Nepal’s corporate sector has been moving ahead energetically to bring a rebound in performance and contribute to economic development. However, the country’s corporate management does not have a rich history compared to the developed countries. It is still struggling to recognise good governance and corporate social responsibility as an engine for ethical performance and prosperity. Regardless, Nepal has experienced prolonged political movements and economic turmoil in this short span of its corporate history. Now we need to transform our corporate practices with management innovation in order to improve performance.

Nepali corporates, large or small, are still following the biological management process and apprenticeship model of business. This is a proven model of business in advanced countries including flourishing Asian economies in their early stages of corporate movement. However, innovation is crucial to survive and move ahead in the global arena. The time has come for Nepal to scale up management theories and practices by learning from the success stories of management in the emerged and emerging markets and countries.

New methods

Management innovation is the process of introducing novelty in an organisation, and it represents a particular form of organisational change and development. It is known as a difference in the form, quality or state over time of the management activities in an organisation where the change is a novel or unprecedented departure from the past. Moreover, it can be defined as the invention and implementation of new management practices, innovative processes and structures or techniques for achieving organisational aspirations.  

Management innovation has four viewpoints based on different scholars. First, there is the institutional perspective that measures innovation in terms of the discourse around particular ideologies and also the level of specific practices or techniques. It gives no direct consideration to the role of humans in shaping the process; instead, it focuses on the preconditions in which innovation first emerges and then the factors that enable organisations to adopt it. Second, there is the fashion perspective that focuses on how the management of innovations emerges through a dynamic interplay between the managers who use new management ideas. This perspective provides a wealth of insight into how management fashions take shape, including a detailed understanding of the typical attributes of managers who buy into these fashions as well as the ways in which trendsetters shape emerging demand for their ideas.

The third perspective of management innovation is cultural. This perspective attempts to understand how management innovation shapes and gets shaped by the culture of the organisation in which it is being implemented. This perspective provides some insight into how the management of innovations is implemented primarily from the point of view of those who are being asked to participate in the process rather than those who are driving it. This typically enforces status quo and does not deny that changes can occur as a result of management innovation; however, the forces at work in organisations normally lessen its impact. Finally, there is the rational prospective, which builds on the premise that management innovations are introduced by individuals who want their organisation to work more effectively. An individual puts forward an innovative solution to address a specific problem that the organisation is facing.

Time to change

Corporates in Nepal have a long way to go in terms of management innovation. Among the four perspectives mentioned above, the country’s corporate world is under pressure from the fashion perspective-based management innovation, and somehow, we are affected by the cultural perspective too. Management fashion and management innovation are two different horizons. In Nepal, we are still more focused on technological innovation than process innovation and structural innovation. Entrepreneurs, leaders and even potential future leaders need to realise that management innovation is an invention and implementation of management practices, processes, structures or techniques that are new and intended to further organisational goals.

Innovation today is not just about stimulating what we have, it is about rethinking and reframing our entire product and service offering. It is time to be familiar with the process and framework of management innovation that consists of four basic

phases —motivation phase, invention phase, implementation phase and theorisation and labelling phase of management innovation. Over the past half-century, researchers, academicians and corporate management gurus around the globe have been working and writing on innovation, and corporates have been adopting the proven principles and findings of such studies.

It is evident how technological innovation has spread around the globe in a few years of its history. Nepalis and Nepali corporates are no exception, and they have not been far behind in adapting to the technological innovations. However, global corporates started the trend of exploring other forms of innovation approximately 20 years ago in line with process innovation, service innovation and strategic innovation for management innovation. Nepali corporates need to rethink the way they function by moving on to management innovation and kicking off discussions on it at the top management team and board levels. Doing so can improve the way the corporate sector functions in Nepal.

Manandhar is Deputy Chief Executive Officer at Prabhu Bank Limited