Management of Organizations in the Context of Development

Innovative Aspect of Business Administration

Modern reality is unique in its complexity. An uncertain future is an inherent characteristic of today’s history. The crisis associated with the pandemic and its consequences demonstrated the vulnerability of economies and businesses, put many companies on the brink of survival, and became a stress test for managers. At the same time, critical moments in the life of society, organizations, and people often act as a driver of development (Afuah, 2020). A necessary provision is that companies innovate in order to grow. Today, more than ever, the topic of the development of organizations is relevant. The practices of developing the best organizations in the world are attractive by their example but copying the experience of Apple or Google is a hopeless solution.

Organizations need to look for their approaches to solving development problems. The stimulating factor here is not only the personal ambitions of management but also the “invisible hand of the market,” competition (Singh & Gaur, 2018). No one is slowing down in the market; business participants genuinely want to neutralize their competitors. The leading companies (Amazon currently employs more than 550,000 employees worldwide) have not reduced their research and development budgets even during the crisis (Frishammar et al., 2019). Similar companies on the retention and development programs of promising employees maintained a relatively high innovative activity with a particular inventory of promising projects.

The tragic stories of once successful companies such as Xerox, Polaroid, Kodak, Nokia, AT&T, Yahoo, and others who failed to lead the revolutionary process and compete with new market players are also indicative. Their ideas decreased, organizational models were inertial and bureaucratic, and companies had not been tolerant of business risk (Riad Shams et al., 2018). In addition, they had outdated, inefficient systems for managing innovation processes, focusing excessively on rules, procedures, meetings, and management’s intolerance of significant failures. In connection with these stories, among other things, many companies have found that it makes no sense to develop independently based on their own innovations (Afuah, 2020). However, it is possible to acquire innovations by absorbing breakthrough start-ups. Creating an innovative enterprise from scratch is a challenging task to act without guaranteeing success. However, the task of maintaining and updating the innovative potential of an existing market player is even more difficult. In order to maintain their growth rate and lead breakthrough technologies, established companies need to create and intensify a continuous stream of innovations over time.

Considerable difficulty in modern business organizations is the problem of combining creative (developers) and routine processes (operators). It is worth noting that the creative process is born in chaos and disorder. At the same time, specialists engaged in routine tasks follow the formalized rules of the game and are generally deprived of opportunities to create, which is a sign of organizational discrimination (Afuah, 2020). However, this problem was solved by the leading companies of the world. Management develops organizational potential by making several interrelated decisions regarding people, processes, and structures. The ability to synthesize is inherent in people connecting different fields and spheres of activity (Singh & Gaur, 2018). This manifests itself in processes that allow experimentation and the acquisition of new knowledge and structures that facilitate rather than hinder the free flow of ideas from different sources (Riad Shams et al., 2018). All this directly depends on the general and personnel management of the organization. The company’s ability to be creative as a potential for innovation is not a consequence of scale but the quality of management.

Opposing Viewpoint

The main argument of supporters of development through the absorption of new and potentially successful companies and products is the example of many IT giants. This is reflected in the fact that such companies have significant financial resources that allow them to negotiate with start-ups easily (Singh & Gaur, 2018). However, in this case, it does not manifest itself in this way since this aspect has several features. The competitive advantage of modern organizations is based on the possession of unique and hardly reproducible (copied) knowledge and skills. Apple, Google, and Tesla have succeeded because they have become unique in essence and spirit (Frishammar et al., 2019). Innovation potential is a powerful source of competitive advantage precisely because it is challenging to create and maintain. Many companies, including direct competitors, can absorb and buy star