Contemporary Management Issues in 21st Century: A Business Essay

This essay delves into the realm of contemporary management, focusing on the core concepts of causation and effectuation within the context of 21st-century business challenges. It begins by defining contemporary management as the strategic control of resources and innovations to achieve predefined objectives. The essay then introduces the concepts of causation, which emphasizes pre-set objectives and strategic planning, and effectuation, which focuses on leveraging available means to achieve flexible goals. The essay uses Tesco, a multinational retailer, as a case study to illustrate these concepts, exploring how the company navigates organizational behavior issues and adapts to dynamic market changes. The analysis includes critical statements, insights into the impact of these management approaches on business functioning, and how companies like Dyson use these strategies. The essay also highlights the importance of strategic decision-making processes, such as those used by James Dyson, and concludes by summarizing the interplay between causation and effectuation in shaping entrepreneurial patterns and business strategies. The essay also presents a detailed account of the principles of effectuation and the decision making process.

Management

Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Contemporary management may be referred as the process of controlling of resources and
innovations along with its operations so as to accomplish proposed objectives within time frame
period (Matalamäki, 2017). In today’s dynamic business environment, many companies are
facing contemporary issues which relates to organisational behaviour. This issue can be
addressed by framing of strategies so that competitive advantage can be taken. Causation and
effectuation supports entrepreneurs to focus on pre-set objectives in order to reach goals. This
project essay is based Tesco, a multinational retailer in UK and having headquartered in Welwyn
Garden City. It will cover various contemporary issues of 21st century that company is facing and
concept of causation and effectuation. In addition to that, it will include critical statement of
above statement along with its insights and how it impacts on functioning of business.
TASK
The concept of causation may be defined as an approach which emphasise on focus of
entrepreneur in contemporary business environment towards pre-set objectives along with
finding a way to reach to objectives. It is important for business to frame strategies so that it
becomes easier to mitigate risk and to attain goals. In world of business economics, causation
depicts that a circumstance ort event is direct proportionate of other (Shirokova and et al.,2021).
Business across the globe are becoming significant free market along with more entrepreneur.
Most of the business ventures opts high technology so that they can take advantage of it and
reduces chance of human error. Rapid change in technology creates difficulty too as for small
businesses it is quite expensive and unaffordable.
In today’s contemporary business environment, causation helps entrepreneur in
understanding dynamic organizational management issues as this approach id linked with
predefined objectives of company. This concepts rest on various logical predictions as well as
involves process which takes specific effect. It also contributes in drawing a clear and vivid
picture about several reasons and about somethings that could be combines in stages of life
cycle. With causal conception, entrepreneurs of 21st century views forthcoming as supplement of
foregone which can be accepted by society. It deals with maximum opportunities which are
concerned with business issues of competition as well as relationship with its suppliers.

The concept of causation instructs business professionals to develop fresh range of
products jointly with establishments (Villani, Linder and Grimaldi, 2018). The STP procedure of
Kotler specifics of causation which demonstrates that professionals of business segments whole
markets on various basis as well as frames strategies to target its audience and position its
products on either online or offline channel. STP analysis is supported on assumptions which
states that there is an existing market having definite demand and supply curve. For example,
James Dyson understand dynamics of management issues which is rapid change in demand
through STP process that assist in enhancing marketing efficiency by guiding and directing
workforce towards particular segment. It helps entrepreneurs in eliminating unwanted cost and
limits so that company can enjoy higher efficiency.
In a new venture creation, entrepreneur engages in practices of turning a fresh idea into
value. It states that group of individuals have complete freedom to craft all types of business.
While doing this, many business faces various contemporary issues and resource constraint is
faced by James Dyson. Company needs to use its resources effectively and efficiently so that it
can lower down its overall cost and enjoy high profitability. Causation is the result of occurrence
which depends on another event. Both the events are interrelated to each other and have potential
to fluctuate result of one another.
The concepts of effectuation implies that entrepreneur focus towards a way at hand for
materialising into several objectives that are not pre-defined (Hauser, Eggers and Güldenberg,
2020). In simple terms, it can be depicted as trouble resolution skills of people which advocates
that future is full of uncertainties and is complex to forecast. It also states that future risk can be
mitigated by human actions.
The theory of effectuation was propounded by Professor Saraswathy by examining
various businessperson skills. He states entrepreneurship that was wrongly taken as form of
management. By various scientific research, he discovered that mangers should think out of the
box and find best way to solve business problem which contributes in attainment of goals. The
concepts of effectuation consist of four basic principles which are affordable loss, bird in hand,
crazy quilt principles and lemonade. All the results of experiments are given to management
students so as to contrast between entrepreneurship and management.
U- haul can referred as providing of organisational resources such as machineries and
equipment with different ventures. It is accomplished by a written agreement basis and facilitates

