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Innovation Importance in Company’s Competitive Advantage Essay

Today, many organizations consider change and innovation as defining forces of their competitive edge (Hana, 2013). Nonetheless, cultivating any modifications in the large-scale organization is a complicated process associated with a plethora of challenges. Majorly, they pertain to internal inertia and resistance to change. Thus, the existence of this phenomenon leads to subsequent failure of the Balanced Scorecard’s (BSC) implementation. To discover the working mechanism of the BSC and resolve this problem, the essay will describe the BSC’s initiatives implemented at BAE Systems. The company was created as a result of a merger of Marconi Electronic Systems with British Aerospace, and today, it is one of the largest defense contractors worldwide (Murby & Gould, 2005).

With the help of the analysis of this company, it is possible to see that the change endeavor requires the management to pay assiduous attention to employee resistance, as it is one of the major obstacles (Yilmaz & Kilicoglu, 2013). Thus, relying on the right strategy can ensure the sufficient integration of a new cultural initiative and its acceptance. In the context of this paper, seven steps of the BSC’s implementation will be described in the context of BAE’s cultural change program to understand potential approaches to deal with internal resistance while depicting a central focus on stakeholders as a key difference. In the end, conclusions are drawn to summarize the main findings of the essay.


One of the central factors that triggered innovation at BAE was the implementation of the cultural change program. Apart from starting gaining profits since 1994, the management of the company defined its performance as “lackluster”, and this finding required them to focus on the development of effective control and monitoring mechanism to enhance its financial position (Murby & Gould, 2005, p. 27). They clearly understood that employees were the main assets of the company, and dealing with their resistance was one of the vital aspects of the change program. To support this process, the management relied on BSC’s framework and developed a seven-step process, and it helped them reach the alignment of the employees’ actions with the mission statement. The initial step was to evaluate the company’s position in the market and depict its strengths, weaknesses, opportunities, and threats (SWOT).

The second step implied involving senior management in the decision-making process to review the key elements of SWOT (Murby & Gould, 2005). After that, the CEO selected 130 employees to implement the project (Murby & Gould, 2005). It could be said relying on this strategy is rational since employees are the core of all processes, and achievement of particular goals is highly dependent on their commitment and satisfaction (Irefin & Mechanic, 2013). These initial steps assisted in creating a bond with the workforce and managing change from the employees’ viewpoint while dealing with resistance simultaneously.

The third step implied creating a shared vision to understand the company’s direction and current gaps that had to be filled (Murby & Gould, 2005). This process helped determine the core of the company’s strategy that would be reflected in its BSC’s model. The fourth phase implied communicating the proposed initiatives to different levels of employees in the organization. In this case, the selected group developed value statements that became the enterprise’s BSC, and they implied that people were the main assets, the performance was a definer of success, partnerships were the future, and innovation was a competitive advantage (Murby & Gould, 2005). With the help of the BSC, these values, and continuous encouragement of idea-sharing, it was possible to deal with the potential resistance of the employees and create benchmarks for the company to attain.

Logically, the subsequent step will imply designing long and short-term goals, as they not only help reach financial prosperity but also modify the organizational climate in the desired way (Schneider & Barbera, 2014). In the context of BAE Systems, the company divided the existent long-term goals into a series of short-term ones (Murby & Gould, 2005). It allowed BAE Systems to focus on individual aims and behaviors while using them as principal motivational drivers. Relying on this method helped the company control and monitor the implementation of each phase and ensure the effective application of the BSC model and its main initiatives to avoid internal resistance.

The sixth step was the actual implementation of the designed framework. To make it successful, the management of the company created “value teams”, and it differentiated it from the original BSCs framework (Murby & Gould, 2005, p. 28). Along with a manager, one of the representatives of 130 employees was leading a group (Murby & Gould, 2005). Using this method was beneficial since it helped view the process from the inside while sustaining cultural change in the organization. Due to the vehement interference with the principles of action learning and research, this strategy assisted the employees in discovering advantages of change and innovation while aiming at organizational dynamics, flexibility, and commitment as critical definers of success (Abbot & Mayes, 2014; Buschgens, Bausch, & Balkin, 2013). Overall, it could be said that appointing leaders, who participated in value creation, could be considered as the most reasonable strategy when dealing with internal resistance.

The last step was focused on finding a connection between the cultural change program and the overall organizational performance and success. As it was mentioned earlier, BAE Systems utilized the BSC and employed it to establish benchmarks (Murby & Gould, 2005). To understand their influence on the enterprise, it was necessary to find their effect on the financial performance of the company, and positive shifts in stock prices and revenues signified success. The level of change acceptance, employees’ attitudes, and the increase in market share were also discovered as valuable indicators. To ease and enhance monitoring and control procedures, the company used a “traffic-light system” to describe the status of the project with the help of color, and this approach is often utilized in the BSC (Murby & Gould, 2005). Overall, this step not only ensured the successful implementation of all processes but also helped react to resistance to change promptly.


In the end, based on the analysis of BAE Systems, the BSC framework can be actively used to deal with internal resistance to change. In this instance, initially, the company relied on its basic principles and established a seven-step process to determine values and support change implementation. Nonetheless, the CEO of the company chose an entirely different perspective while focusing on various stakeholder groups such as employees. Discovering the workforce as the central asset of the company and defining its direct correlation to the corporate financial performance helped the enterprise enhance its competitive advantage. In turn, this case showed the flexibility of the BSC while highlighting its similarities with the performance prism presented by a focus on stakeholders’ preferences. Overall, it could be said that BAE Systems is a bright example of using the BSC in dealing with the resistance issue and motivating employees, and I believe that their efforts paid off to a great extent due to their rapidly growing market share and financial excellence.


Abbot, C., & Mayes, C. (2014). Action learning for professionals: A new approach to practice. Action Learning: Research & Practice, 11(1), 72-80.

Buschgens, T., Bausch, A., & Balkin, D. (2013). Organizational culture and innovation: A meta-analytic review. The Journal of Product Innovation Management, 30(4), 763-781.

Hana, U. (2013). Competitive advantage achievement through innovation and knowledge. Journal of Competitiveness, 5(1), 82-96.

Irefin, P., & Mechanic, M. (2013). Effect of employee commitment on organizational performance in Coca Cola Nigeria Limited Maiduguri, Borno State. Journal of Humanities and Social Science, 19(3), 33-41.

Murby, L., & Gould, S. (2005). Effective performance management with the balanced scorecard: Technical report.

Schneider, B., & Barbera, B. (2014). The Oxford handbook of organizational climate and change. Oxford, UK: Oxford University Press.

Yilmaz, D., & Kilicoglu, G. (2013). Resistance to change and ways of reducing resistance in educational organizations. International Associations of Social Science Research, 1(1), 14-21.

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"Innovation Importance in Company's Competitive Advantage." IvyPanda, 6 Sept. 2020, ivypanda.com/essays/innovation-importance-in-companys-competitive-advantage/.

1. IvyPanda. "Innovation Importance in Company's Competitive Advantage." September 6, 2020. https://ivypanda.com/essays/innovation-importance-in-companys-competitive-advantage/.


IvyPanda. "Innovation Importance in Company's Competitive Advantage." September 6, 2020. https://ivypanda.com/essays/innovation-importance-in-companys-competitive-advantage/.


IvyPanda. 2020. "Innovation Importance in Company's Competitive Advantage." September 6, 2020. https://ivypanda.com/essays/innovation-importance-in-companys-competitive-advantage/.


IvyPanda. (2020) 'Innovation Importance in Company's Competitive Advantage'. 6 September.

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