Impact of Innovation and Entrepreneurship: Contextual Factors Analysis

This essay examines the contextual factors of innovation and entrepreneurship and their impact on a company's strategy and decision-making processes, specifically within the supermarket industry. It defines entrepreneurship and innovation, highlighting their importance in adapting to market demands and competition. The essay analyzes how these factors influence a company's structure, suggesting that innovation in products and processes is crucial, especially in a saturated market. It discusses various types of entrepreneurship, such as creating new products, transforming the organization, and changing industry competition rules. Furthermore, the essay explores the role of innovation in decision-making, emphasizing the use of technology, like intranet applications, to improve communication, data analysis, and inventory management, ultimately leading to more efficient and effective decisions. The conclusion reiterates the importance of entrepreneurship and innovation for business success, emphasizing their impact on strategies and decision-making processes within companies.

Running head: CONTEXTUAL FACTOR 0
CONTEXTUAL FACTORS

CONTEXTUAL FACTOR 1
Table of Contents
Introduction:...............................................................................................................................................1
Contextual factor:........................................................................................................................................1
Impact on strategy and structure of the company:.....................................................................................2
Impact on the decision making of the company:.........................................................................................3
Conclusion:..................................................................................................................................................4
References:..................................................................................................................................................4

CONTEXTUAL FACTOR 2
Introduction:
Innovation and entrepreneurship is the contextual factor that has great impact on the functioning
of the companies. Entrepreneurship is the factor that is related to the activities that are conducted
by the organizations (Teece, 2010). It is not necessary that every business have that
entrepreneurship quality in them. Innovation is one of the factors that drive entrepreneurship.
This is because it is required by the companies these days to be innovative so that they can attract
the customers by offering them something new. This essay aims at identifying the contextual
factors and their impact on the strategy and decision making practices of the company. The
contextual factor that has been discussed in this essay is innovation and entrepreneurship at the
business. The scope of the study suggests that the contextual factors affect the company’s
functioning and understanding this impact can help the company to strategize itself.
Contextual factor:
Entrepreneurship refers to the capability of the person to develop mad organize the business
processes in order to conduct the business activities along with taking the risk associated with it
to earn the profit (Drucker, 2014). It can also relate to exploit the opportunities available in the
marketing a fulfilling the needs of the market. The theoretical aspect of the factors suggests that
risk taking is the first and foremost quality that should present in the entrepreneur. Economic
theory of entrepreneurship relates the risk taking aspect with entrepreneurship. The criticism of
this theory deals with non-consideration of other factors such as the environment changes and
resource availability (Tidd & Bessant, 2015). Thus, this theory has not been accepted. Another
theory that is based on resources have been developed which suggests that entrepreneurship is
about exploiting the opportunities and using the resources available to conduct the business
activities. Innovation is also considered as the major contextual factors that affect the functioning
of the company. It can be defined as the aspect that brings changes in the existing functions or
processes or developing the new ones according to the requirement of the market. As both the
entrepreneurship and innovation is related to fulfilling the needs of the market thus both are the
important aspect of business.

CONTEXTUAL FACTOR 3
Impact on strategy and structure of the company:
As per the business discussed in the above case, it has been identified that it is the company that
operates in supermarket industry. Supermarket retail industry is very saturated thus developing
new and innovative products and processes is the basic requirement of the company (Franke,
Harhoff, Henkel & Häussler, 2013). It is not only the new products that required to be developed
but the structure of the company needs to be innovated in order to attract the market and compete
with the competitors. As far as entrepreneurship and innovation in strategic management is
concerned, it has been analysed that there are three types of entrepreneurship in the business that
can be implemented by the above discussed company. The first one is about creating something
new in the existing business, second is transformation of the organization and third one is the
changes in the competition rules for the industry (Galindo & Méndez, 2014). As the business is
new, it is required by the company to come up with any new products that can attract the
customers along with innovative process of customers’ interaction. This is because it is the
process that directly deals with the customers and can be noticed by the customers. It has been
analysed that structure of the company and the strategies used by the same gets affected by the
entrepreneurship level of the company (York & Danes, 2014). If the company has the capability
to exploit the resources then it may have different strategies along with contingency planning
while the company does not have the capability to take the risk then it may have strategy without
contingency plan. As per the above business, it is required by the company to implement the
strategies that are without risk because it is the new business venture and if the risks have been
taken at the initial stage of the business then it may be possible that business fails to penetrate in
the market (Kerr, 2013). Today, businesses are using many innovative technological methods in
their processes. Communication is one of the processes in the business that required to be
focussed upon so that the business can interact with the clients and with the other staff members.
Intranet is one of the strategies that are a new innovation in terms of communication inside the
company. As the company operates in supermarket industry, so it also needs to develop the
technological tool for the stores so that all the stores can be linked to each other (Bierly,
Gallagher & Spender, 2014). The tools such as intranet application can be made so that the staff
of different stores can share information about the inventory and the goods with each other.

