Innovation: Improving existing things, creating new things

Abstract

Fewer and fewer companies are succeeding in differentiating themselves in the market, either on the products and services level, or on the processes level, or on the business model level. This was shown by the results of our first survey of senior executives. Over 70 percent of the senior executives we surveyed saw little or no possibility of differentiation in their industry, either with respect to production or distribution, or on the products and services level. In other words, differences are disappearing and companies are becoming increasingly similar to one another. This is confirmed by research on neo-institutionalist theory, which is gaining influence in both management and organizational theory, as well as in sociology. This phenomenon — termed “isomorphism”¹ — arises due to increasing pressure in the market and in the institutional environment of the company. Conscious, as well as unconscious, norms, rules, and procedures lead companies to conform, rather than to be different.