativity, innovation and change in corporate entrepreneurship will hinder the organization's progress. Creativity and innovation have become an integral part of the corporate environment, enabling organizational and cultural leaders to keep abreast of recent changes by implementing innovative and creative ideas and strategies across different domains (Amabile and Pratt 2016). Innovation and creativity help develop new approaches to improve the current services or products to optimize the business operation. It allows entrepreneurs to think outside the box and out of traditional solutions. In creating new strategies to sustain the organization competitively, the creative problem-solving approach gives each business the desired competitive advantage. Hence, it requires more critical management insights to find effective and suitable solutions at any time (Bailey, Kleinhans and Lindbergh 2018).

The report evaluates the climate, leadership and readiness to change at The Agency. For this reason, the report explores the importance of corporate innovation and entrepreneurship in the organization. The Agency is the Australian office of a highly successful global advertising organization. It is also part of the largest agency in the world that has constantly won prestigious international and local advertising awards. The Agency is responsible for planning and making advertising for customers and gives consulting advice on branding and marketing. With functional silos, status inequalities and traditional structures, the internal environment of The Agency are not generally seen as conducive to change, creativity, and innovation, but it is successful in this regard. However, to understand this, it is necessary to examine work practices and daily interaction that compensate for creative barriers created by conventional frameworks to support innovative outcomes and activity (Bailey, Kleinhans and Lindbergh 2018).

The report focuses on understanding the importance of creative and innovative management at The Agency and how the company has implemented creativity to corporate entrepreneurship to increase profits and revenue. The purpose of the report is to shed light on the real business potential for innovative and creative concepts for winning advertisements. In addition, the study also identifies the barriers and challenges in terms of culture, climate, leadership and readiness for change in the organization and recommend strategies for dealing with them effectively.

Critical analysis of the Agency in respect of creativity and innovation, entrepreneurship and change 

The term "entrepreneurial architecture" was created by Burns (2005) as an organizational structure to understand entrepreneurship within the corporate context. It can be described as a factor in the internal culture of an organization based on communication, innovation, and coordination. Entrepreneurial architecture has innovation based on institutional, communicative, coordination, and organizational culture. The entrepreneurial architecture consists of five elements: structure, system, strategy, leadership and culture. These are interrelated and overlapping (Bakari, Hunjra, and Niazi 2017).

At the Agency, entrepreneurial architecture can be defined in five functional areas, such as account, planning, creative, production, and design. The management team consists of representatives from each region, including the chief executive director (CEO). The Accounts Team is accountable for bringing in new business and keeping an ongoing relationship with customers and is known as the 'suits' in the Agency. The planning includes only the planning manager, who works closely with the suite to set advertising goals. Also, the creative team is accountable for bringing ideas about advertising and is called 'creative'. The design team has two tasks. First, they work on pure design requests, like creating flyers for supermarkets, involving straightforward and conventional artwork. Second, they create the artwork to support a creative idea, like combining a finished image into a poster designed by the creative. Then, a production team is referred to as a factory, describing their feelings about what they do. They obtain ideas created by creatives and signed by customers and then work to create ads, confirming they are connected to the desired media (Baporikar 2017).

The Agency and its climate for innovation and entrepreneurship

The Burn 2020 model emphasizes the complex interactions between situations and individuals to create creative outcomes in the company and includes interactions between three levels, like organizations, individuals, and groups. First, the model considers a high-level isomorphism between what is needed for individual creativity and what is needed for organizational innovation, as both create new ones. Second, the model assumes that individual creativity and corporate innovation are inseparable. In particular, the creativity of teams and individuals provides organic innovation throughout the organization to implement the climate or culture of innovation and change at The Agency (Bocken and Geradts 2020).

Critical analysis of climate and culture to support corporate innovation and entrepreneurship at the Agency

Whittington (2008) stated that organizational culture is a set of shared assumptions that determine appropriate behavior in different situations and indicate what will happen in the organization. Organizational culture influences the way groups and people communicate with each other, stakeholders and clients (Coulson-Thomas 2017).

