Nortel Telecommunications Company. Disconnection In Innovation.

Finance & Accounting
Pages 4 (1004 words)
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There are many factors that can make innovation fail, and one such factor is failure to appreciate the main objective of the innovation, and link it with the strategy of the company. This creates a disconnection between the goals of the company, and that of the innovation.


This is because the innovative product created will not reflect the goals of the organization. A good case study is the failure of Nortel Telecommunications Company to develop an innovative product that reflects its goals and objectives (Shehabuddeen, 2007). In 2005, Nortel Telecommunication, under Mike Zafirovski embarked on an innovative transformation of the company by revamping its Research and Development department, and experimenting with the emerging technologies. Nortel Telecommunications spent an approximate amount of 2 billion dollars in revamping its R and D department. 20% of this amount was directed towards emerging technology, 60% towards supporting it core business operations, and 20% in boosting its declining products. As a result of these tendencies, the company developed the 2.0 web application that made it possible for employees to interact with one another while on the internet (Gertner, 2012). However, this was an effective innovation in turning the fortunes of the company. Gartner denotes that this was because the company was experiencing a decline in its sales revenue, and the 20% of the total amount given to R and D was not sufficient enough to facilitate the development of products that will improve the market share of the organization (2012). ...
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