Abstract the factors that push the worldAbstract the factors that push the world

Abstract In today’s complex, dynamic and increasingly competitive world, entrepreneurship and innovation are the main driving forces of economic development. According to Joseph Schumpeter (1939), one of the greatest economists of the first half of the 20th century, “innovation is the only function which is fundamental in history.” The world is changing at an unprecedented pace. Enhanced globalization, integration of markets, freer trade and capital and labor mobility are just a few of the factors that push the world to a place where only the competitive organizations will prosper, if not survive. Those changes require adequate actions from the business stratum. Drucker (1985) put it nicely, stating that “the best – perhaps the only – way business can hope to prosper is to innovate.” In this context, the aim of the paper is to examine and uncover the most impactful factors for creating an organizational structure, in which innovation becomes an integral part and feels like a second nature. In its endeavors to do so, the paper also aims to assist business owners and managers in understanding their role in the process of creating innovation and advise them indirectly on several fundamental practices in their management to take their organizations to a place of continuous innovation.  Introduction The rather conventional understanding of innovation as being a function of the Research and Development (R) department has long been outdated. The most successful companies understand that innovation is not solely a responsibility that is put on the shoulders of the R team. Rather, it is a collective effort and a way of operating that encourages innovation to arise on all organizational levels. In the past, management has focused on cost efficiency, lead time reduction, and quality improvement for competitiveness (Rejeb et al., 2008). However, in a fierce business environment like today’s, quality and cost efficiency are necessities, but are not sufficient for continuous competitiveness. Companies must incessantly innovate, develop new processes, products and services, and deliver more value to their customers in order to stay competitive. The paper examines the concept of innovation with the purpose of drawing a clear picture for business owners and executives as to what the main sources of innovation are and what the management’s role in the process of creating innovation is. In doing so, it aids them in building the foundations of their companies in accordance with the practices and structural specifications of an innovative organization. For that reason, the paper takes a more holistic approach towards examining the issue, taking into consideration the most universal aspects of innovation. Thus, no specific organization or market has been studied in isolation. In its outset, the paper outlines the methodology used in studying the topic of interest. Thereafter, the concept of innovation and the main factors that lead to the creation of innovation have been elaborated on in some detail, including the most common definitions and sources of innovation identified in recent literature. Subsequently, the role of the management has been examined, taking into account different leadership styles, the importance of transformational leadership in particular, and corporate culture. The link between the concept of innovation and the role of the management has been drawn in the succeeding section. The results of the study are then summarized in the conclusion.  Methodology The methodology used in studying the factors that impact the creation of innovation in an organizational context and the role of the management in the process is solely built around information obtained from secondary sources such as books, articles, surveys, journals and accredited websites. Thus, primary sources of information have not been collected – that is, no interviews, surveys or qualitative studies have been conducted in studying the problem at hand. The reason for this is the limited amount of time and resources as well as the size of the project. Moreover, the nature of the problem statement of the paper requires a more universal examination of the surrounding subjects. Nevertheless, the literature used in exploring the topic contains several extensive qualitative studies, among others, that give very solid answers to some particular questions sparked from the core problem statement of the paper. Therefore, any possible primary study would not have given the readers the insight into the topic as clearly as the more extensive secondary ones used throughout. The structure of the paper identifies three major sections so as to give a better grasp of the issue under study – that is: (1) the concept of innovation and how it’s created; and (2) the role of the management in the process of creating innovation; (3) the link between the role of the management and innovation. The first two are broken down into multiple subsections to cover all important matters.    The Concept of Innovation and How It’s Created? The essence of innovation is change. However broad (and at the same time simple) it may appear, the term ‘change’ embodies the continuous effort of people, companies, institutions, and societies, for that matter, to improve their standards of living (Goodwin, R., 2009, pp.6,8). What is ultimately important is that life becomes more and more comfortable – with respect to developing new and better products, more advanced technologies, healthier foods, faster and more enjoyable means of transportation, just to mention a few. Therefore, innovation as a function of change is crucial for making human progress. The definition of innovation itself is something that has been the interest of researchers and industry practitioners since the turn of the twentieth century. Yet, it was Joseph Schumpeter that first popularized the concept of innovation in its modern form in what many believe to be his most salient work, Capitalism, Socialism and Democracy, in 1943. It is not surprising that since then many diverse definitions of innovation have emerged. In an organizational sense, the way innovation is being defined is widely considered to determine the activities and practices that will take