Lowernberg (2009) shows the perfect accumulation of creativity and innovation that companies capitalize on in the market. The main barriers to innovation and creativity follow organizational culture, structure, and leadership in The Agency, such as:

  • Poor communication in the organization
  • Poor handling of change management
  • Delays in the organizational procedure
  • Lack of initiative to execute new changes
  • Inadequate recognition and rewards
  • Inadequate arrangements for the promotion of creative ideas
  • Unclear norms in creativity and innovation

The organizational culture is an important determinant of corporate innovation and creativity. Elements of organizational culture (i.e., beliefs, shared values, and rules of conduct) are key to generating and implementing useful and novel ideas. Employees can gradually learn about acceptable behaviors through informal and formal socialization processes. Thus, innovative organizations tend to have a culture that evaluates and emphasizes norms and values that support the creation and execution of new ideas (Coulson-Thomas 2017).

The cultural web created by Kevan Scholes and Gary Johnson, gives a way to see and change the organization's culture. It is a tool used to map the culture of the company and is a way to see and understand the various effects that influence the organization culture. This model recognizes six interrelated elements that helped Scholes and Johnson create a “Paradigm” model in the work environment (Goffin and Mitchell 2016).

 Cultural Web model

Fig: Cultural Web model

Source: https://www.businessballs.com/strategy-innovation/cultural-web-johnson-scholes/

Schein's Model of Organizational Culture is a method to interpret cultural concepts and their effects on the organization. It is a model of dynamic learning and group dynamics. He noted that culture is always in the process of change and formation, which encompasses each aspect of human functioning. Also, it is learned about the key issues of internal integration and external adaptation. It can ultimately be perceived as a set of interrelated and patterned fundamental assumptions relating to fundamental issues such as human nature, human relationships, space, time, as well as the nature of truth and reality. This model allows companies to reorganize their culture by implementing the ideas proposed by the model (Goffin and Mitchell 2016).

 Schein's Model of Organizational Culture

Fig: Schein's Model of Organizational Culture

Source: https://think-boundless.com/edgar-scheins-anxiety-assumptions-powerful-ideas-on-culture/

The Burns Model stated that culture is considered a form of social control considered by a shared phenomenon, which exists on a less visible and deeper subconscious level in addition to visible archetypes and mission statements. The corporate members have learned through socialization and long-term and relative stability. It plays a major role in forming the creative process. Additionally, a strong culture is not necessarily conducive to creating and implementing ideas in a company but needs a strong culture that encourages the rules of innovation promotion and, at the same time, encourages the social cohesion needed to turn ideas into product innovation. However, many companies focus solely on profitability and revenue, ignoring future progress and investing in innovation (Han and Park 2017).

Importance of creative and innovative management for increasing profits

The working week began with a high-profile and critical work-in-progress (WIP) session in The Agency. The session was detained in a communal area, and all staff were expected to attend. The CEO must start by rescheduling the week's results before emphasizing upcoming priorities. The Creative Services Manager then details the status of each campaign and the progress of the workflow via WIP. The Agency needs to become an innovative organization and maintain its position as the largest advertisement agency globally. Using the principles of Burns Model, the management of The Agency can develop ideas, new opportunities and markets and make innovative changes. It focuses on creativity considering the significance of winning an award, which benefits the organization's position as a whole (James et al. 2018).

The organizational climate is an indicator for judging workers' attitudes about their manager’s practices and policies. By determining the barometer, corporate practices and principles can be better integrated with business strategies and goals.

Amabile states that the organizational climate measures innovativeness supports innovation and creativity. Some of these measures promote innovation in an organizational climate. Amabile's Organizational Creativity model (1996, 1997) is a portion of the component theory of creativity. This model looks at creativity from three angles, such as team, individual, and larger work environment. In terms of team and individual creativity, he analyzes motivation, creative skills, and expertise while analyzing management practices, organizational motivation, and available resources in the work environment. The work environment is an external factor influencing the personal creativity of workers within a company.

