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Student Number: 1012871 Date of submission: 30 Dec 2012

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TABLE OF CONTENTS

SECTION Page

Introduction 3

Literature review... 5

Application. 13

Conclusion and Recommendations.. 17

Bibliography.. 18

Appendices 21

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INTRODUCTION

Established in 1962, with its fifty years development history, the University of

Technical Education Ho Chi Minh City (HCMUTE) is being considered as the top

technical education institute in the Vietnamese University System ranked by the

Ministry of Education and Training (HCMUTE Brief, 2012; MOET, 2012). Located in

the Northeast entrance of Ho Chi Minh City, the university has been assigned its

national educational mission as a major supplier for technological labours market in

Ho Chi Minh City and the surrounding provinces; and as the main training centre for

vocational teachers of the whole country (HCMUTE Mission, 2012). Currently,

HCMUTE offers 52 undergraduate and 15 graduate programmes at both master and

doctoral level to more than 26 thousand full-time and part-time students (HCMUTE

Brief, 2012).

As a large-scale organisation with over 1000 faculties and staffs, the university is

organised in a functional structure where all interactions between academic

departments, functional offices and other service centres are coordinated by the board

of president (see Appendix 1). This is a general-applied structure among Vietnamese

public universities for supporting deep specialisation in the academic departments,

functional offices and dedicated service centres in the university. This structure also

bring more decision-making rights to each functional managers and to the board of

president in operating and applying of new policies or strategies from the government

or the ministry of education and training (or MOET). However, this structure slows

down adaptation progress when experiencing changes as well as discourages the

firms innovation ability (MOET, 2010; Moran, 2012).

In order to pursue sustainable growth in the new challenging period with the rises of

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many competitors from the private sector, the current universitys key strategy is to

prolong HCMUTEs national education leading position through educational

innovations in both structure, strategy and culture. (HCMUTE Mission, 2012). Leaders

in HCMUTE are being exposed to the needs of utilising innovative ideas among

faculties and staffs, however, this is a slowly progress with many difficulties. As the

Associate Dean of Faculty of Mechanical Engineering (FME), the author has been

working for HCMUTE for ten years. Beside the duty of supporting the dean in

managing cooperative affairs and international training programmes, from 2010, the

author has been assigned the role as the institute leader in the HEEAP programme

(see heeap.org) which applying teaching innovation to enhance engineering

education effectiveness. In addition, the author is also a lecturer in Mechatronic

engineering from 2001.

This papers objectives are to evaluate the benefit and difficulties that may occur when

applying the idea of Innovation Value Chain model (Hansen and Birkinshaw, 2007)

into the university.

The following section will presents a critical Literature Review on relevant findings of

firms innovation and the Innovation Value Chain model introduced by Hansen and

Birkinshaw (2007). Then, Application details an analysis of benefit and obstacles

when apply IVC model to HCMUTE. Finally, Conclusion is followed by

Recommendation with some suggestions from the author to overcome these

obstacles.

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LITERATURE REVIEW

Today in a trend of globalisation with threads from many sources (e.g. political

policies, technology revolution, economic recession, merge and acquisition, etc.), the

ability to consistently and continuously adapt with changes and foster innovation are

vital requirements to every organisation to survive (Daft, 2007). Davila et al. (2006:3)

argue the greater innovation of the firm would provide a better opportunity to grow

faster, better, and smarter than their rivals and eventually influence trend of the whole

industry. In addition, Dooley and Sullivan (2001) suggest that the companys ability to

manage its innovation successfully in the high competitive market would be one of the

core competencies of the firm. Hence, innovation is an essential requirement for any

organisation.

Drucker (2002:95) defines innovation as a particular function of entrepreneurship and

can be applicable in existing businesses, public service institutions or new individually

started venture. Innovation could produce benefit to the company with new valuable

resources or providing potential creating prosperity on its current resources. Daft

(2004) argues, Organisational innovation is the adoption of an idea or behaviour that

is new to the organizations industry, market or general environment. In addition,

innovation is the significant initiation or improvement of the firms product, service or

process that resulted in an application of organisational and personal creativeness, as

well as intended and unintended discoveries (Rabe, 2006; Hivner et al. (cited in

Troshani and Doolin, 2007); Degraff and Quinn (2007:8)).

