Macroeconomic strategy and innovation

Modern societies advanced experience a complex transition to new models based on knowledge and sustainable development, which put in front of managerial activity problems of economic and socio-human nature and ask what the appropriate responses. Appearance of management is related to a context characterized by:

a. the prevalence of societal reproduction processes, the industrial type generalizing and evolving into the same basic structure, change involving a process of maturation and consolidation within the same features: early industrial era societies, and then, the mature industrial societies or super industrial (A. Toffler);

b. the change was generated by innovation "growth" ("Incremental innovations") which increased the effectiveness of techniques used in production, of the general, same products;

c. the scope of change was, therefore, mainly, technical (equipment), which have weak effects on other dimensions of the enterprise;

d. the practiced management was the technocentric (taylorist-fordist), a management of production and consumption standardized massificate, in which the technology factor (determined) minimum general shift in product domains, organization of human resources.

The transition to a society driven by knowledge transforms the socio-economic context in which industrial enterprises will operate. The change becomes the permanent mode, normally, promoted conscious and based on knowledge. The management of change of innovation type knowledge-based is a management that consciously, systemic, permanent, promotes innovation successful (P. Drucker). Such change management (management of innovation, called by P. Drucker, entrepreneurship) is developed in relation to enterprises context (an important role playing the context as interpretation of what is outside the organization and it enters into relationship) and the decisions of management specifically for each company.

Strategic change management does not provide unique "recipes", ready developed to ensure success, but to create (and apply) on the preparation of management team (coaching), as well as aspects of organizational culture of the manager (risk taking, courage to face uncertainties, assessment of change, the art of mobilizing staff, etc.). Therefore, management no longer refers primarily to the smooth functioning of an organization in its current model, but in design and promotion the change the company to make effective and efficient in terms a changing future. In the present conditions when the change becomes the element of normality and, also, of necessity, the management theories are experiencing a fundamental change in their outlook and analysis practice.

But not every change is sufficient, but one that is placed on the new paradigm of change namely innovation change as based on knowledge. In the globalized process of shift from industrial type societies to those of knowledge, the resource base of the new economy, knowledge is by nature in constant change, creating the need and possibility of innovation. The process of knowledge is a differentiated process and unitary. The differentiation consists of its deployment on a flux (trajectory) from the breakthrough (entrance in an area where we have only few guiding assumptions, for example: the study of nonlinear cognitive processes and implementation of computer other than the linear (Von Neuman), to the basic research, applied and technological. The result of scientific - technological research is the invention: achieving of new (worldwide) in a given field.

The innovation is the social process of dissemination of the invention in various fields (direct innovation and transfer-application of the invention other than that it was designed). Knowledge-based management is, therefore, the management of change of the type innovation based on knowledge, more precisely, the specific management for transition to the knowledge society becomes the management of change based on innovation intensive cognitive.

What is the intensive cognitive innovation? I saw that every innovation is the broadcast of an invention that has as generator a new idea. So, any innovation is based on knowledge (empirical or scientific). New innovations are not only generated by knowledge, but - what is essential - there are dependent on algorithms (programs) that involve knowledge. The light bulb was an application of scientific knowledge, which was based on intensive knowledge.

Automated systems and robotic technologies - in general - the information and communication technologies (ICT), biotechnology etc., works on programs (software) that is actually an expression of knowledge (such as know-how). What "works" is the program (electricity is only a support). Product innovation involves also an intensive knowledge. Unlike innovation in massificate production (which focuses on technology), custom production involves intensive knowledge on man and his lifestyle. In the innovation of massificate economy, changes in the product are not essential, increasing, to a lesser extent its market presence. (Scheme 1)

Scheme 1 Innovation of product in massificate economy

Let's make a comparison between growth innovation ("incremental innovation") and hard-cognitive in terms of, for example, making clothing. In mass production, the same model can be produced in large amounts for a very long time. Some innovations can be introduced to extend more than the presence on the market. In the customized production (Scheme 2) products have a short lifetime, a wide variety of knowledge about a major motivation, variety of customer groups and differences in how to use clothing (at different occasions, in relation to sex, age, cultural level, religious beliefs, traditions, climatic characteristics, etc.).

