The Capacity to Innovate
Large companies cannot be innovative. In the wake of a global recession and expensive debts, companies are cutting down their costs so as to survive. Innovation of a large company, as per the customer insights, requires fundamental changes (Drew, Papps & Funk 2010). Innovation of a large computer so as to suit the business opportunities decreases the productivity since some departments will be controlled by others. Also, when large companies initiate practices that will innovate the company the roles of some people may feel threatened and thus they may defend their roles thus hampering changes.
It is true that large companies are destined to always be followers of smaller, more nimble start-up companies. Whereas large companies seek workers from the MBA league, small firms scout for creative talents from creative colleges (Sally, Lamoreaux & Usselman 2009). Thus, large companies find themselves following smaller firms because the smaller firms have the right people in the right places. Lastly, large companies use old-fashioned innovation strategies that often fail to implement whereas small firms use novel innovation strategies and capped with the creativity talents are easily implemented.
Innovation and entrepreneurship are impossible to foster in large companies. Large companies, unlike the smaller firms, lack the insight and strategies which can be related to the business opportunities (IDB 2001). A large company may be impossible to foster innovation and entrepreneurship because most lack the resources to let their employees work on individual innovative projects at the expense of the company such how Google license its employees 20%-time. Such projects require trust from the employees and a large company with so many employees may find it impossible to hedge its trust on all of them. Also it may be impossible because may company leaders view innovation as intangible, requiring huge resources and that which cannot be sustained.
Drew, Papps & Funk (2010, February). Retrieved October 14, 2011, from The Capacity to Innovate: http://shiftworkspace.com/TheCapacitytoInnovate.SHIFT.0210.pdf
Sally, Lamoreaux & Usselman (2009). The challenge of remaining innovative: insights from twentieth-century American business. California: Stanfrord University Press.
Inter-American Development Bank (2001). Competitiveness: the business of growth : economic and social progress in Latin America : 2001 report. New York: IDB