There are many ways to classify change/innovation. Gaynor (2002:24) argues that the

there are six typical types of innovation: architectural, discontinuous, incremental,

radical, systematical and the more recent disruptive. Chesbrough (2003) suggests

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close and open innovation. Close innovations are self-generated advances in ideas,

processes, markets or services of the firm whether open innovations are those

improvements that come from either internal or external sources. It is recognised that

the there is a trend of innovation from close to open innovation (Chesbrough, 2005).

Daft (2004:417), in the dual-core approach, considers that there are administrative

innovation and technical core innovation and furthermore, Daft (2007) categorises

innovation/change as technology, product/service, strategy/structure and culture.

Recently, Bessant and Tidd (2007) cited in Moran (2012) consider

changes/innovations in four groups: product/service innovation, process innovation,

position innovation and paradigm innovation. They are respectively changes in the

organisations products/services, the ways products/services are created and

delivered, the context where products/services are introduced and finally the

underlying mental models, which frame organisational activities. This way of grouping

helps firm consider easily long-term and short-term focused innovation types to have

a strategic plan for building its competitive advantages (Moran, 2012).

Since innovation plays a significant role in the existence of the organisation, it is

essential to review the factors in the inner contexts of the firm that majority affect on

this important requirement. Pettigrew et al. (2001) consider structure, culture and

politics as the factors that may encounter innovation. According to Gaynor (2002),

there are four elements of the firm affect on innovation, which are culture,

infrastructure, process and resources. Recently, Moran (2012) mentions strategy,

structure, culture and organisational learningas the major factors that have affects on

innovation.

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Firstly, Dooley and OSullivan (2001) point out that one of the reasons for the failure

of the company revolution projects is the misalignment of the firms strategic goals

and innovations. Daft (2004) mentions the firms strategy as a business plan which

include organisational change and innovation to accomplish the stated goals of the

organisation. Moreover, Bessant and Tidd (2007) quoted in Moran (2012) comment

that the firms business performance would not be innovated if innovation does not

support to strategy. Hence, in order to generate changes or innovations properly, the

firms strategy needs to include innovation and to be well communicated within the

organisation. Strategy is an easier and faster factor to change in the organisation

(Moran, 2012).

Secondly, Cooper (1998) argues that there is a tight connection between structure

and innovation. The organisational structure is defined as a hierarchy of managers

and the source of authority, as well as the legitimacy of decisions and actions

(Stacey, 2003 quoted in Senior and Fleming (2006:78)). Communications within an

organisation depends on its communicative environments which created by different

organisation structures. Consequently, the changes and innovations will be affected.

Organisational structure is classified into vertical and horizontal control including eight

groups: simple, functional, divisional/geographical/product, hybrid, matrix, team based

and network structures. There are advantages and disadvantages in each structure

depending on the organisations business situation and culture should there be a

suitable structure for growth (Moran, 2012). According to Daft (2007), the vertical

control structures are linked to goals of stability, while horizontal ones are related to

learning and innovation. Daft (2007) points out the cause for lacking of innovation is

that the missing of horizontal coordination between sections in vertical controlled

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structures and vice versa. Structure is also an easier and faster factor to change in

the organisation (Moran, 2012).

Thirdly, Brown (1995) reveals culture as one crucial factor, which support the firm in

reducing complexity, uncertainty and conflict of interest that normally occur inside

the organisation. Armstrong (2003) quoted in Senior and Fleming (2006) considers

organisational culture to have close relations to attitudes, assumptions, beliefs, mind-

sets and values of the firm. These related aspects may not clearly pronounced but

align with people behaviours and working styles. Van de Ven and Poole (2004:191),

Balogun and Hailey (2004) discovered that the main reason of organisational change

and innovation conflict and resistance is the cultural factor, which is moving around

existing staffs and passing around new employees through socialisation and affecting

people behaviours and working attitudes (Kreitner and Kinicki, 2004:81).

Organisational culture can allows firms to new working environment; creatively

respond to challenges and competitive opportunities or threats. However, a resilient

culture can also be a resistance to changes and innovations and discourage

adaptation (Daft, 2007). This is a factor cost the firm a lot of time and efforts to achieve

(Moran, 2012).

