Analogy of a Basketball Game

Objectives of Firms

We can use the analogy of a basketball game to represent the main objectives of firms. Firms must play offensively by taking the initiative to innovate. They must also be defensively adept by anticipating and adapting to changes. Failure to do so results in firms growing redundant after losing the objective of the game: their profits and market share. Both facets are equally important they complement each other. Similar to a turnover in basketball, it is important for firms to swiftly transit between both aspects. For instance, the article mentioned that the strong focus on improving a dominant design through incremental innovation leads to a lack of brainstorming. This results in firms being caught off-guard when a radical/architectural innovation emerges. I think the root of the problem lies with firms viewing the two aspects separately. Prioritising one aspect should not lead to neglecting another. From a managerial perspective, we must be able to identify the key elements required for success such as how to best hedge against risks.

“Components” and “Architecture”

The article discusses how innovations are created through changes in components and architecture. I find this a useful metaphor for a typical workplace setting where we select workers best suited for particular jobs and group them in a department. This is similar to selecting components in technology. The organisation and interactions of the different departments (which may have sub-teams) can be viewed as the architecture of the organisation. If I were to strictly apply the metaphor discussed in the article, we can observe that the concept of changing the “components” and “architecture” of the firm may actually result in technological innovations. While this might be true in some companies, a more significant result of this concept is that firms are better poised to resolve problems faced. The appropriate alteration of “architecture” to create architectural innovation is useful in resolving problems of a greater magnitude. For instance, the Monetary Authority of Singapore designated tax crimes as a predicate offence in 2012 and financial institutions were instructed to develop a risk based assessment to determine the likelihood of clients committing such offences. It was a challenge to adapt the existing Anti-Money Laundering framework and workflow processes to suit the current requirements. Thus, departments within the bank and their respective methodologies were restructured to resolve this issue. This helped create an “innovation” to adapt to change and solve the problem.

Macroscopic Application of both metaphors

This application of both concepts can be clearly seen in Singapore’s strategic shift towards a knowledge based economy. The Government encourages entrepreneurship by providing incentives