BUS705 Innovation And Management Decision Making: Business Innovation In Tesla Assessment Task 1 Answer

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Question :

BUS705 Innovation and Management Decision Making

Assessment Task 1:Blog post

Write a professional blog article on how forces (trends) in the business environment require organizations/companies to be innovative, using examples, data, and image(s) as evidence for your claim. Ensure the arguments within your blog article are supported by credible theory, evidence, and examples.

To do so, select one or two of the forces that we examined in week one and draw on external, real-world information as well as one or two other relevant concepts from the first weeks of the course to make your argument.


  1. You might select the environmental forces and trends that require an innovative response from a company/organization and discuss what type of decision-making model (e.g. rational, real world complications, or contingency) and business paradigm(s) would support such an innovative response.OR
  2. You might select technological and socio-cultural forces and trends that require an innovative response from a company/organization and discuss which strategic innovative respond (e.g. limpet, cautious, or innovative) and what business paradigm(s) would support such an innovative response.OR
  3. You might select economic and technological forces and trends and discuss the type of management theory (e.g. theory X, Y, or Z) and the type of business decision (e.g. strategic, tactical, operational, or micro) that would support an appropriate innovative response.

Your blog post will also need to conform to an appropriate presentation format, including correct citing of references, structure of the post,and an appropriate headline.

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Answer :


Business innovation is a recent trend in the world economic system. The process of business innovation creates new methods, idea and products for a certain business organization. Tesla is recommended as world’s largest electric car manufacturing company in U.S. The main goal of this company is business innovation, which its profitability in global market .Competitive markets creates new technologies as well as new opportunity for business organization. Innovation gives a chance of business to be more productive and competitive to the global market. Innovation is important for Telsa to maximize the profit in productivity.  Business innovation ensures to supply products according to customer needs. There are lots of factors that influence business innovation. Such forces are economic, technology, environmental, socio-cultural and so on. In this assignment technological and economic force is chosen to discuss the importance of such forces in business innovation.   

Technological forces and economic forces are selected as a important tool to innovate Tesla. All the business is affected by economic factors. The development of business is depended on all the factors of economic forces. There are lots of economic forces that regulate business innovation. Some of them are recession, inflation, interest rate, demand and supply. 

Demands indicate how much a customers want a certain product where as supply shows the availability of a certain product in the market. In the words of Castaño, Méndez & Galindo (2015), Tesla become profitable when both demand and supply approach is equal. In this context,  Telsa delivered 99,475 vehicles in 2008 and expecting to deliver 360,000 to 400,000 vehicle in 2019 to 2020 (tesla.com, 2018).  On the other hand, employment plays a vital role in economic growth of a business organization. As per employment rate it can be said when unemployed rate is high, people don't have much money to spend on goods which affect the productivity and profitability of a business company. Similarly, low unemployment rate indicates more purchasing of goods which are a good sign for a business organization to become profitable which indicate the innovation of the business. In this context Telsa has fired more than 400 to 700 employee that effects its production (academia.edu)

Interest rate has great influences in economic environment which is directly connected with business innovation. Telsa carry out 9.9% rate and additionally approx $497 million in the mode of interest payment annually (economist.com). As mentioned by Tchamyou (2017), high rate of interest causes the debt in business. Such interest rate also cut off the spending of consumer as high rate of interest make a product more expensive.

The situation of inflation comes out when there is an increment of business expenses. Rent, cost of products, utilities, such business expenses causes inflation. Telsa has faced the repayment procedure of the amount of $1.3 billion within 2021 (economist.com). Telsa raise their cost of products to overcome inflation. Such condition reduces product purchasing as consumer cannot afford the product due to its high price. Besides privatization, globalization also helps in business innovation. 

Business Model Framework

Figure 1: Business Model Framework

(Source: Mian et al. 2016)

The adoption of technology in Telsa helps the company to introduce new ideas regarding business strategies. As mentioned by GërguriRashiti et al. (2017), technology acts as a vital tool for business organization to improve their operations and ideas. Telsa has decided to manufacture more than 300,000 vehicles in nxt 2019 to 2020. In this regards Telsa needs to develop more supercharger power stations to manufacture large number of vehicles. In 2018 they opened near about 293 supercharger stations which have more than 20 to 30 supercharger station per location (tesla.com, 2018).  Technology makes easy data analyzed which help a business organization to make proper decision regarding business development. digitization,  automation in data transfer, ICT, global network development are all those technological forces that are used in a business organization for business innovation. In the words of Lewandowski (2016), automation process helps a business more innovative. This process reduces the cost of production which helps Telsa to make more profit in the competitive market. Technological advancements also increase the rate of employment which helps to increase productivity of business organizations. Such process can raise a business organization to the top of business innovation. 

There are lots of recent economic trends that make business more innovative. All the business organization follow recent economic trend to hold their position in global market. Business organizations are focused on global demand. Business innovation happens when productivity is become equal to demand. Telsa emphasize on the improvement of productivity. Telsa sales their product in the total sale amount of $5.5 billion ( Ihsmarkit.com .). They are thinking strategically to attract more consumers to buy their product. Telsa spend near about $4.1 billion wages to its employee (Ihsmarkit.com.).  Employment rate has a deep impact of economic growth as well as business innovation. As per U.S economy, there are 6.7 million needs for employment but only 6.4 million are there to fill the vacancy. It can be said from that a business organization become innovative if they hire efficient employee. Business organization needs to check interest rate for better business development. According to U.S economy interest rate is increase up to 2.4 % which can be quite difficult for all the business organization in U.S to profit in the global market. In the words of Foss & Saebi (2017), inflation is major problem of business innovation. Inflation problem can be solved by increasing the rate of interest in which business organization and consumers both can borrow money. Telsa has also faced such situation. In this regards Telsa need to concentrate on their productivity policies so that they can attract more people to buy motors. Business innovation can be easier for those companies who are seeking for new ideas and opportunities for economic growth. 

