Creativity and innovation

Creativity and innovation are critical components of market growth. With increasing rivalry, companies must constantly develop new tactics and methods to gain a competitive edge. As a result, it is important to have staff that is imaginative and inventive. Intelligence employees are those whose primary capital is knowledge. Digital engineering, pharmacists, and doctors are examples of those staff (Pervaiz, 1998, Pg. 38). This paper investigates expertise and creative worker efficiency, as well as the impact of financialization on non-financial organizations. The key motivational, social, and organizational factors needed by knowledge or innovation workers to be creative and highly productive

Motivational factors

Recognition: Recognition is among the top motivational factors for knowledge workers. People like it when they are recognized within their organizational setup. Imagine a situation where no one sees you as an important person? It becomes easy to get discouraged which can lead to one seeing no need of working hard. However, recognition makes the innovative workers to try their level best to ensure they produce excellent performance in their areas of work (Jean, 2013, Pg. 327). This is when the employee goes an extra mile to research more on new methods and techniques that can bring the business to a higher level of success.

Delegation: It always feels entrusted when your boss chooses you to perform some specific tasks on their behalf. It boosts a person’s self esteem in feeling that they are important and that they have the required level of expertise to work at the senior level. Delegation is, therefore, among the factors that can boost knowledge workers’ productivity. Such an employee will ensure giving the best results or at some times employ creativity and innovation to go an extra mile of the assigned duty which leads to success of the organization (William, 2010, Pg. 679).

Social factors

Affirmative action: Everyone is gifted in a certain way. However, there are those who do not believe in themselves which makes them to perform poorly. In such situations, affirmative actions are among the best techniques of improving worker productivity. This is to let the individual employee understand how important they are and that they have special knowledge and skills that can be useful to the organization (Drucker, 1999, Pg. 95). With such an understanding, the individual employee makes maximum use of the realized strengths and hence a higher level of success.

Identity: When dealing with knowledge workers, it is important to make them feel part of the organization. This can be done by involving the employees to take part in decision making. Once the individual finds some of their ideas implemented, it boosts their confidence and self esteem and hence the motive to work more productive (Julie, Colin, Sukhdel & Karel, 2000, Pg. 101).

Organizational factors

Employee evaluation: As previously explained, employees like it when they are recognized in what they do. However, recognition can only take place when there is evaluation. Imagine a situation where the organization does not recognize an employee’s hard work? It becomes so discouraging. With evaluation, the organization stands a chance to identify who performed well and who performed poorly during the specific period. As a result, every employee will want to be among the top performing workers coming the following period (Margaret, Mather & Maria, 2017, Pg. 829). This leads to some form of competition which results to performance improvement for every individual employee.

Commitment: It feels good when employees see their organization committed to their success. Such a commitment can be shown through provision of free employee training, ensuring a better working environment, providing the latest technological tools among other things. As a result, the employees get motivated to work more productive leading to a higher level of success (James, 2002, Pg. 42).

Financilization

What is financialization?

Financialization refers to the process by which the financial sector expands in the economy. It involves an increase of the financial organizations within a society that leads to more access to funds and other financial services. According to the Natascha 2014, the debt to equity ratios in non-financial organizations increased during the period 1980-2010 following the increase of financial institutions in the nation.

The effects of finacialization on the management strategies of non-financial organizations

Every organization is working towards attaining a higher level of success. Management strategies are those plans or measures put in place to help the organization meet the set objectives and goals. Such strategies include quality, relationship management, and structured decision making. However, implementing such strategies becomes difficult as the financial sector expands. Financialization has made non-financial organizations to concentrate on conquering the increasing competition rather than on issues such as quality, building better relationships and structured decision making (Sharon, 2013, Pg. 664). For instance, quality performance will require the organization to invest more in technology as well in the human power, better employee and other stakeholders’ treatment, and allowing all the stakeholders to participate in decision making. However, as the organization focuses on profit maximization due to the stiff competition, it becomes impossible to focus on the managerial strategies as they tend to increase the overall cost.

Why non-financial companies must put short-term shareholder value well above other business goals and strategies

As much as an organization is working towards profit maximization, it is important to prioritize share-holder value especially at the current age where the financial sector has really grown. According to Pervaiz 1998, a company’s performance is determined by the ratio of debt to equity used to finance the business operations. A situation where a higher level of debt financing is used places a business to a higher level of risk which can result to failure. This is why non-financial institutions must view shareholder value more much important than all the other strategies. By prioritizing shareholder value, the company stands a chance to have a higher level of equity finance than debt. As a result, the level of risk becomes lower and hence an opportunity for great success.

Effects of the managerial imperative of short-term profits and shareholder value on funding of research and development in non-financial firms

As non-financial firms are focusing on short-term profits and shareholder value, they tend to pay less attention on research and development. Research and development is a key to creativity and innovation. However, the organization may be required to allocate more funds on research and development and not only concentrate on profit maximization as well as maximizing shareholder value. To maximize short-term profits and shareholder value, the organization will be required to do all means to minimize the level of expenditure. Among the ways in which most organizations chose to minimize expenditure is to do away with research and development (Jean, 2013, Pg. 331).Research and development is an investment that does not provide profits during the short-run. Therefore, most of the non-financial organizations will not see the need for research and development when working towards maximizing short-term profits and shareholder value.

Effects of the managerial imperative of short terms-profits and shareholder value on the treatment and pay of innovation and knowledge workers within these companies

As explained in the above section, non-financial organizations are working towards minimizing business expenditure as they try to maximizing short-term profits as well as their shareholder value. Salaries and wages are part of expenditure and they will try to pay their employees at the lowest level possible. Such low payments discourage knowledge workers given that they contribute much towards the business success. As a result, knowledge workers get discouraged and hence lose the motive to work. Instead, the employees will only work to meet the minimum expected results and not for excellent results (William, 2010, Pg. 681). This would affect the overall performance of the organization and that is among the reasons why non financial organizations are experiencing struggles.

How and why non-financial corporation’s engage in doublespeak

Double speak is the use of a false language to influence an individual to take a certain action. Non-financial corporations have been using this concept in various ways to ensure that they meet their objectives. Among the major ways in which double speak applies is when the organizations are in need of finance. As previously stated, non-financial organizations can obtain their finance from either debt or equity. Starting with debt financing, the organization must meet certain qualifications as well as proof to have the capacity of entering into the debt contract for them to be offered the required funds. Some may present false financial statements to convince the lending institutions that they qualify for the loan. On equity finance, non financial organizations may present information that can convince prospective investors to buy the offered shares among other forms of security (Drucker, 1999, Pg. 99). For instance, the organization can present a list of beneficiaries or the previous increase in share value to convince the investors buy their shares. As a result, investors end up getting less than what they expected while the firm attains their profit maximization objectives.

Possible solutions

Financialization has affected non financial organizations. The expansion of the financial sector has increased the level of competition. Non financial organizations are relying more on debt financing as compared to equity finance. The level of business risk is too high among non-financial organizations. How can these problems be solved? What can these organizations do?

First, non-financial organizations need to invest more in research and development. Focussing on short-term profit cannot be helpful. These organizations need to focus more on the future than what is happening today. By investing more in research and development, non-financial organizations will stand a chance to concur the still competition as their levels of creativity and innovation increase. With the ongoing improvements in technology, research and development will enable the organizations to continuously come up with new ideas, methods and techniques which can take them to higher levels of success. Another thing, non financial organizations should employ globalization as one of their business strategies. As they go global, they will increase the size of the market which can minimize the increasing competition.

Bibliography

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