Isaksen recognized nine dimensions of climate that have been implemented at the level of psychological, organization, and team analysis. It has been possible to distinguish these dimensions, including the level of leadership support for innovation within the worst- and best-case working environment, and expect high levels of support for corporate innovation and creativity. There is also ample evidence that the development of intentional problem-solving and creative thinking skills positively affects creativity outcomes and climate (Livermore 2016).

Pauline's integrated model of organizational climate provides a broad framework that can be implemented to specific focus areas, such as service, safety, and quality. In the context of focus, the explanatory lens will consider different cultural and climatic elements from the standpoint of the focus area. Hence, an organizational climate means that members of an organization connect with their experiences, practices, policies, and approaches and observe supported, expected, and rewarded behaviors (Mahmood, Uddin and Fan 2019).

The organizational climate reflects the behavior of workers in an organization based on recognized values, assumptions, and beliefs. Creative ideas are the first step in innovation, which leads to the acquisition of new programs, intangible services, and tangible products, and all innovation begins with creative ideas in the Agency. Thus, an innovative climate positively impacts the nature of culture and innovation that supports innovation. The people of the organization need to develop a climate that encourages innovation and create innovative ideas. Also, the organization needs to be structured to facilitate innovation without hindering the practice (Markman et al. 2016).

The Burn 2020 model for creating creative outcomes in the company

The Agency has used the Burns model to introduce innovation and creativity in the workplace. The model presents two-stage incorporate innovation and entrepreneurship at the Agency. First, exploitation and innovation. It recognizes opportunities to create new ideas, evaluate ideas, and incorporate ideas and processes related to creativity. Furthermore, the second stage is commercialization and development, which means exploiting innovative ideas together.

Critical analysis of leadership for creativity innovation and entrepreneurship at the Agency

Creative leadership is based on generating innovative ideas and applying them to enhance creativity for corporate entrepreneurs. The management of the Agency has successfully implemented transformational leadership that has adopted a fundamental model of leadership creativity. Teresa Amiable proposed a componential of creativity in this context, which shows task motivation, expertise, and creativity skills.

 Componential Theory of Creativity

Fig: Componential Theory of Creativity

Source: Adil and Ab Hamid, 2019

The model suggests creative skills, task motivation, and expertise as the foremost reasons for creativity in the company. The theory proposes that creativity requires a combination of the three elements of a model. Creativity can be maximized when involved with creative thinking in the workplace with a high level of skill and competence, including internal motivation. Transformational leaders depend on these strategies and tools to stimulate innovation and creativity (Chang, Chang and Chen 2017). The Agency applies this leadership concept to its activities, focusing on using employees' creativity. The transformational leader encourages employees to come up with creative and innovative ideas. Despite management centralization, the organization leads human resources in a democratic leadership style. The Agency uses employee motivation to create creative ideas from employees. The organization hires project supervisors to look after the production of advertising and control client services. Also, it rewards and recognizes efficient and creative workforce members (Coad, Pellegrino and Savona 2016).

Leaders can indirectly or directly influence the climate for creativity, change, and innovation by.

  • Showing interest in improving the careers of their people without focusing on improving their own career;
  • Instead of setting their own goals and directions, actively engage others in setting directions and goals and communicating with others;
  • Praising and acknowledging their significant achievements and productive performance against disregarding those who made such contributions (Sloane 2017).
  • Provide guidance and assistance in overcoming obstacles and ensure that the components can be used in the same way, rather than inspecting the assigned work status frequently;
  • Allow staff to choose a work in that area instead of focusing entirely on finding out what staffs are interested in and who can do their job best (Coad, Pellegrino and Savona 2016).
Critical analysis of readiness for change at the Agency

In the organization, change refers to activities where an organization changes their major components, such as culture, basic infrastructure or technologies used for internal operations and processes (Adil and Ab Hamid 2019).