CONTEXTUAL FACTOR 4
Impact on the decision making of the company:
Decision making is the function of the company that needs to be conducted with a proper
process. This is because the outcome of this function decides the fate of the business in future.
All the strategies and the processes conducted in the company depend on the decision that has
been made for the company by the management. This is the function that needs to be conducted
on daily basis at lower levels (Bessant & Tidd, 2007). Small decision regarding any of the issues
faced by the company needs to be taken by the mangers in which the top management of the
company is not involved. In case of supermarket, store managers are the one who needs to take
the decision daily as they have to deal with the stock and the sales at daily basis. The store
managers also have to show their entrepreneurship skills at this time because it is not possible to
ask to the top management about every issue faced at the store (Oliveira, Rozenfeld, Phaal &
Probert, 2015). Innovation in the daily processes and functions of the store such as
implementation of the intranet process or the application that is used to record the data of the
sales and the inventory helps in making decisions. This is because the data is clearly sorted in
front of the managers. He can easily look for the drawbacks and the areas where the issues are
generated thus decision making process also become easy (Jerinabi & Santhi, 2012). It becomes
speedy as well because use of technology in such processes helps in analysing the data with high
pace and thus decision can be made easily. This also results in making effective decision as the
data is accurate if calculated from this application. Human efforts reduce by using such
applications. No staff can do any illegal or unethical practice in the store because all the data is
captured with the help of the bar code on the products. This helps in analysing the sales and
inventory stock of the products easily. The staffs need to count the products manually but the
data is recorded in the software that helps in identifying the products quantity at the store, this
information of the data helps in managing the inventory (Windrum & Koch, 2008). The store
manger can make the decision over the ordering of the products according to the quality left.
Counting the products manually take too much of time and efforts are also very high in this case.
As far as the entrepreneurship is considered, it should be there in each and every employees of
the company especially the ones who deal with the customers directly.

CONTEXTUAL FACTOR 5
Conclusion:
It has been concluded from the report that entrepreneurship and innovation are the basic elements
that needs to be considered by the companies in order make the process effective and efficient.
Entrepreneurship is the factor that is related to the activities that are conducted by the
organizations. It is not necessary that every business have that entrepreneurship quality in them.
Innovation is one of the factors that drive entrepreneurship. This is because it is required by the
companies these days to be innovative so that they can attract the customers by offering them
something new. But these contextual factors have their impact on the strategies that the company
make and the process of their decision-making. It has been analysed from the above case that
supermarket business can enhance their in-store process by implementing the technological tools
in their store so that they can record various data in the application used. This data can helps
them to take better and efficient decision regarding the sales and the inventory.

CONTEXTUAL FACTOR 6
References:
Bessant, J., & Tidd, J. (2007). Innovation and entrepreneurship. John Wiley & Sons.
Bierly, P., Gallagher, S., & Spender, J. C. (2014). Innovation decision making in high-risk
organizations: A comparison of the US and Soviet attack submarine programs. Industrial
and Corporate Change, 23(3), 759-795.
Drucker, P. (2014). Innovation and entrepreneurship. Routledge.
Franke, N., Harhoff, D., Henkel, J., & Häussler, C. (2013). Innovation und Entrepreneurship.
Springer/Gabler.
Galindo, M. Á., & Méndez, M. T. (2014). Entrepreneurship, economic growth, and innovation:
Are feedback effects at work?. Journal of Business Research, 67(5), 825-829.
Jerinabi, U., & Santhi, P. (Eds.). (2012). Creativity, Innovation and Entrepreneurship (Vol. 1).
Allied Publishers.
Kerr, W. R. (2013). US high-skilled immigration, innovation, and entrepreneurship: Empirical
approaches and evidence (No. w19377). National Bureau of Economic Research.
Oliveira, M. G., Rozenfeld, H., Phaal, R., & Probert, D. (2015). Decision making at the front end
of innovation: The hidden influence of knowledge and decision criteria. R&D
Management, 45(2), 161-180.
Teece, D. J. (2010). Business models, business strategy and innovation. Long range
planning, 43(2), 172-194.
Tidd, J., & Bessant, J. (2015). Innovation and entrepreneurship (No. 3). Wiley.
Windrum, P., & Koch, P. M. (Eds.). (2008). Innovation in public sector services:
entrepreneurship, creativity and management. Edward Elgar Publishing.
York, J. L., & Danes, J. E. (2014). Customer development, innovation, and decision-making
biases in the lean startup. Journal of Small Business Strategy, 24(2), 21.