in reducing down of functional cost. This approach is very impressive for businessperson who
have little finance but want to setup enterprise at big level.
Causation approach may be depicted as causal thought of managers in which they
emphasise on pre-set objectives and seeks for resources in order to fulfil them Grégoire and
Cherchem, 2020). Where effectuation approach states to the process of concentration on the way
which helps in setting objectives. In terms of advocacy, these two terms are quite similar. In
order to demonstrate entrepreneurship in an impressive manner, professor Saraswathy proposed
these two terms. Both thoughts were formed by same operation called observation.
In order to simplify concept of effectuation, Professor Saraswathy had given five
principles. Bird in hand principle states that entrepreneur have skills and competencies so as to
find means to start job. The another principle is affordable loss and states that businessperson are
rationale to evaluate risk and prefers to take risk. Lemonade principle states that entrepreneur can
be considered as amazement box as they are bendable to alter strategies in order to mitigate risk.
Patch work quilts is defined as entrepreneurs have to think out of box and have to bring
innovation so as to influence investors with unique business ideas (Ortega., García and Santos,
2017). They can create partnership with well-known company so as to take competitive
advantage of its goodwill. Pilot in plane principle states that successful entrepreneur has trust on
people rather than equipment and machinery. They conduct market research in order to identify
needs and wants of customers so that expectations can be met effectively by rendering quality
products and services.
James Dyson is a British inventor who deals in household appliances. Through an
extensive research, it firstly introduced vacuum cleaner. He sold that vacuum cleaner and was
awarded for its design. The appliances are affordable with top quality as compared to its
customers. The main aim of Dyson is to serve quality household appliances to its customers with
minimum price. In order to capture larger market, it frames marketing strategies and elements of
promotional mix so as to reach wider range of customers. In addition to that, it regularly brings
innovation to its products so that customers can get according to their expectation with low cost.
In the initial stage of Dyson, it faces various complexities in its operational functioning. But by
applying various applications of management, it addressed various issues. The promotional mix
of company was very effective and marketers focus on every segment from economic to
premium category. In today’s contemporary business world, it faces complexity due to rapid

change in technology and change in customer preference. Dyson went to investors and proposes
idea of manufacturing household appliances. That was turning point in success of company and
after introducing household appliances, it regularly brings innovation that captures customer’s
decision.
There can be seen a connection between effectuation and James Stoner decision making
process. Stoner define decision making process as identifying, analysing and opting corrective
alternative in pool so as to take critical decision Whereas effectuation can be defined as thinking
process of enterpriser in which they attempt to discover way to accomplish provided project.

CONCLUSION
From the project essay, it was concluded that effectuation and causation are two crucial
elements which facilitates in altering enterprising pattern. Causation relates to informal thought
of people that emphasise only on pre-set objectives and methods to each them. Whereas in
effectuation, methods are discovered first by people in order to meet those targets that are
inevitable. Both the conception are contrastive and related to each other. Both approaches are
formulated for healthier knowing of enterprising pattern. It helps entrepreneurs in framing in
strategies which helps in minimising overall cost of company. It also facilitates in higher
efficiency of establishment as it makes easier to allocate resources wisely. It is need to take these
two approaches into consideration while framing strategies.

REFERENCES
Books and Journals
Grégoire, D.A. and Cherchem, N., 2020. A structured literature review and suggestions for future
effectuation research. Small Business Economics, 54(3), pp.621-639.
Hauser, A., Eggers, F. and Güldenberg, S., 2020. Strategic decision-making in SMEs:
effectuation, causation, and the absence of strategy. Small Business Economics, 54(3), pp.775-
790.
Matalamäki, M.J., 2017. Effectuation, an emerging theory of entrepreneurship–towards a mature
stage of the development. Journal of Small Business and Enterprise Development.
Ortega, A.M., García, M.T. and Santos, M.V., 2017. Effectuation-causation: what happens in
new product development?. Management Decision.
Shirokova and et al.,2021. Effectuation and causation, firm performance, and the impact of
institutions: A multi-country moderation analysis. Journal of business research, 129, pp.169-
182.
Villani, E., Linder, C. and Grimaldi, R., 2018. Effectuation and causation in science-based new
venture creation: A configurational approach. Journal of Business Research, 83, pp.173-185.