Change management strategy leads to the successful adoption and implementation of change in the organization. This allows staff to be aware and subject to change and work effectively. However, organizational change can be difficult and costly without effective organizational change management in terms of resources and time. It can cause lower employee morale and relevant skill development. In the end, the lack of effective change management can make a company unsuccessful (Hussain et al. 2018).

The readiness for change helps organizations evaluate how they are prepared for change. It refers to the collective determination of the organization members to implement change (commitment to change) and shared belief in their collective strength to do so (the effectiveness of change). When the readiness for change in the organization is high, members are more expected to initiate change, show more cooperative behavior, exert greater effort, and exhibit greater persistence (Patricio 2017).

Change Kaleidoscope Model developed by Balogun and Hailey (2004) to help change agents who face a puzzling array of implementation decisions - design choice - that should address how change should be executed. The model proposes different design choices based on the nature of the change - some important aspects of the context of organizational change that require consideration in the design (Pawar and Charak 2017).

Organizational culture and its impact on corporate innovation and creativity

 Change Kaleidoscope Model

Fig: Change Kaleidoscope Model

Source: https://www.wisdomjobs.com/e-university/change-management-tutorial-103/the-change-kaleidoscope-13090.html

The model provides a practical and simple model to understand the change process. For Lewin, the change process creates awareness that is required, then moves on to the desired new level of behavior and ultimately reinforces that new behavior as the norm. Lewin has created a change model that consists of three steps (Hussain et al. 2018).

  Lewin's model of change

Fig: Lewin's model of change

Source: https://online.visual-paradigm.com/knowledge/business-design/understand-lewins-change-management-model/

Kotar's 8-step change model

This is one of the most important models created to understand the change management system and easily implement the change in the company. Kotter introduced the eight steps of the change process, including creating a sense of urgency, building strong leadership alliances, creating perspectives and strategies, communicating perspectives, overcoming obstacles and allowing staff for action, consolidating gains, creating short-term wins, and reinforcing change within the culture (Arshi and Burns 2018).

 Kotar's 8-step change model

Fig: Kotar's 8-step change model

Source: https://frontlinemanagementexperts.wordpress.com/2015/07/02/kotters-8-step-change-model/

The Agency aims to implement innovation through creativity in corporate entrepreneurship, which is reflected in its annual business plan, relying on the business 'steering wheel'. The organizational environment is an important factor as a business driver, so the Agency aims to build commitment to the community sustainably. To stay in touch and connect with clients by building friendly relationships with marketing strategies, the organization address the following aspects:

  • Make sure it uses the latest technologies and trends within the market
  • The R&D team must gather internal and external insights into innovation.
  • For the overall implementation of a successful implantation concept, managers need to use the potential creative potential of the workforce.

Using and implementing Lewin's change model, The Agency needs significant change management to effectively compete with strong competitors and covert ideas into winning advertisements within the market. This became a stimulus for the Agency to implement change in its strategies and policies (Provasnek et al. 2017).  

In the unfreezing phase, the Agency tends to meet with stakeholders a few days after giving an idea to share their ideas. The discussion is very informal, and they discuss the bouncing idea from each other and ideas are created through discussion. Although no one formally supervises or schedules creative meetings, there is pressure to meet because there are different workflow points where review meetings are scheduled with a wider audience. Accordingly, creative managers must participate in the creative process and encourage winning awards and maintaining agency reputation. It is recommended to maintain and be open to sharing ideas with clients and getting their perspectives (Phillips and Phillips 2017).

In the change phase, The Agency has to give a dedicated workforce to create ideas by executing specific initiatives, such as creating marketing strategies to implant innovative, creative ideas, training workers for creativity in the workplace, and integrating them with local businesses (Trapp, Voigt and Brem 2018).

In the phase of Refreeze, the human resource department of the Agency needs to conduct appropriate training courses to encourage employees to provide adequate knowledge at the performance level. Second, The Agency should learn from the competition and develop a long-term strategy with innovation to gain a further advantage over its competitors (Shepherd 2018).

