Towards a New Theory of Innovation Management: a Case Study Comparing Canon, Inc. and Apple Computer, Inc.
Journal of Engineering and Technology Management, 8 ( 1991 ) 67-83 Elsevier
Towards a new theory of innovation management: A case study comparing Canon, Inc. and Apple Computer, Inc.
Ikujiro Nonaka
Institute of Business Research, Hitotsuhashi University, Kunitachi, Tokyo, Japan
Martin Kenney
Department of Applied Behavioral Sciences, University of California, Davis, CA 95616, USA
Abstract
This paper argues that innovation can be best understood as an information process which is then concretized as a product that meets demand. Two very different firms, Canon Inc. and Apple Computer Inc., are used as case study illustrations. Innovation does not proceed through logical deduction, but rather is furthered by the use of metaphors and analogies. The bureaucratic and staid structures of the firm can be challenged and broken up to provide the space for innovations to emerge. The leader’s role in the innovating firm is as a catalyst and facilitator, not as an allknowing despot. The importance of innovations is not merely in the new product, but also the “ripple” effects of innovations which can propel the firm into a self-renewal process. Keywords: Innovation management, High-technology, Case study.
1. Introduction Increasingly, corporate competitive success is hinging upon the effective management of innovation. Innovation has been the object of considerable academic study from a variety of perspectives. However, innovations are usually considered as objects. We choose to look at innovation differently. For us, innovation is a process by which new information is created, and it is this information that is embodied in the product. To understand this process we conceptualize human beings not merely as information processors (Galbraith, 1973), but more importantly as information creators. Inherently, innovation is the process by which new information emerges and is concretized in a product that meets human needs1. The healthy firm is a negative-entropy system
Towards a new theory of innovation management: A case study comparing Canon, Inc. and Apple Computer, Inc.
Ikujiro Nonaka
Institute of Business Research, Hitotsuhashi University, Kunitachi, Tokyo, Japan
Martin Kenney
Department of Applied Behavioral Sciences, University of California, Davis, CA 95616, USA
Abstract
This paper argues that innovation can be best understood as an information process which is then concretized as a product that meets demand. Two very different firms, Canon Inc. and Apple Computer Inc., are used as case study illustrations. Innovation does not proceed through logical deduction, but rather is furthered by the use of metaphors and analogies. The bureaucratic and staid structures of the firm can be challenged and broken up to provide the space for innovations to emerge. The leader’s role in the innovating firm is as a catalyst and facilitator, not as an allknowing despot. The importance of innovations is not merely in the new product, but also the “ripple” effects of innovations which can propel the firm into a self-renewal process. Keywords: Innovation management, High-technology, Case study.
1. Introduction Increasingly, corporate competitive success is hinging upon the effective management of innovation. Innovation has been the object of considerable academic study from a variety of perspectives. However, innovations are usually considered as objects. We choose to look at innovation differently. For us, innovation is a process by which new information is created, and it is this information that is embodied in the product. To understand this process we conceptualize human beings not merely as information processors (Galbraith, 1973), but more importantly as information creators. Inherently, innovation is the process by which new information emerges and is concretized in a product that meets human needs1. The healthy firm is a negative-entropy system
References: Abernathy, W., 1978. The Productivity Dilemma: Roadblock to Innovation in the Automobile Industry. Johns Hopkins, Baltimore, MD. Aoki, M., 1989. Information, Incentives and Bargaining in the Japanese Economy. Cambridge University Press, Cambridge. Baumol, W. and Benhabib, J., 1989. Chaos, sign)ficance, mechanisms, and economic applications. J. Econ. Perspect., 3(1): 77-105. Burns, T. and Stalker, G., 1961. The Management of Innovation. Tavistock, London. Canon, Inc., 1987. Canon Handbook. Canon, Inc., Tokyo. Daft, R. and Weick, K., 1984. Toward a model of organizations as interpretation systems. Acad. Manage. Rev., 9(2): 284-295. Florida, R. and Kenney, M., 1990. The Breakthrough Illusion: Corporate America '.s Inability to Link Production and Innovation. Basic, New York. Galbraith, J., 1973. Designing Complex Organizations. Addison-Wesley, Reading, MA. Guterl, F., 1984. Design case history: Apple 's Macintosh. IEEE Spectrum, (December): 34-43. Imai, K., Nonaka, 1. and Takeuchi, H., 1985. Managing the new product development process: How Japanese companies learn and unlearn. In: K. Clark, R. Hayes and C. Lorenz (Eds.), The Uneasy Alliance. Harvard Business School, Boston, MA, pp. 337 376. Kenney, M., 1986. Some observations on the structure of the U.S. and Japanese biotechnology industries. Hitotsubashi Bus. Rev., 34 (December): 20 37 (in Japanese). Kodama, F., 1988. Japanese innovation in mechatronics technology. Sci. Public Policy, 13 (1): 44 51. Latour, B. and Woolgar, S., 1979. Laboratory Life. Sage, Beverly Hills, CA. Machlup, F. and Mansfield, E. (Eds. ),1983. The Study of Information. Wiley, New York. Moritz, M., 1984. The Little Kingdom. Morrow, New York. Nitanda, H., 1984. Personal interview by I. Nonaka (November 28). Nonaka, 1., 1987. Managing the firm as an information creation process. Working paper, Institute of Business Research, Hitotsubashi University, January. Nonaka, 1., 1988a. Creating organizational order out of chaos: Self-renewal in Japanese firms. Calif Manage. Rev., 30(3). Nonaka, 1., 1988b. Toward middle-up-down management: Accelerating information creation. Sloan Manage. Rev., (Spring): 9-18. Nonaka, 1. and Yamanouchi, T., 1989. Managing innovation as a self-renewing process. J. Bus. Venturing. Parsons, T., 1951. The Social System. Free Press, New York. Peters, T., 1988. Thriving on Chaos. Macmillan, New York. Prigogine, l., 1980. From Being to Becoming. Freeman, San Francisco, CA. Prigogine, l. and Stengers, I., 1984. Order Out of Chaos. New Science Library, Boulder, CO. Quinn, W., 1985. Managing innovation: Controlled chaos. Harv. Bus. Rev., (May-June): 73 80. 83 Rose, H. and Rose, S. (Eds.), 1976. The Political Economy of Science. Macmillan, London. Saito, K., 1984. Personal interview by I. Nonaka (November 28). Schoonhoven, G. and Jelinek, M., 1990. Dynamic tension in innovative, high technology firms: Managing rapid technological change through organizational structure. In: M. Glinow and s. Mohrman (Eds.), Managing Complexity in High Technology Organizations. Oxford University Press, New York, pp. 90~ 118. Schumpeter, J. (abridged by Rending Fels), Busines.s Cycles. McGraw-Hill. New York. Sculley, J., 1988. Odyssey. Harper and Row, New York. Simon, H., 1969. The Science of the Artificial. Free Press, New York. Takeuchi, H. and Nonaka, I., 1986. The new product development game. Harv. Bus. Rev., 64 (1): 1.17 146. Tanaka, H., 1984. Personal interview by 1. Nonaka (September 10). Usher, A., 1954. A History of Mechanical Inventions. Boston: Harvard, IJniversity Press, Boston, MA. Walton, M., 1985. Mind behind the Mac. Bay Area Computer Currents, (May 7): 13-28. Young, J., 1988. Steven Jobs: The Journey is the Reward. Scott Foresman, Glenview, IL