Innovative management strategies at United Technologies Corporation

Innovative Management From United Technologies

United Technologies

Due to intensified competition and the expansive market share, firms are exploring new strategies and approaches with a view to remain productive and increase their profits. This has led to evolvement of innovation approaches by companies which broadly focus on technology, process, product and management. Management innovation entails the implementation of new management practices, innovative ways of executing activities that leads to effective management and shift from conventional management skills Tyagi, 2000.

Innovative management strategies are a major key component to companies in relation to growth in profit, revenues, market share, employees' management and competitive advantage. This is can be further supported by various studies that have shown deemed innovation management as a perquisite for enhancing value of companies Hitt, Ireland, & Hoskisson, 2010.

The purpose of this paper is to examine innovative management in United Technologies with much emphasis on key management skills and other practices and application that are used in the company.

Discussion and Analysis of Innovative Management from United Technologies Corporation

United Technologies is a firm that deals with the provision of a wide range of products and services. The company provides high level technology products and services that are used globally in aerospace and building system industries. Examples of its products include carrier heating, air conditioning and refrigeration solutions, elevators and escalators, aerospace engines, helicopters, fire and security systems among others. The firm also boasts of a central research organization that deals with technologies for the enhancement of performance, energy efficiency and cost of its products and processes United Technologies Corparation Annual Report: Big goals, Big results, 2011.

United Technologies has employed various innovative management approaches that have enable it to increase its profits, meet their financial goals, expand their market share and above all. Provide high technology products and services across the world. The following are the core innovative management strategies that United Technologies has used Afuah, 2003()

Organization Structure

United Technologies Company has various commercial business units that are involvement in the development, generation and distribution of various products and services. The existence of the commercial business units is a good innovative management strategy since these units are involved in the provision of various product and service categories that in turn contributes to the overall growth of the company. The key commercial business units under United Technologies Corporation include carrier, Otis, UTC fire and security, Hamilton Sundstrand, Pratt and Whitney and Sirkorsky Thomas, LoVuolo, & Hillson, 2006.

Carrier business unit is involved in the provision of heating, ventilation, air conditioning and refrigeration systems, Otis is mandated with design, manufacture, installation, service and upgrading of elevators, escalators and moving walkways in buildings while UTC fire and security on the other hand provides fire detection, alarm and suppression systems. Other three commercial business units namely Hamilton Sundstrand, Pratt and Whitney and Sirkorsky provide aerospace and electronic power generation and distributions systems United Technologies Corparation Annual Report: Big goals, Big results, 2011.

The overall leadership structure of United Technologies Company lies with the Board of Directors who have extensive knowledge on various issues ranging from telecommunication, manufacturing, distribution and environmental sustainability. The commercial business units are headed by presidents who are charged with decision making and operations of the components. The organizational structure of United Technologies has ensured that the firm carries out its innovation management approaches by specifying the firms reporting relationships, procedures, control, authority and decision making processes Hitt, et al., 2010()

Decision Making

Innovative management at United Technologies revolves majorly on the formulation of strategic plans and decision and making of choices. This is particularly evident in the allocation and committing of resources to various enterprises within the company. Decision making has been a crucial and integral component in United Technologies more so in product extension, launching of new products and improvement of technologies.

Commercial business units within the company usually make choices on various options and decision with a view to steer the company on progress path. For instance, Carrier which is one of the commercial business units has in executed various restructuring decisions so as increase its growth prospects. This has involved engagement in joint-venture approaches, sale or closure of more than thirty businesses and investment in leaner production United Technologies Corparation Annual Report: Big goals, Big results, 2011.

Key decision making process often occurs at various commercial business units where the presidents and everyone are set out innovation goals for the company.

International Business

Domestic growth for companies including United Technologies has reduced in the past decades and this has necessitated them to seek investments in other foreign countries. The challenge is further compounded by influx of foreign rival companies that are keen to develop and expand their operations beyond home markets Hill & Jones, 2010.

United Technologies has reinvented itself due to its engagement in international business, a factor that has led to the current increase in its revenue and market share. Through innovation management, United Technologies has ventured in emerging markets by expanding the mandate and presence of its commercial business units in overseas markets.

Involvement of United Technologies in international business has led to productivity improvement and diversification of its ventures. For instance, the company currently partners with other firms in emerging markets such as Brazil, China, Japan, India and Spain. The joint venture between the company and a Japanese quality consultant company, Yuzuru Ito has been a major source of profit increase for the company over the last ten years Hill & Jones, 2010.

Franchising has also enabled the firm to implement its manufacturing and distribution strategies thereby expanding its market share in the global market.

Strategic Management

In most firms, strategic management entails assessment of the prevailing business environment, strategy formulation, strategy implementation and evaluation and control. United Technologies has employed strategic management to assess both the external business environment for opportunities and threats and its internal environment for strengths and weaknesses Tyagi, 2000.

The firm has developed strategic decisions that are geared towards the achievement of financial goals and extending the market share. United Technologies has successfully grown and prospered through careful and well-calculated execution of its strategic management process. Indeed, this approach has enabled United Technologies to outperform their various counterparts from the sector in terms of product and service provision.

Strategic management by United Technologies is evident in the joint venture initiatives and outsourcing. This process has led to the continued innovation management at the company. Through the assessment of its external environment for opportunities and threats, United Technologies has engaged in various joint-venture initiatives with other firms in fast growing markets. For instance, the company recently signed a joint-venture agreement with Tata Advanced Systems Limited (TASL) in India for assembly operations for Sirkorsky helicopters and their Hyderabad facility located United Technologies Corparation Annual Report: Big goals, Big results, 2011.

The company has also been involved in strategic sourcing strategies and agreements with other various companies in emerging markets such as Brazil, China and Spain. The company also signed a joint-venture agreement with an electromechanical company in China (AVIC) with the goal of co-developing and manufacturing of new electric power systems and in addition, the Chinese Company is also involved in the distribution of the power systems United Technologies Corparation Annual Report: Big goals, Big results, 2011()

Conclusion

United Technologies is a global company that has enjoyed a tremendous growth over the past decades. The company has an efficient innovative management strategy that is committed to research and development in its products, processes and services. Strategic sourcing and franchising has been a key innovative management strategy for United Technologies more so in venturing into international markets and competing with other firms in several countries. The innovative management approach for united technologies has greater prospects for the growth of the firm and it can be applicable to other sectors or industries. The strategy can be applicable to the aviation industry in relation to extension of products and services since the sector transverse across the globe. This can be achieved through strategic sourcing, acquisition, franchising and joint-venture agreements with other firms in emerging markets and it has the potential for improving revenue and expansion of market share for the aviation industry.