Lastly, the organisational learning plays a crucial role in the acquiring, educating and

applying knowledge for the firm to adapt changes and innovation to remain

competitive (Greenberg and Baron, 2000). Organisations are required to collect, attain

and develop knowledge to create and maintain their competitive advantages through

innovation to survive and develop. In other words, it is necessary to be a learning

organisation to have sustainable growth (Gravin et al., 2008). There is a tight relation

between culture and organisational learning. Cultural pattern of the firm may limit or

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stop the organisation from attaining, accumulating and manipulating knowledge (Daft,

2007). Argyris (2001) points out two cultural margins related to organisational

learning. The first issue is resistive behaviour from individuals to avoid risk-taking for

challenging the uncertainties and openness to learning. The second one is

administrative defensive procedures, which avoid employees from educating and

analysing the reflection area themselves.

Realising the importance of innovation to the organisation, several researchers has

proposed many approaches to manage change and innovation to improve competitive

advantages (e.g., Kotters 8-steps change model (Kotter and Cohen, 2002), Collinss

N-Step guide for change (Collins, 1998), etc.). Since firms with diverse strategy or in

different industry would face with challenges of change and innovation in various

ways. Hence, it is recommended that there is no one-size-fits- all model exists to

help different types of organisations to manage change and to promote innovation

competency completely (Hansen and Birkinshaw, 2007; Lindeke et al., 2009).

Recently, the Innovation Value Chain (or IVC) was introduced by Hansen and

Birkinshaw (2007) to provide a comprehensive management framework for

innovation. It is a personalised and endwise method for the firms administrators to

detect current weaknesses and focus appropriate plans and innovation tools to

overcome the problems.

The IVC model considers three phases (idea generation, idea development and

concepts diffusion) of innovation and across the three phases there are six critical

activities including internal sourcing, cross-unit sourcing, external sourcing; idea

selection, idea development and widespread of ideas (Appendix 2). There are set of

key questions and key performance indicators (KPIs) in each task for organisations to

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answer to find out their strongest and weakest activities. (Hansen and Birkinshaw,

2007).

In the first phase of IVC, Idea Generation, the innovative ideas are utilised from three

sources: inside the functional units, across the functional units and from outside of the

organisation (Hansen and Birkinshaw, 2007). If the firm cannot be able to motivate

and utilise the good ideas from its employees inside the functional unit for any reasons

then this should be a weak link. From the authors observations in Vietnam, this

activity is now growing in many companies that applying TRIZ, Kaizen or LEAN

processes. However, it is rarely seen in the public sector organisations. The firm can

have creative ideas by fostering cross-unit internal communication from different

functional unit, operational departments or production groups. However, if the firm

applies decentralised or geographical organizational structures then this may limit the

cross-unit communication and may lead to a weak link in acquiring innovation from

internal sources. For the third source of creativity, the organisation can collect or buy-

in good ideas from its customers, suppliers, competitors and other external networks.

This link is weak in such organisation with or lack of plan for managing customer

relation, supplier chains and market research (Hansen and Birkinshaw, 2007).

The second phase of IVC is Idea Conversion, where critical points is selected and

developed among several of good ideas collected from the first phase. Thus, it is very

important for the organisation to select the most suitable ideas in balancing with its

limited resources, budget and funding criteria. If the proper ideas are not well selected

due to some reasons (e.g., limitation of time or capability), the firms may subject to

losses or even drop its competitive advantages. After the selection task, the most

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suitable ideas are funded and developed into products, services or processes

(Hansen and Birkinshaw, 2007).

The final phase of IVC, Idea Diffusion, is the stage when the firm spread out the new

developed products, services or processes from previous stage to the entire internal

and external links of the organisation. It is very important for the firms executives to

successful sell the innovation ideas from inside the organisation to external bodies

especially customers. In addition, for large scaled firms and decentralised or

geographical structured firms, this phase is really taken much resources, time and

effort to spread out innovations to the whole organisation and its external networks

(Hansen and Birkinshaw, 2007).

