BUS705 - Innovation and Forces Shaping Management Decision Making

This report explores the impact of various forces, particularly technological and economic factors, on business organizations and the critical role of innovation in management decision-making. It emphasizes the need for organizations to adapt innovative practices to navigate a competitive and dynamic business landscape. The report discusses how technological forces influence all organizational functions, from manufacturing to marketing and logistics, and how economic forces, such as economic downturns and government investments, affect multinational companies. It advocates for the adoption of contingency management theory, which empowers managers to make flexible decisions in response to diverse situations. The report further highlights the importance of strategic decisions that align with organizational expectations and foster innovative approaches to address unexpected challenges, emphasizing that innovation and creativity are essential for meeting evolving consumer demands. The report also touches on the role of organizational culture and employee empowerment in fostering a creative and innovative workplace.

Running Head: Innovation
Innovation and management decision making

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Table of Contents
Introduction.................................................................................................................................................2
Technological forces....................................................................................................................................2
Economic forces..........................................................................................................................................2
Management theory....................................................................................................................................3
Business decisions and response.................................................................................................................3
References...................................................................................................................................................5

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Introduction
Functionalities of contemporary business organizations affect through various forces and
in order to manage all those forces, it is necessary for the management to implement
certain strategic decisions through which the forces could be dealt with easily. Economic
and technological forces are the most affecting factors through which business decisions, as
well as the whole functionality, gets affected. In relevance with this, an adaptation of
innovative practices becomes necessary for the organizations in order to manage their
functionalities as well as to grow rapidly in the competitive and dynamic business
environment (Dodgson, 2018).
Technological forces
Technological forces not only affect the business’ performance it also affects functionalities
i.e. from manufacturing a product till its usage by the customers. Thus, technological factors
have an impact on every function of the organization which includes what products are
being produced, how marketing activities are executed for spreading awareness amongst
the customers, and the tracking and management of sales. On the other hand, technological
changes also invent new ways to handle logistics and shipping. The competitive intelligence
(CI) plays a vital role in the organization in terms of tracking technological forces and
providing insight to the management that how each area of these forces could affect
organizational functionalities (Aydalot & Keeble, 2018).
Economic forces
All sorts of economic events impact on organization i.e. from an economic downturn to
sequestration to the government deciding to invest in the solar energy. The multinational
companies mainly get affected by economic forces because they run their functionalities in
different parts of the globe and every country’s economic conditions, financial performance
and the purchasing power of citizen’s differs from each other. Thus, competitive
intelligence team monitors these events in every country where organization runs is
operations to analyse the factors which may create adverse effect over organizational

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performance. Apart from this, this team also keeps an eye on the opportunities in relation
to the economic forces in order to make out the things favourable for the organization
(Sierzchula, et. al., 2014).
Management theory
In order to manage these forces along with heading towards innovation, it is required for
the organizations to adopt contingency management theory. This management theory gives
freedom to the managers to look out for the best option available in the market for dealing
with different sorts of situations. Contingency approach of management is also effective in
dealing with the internal situations of the organization as well. This shows the efficiency of
the managers and while dealing with the internal challenges and issues, it is necessary for
the managers to generate a win-win situation for all the parties involved in the dispute.
This will helps in gaining trust from both the parties along with leading towards success
and growth in the long run.
Business decisions and response
In order to deal with external environmental, technological and other types of forces,
contingency management approach could be implemented along with the implementation
of the relevant business decision. The complexity of innovation as a corporate capability is
decision making. The decision making process is one of the biggest process-halting
problems in corporations (Kim & Min, 2015). Contingency management approach is
innovative and at the same time, it is also effective in terms of evaluating all the options
through which innovation practices could be implemented in order to enhance
organizational performance. Strategic decisions are required to be implemented in order to
match up the organizational expectations and it is also effective in terms of leading towards
innovative measures for dealing with the unexpected situations of the dynamic business
environment. As per various business experts, innovation and creativity have been
considered as the best measures for the contemporary business organizations to invent
new ways in order to originate new ways for fulfilling rapid changing consumers’ demands
and wants. Technological forces are regularly changing and the primary reason behind

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these upgradations is introducing new products in the global market through which the
regular new products could be invented in order to retain the interest of the existing and
potential customers as well as to taking the business to the next level (Noble, 2017).
The main requirement behind making the workplace environment innovative and creative
is the employees' behaviour, the culture of the organization, the nature of the organization,
etc. Apart from this, management plays a vital role in terms of promoting innovation at the
workplace by encouraging the employees to contribute their best in terms of fulfilling the
desires of the organization. For the objective of encouraging employees towards
innovation, all required resources and sufficient time should be made available for the
employees so that they could think out of the box. These are certain crucial factors which
are required to be considered while making the workplace environment innovative and
creative as per the organizational requirements (Sekaran & Bougie, 2016).

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References
Aydalot, P. and Keeble, D., 2018. High technology industry and innovative environments: the
European experience. Routledge.
Dodgson, M., 2018. Technological collaboration in industry: strategy, policy and
internationalization in innovation. Routledge.
Kim, S.K. and Min, S., 2015. Business model innovation performance: When does adding a
new business model benefit an incumbent?. Strategic Entrepreneurship Journal, 9(1), pp.34-
57.
Noble, D., 2017. Forces of production: A social history of industrial automation. Routledge.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Sierzchula, W., Bakker, S., Maat, K. and Van Wee, B., 2014. The influence of financial
incentives and other socio-economic factors on electric vehicle adoption. Energy Policy, 68,
pp.183-194.