Scheme 2 Innovation in personalized product

Innovation-intensive cognitive occurs at different levels (Scheme 3): management (strategic), in the product, process, organization and human resources.

Scheme 3

After innovation management (strategic), which generates innovation in all other areas, the most important is on the human resources.

Strategic innovation, for example, the transition from technocentric management (massificate) to the custom involves a radical change of human resources. Changing the enterprise in terms of transition to knowledge-society and sustainable development is a typical strategic management of change cognitive-intensive, requiring a deep knowledge of its many dimensions, processes, actors of society. Strategic management of objectives is considering the means through which goal will be achieved they are an answer to the question "how?"

The purpose of change may be the increase of competitiveness and performance by switching from standard production, massificate of a clothing enterprise to production with a high degree of customization. To achieve these purposes, the goals may provide: replacement (gradual) of operations division of labor with the work of creating a unified product from beginning to end: the introduction of computers to achieve attended design and assisted production, product qualification workers (not operations); employment and remuneration of staff negotiated on the principle of competence; transition to a marketing-based consumer lifestyle etc. These changes involve a multidimensional construct based on enabling culture of businesses and its process of organizational knowledge. Intensive-cognitive motivation is the means to change, but the goals must be prepared very carefully.

Do not confuse the goal with the objective. The goal responds to question "why?," "Why (should) we to make changes?" in other words "What benefits do we get by promoting change?" The purpose is expressed through performance. The performance is the practical expression of the purpose of change. The change is measured by its efficiency, the purpose and the ratio of the accomplished performance. Thus an efficient change refers to the evaluation of change management. If the goal is minor, performance can be large (a minor effect is easier, but performance will express low desirability). Therefore, the change management is measured through its effectiveness, the ratio between performance and values underlying purpose. A change that aims (purposes) only to improve ecological results can have large efficiency, but less effective than a strategic change with the goal the transition to personalized management, improved report with environment, meeting the top employee's personality, new relationships with shareholders etc. In this case, the goal is more complex, more difficult, but if performance would fall within the scope, management effectiveness will be much higher.

The management of strategic change projects the performances on new paradigm, as an expression of management innovation itself. As in accordance with EU requirements now placed in front of companies,^[1] the performance are required to be designed and made on a large scale value, as matters involving the internal order and external ones (societal) firms. The efficiency begins to be pursued as societal efficiency (the purpose assuming fundamental changes to the effects on natural and social environment and as societal efficacy, goal values extending to the extra-economic internal. Thus, the performance will track companies practicing change management (strategic) are of internal order (company) and external (societal).

• Performance of internal (company) can be: economic, innovation, production and use of knowledge, knowledge transfer, the socio-human order, etc.

• Performance of external (societal) concerns aspects: socio-human partnership and market positioning, environmental protection and restoration, the creation of new jobs, to ensure competitiveness of rational economic etc.

• The performance of the company (internal):

• economic performance: return (net gain) and reference to other companies; the cost price of production; productivity; variety of services and goods; coverage of market demands.

• the degree of innovation performance (comparing to the situation of competitors): in management; in the product (goods and services); in the processes; in human resources; in organizing.

• performance on knowledge production and its use: operation of its sector of research - innovation - development; applied achievements and their effectiveness in terms of competition and economic (cost / benefit);

• performance regarding the transfer of knowledge and its use; the operation of transfer and adequacy of knowledge sector, implementation (application) and their effectiveness in terms of competitive and economic; outsourcing of knowledge and innovation, competitive level, ensuring intellectual property rights, return;

• socio-human internal performance (adequacy of social internal performance to economic performance and innovation): satisfaction of employees, motivation system and its criteria; transfer of knowledge between employees and career development; system of promotion and participation; communication and leadership;

External performance:

• Socio-human external performance: contributing to the social processes of man; development of personality; contributing to the development processes of social cohesion; implementation requirements "corporate social responsibility"; contributing to raising living standards;

• performance of the partnership and the business position market: partnership with suppliers of raw materials, semi-manufactured technology; partnership with other companies in alliances, clusters, networks; partnership with research and education; partnership with financiers (venture capital);

• performance on environmental protection and reconstruction: environmental performance is an essential dimension of responsibility corporate social and societal effectiveness;

• performance of job creation and competitiveness of the national economy: feature of the social functions (external) is participating in achieving sustainable development of the country, which means ("Lisbon Strategy 2000") jobs and greater complexity.