As the IVC model has a strong empirical base for has successful derived and

implemented in five large projects in 10 years with over 130 multinational executives

and 4000 nonexecutives interviewed and survey, it is suggested that the IVC model is

a good to apply model for change and innovation management (Moran, 2012). By

applying the IVC model, the firms managers consider their existing processes for

creating innovations, pinpoint their unique challenges and develop ways to address

them (Hansen and Birkinshaw, 2007). Moreover, the model points out many ways to

accumulate innovative ideas, which are missing in other innovation management

models.

Although having many advantages, there are some drawbacks of the IVC model.

Firstly, it is seen from the KAIZEN philosophy (Karkoszka and Honorowicz, 2009) that

innovation is a close-loop process to help bringing continuously improvement while

IVC is an open-loop model for not mentioning of the return or feedbacks to previous

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phases and evaluation processes. Kusiak (2009) suggests the important problem in

innovation management is an early evaluation of many potential substitute solutions.

Secondly, IVC model missed to include strategy, structure, culture, organisational

learning, leadership, capability, time and budget that are the very important factors,

which directly affect the success organisation innovation (Dooley and OSullivan,

2001; Kotter, 2007; Moran, 2012).

Thirdly, the IVC model has shown practical projects data on large and multinational

companies or corporate venturing units, however, the author found that there are no

empirical data of the IVC applications in public organisations (like HCMUTE) or local

and small business. These organisations may benefit from applying this model to

improve creativeness.

Finally, as analysed through the IVC empirical base, the author realised that all

projects, conclusions, interviews and surveys are done in the North America and

Europe where the working cultures are far different from that in other regions on earth,

like Asia or Africa. This may not be a good innovation management model for these

areas.

To the author, the idea of applying Innovation Value Chain model to seek for new

ideas and innovation in HCMUTE is a potential project to access its innovative

capability and to determine the pragmatic difficulties and weaknesses of the

organisation to recommend most suitable solutions. The next part will discuss the

benefit if HCMUTE implement IVC and other issues in each phase of attempting the

model.

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APPLICATION

In the observation on the 3 years assessment project (from 2006 to 2008) done by

Intel Products Vietnam to evaluate the Vietnamese engineering students adaptability

to the requirements of the high technology companies, over 70 percent of graduating

students failed, nearly 20 percent partly satisfied and less than 10 percent met all the

knowledge and skill prerequisites for a new engineer (HEEAP, 2012). As the institution

leader in HEEAP programme for education innovation, the author and his team have

developed and applied many new instructional and effective evaluation methods.

However, the university, HEEAP programme and the team did not apply any

innovation management models to foster new ideas and creativeness. IVC can be a

pilot model for HCMUTE to gain benefits from analysing the each phase results and

activities crossing the phases.

At the first phase of IVC, Idea Generation, the professional, administrative and service

units in HCMUTE are excellent at gathering new ideas from people inside each unit.

In all meeting at HCMUTE, all members are required to show their opinions. New

ideas are raised and collected in weekly internal meeting of each unit and regular

discussion between the board of deans with faculties and students (twice a semester).

However, new students are very slow and limited in providing new ideas. Through

scheduled meetings, discussions and inter-department projects and businesses

between different functional units of the university, new good ideas can be

determined. Recently, in the implementation progress of the new CDIO training

programmes, over ten excellent ideas from the cross academic departments activities

has been raised and developed. Nevertheless, the chances for functional units

working together are limited in some particular activities. HCMUTE also provide many

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interactive information channels to survey and acquire new ideas and contributions

from external sources like alumni network, industries, partner universities, students

families, etc. As a result, a large number of new ideas from all units are collected and

categorised by their important rate by the Quality Management Office. By every

semester, best ten creative ideas will be rewarded. Most of which are own by HEEAP

members.

There are some issues while implementing the Idea Generation phase. Firstly, most

of Vietnamese people are shy to talk or to show their own opinions. It is not because

they do not have any good ideas but their inherent culture. This should be tackled by

providing multiple ways to collect ideas, ideas motivation plan and ideas

communication, expression training. Secondly, it is needed to have a powerful

management IT platform to collect, store and sort ideas and an idea-ranking model in

HCMUTE. The university may utilise its resources including students to build and

operate such platform and research for a proper ranking model.

