In a nutshell, technological innovation through computerization and information technology allowed banks to centralize accounting systems and develop comprehensive database of customers, providing services online or over the telephone. The adoption of information technology through the internet and telephone brought fast and speedy and more efficient customer services. Customers no longer have to wait for hours on end to get their money. The adoption these new technologies sent signals of better and more efficient customer service identities and resulted in favourable corporate image for banks among stakeholders. Financial services
Organizational innovation: refers to the adoption of innovation in business organizations. It involves the generation and implementation of new ideas or behaviour. Organizational innovation may be founded on the adoption of a new product or service, a new production process technology, a new structure or administrative system, or a new plan of programmes (Damanpour, 1991). Following Draft (1982); Damananpour and Evan (1984); Zaltman, et al. (1973), Damanpour defined the notion of organizational innovation stating thus:
“The adoption of an internally generated or purchased device, system, policy, programme, process, product or service that is new to the adopting organization”.
Broadly speaking, the main intention of organizations in the pursuit of innovation is to contribute to the efficiency of their core business activities and operations. It is a means of re-aligning organizations to respond effectively to rapid changes witnessed in the business environment. The implementation of organizational innovation often requires the development of a new culture. The discipline of organizational innovation has been pursued by organizations in several ways. Organizational innovation evolves over time in three major ways (Fuglsang and Sundbo, 2005). First is via a value based entrepreneurial system, second via a technology based functional system and third, through a strategic reflexive system.
The value based system is the start of an exciting journey which will re-energize the organization. It occurs where organizations assume an entrepreneurial role with a spirit of independency and creativity. Writing in support of Fuglsang and Sundbo (2005), an anonymous author identified 7 factors impinging on value based innovation system. These include fear of failure, lack of step-change in growth and value, poor commitment from middle managers, poor shared commitment across boundaries, ‘the running of good ideas out of momentum’, pressure to manage measures more than value and unnecessary focus on processes and outcomes. Similarly three strategic ideas (immersion, innovation and impact) otherwise called 3i’s were put forward by the same author as a possible way out of this quagmire. First is to understand what consumers want and not sell what the organization can produce. This is conceived as immersion. Second is innovation. This is to gain insight into the business demand and re-defining resources. Third is to make innovation an organizational culture by engaging the entire organization in innovation. This equally conceived as impact.
Business organizations build systems, create new structures, lead and create change and within a short period of the change become reference points and heroic and historic figures in the industry. The change or invention led by entrepreneurial organizations does not happen accidentally. It occurs through a series of activities of trial and error and risk-taking behaviour and organizations that change the business environment with new innovations display leadership behaviours at each stage along the way. Entrepreneurial ability is, however, weaved together by organizational entrepreneurial charisma and personality relating to organizational behaviour and communication (Albert and Whetten, 1995). Essentially, this results in what could be termed organizational innovative identity. It is observed that business organizations that are involved in value based innovation systems automatically project industry leader identities and in return create similar image among stakeholders in markets.
Organizations that pursue technology based systems are mostly driven by institutional routines that lead to the production of specific goods and standardized technology-based services at specific prices and volume. Under this system, organizations are hierarchically structured through various socialization mechanisms, ranging from the patriarchal leadership of an individual person to more indirect forms of socialization, for example, in the professional organizations. Organizations that pursue the technology based system of innovation take a very careful route in the course of adapting to changes in the environment. The technological innovative policies pursued by such organizations (particularly pharmaceutical industry operators) rely heavily on empirical evidence and identifiable trajectories of change. Highly rigorous systematic routines existing within technical and natural science research are strictly and religiously followed in the course of the technological innovative process. Thus, a lot of time is consumed in arriving at the product through this innovation process. Consequently, this process sends identity signals that indicate that organizations are pursuing ‘laid down’ rigorous systematic scientific rules.
The strategic reflexive organizational system is driven by the entire organization. Business organizations operate in turbulent business environments where things occur for the good or bad at most times. As such business forecasts, may at times, fail to come true. Organizational activities in most markets are highly dependent on strategic moves made by other market operators. Organizations operating in the biotechnology industry (Van der Valk et al, 2003) for instance are forced to develop networks and strategic alliances, share information and take joint strategic decisions that affect all if they want to survive in business, but are left unsure about where to go and how to move. Strategic decisions are taken among such organizations because of the recognition that modern technological developments evolve rapidly, creating uncertainty concerning which technological fields companies need to focus on. Therefore organizations tend to specialize in their core competencies and look for appropriate partners when it comes to activities that they have less competence.
Thus, when deciding to establish partnerships, firms take into account their own needs as well as the core competencies of potential partners (Van der Valk et al, 2003). The value or rule of organizational behaviour in this context is called strategic reflexivity. Importantly, when organizations pool their resources together, share information and take strategic decisions that affect all market operators together, two conflicting signals are given. First, a harmonious identity is developed by market operators and sent to stakeholders. Second, a homogeneous identity is also drawn based on the similarities in the decision making activities of operators. Either way, organizations operating the strategic reflexive organizational system of innovation develop industry wide generic image on the one hand and a harmonious image on the other.