Question

1. This case suggests that a lack of continuous innovation contributed to American Express’s (AmEx) poor performance in 2014. Assuming this is true, what factors might prevent a firm the ?size and scope of AmEx from being able to innovate continuously?

Answer 1

There could be various factors which would make any organisation including the AmEx preventing them to work accordance with the innovative productions. The factors are:

1. Cost: For the innovation to prosper, an organisation required huge funding and costs. Thus, one factor which would have lead to innovative techniques in the firm could be cost related factors. Any organisation having lower funds, low cost or funding available would not be able to have innovative resources.

2. Lack of Skilled Labour: The second factor which prevents the organisation to have the innovative culture in the environment would be the lack of skilled labour. Innovation comes within the people. Thus, having strategic and skilled labour and employees and make them train and develop is one reason and one factor which could lead to the innovation.

3. Organisational Culture: At last, the biggest factor which contributes for the achievement of the innovation is the organisational culture. AmEx might be having a close organisational culture, where flexibility is limited and rigidity is all around, communication is restriced etc would make the innovation go less for the organisation to achieve success.