In the second phase, Idea Conversion, collected ideas are refined, carefully selected

and funded for development. Hansen and Birkinshaw (2007) suggests that no matter

how large the number generated ideas are, the importance point is how to handle

them properly. In HCMUTE, the selection process for investing new idea applications

or scientific research proposals are very strict. All proposed ideas have to be carefully

analysed by a committee to make sure they are aligned with the universitys visions

and missions and screened for feasibility in three aspects: technology, economic and

competency. In average, around 60 percent of applications and proposals will fail this

step for not satisfying at least one selection criterion. This rate is quite high but

necessary for the university not to waste its limited budget and to assure enough

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funding for better ideas. As a result, the development step produces over 90 percent

of successful and contributively products and can be widely applied or transferred to

the entire university or other partners. The rests are late and below expectation

products and had to refund to the university. From 2010, all funded scientific

researches of HCMUTE must have SCI and SCIE papers.

By applying IVC, it is said that the university does not have any weak issues in the

Idea Conversion step based on findings under selection and development steps.

However, there are some points need to improve to raise up this phase performance.

First, the bottlenecked selection process was too much time consuming and too

complicated, this may discourage innovation ideas. Secondly, it is need to have a

regular progressive report requirement on funded ideas to make sure that all of them

can turn into viable products on time with expected quality. Lastly, the tight selection

and development framework with so many requirement may discourage people to

take risk in applying for innovation. Therefore, beside the regular process, it is

suggested that HCMUTE should plan for a venture capital with much faster screening

process for encouraging some crazy but beneficial promise ideas.

The final phase, Ideas Diffusion, is the phase where the successful developed ideas

are widely spreads across the entire organisation and its external networks. In

HCMUTE, this phase encountered most difficulties.

For educational innovations, there were many resistances from over 65 percent of

lecturers in spreading out new instructional methods, which have successfully

developed by the HEEAP programme across the current curricula. The authors

observation on reasons for these oppositions were partly the cultural causes for

lecturers and students are not able to accept or adapt changes easily. This problem

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can be solved by having a progressively systematic modification in the educational

programmes and applying train-the-trainers activities. The other reasons for this

struggle were inadequate competencies, low facilities, poor teaching conditions and

lack of motivations (including satisfied payment) from the university in implementing

new instructional methods, which cost lecturers much effort than the traditional

methods. To resolve these difficulties, the university must have plan to upgrade its

infrastructures, improve the motivation policies to foster innovations and provide

further training to develop staffs and lecturers capabilities.

For administrative and service innovations, less than 50 percent of new ideas were

successfully accepted by the university internal and external networks. Main causes

were found in the implementation planning and execution processes. People did not

buy-in new ideas for lacking of sufficient awareness and information of how benefit

are the new processes. Besides, the infrastructure was not harmonised with the

innovation requirements. Moreover, it was also highlighted for the importance of the

capability of the organisations executives in driving the firm to innovation and

adaptation of changes (Kotter, 2007).

It is shown that this link in HCMUTE is weak, made the university a Diffusion Poor

organisation and need to be developed. Hansen and Birkinshaw (2007) proposes a

practical way to improve Diffusion - Poor Company is applying several of facilitators

like an evangelist who uses their communicative means (e.g., direct talks, meeting,

forum sharing, consultancy, experiencing, etc.) to persuade people to accept and buy-

in new developed ideas.

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CONCLUSION AND RECOMMENDATIONS

As an endwise model, the Innovation Value Chain (Hansen and Birkinshaw, 2007) is

a good framework to support the organisation executives in identifying the weakest

links and focusing on the critical activities in the firms innovation management. After

utilising the IVC model in innovation management at HCMUTE, the weakest link in

idea in Idea Diffusion of the innovation process has been revealed. Moreover,

difficulties occurred in the implementation steps of IVC has also been targeted with

clear reasons analysed and potential solutions proposed.

Although IVC has an empirical basement on several multinational projects, it does

have many downside points for not mentioning other important factors in innovation

process. These weaknesses may reduce the effectiveness of IVC model in some

circumstances.

In the author standpoint, IVC model is not yet concluded as an appropriate model for

innovation management in Vietnam in general and HCMUTE in particular. As

mentioned before by Hansen and Birkinshaw (2007) that there is no one-size-fit-all

model for different types of firms, the author suggest HCMUTE should tailor a most

appropriate innovation management model, which may adapt IVC phases and

KAIZEN philosophy in addition with culture, leadership and other appropriate factors

to have build a close-loop process for fostering innovation.

