Final answer:
Process innovation is the change in how an organization does its work, particularly in its production process. The innovation strategy that encourages creativity and new ideas within an organization is known as horizontal collaboration and open innovation.
Step-by-step explanation:
When considering changes in the manner in which an organization does its work, process innovation is the change related to the organization's production process. Process innovation involves the transformation of workflow, equipment, and resources to produce goods or services, which differs from product innovation that focuses on developing new products or improvements to existing products. Incremental innovation speaks to small, iterative changes over time, while creativity innovation isn't a commonly used term within the scope of this question. Entrepreneurship generally refers to starting new businesses or ventures rather than changes within existing organizational processes.
As for the second question on types of innovation related to the organization's production process, process innovation is the correct answer, since it directly involves changes in the way products are created and delivered. Categories like product, culture/people, structural, and competitive innovation focus on other aspects such as the goods themselves, organizational culture, the organization's structure, and strategic positioning in the market, respectively.
Regarding the innovation strategy that is known as a combination of designing organizations to encourage creativity and the initiation of new ideas, the term that best fits this description is horizontal collaboration and open innovation. This strategy leverages a broader spectrum of ideas and expertise by promoting cross-department cooperation and incorporating external resources and input, contrasting with discovery which pertains more to the act of uncovering new findings or knowledge.