Similarly modern technological advancement makes a business organization more innovative. Telsa use the process of cloud computing for manufacturing goods. In this process data can be accessed by both co-workers and business organizations. HP, Apple, Nokia, Samsung , Blackberry, all these wireless network manufacturing companies help other business organization to run their business through wireless networking system. As suggested by Palacios-Marqués et al.(2015), digital market is quite common adaptation of business organization. Digital market provides a business organization more efficiency and profitability in global market. Telsa adopt digital marketing to make their sales more reliable to the people. They use modern digital networking system to connect with their customers. Telsa use solar energy for manufacturing goods. They mainly use renewable energy resources for sustainable development. They introduce supercharge network that people can charge Telsa’s vehicles for 30 minutes without any payment.

A business organization can achieve business innovation when the company adopts an ideal business management plan. Such business management plan gives new ideas, new way to solve problem and ensure innovative ideas for business development as well as economic growth. There are mainly three type of business management plan. It includes theory X, Y and theory Z. 

Theory X is emphasis on the pessimistic view of a worker in business organization. In this theory, it is assumed that peoples in the business organization dislike their work and like avoid the work. It also assumes that most of the workers in the organization are not ambitious and self-centered. This theory says that all these criteria have a negative impact on business innovation. Theory X emphasize on monetary rewards which is effective when employees are tried to attempt higher-level needs. It also emphasize that command policy is not applicable for those workers who are not ambitious or dislike the work. The best way to motivate them is to ensure rewards for their work. Theory X management is quite difficult as workers are less interested in work.  This theory is based on two approaches, one is hard approach and other one is soft approach. In hard approaches, the rules and regulations towards workers are strict which is not effective those workers who dislike the work. In soft approach, such rules and regulations have relaxation. This approach is less strict and expecting more effective for non active workers. 

Theory X and Y

Figure 2: Theory X and Y

(Source: Tchamyou, 2017)

On the other hand, theory Y is based on the optimistic view of business organization workers. This theory assume that peoples are creative and well concern about their work in the business organization and such approaches help in the innovation of business. It also assumes that the creativity of the workers will spread all over the organization that can help that organization to be innovated. Theory Y encourages trust-based relationship and collaboration among workers and business organization. Such approaches help the organization to become more innovative. 

As per Theory Z, it is the result of theory X and theory Z. It is assumed that, this theory can help to increase commitment, improve work satisfaction, reduce turnover of employment and increase innovation of business organization. Z theory ensure if company need to develop innovation for their business organization they need to concern about employee generalization, happiness of the workers, individual responsibility of the workers. 

In the context of business innovation, all the business organizations adopt some decision making strategies to develop their business. There are mainly three type of decision making approaches. These are includes rational decision making, real world complication decision making, and finally contingency approach.

According to rational decision making approach, a business organization first needs to identify the problems. It must ensure that the main focus will be on the identification of the cause of problem not its symptoms. In the words of Soto-Acosta et al. (2016), business organization need to identify the backlog between current situation and desired situation. After that, organization needs to gather all the information regarding the problem. They have to analyze the situation. Furthermore, business organizations need to develop ideas to solve the issues. After adopting all the ideas, organizations need to work according the ideas. The main strength of rational decision making approach is that this approach provides discipline and a structure of the process of decision making. It helps to relate all the factors that are used to solve the problem and it helps the business organization to make better decision regarding business innovation. Such process helps the organization to develop business innovation. 

Rational Decision Making ApproachFigure 3: Rational Decision Making Approach

(Source: Andersson et al. 2016 )

real world complication decision making approach emphasize on the practical life decision making. As mentioned by Clauss (2017), it emphasize when a business organization face a problem, they need to handle the problem tactfully. At this time the organization need to prepare for accepting all the challenges to overcome the worse situation. This approach is quite important practical for all the business organization. 

Contingency approach states that there is no existence of best way to set a business organization successfully. As mentioned by Mian, Lamine and Fayolle (2016), the framework of corporate structure is based on three environment includes physical, social and economical. In this approach it is clear that a successful corporate structure need the collaboration of all physical, economical and social factors. Contingency theory can be applied to leadership which help to change management styles.

After examine all the factors about a business organization, it is clear that economic and technological forces have a great impact on business innovation. Business innovation ensures the increase of productivity, profitability of a business organization. The main motive of business innovation is creating the value of business organization. Such values can arrive from rising new ideas and opportunities business organization need to focus on negative sides of the business which is processed during business innovation. On the other hand, business organization need to take all the risk in regards of benefit of the company. Such reprocess ensure the process of business innovation. And it also helps to improve productivity and profitability. Innovation in business includes the reduce cost of product, improve productivity, bring the business organization more competitive, set up new partnership, increase employment. In the above study theory X, Y and Z is mentioned which can act as a tool to execute different business strategies. There are different decision-making processes that help a business organization in a innovative way to develop their business in the global market.