Conclusion

The Agency fails to develop creative ideas for its advertising services by increasing competition. It faced problems in organizational culture are inconsistencies, ambiguity, and poor communication. It can contribute to an unpleasant and poor work experience. These can be communication and messaging problems, general dissatisfaction with leadership and business decisions, or deep structural and systematic errors that can lead to frustration and loss of satisfaction and engagement. The change can lead to fear and uncertainty, while employees can take their frustrations on top of each other.

There are barriers to creativity and innovation in the organization. Leaders need to create creativity, maximize creativity, and establish innovation in an organization. The management generally rejects creativity, making it problematic to implement the change in the agency for its development. Leaders prevent change because new ideas and innovations may fail, and organizations may shrink rather than grow. Fear of new creative ideas is often criticized, and harsh judgments are given. The main reason for this is that much high-level management is untrained and ignorant of the importance of creativity, which is why creativity is underestimated and criticized. In the company, creative ideas can be misunderstood by people who lack creativity. Therefore, these good innovations and ideas are often ignored. It takes a lot of effort and capital to create a new concept for implementation from its birth. Usually, the organization and its staff do not want to put extra effort into implementing the change and innovation.

There are many ways for corporate entrepreneurs to adapt and overcome barriers to creativity and innovation. Immovable forces include preventing new trusts and processes in the organization. The organization can surpass immovable forces through democratic and transformational leadership. The organization needs to grow its business, increase brand recognition, diversify across different domains, and implement new strategies. Also, the judgement of leaders is often a big hurdle. This includes being reluctant to use new ideas due to the fear of ridicule and failure. The organization adopts a no-mockery ideology that inspires and encourages every employee to participate and share ideas. Misunderstanding is another big barrier to creativity and innovation management. As a result, good innovations and ideas are often ignored. Therefore, to overcome this hurdle, the organization must allow all staff to use the creative side and innovative ideas. The management needs to train their staff to present ideas correctly to avoid misunderstandings.

To build a culture of innovation, the management of the Agency should close down any ideas about employees and allow them to say what they like. Managers need to encourage them to share their views and be a part of every creative process. According to the Burns model, employees feel valued when they recognize their efforts (Villaluz and Hechanova 2018). This approach will encourage workers to appreciate innovative efforts and surface the way for a culture of innovation in the organization. Innovation gives a creative thinking culture that allows employees to think outside the box and create something unique and new (Trapp, Voigt and Brem 2018). In addition, if the management wants to promote a culture of innovation in the company, they should execute incentive-based policies that reward employees for their level of innovation in their work. The organization should not limit innovation to only research and development. To execute an innovative culture and climate, it is important to include every employee of different departments in the organization. During the change, the management needs to play a major role in shaping consequences, with staff seeking general guidance and understated clues from managers on how organizational changes can influence their role. The management needs to focus on promoting employees' creative side and capitalizing on innovation for better services and products (Ucar 2018).

References

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Amabile, T.M. and Pratt, M.G., 2016. The dynamic componential model of creativity and innovation in organizations: Making progress, making meaning. Research in organizational behavior, 36, pp.157-183.

Arshi, T. and Burns, P., 2018. Entrepreneurial architecture: a framework to promote innovation in large firms. The Journal of Entrepreneurship, 27(2), pp.151-179.

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Bakari, H., Hunjra, A.I. and Niazi, G.S.K., 2017. How does authentic leadership influence planned organizational change? The role of employees’ perceptions: Integration of theory of planned behavior and Lewin's three step model. Journal of Change Management, 17(2), pp.155-187.

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Chang, Y.Y., Chang, C.Y. and Chen, C.W., 2017. Transformational leadership and corporate entrepreneurship: Cross-level mediation moderation evidence. Leadership & Organization Development Journal. Vol. 38 No. 6, pp. 812-833.

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