Innovation's Managers and Social Maturity ABSTRACT ...

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Innovation's Managers and Social Maturity ABSTRACT ...

Tomas Bata University in Zlín FaME M. Hassanin, 2009“holistic management” (Porvazník, 2008) as a new model that contains of three pillars toachieve competence in management. The new approach tries to prepare individuals to beintegral managers to act as a team member within the organizational team. It provides a planfor managers to work globally with three skills: as a social mature, professionally efficientand practically skilled person. This paper discusses the absence of social maturityqualifications that are required for innovation’s managers. It will provide an overview ofinnovation, innovation management system, Total innovation management and socialresponsibility concepts. Moreover, it provides four case studies for companies. Two cases areexamples of organizations with absence of social responsibility and other two fororganizations that considered as pioneers in corporate social responsibility.1. InnovationThe best innovators aren’t lone genius but they are people who can take an idea that isobvious in one context and apply it in not-so-obvious context, and the best companies havelearned to systemize that process. Innovation is an integral part of any successfulorganizational strategy. Organizational changes reported that organizational innovation tookplace in order to strengthen the ability of the firm to continuously develop new products orservices and renew the firm knowledge (Menke; Xu; GU, 2007)"Innovation is generallyunderstood as the successful introduction of a new thing or method”.2. Innovation Management SystemInnovation management includes a set of tools that allow managers to co-operate witha common understanding of goals and processes. The focus of innovation management is toallow the organization to response to external or internal opportunity, and use its creativeefforts to introduce new ideas, processes or products to achieve sustainable competitiveadvantages. Innovation Management System (IMS) is a central tool for enterprises to survive.It is seen as an important mechanism for enterprises to control innovation processes and gainsustainable competitive advantages (Costello, et al, 2006). Efficiency and effectiveness ofIMS are essential to add value to the enterprise. Innovation management system consists offour major parts: Corporation, industry, government and society. The role of innovationsystem is to link and connect all parts together to achieve resources’ synergy andorganizational sustainability.Total Innovation Management (TIM) provides a theoretical framework of MIT andpresented a tri-dimensional innovation strategy model. This model provided a new vision ofTIM that consists of 3 totals: First total: all elements of innovation “technological and nontechnological “, second total: all employees are considered as innovators in all levels and alldepartments. Third total: innovation in all times and spaces (Xu, Et al, 2006).3. Innovation’s Managers3.1. CharacteristicsMcKean, J. & Staples, D., 2001, suggested that knowledge managers should have thefollowing characteristics: 1. highly educated, 2. a seasoned organizational performer, 3. aresearcher, 4. Attracted to being the forefront. 5. Motivated by challenge more than power, 6.arisk taker, 7- Seeing K.M. as a tool to make a mark within the organization (McKean; Staples,2


Tomas Bata University in Zlín FaME M. Hassanin, 20092003). Amidon and McNamara, 2000, wrote seven main characteristics and activities theknowledge’s manager should have: Context, Competence, Culture, Communities,Conversation and Common Language, Communications and Coaching (Amidon; McNamara, 2003).3.2. Holistic Management ModelHolistic management’s model introduces a complete conceptual framework formeasuring manager’s qualities and qualifications. The model divides managerial competenceinto three pillars: Social maturity, practical skills, and professional knowledge. For example:Social maturity contains: cognitive, character, temperament and somatic qualities. Practicalskills consist of: Communications, motivation, team work and time management.Additionally, Professional knowledge emphasizes: knowledge of objects, knowledgesystematic thinking, function of control and information for control. One of the mostimportant advantages of the model is that it mitigates the shortage of such categorizationframework. Most of corporations are looking for managers with highest practical andprofessional experiences hoping that will achieve maximum profit. Meanwhile, they give lessattention to the social responsibility and maturity characteristics. Citizenship of thecorporation depends on manager’s behavior towards the surrounding society. Citizenshipleads to corporation long life. Lack of social maturity can lead to a lot of corporations’scandals and could be considered as one of the most important reasons for financial crisis in2008.4. Corporate Social ResponsibilityIt is defined as "Corporate Social Responsibility is the continuing commitment bybusiness to behave ethically and contribute to economic development while improving thequality of life of the workforce and their families as well as of the local community and societyat large" according to The World Business Council for Sustainable Development.5. Absence of Manager’s Social MaturityCorporation’s Managers are people who are responsible for not only achieve maximumprofit for stakeholders but also to serve their communities honestly and honorably. Most ofmanagers have professional skills and practical experience because all organizations arewilling to hire the best. But the question of how much social mature are our managers doesexist. Lack of corporation’s citizenship can lead to many crisis and disasters. The followingcase studies are obvious examples of absence of social maturity for managers. It shows theother side of managers that can destroy their community and create crisis.5.1. ChevronIt is one of the most famous petrochemical companies in the world. It is accused of oneof the most horrible environmental violation in Ecuador. The company according togovernmental accusation is guilty for what called” Rainforest Chernobyl”. The company leftmore than 600 unlined oil pits in pristine northern Amazon rainforest and dumping 18 billiongallons of toxic production water into rivers used for bathing water. The toxic crude oil andformation water seeped into the subsoil, contaminating surrounding freshwater and farmland.As a result, local communities have suffered severe health effects, including cancer, skin3


