Innovation Model for Organizational Sustainability (IMOS): The Concept

Innovation Model for Organizational Sustainability (IMOS): The Concept

Copyright: © 2023 |Pages: 35
DOI: 10.4018/978-1-6684-8223-0.ch010
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This chapter describes the concepts and methodology necessary to apply the IMOS (innovation model for organizational sustainability), and shows to entrepreneurs, academics, consultants, and people interested in this subject, a practical management model that motivates decision makers look for the best alternatives to boost their company and bring it to the best sustainability standards. The IMOS is made up of eight organizational components: Strategic direction, production and/or commercialization and/or transformation of goods and/or services, organizational culture, associativity, marketing, technology, legal matters, and financial indicators. In turn, each component analyzes four factors: social, environmental, managerial and innovation. In each factor, a series of variables are presented (42) that are explained in detail in the theoretical framework of this chapter, which allow four levels to be measured from one (1) to four (4): one (1) (incipient), two (2) (survival), three (3) (developing) and four (4) (world class).
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To speak of IMOS (Innovation model for Organization sustainability) is to merge a series of “constructs” that make dynamic the idea of giving the academic, business and government community a model that allows measuring the level or state of innovation management focused on sustainability, in which it is found. an organization, whatever its origin of capital, economic sector and size.

In this sense, it is convenient to clarify each of the concepts that make up this proposal:

Model: In the light of Arthur Andersen's dictionary of economics and business (1999), model means the “simplification of reality that facilitates its understanding and study” (p. 413). Mujica and Rincón (2011), affirm that this concept of “model” is used as a form of representation of some reality or series of realities, of some process or series of processes (p.54).

Innovation: For its part, the dictionary of economy and business of Arthur Andersen (1999) and Ramírez-Cardona and Ramírez-Salazar (2016, p.231), states that innovation is the “process of marketing new products, implementation of new production techniques different from existing ones or opening of new markets, which helps stimulate the economic development of any society or nation. This is also the name given to the process of transforming an existing product, modifying its characteristics to improve it or creating new applications” (p. 335).

Sustainability: According to Pérez-Uribe and Ramírez-Salazar (2021, p.3 and 4) and Garzón & Ibarra (2014, p. 54 and 55), state that: Sustainability and, consequently, the green economy essentially depends on the use or consumption of resources, as well as the capacity of the environment to absorb the waste that society generates. Sustainable development implies the use and consumption of resources, considering that the consumption of the resource does not exceed its regeneration capacity. This should be the concern of company directors, without ceasing to exploit basic resources, in order to allow their recovery, as is the case in agriculture or fishing. They are the resources that are regenerated, therefore, the problem lies in the determination and estimation of the inventories of available and necessary resources, as well as the times required for their recovery (p. 54 and 55).

Organizational: The dictionary of economics and business by Arthur Andersen (1999) and Dávila (1985), states that it is pertinent when talking about organization to refer to Dávila (1985), who affirms that the term “Organization” refers to public and private organizations, of any economic sector and size (micro, small, medium and large). This concept does not only refer to companies, but also to institutions belonging to the state at the local, regional, departmental and national level (ministries, superintendencies, mayors, governors, among others), non-profit entities such as foundations, unions, NGOs (non-governmental organizations), clubs, etc. (p. 6).

Key Terms in this Chapter

RISE: Route of innovation and sustainability for enterprises, it is a model that allows to measure the level of innovation and sustainability of organizations in the light of nine factors, four dimensions and thirty-six variables, on a scale from 0 to 100%. It was created by Dr. Rafael Perez-Uribe and Dr. María del Pilar Ramírez-Salazar and colleagues of the EAN University in Bogotá, Colombia.

Gross Margin: It is the difference obtained from the income and the products or services sold. It is expressed as a %, but it does not indicate the real profit, because it only takes into account the direct expenses related to the product or services offered ((Operating income- costs) / operating income x100).

MMOM: (Modernization Model for Organizations Management): It is a management model developed by the management research group for large, small and medium-sized enterprises (G3pymes) of EAN University which allows SMEs to evaluate their management status in the light of four levels, the fourth level is the best management practices.

SELA: The Latin American and Caribbean Economic System (SELA) is a regional intergovernmental organization, aimed at promoting a consultation and coordination system to agree on common positions and strategies of Latin America and the Caribbean, in economic matters, before countries, groups of nations international forums and organizations and promote cooperation and integration between Latin American and Caribbean countries.

ROA: Return on assets is a type of return on investment (ROI) metric that measures the profitability of a business in relation to its total assets. This ratio indicates how well a company is performing by comparing the profit (net incomes) it’s generating to the capital it’s invested in assets.

EBITDA: Is a financial indicator (acronym for the English terms Earnings Before Interest Taxes Depreciation and Amortization) that shows the profit of a company before subtracting the interest that has to be paid for the debt incurred, the business's own taxes, the depreciation for deterioration of this, and the amortization of the investments made. The purpose of EBITDA is to get a fair picture of what the company is earning or losing in the core business.

Net Margin: It is a financial indicator of profitability that represents the amount of income generated by a company, expressed in percentages. It is the relationship between net income and profit of a company. Net income or profits are also known as final result or result for the year. (Net income / total operating income).

Operating Margin: It is a % that quantifies the percentage of sales revenue that the company in question converts into profits. It reflects those benefits before having deducted both taxes and interest. In order to calculate this %, the data used refers to the main activity of the company. Operating margin is also known as operating margin, operating income margin, EBIT margin (Earnings Before Interest and Taxes), operating profit margin, and sales yields (Operating Income).

ROE: Return on equity is the measure of a company’s annual return (net incomes) divided by the value of its total chareholders equity, expressed as a percentage (e.g., 12%). Alternatively, ROE can also be derived by dividing the firm’s dividend growth rate by its earnings retention rate (Net incomes / Total equity).

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