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Hansen, M. T. and Birkinshaw, J. (2007) The Innovation Value Chain, HarvardBusiness Review

HCMUTE Brief (2012), A brief history, [Online] available athttp://www.hcmute.edu.vn/Default.aspx?ArticleId=5f2c83c1-3935-4a3b-9fed-255099442560(20/11/2012).

HCMUTE Mission (2012), The University Vision and Mission, [Online] available athttp://www.hcmute.edu.vn/Default.aspx?ArticleId=7e5e6d5c-0d4d-4aaf-b8af-80b1a1e4bed0 (20/11/2012).

HEEAP (2012), Introduction to Higher Engineering Education Alliance Program,[Online] available at http://heeap.org/info/about(20/11/2012).

Karkoszka, T., Honorowicz, J. (2009) Kaizen Philosophy: A Manner of ContinuousImprovement of Processes and Products,Journal of Achievement in Materials andManufacturing Engineering, Vol. 35, Iss. 2.

Kotter P. J., Cohen, D. S. (2002) The Heart of Change: Real-Life Stories of HowPeople Change Their Organizations, USA: Harvard Business School Publishing.

Kotter, J. (2007) Leading Change: Why Transformation Efforts fail?, Harvard BusinessReview

Kreitner, R., Kinicki, A. (2004) Organizational Behaviour, 6thed., New York: McGraw-Hill/ Irwin.

Kusiak, A. (2009) Innovation: A data-driven approach, International Journal ofProduction Economics, Vol. 122, pp. 440-448.

Lindeke R. R., Wyrick D. A., Chen H. (2009) Creating Change and Driving Innovationin Highly Automated and Lean Organizations: The Temporal Think Tank TM (T3TM),Journal of Robotics and Computer-Integrated Manufacturing, Vol. 25, pp. 879887.

MOET (2010), Hi th#o v%ti c(u trc v cc v(n *%trong c#i cc hnh chnh giod+c *-i h.c, H Ni.

MOET (2012), Quy */nh c1a bGD&2T v%khung h.c ph m3i c1a b6c *-i h.c, cao*7ng v THCN, BGD-$T.

Moran, P. (2012) Managerial Challenges of Change, Lectures Handout, University ofBolton.

Pettigrew, A. M., Woodman, R. W., Cameron, K.S. (2001) Studying OrganisationChange and Development: Challenges for Future Research, Academy ofManagement Journal, Vol. 44, Iss. 4, pp. 697-713.

Rabe, C. B. (2006) The Innovation Killer: How We Know Limits What We Can Imagine

And What Smart Companies Are Doing About This?,USA: Cynthia Barton Rabe.
http://www.hcmute.edu.vn/Default.aspx?ArticleId=5f2c83c1-3935-4a3b-9fedhttp://www.hcmute.edu.vn/Default.aspx?ArticleId=7e5e6d5c-0d4d-4aaf-b8afhttp://www.hcmute.edu.vn/Default.aspx?ArticleId=7e5e6d5c-0d4d-4aaf-b8afhttp://heeap.org/info/abouthttp://heeap.org/info/abouthttp://heeap.org/info/abouthttp://www.hcmute.edu.vn/Default.aspx?ArticleId=7e5e6d5c-0d4d-4aaf-b8afhttp://www.hcmute.edu.vn/Default.aspx?ArticleId=5f2c83c1-3935-4a3b-9fed

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Senior, B. and Fleming, J. (2006) Organisational Change.3rded., Spain: Prentice Hall.

Troshani, I., Doolin, B. (2007) Innovation diffusion: a stakeholder and social networkview, European Journal of Innovation Management, Vol. 10, Iss. 2, pp. 176-200.

Van de Ven, A. H., Poole, M. S. (2004) Handbook of Organizational Change andInnovation, USA: Oxford University Press.

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APPENDICES

Appendix 1: The organisational chart of HCMUTE

Source: HCMUTEs organization (2012)

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Appendix 2: The Innovation Value Chain Model.

Source: Hansen and Birkinshaw (2007)

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