Tomas Bata University in Zlín FaME M. Hassanin, 2009lesions, birth defects, and spontaneous abortions. Indigenous communities have beendispossessed of their lands, and millions of hectares of rainforest have been destroyed to makeway for the company's pipelines and oil wells (online source, 2009). The environmentalists,wholeheartedly backed by the Ecuadoran government, are pressing Chevron to own up thedamages and clean-up effort they maintain are the rightful dues of local villagers that havebeen greatly wronged (Jilter, 2009).5.2. EnronEnron Scandal in 2001 is an example of absence of manager’s social maturity. Enronwas established in Huston taxes, USA, as American Energy Co. it employed 22,000 and wasone of the most leading companies on the field of electricity, energy, natural gas, pulp andcommunication. The company announced 101 billion dollars in year 2000 and Fortune namedEnron as "America's Most Innovative Company" for six consecutive years (Maclean; Elkind,2003). In 2001, Enron’s managers and its Arthur Anderson financial, accounting firm havebeen accused for hiding information and financial book fraud. Problems was deeplyinvestigated and discovered that the firm management has built offshore entities that maybeused for planning to avoidance of taxing and increase organizational profits on documents.Some manager’s tried to achieve personal benefits through abusing stockholders assets andproviding misleading information. As a result of this scandal the share‘s price went from morethan $ 90 to $ 0.35.6. Pioneers In Social ResponsibilityOn the other hand, some organizations can lightening the road for their society andcreate hope. In the following two examples, we can find how social mature managers cantackle the community challenges and leave a font print on the earth.6.1. Tomas Bata CompanyTomas Bata (April 3, 1876 - 1932) was the founder of Bata Shoe Organization, one ofthe world's biggest multinational retailer, manufacturer and distributor of footwear andaccessories. World War 1 created a booming demand for military shoes, and the companyquickly became one of the prime brands. From its beginnings over a hundred years ago, theBata Shoe organization has sold more than 14 billion pairs of shoes - greater than the numberof pairs of human feet that have walked the earth. After death of Tomas Bata Jr in plane crash,his son Tomas Jr managed the company (online source, 2007). His enterprising spirit,idealism and commitment to his workers formed the company's credo. Tomas is widelyregarded as businessman with an acute sense of social consciousness. His father’s moraltestament was that the Bata Shoe Organization was to be “treated not as a source of privatewealth, but as a public trust, a means of improving living standards within the community andproviding customers with good value for their money”. Under Mr. Bata’s leadership, the BataShoe Organization has provided employment opportunities for thousands of people whowould not otherwise have had those opportunities. In many countries, Bata employees andtheir families have access to company-sponsored schools, health care and social facilities. Heand Mrs. Bata helped Mother Theresa in her crusade to counter poverty in the slums ofCalcutta. He was a capitalist with a social conscience as Sonja Bata said. Bata Company has4


Tomas Bata University in Zlín FaME M. Hassanin, 2009more than 4700 retail stores and 60 shoe production facilities in over 30 countries around theworld (Marshall; Tenenbaum, 2008).6.2. Grameen Bank in BangladeshProf. Dr. Muhammad Yunus, who is the founder and manager of Grameen (rural-Village) Bank in Bangladesh, has awarded Peace Nobel prize in 2006. His idea is very simplethat “lasting peace cannot be achieved unless large population groups find ways in which tobreak out of poverty”. Every single individual on earth has both the potential and the right tolive a decent life. Loans to poor people without any financial security had appeared to be animpossible idea. From modest beginnings three decades ago, Yunus has, first and foremostthrough Grameen Bank, developed micro-credit into an ever more important instrument in thestruggle against poverty. He created a banking system based on mutual trust, accountability,participation and creativity. Grameen Bank has been a source of ideas and models for themany institutions in the field of micro-credit that have sprung up around the world. Microcredithas proved to be an important liberating force in societies where women in particularhave to struggle against repressive social and economic conditions. Economic growth andpolitical democracy cannot achieve their full potential unless the female half of humanityparticipates on an equal footing with the male. Yunus long-term vision is to eliminate povertyin the world. That vision cannot be realized by means of micro-credit alone. But MuhammadYunus and Grameen Bank have shown that, in the continuing efforts to achieve it, microcreditmust play a major part. Micro credit is a way for providing large populationsspecifically women, disability and poor families’ small collateral- free loans. As of March,2009, it has 7.80 million borrowers, 97 percent of whom are women. With 2,548 branches,GB provides services in 84,096 villages, covering more than 100 percent of the total villagesin Bangladesh. In April, 9, 2009, rate of recovery (The amount due of the loan) was % 97.94.Today Grameen Bank is owned by the rural poor whom it serves. Borrowers of the Bank own90% of its shares, while the remaining 10 % is owned by the government (Yunus, 2009)ConclusionCorporations must differ between two periods, before and after financial crisis. Financial crisis can beconsidered as a turning point in corporation social responsibility and corporation citizenship. Therefore,corporations are in-need to new social mature managers who can establish the balance between achievingmaximum profit and supporting societies. Holistic management gives the model of management that containsthree main pillars: social maturity, practical experience, professional knowledge to allow organization toevaluate and to identify required skills for its managers. Cognation qualities such as: credibility, truthfulness,correctness, sincerity, integrity, morality, kindness, helpfulness, nobleness, humanity, generosity, honesty,loyalty, politeness, considerateness and dignity are very important for sustainability of organization.References- AMIDON, D.; McNAMARA, D. The 7C’s of knowledge leadership: Innovating our future. InHOLSAPPLE, C. W. (Ed.) Handbook on knowledge management: knowledge matters. [s.l.] : [s.n.], 2003. p.539-551. ISBN 978-3-540-43527-3.- COSTELLO, G. J. et al, Innovation Management in a Multi-national Corporation’s Subsidiary of Ireland’sEvolving Knowledge Economy [online]. Berlin: Springer, 2006. [cit. 2009-04-20], p. 25-36. DOI:10.1007/11944935_3. Available from WWW: , ISBN 978-3-540-49998-5.5


