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cemex case study

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Introduction

Master degree Business Administration Innovation and entrepreneurship BUS 705 Essay Cemex S.A. Prepared for: Rodd Farr-Wharton Prepared by: N Spykerman Cemex is one of the largest cement and concrete companies in the world with operations in 50 countries and revenue of US$ 15.2 billion last year. It claims that its continuous growth since 1968 is caused by continuous innovation (case_p1). It can be disputed whether innovation is the only factor that contributes to innovation. The purpose of this essay is to identify the factors that contribute to successful growth in business. Examples of Cemex will be used to illustrate the topics. This essay defines what 'growth' and 'innovation' is before identifying factors and conditions that contribute to successful growth of business. These conditions and factors need to be facilitated by the organisation. The leader of a business ultimately determines how the business will be done by the decisions he makes. Therefore, the role of the leader in relation to growth is further discussed and analysed. Even though all conditions are met and a suitable leader is in place, it does not necessarily mean that all innovations will be successfully implemented. ...read more.

Middle

showed the significance of access to external information for innovation. Cemex's leader attributes a great deal of its growth to their sophisticated information systems. Additionally processes that enable experimenting with innovations are essential. At Cemex, innovation processes were facilitated through pilots of increasing size. They claimed that these pilots maximized their learning experience. The manners in which the above mentioned keys are facilitated depend on the decisions of the leader. This leads to the conclusion that leaders play a crucial role in facilitating innovation within the organisation. Organisational behaviour theories have done extensive research on the traits that characterize successful leaders. These traits have such a significant impact that companies like GE are selecting their leaders on traits rather than technical expertise. Expertise is only considered an added bonus. Mogollon (2005), GE Global Commercial Vice President for Equipment Services, contends that GE's success in competing in a global market depends on building growth leaders. Describing personal characteristics of growth leaders, Mogollon (2005) mentioned that they should be 'imaginative and courageous -essentially, self-confident'. Heunk (2005) found in his research that leaders of innovative firms had in common to be self-confident, risk taking, persistent, independent, flexible, dynamic, and optimistic. ...read more.

Conclusion

Failure of innovation varies between organisations but O'Sullivan (2002) identified that poor leadership is the most common reason of failure of implementation of innovation. The leadership of Cemex embraces and facilitates innovation within the company and the successful innovations had a considerable added value and impact on the organization and its environment. This has lead to a growth from one cement plant to an operating income of US$ 3.1 billion. . It can be summarized that growth is fostered by innovation. However, innovation needs to be facilitated through an appropriate culture, suitable processes and tools and involvement of its people and utilization of their skills. Whether innovation is facilitated within an organisation depends ultimately on the decisions of the leader. Research has concluded that a leader that is likely to create an innovative environment is self-confident, imaginative, risk-taking and persistent. These traits are necessary to initiate and to implement innovation successfully. Not all innovations have the same impact on the organisation and the external environment. The risk of failure relates to the impact that an innovation has on the organization and its environment. The decision whether to take the risk can be supported by using several valuation frameworks. Ultimately, the leader will have the most crucial affect on the level of innovation within its business thus enabling considerable growth. ...read more.

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