Question

QUESTION 3

It has been said that a firm’s decision-making processes center upon technology,

entrepreneurship, innovation, employment relations, outsourcing, and

competition policy. Discuss this statement giving relevant examples in real life.

Answer 1

Real life example: smartphone

The decision making for the introduction of “smart phone” is the market depends upon the followings.

Technology: this is a new technology and it requires new technology in production, which is already in the market. Therefore, if a company wants to produce smartphone, it has to think whether the new technology is affordable or not. Without the affordability, the firm can’t take decision of production.

Entrepreneurship: this is the creativity and risk taking ability of the decision maker. If these are favorable, means “yes” for both these elements, the decision of production would be positive.

Innovation: all smartphones are not equal; there features are different. Such differentiation should always be made for the sake of brand image and uniqueness. The decision maker must need this quality. Once there is surety of innovation, the decision of production could be made.

Employment relations: workers are needed for production and the firm must have good relation in market – such as staff turnover is very low and the existing staffs in the firm are satisfied. This is required for getting employees on the new production.

Outsourcing: few parts of smartphone are made in Japan. The firm must need this facility of outsourcing. This should not be obstructed in political banner, which are seen usually.

Competition policy: the firm must have such policy – like lowering the average cost for keeping the price level down. Before making any decision of production, the firm must setup plan how to cope up with competitors.