Tomas Bata University in Zlín FaME M. Hassanin, 2009- HOLME, R.; Watts, P., Corporate social responsibility: Making good business sense. World BusinessCouncil for Sustainable Development,[online]. 2000, [cit.2009-04-15], p. 1-19, Available from WWW: , ISBN 2-940240-078.- JELTER, J., Chevron case spawns a rare partnership commentary: SEC backs transparency in tacklingEcuador lawsuit [online]. Market Watch, c2009 , 8.4.2009 [cit. 2009-04-20]. Available from WWW:.- MacLEAN, B.; ELKIND, P. Smartest guys in the room: the amazing rise and scandalous fall of Enron. NewYork: Portfolio Hardcover, 2003. 464 p. ISBN 1591840082.- McKEAN, J.; STAPLES, D. Knowledge managers: who they are and what they do? In HOLSAPPLE, C. W.(Ed.) Handbook on knowledge management: knowledge matters. [s.l.] : [s.n.], 2003. p. 21-41. ISBN 978-3-540-43527-3.- MENKE, M.; XU, Q.; GU, L. An analysis of the universality, flexibility, and agility of total innovationmanagement: a case study of Hewlett–Packard. Journal of Technology Transfer [online]. 2007, vol. 32, no.1 [cit. 2009-04-20], p. 49-62. Available from WWW: , ISSN 0892-9912 (Print) 1573-7047.- MARSHALL, D.; TENENBAUM, L. Thomas John Bata: 1914 –2008 [online]. [cit. 2009-04-20]. Availablefrom WWW: .- PORTER, M. “The Competitive Advantage of Corporate Citizenship.” Speech presented at the Joseph L.Rotman School of Management, University of Toronto, April 8, 2005.- PORVAZNÍK, J. Holistic management: pillars of competence in management. Bratislava: IRIS, 2008. 447p. ISBN 978-80-89256-11-2.- Some of the "Most Wanted" Corporate Human Rights Violators [online]. Last update 2007-12-02, [cit.2009-04-20]. Available from WWW:.- Tomas J. Bata awarded in London for responsible capitalism [online]. Embassy of the Czech Republic inLondon , 5.12.2007 [cit. 2009-04-24]. Dostupný z WWW:.- XU, Q. Et al, Total Innovation Management: a novel paradigm of innovation management in the 21stcentury. The Journal of Technology Transfer [online]. 2006, vol. 32, 1-2/April, [cit. 2009-04-20], p. 9-25.DOI: 10.1007/s10961-006-9007-x. Available from WWW:, ISSN 1573-7047.- YUNUS,M., Grameen Bank, Bank of the poor, [online]. 2009, [cit. 2009-04-20] Available from WWW:.- ZELENÝ, Milan. Knowledge-information autopoietic cycle : towards the wisdom system. InternationalJournal of Management and Decision Making [online]. 2006, vol. 7, no. 1 [cit. 2009-04-20], p. 3-18. DOI:10.1504/IJMDM.2006.008168. Available from WWW: . ISSN 1741-5187.Summary:Manager’s social maturity qualifications play a great role in determining the visionand strategy of the organization. Managers with social maturity can benefit all stakeholderssuch as: owners, stockholders, society and government. Absence of social maturity can lead tomany financial and environmental crises.6

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