by Yu, Lawrence Kwok Cheung. / Thesis (M.B.A.)--Chinese University of Hong Kong, 1998. / Includes bibliographical references (leaves 46-47). / ABSTRACT --- p.iii / TABLE OF CONTENTS --- p.iv / LIST OF TABLES --- p.vi / ACKNOWLEDGMENT --- p.vii / Chapter / Chapter I. --- INTRODUCTION --- p.1 / Benefits of Outsourcing --- p.1 / Strategic Benefits --- p.1 / Financial Benefits --- p.2 / Operational Benefits --- p.3 / Human Resources Benefits --- p.3 / Risks of Outsourcing --- p.4 / Strategic Risks --- p.4 / Financial Risks --- p.4 / Operational Risks --- p.5 / Human Resources Risks --- p.6 / Outsourcing Issues --- p.7 / Feasibility and Planning --- p.7 / Outsourcing Candidate Identification --- p.8 / Outsourcing Engagement --- p.10 / Managing the Outsourcing Contract --- p.12 / Human Resources Development --- p.14 / Outsourcing Post-mortem Analysis --- p.14 / Other Important Findings --- p.15 / Outsourcing Trends --- p.16 / Chapter II. --- MOTOROLA SPS CONSUMER SYSTEMS GROUP --- p.19 / Background --- p.19 / CSG Needs --- p.20 / Analyzing Outsourcing to Cadence --- p.21 / Chapter III. --- REVIEW OF CADENCE DESIGN SYSTEMS --- p.22 / Company Background --- p.22 / Cadence Design Services --- p.23 / Multimedia Design Services --- p.26 / Recent Cadence Design Services News --- p.27 / Chapter IV. --- MOTOROLA SPS AND CADENCE --- p.28 / Past Cadence Outsourcing Projects --- p.28 / Views of Colleagues on Past Cadence Outsourcing Projects --- p.30 / Views of Colleagues on Outsourcing Design Work to Cadence --- p.32 / Chapter V. --- ANALYSIS --- p.35 / Technical Issues --- p.35 / Economic Issues --- p.36 / Legal Issues --- p.37 / Operational Issues --- p.37 / Sensitivity Issues --- p.38 / Other Analyses --- p.39 / Chapter VI. --- RECOMMENDATIONS AND CONCLUSIONS --- p.41 / Other Recommendations --- p.42 / Conclusions --- p.43 / APPENDIX --- p.44 / BIBLIOGRAPHY --- p.46

Innovation is one of the most important sources of competitive advantage. It helps a company to fuel the growth of new products and services, sustain incumbents, create new markets, transform industries, and promote the global competitiveness of nations. Because of its importance, companies need to manage innovation. It is very important for a company to be able to measure its innovativeness because one cannot effectively manage without measurement. A good measurement model will help a company to understand its current capability and identify areas that need improvement. In this research a systematic approach was developed for a company to measure its innovativeness. The measurement of innovativeness is based on output indicators. Output indicators are used because they cannot be manipulated. A hierarchical decision model (HDM) was constructed from output indicators. The hierarchy consisted of three levels: innovativeness index, output indicators and sub-factors. Experts' opinions were collected and quantified. A new concept developed by Dr. Dundar Kocaoglu and referred to as "desirability functions" was implemented in this research. Inconsistency of individual experts, disagreement among experts, intraclass correlation coefficients and statistical F-tests were calculated to test the reliability of the experts' judgments. Sensitivity analysis was used to test the sensitivity of the output indicators, which indicated the allowable range of the changes in the output indicators in order to maintain the priority of the sub-factors. The outcome of this research is a decision model/framework that provides an innovativeness index based on readily measurable company output indicators. The model was applied to product innovation in the technology-driven semiconductor industry. Five hypothetical companies were developed to simulate the application of the model/framework. The profiles of the hypothetical companies were varied considerably to provide a deeper understanding of the model/framework. Actual data from two major corporations in the semiconductor industry were then used to demonstrate the application of the model. According to the experts, the top three sub-factors to measure the innovativeness of a company are revenue from new products (28%), market share of new products (21%), and products that are new to the world (20%).