What is the change management (strategic)? To answer this question it requires, first, to explain the meaning of the two terms of expression. While it may seem curious, the definition (or just characterization) of management and change involved discussions. These discussions have their basis in the first place, in the different complementary perspectives by which we can interpret, in general, reality and its knowledge.

Without going, therefore, to address the issue, note that management is a kind of socio-cultural activity generated on the basis of mutual power relations between the owner (manager) and employees (in which prevail, in general, the power owner) that the interests of both parts are negotiated and brought to the level of understanding to pursue its interests by ensuring that specific features of the organization (enterprise).

If an enterprise works better, then both owners and employees benefit. The management model is not seen in the light of conflict (owner wins if employees lose and vice versa - the "bread end" from which the part is no longer the other), but that of the partnership (both owner and employees can gain or lose together-model "bread-size" so that all can take more or least). Management, as an expression of interest negotiated involves a vision, a "state of mind" regarding how to interpret the interests and how that the company can meet.

Before and above what management provides like the means of meeting the requirements of the proper functioning of enterprises, it is a vision, a concept, a way to interpret the context and positioning the company in a context, a state of mind on how to act and react in this context: EU defines as management. "Entrepreneurship is the mood and process to create and develop economic activity by combining ownership risk, creativity and / or innovation through effective management, the new or existing organizations."^[2] To distinguish (without break) between the theoretical aspect of management and the management practice (sometimes made spontaneously, empirically, sometimes, for large organizations, in particular, the application of management concepts and theories.

In terms of theory, we present management as a whole different (sometimes even contradictory) of concepts, theories, instruments for action. There is not a single conception and management theory, but different types of approach in relation with the socio-cultural (national models management), type of business (economic branch, size, level of technology, etc.), particular market segment that acts - especially - the choices made by the very organization (management team).

There is a rich and varied body of possible management approach (in which the creative initiative brings permanent new elements), from which the manager (management team) selects and uses (not "apply") differentiated what he believes it fits the vision, situation and strategy. Sometimes the same company can practice different types of management to the extent it chooses to develop a strategy or another.

The strategic choice of management is the essential element that proves the quality and the professionalism of management (team). Of course, different choices can lead to special performances. A clothing company may be performance remaining in the practice of standardized management of production and mass consumption. The same company may be efficient by choosing the transition to personalized management.^[3] Management theory is not the discipline to learn and apply, but a complex set of scientific approaches, attitudes based on imagination, creativity, courage, risk, vision, lucid analysis, etc. and fantasy. As theory, change management involves in the highest degree, nonconformity, creativity, selective thinking, and the courage to contradict what appears to be well and proved definitively demonstrated. The change of management itself may be part of practice management (in its broadest sense). "Three key factors in industrial competitiveness retain special attention: knowledge, innovation and entrepreneurship."^[4]

The change management is built today, on this tripod: knowledge is constantly evolving and involves innovation, innovation requires entrepreneurship. The practice management is itself particularly distinguished. A large theorist said that "there is no management but managers" - wanting to show that each manager (in relation to skills) used in its own terms what is present in the "body theory" of management. Management is not taught and applied as the rules regarding the four arithmetic operations. The first thing you need to learn as manager is that management (as a theory) does not provide recipes, but just possible elements to be used if it meets the manager's intentions.

• [1] It is a concept of "corporate social responsibility" by the company integrates social and environmental interests in its business operations and in its interactions with its shareholders on a voluntary basis (Promoting an European framework for Corporate Social Responsibility, European Commission, 2004, p.8)
• [2] *** (2003), Green Paper, Entrepreneurship in Europe, COM, 22 final, 6.
• [3] *** (2005), "The Fabric of Society," European Innovation, European Commission, 5 (and 7).
• [4] *** (2002), Industrial Policy in an Enlarged Europe, Com, 714 final, 20.