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Innovation is defined as the development and implementation of new ideas by people who over time engage in transactions with others within an institutional order. This definition focuses on four basic factors (new ideas, people, transactions, and institutional context). An understanding of how these factors are related leads to four basic problems confronting most general managers: (1) a human problem of managing attention, (2) a process problem in managing new ideas into good currency, (3) a structural problem of managing part-whole relationships, and (4) a strategic problem of institutional leadership. This paper discusses these four basic problems and concludes by suggesting how they fit together into an overall framework to guide longitudinal study of the management of innovation.

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