Business

Every business has an obligation to observe ethical issues while conducting its affairs to ensure fairness to both the seller, customer and the world at large. Most multi-million companies are forced to compromise on ethical issues because of the money that they stand to make incase they do not follow ethics. However, there are penalties imposed on such companies but these penalties are too lenient and big companies opt for the fine because it is negligible compared with the profit they stand to make in the transaction at hand.
    Many business people argue that the strict ethical issues are found in books and lecture hall but do not apply in the real world. Such corrupt people support their case by saying that the essence of   capitalism is making profits. So they should not involve themselves so much with ethical issues but rather should be concerned on how to maximize on their profits.
Ethical dilemma faced by Bob Hopkins
    In the scaffold plank incident Bob Hopkins is faced with an ethical issue of being honest and tell the customer the truth that the scaffold planks that they had in their shop was not the right quality the customer needed. By doing so Bob Hopkins would have created a good relationship with that customer and therefore ensure that he retains himher in the future. This is because the customer will develop confidence that any item sold to himher from that shop is of good quality.
    On the other hand Bob Hopkins was faced with the option of selling the product to the customer and make money at that moment but risk losing the customer after they realize that the product they purchased was substandard. The business could also risk losing other potential customers since the customer was likely to share his experience with other people.
Other stakeholders
    Other stakeholders in Bobs conflicting decision were his co-workers who benefited from the business through employment. Such people were so critical that for the business to perform all workers must work in unity and in one spirit. The unity will ensure that the business makes profits inorde to sustain the entire workforce so that they could meet their personal needs.
Bobs alternatives
    Bob Hopkins had two alternatives to be in a position to deal with the dilemma he was undergoing. One was to stand his ground and be informed by his morals. In this way he could chose to advise the client that the lumber they were buying was not the correct quality and therefore ensure that the lives of other people is safe. This is because scaffold planks are used to support people working in tall buildings and if it was of low quality it would put the lives of such workers at risk.
    The other alternative was for Bob to tow the line and let the customer buy the product. In doing so the business would make profit. There was a probability that the substandard lumber would work normally without any problems and the customer would never know that they bought substandard lumber.
Solution
    The best thing for Bob to do would be to share his dilemma with the senior management of the business and hear their take on the issue. If he is convinced beyond any doubt that he was doing the right thing and the management fails to support his stand, my opinion is that he should do the honorable thing and resign. By doing this he would safeguard his personal integrity and his conscience would remain clean. This is the best practice and attitude that anybody who wishes to do business should emulate.

Role of intellectual property

It is very crucial to keep in mind that innovations and new product development should be protected though copyrights and patents so that no can imitate or steal our ideas. Without patents, competitors can mimic our strategies and product innovations. Thus, I would focus on protecting the intellectual properties through patents.

Conclusion

In conclusion, new product development requires innovation and creativity with integrating all functional areas. Introducing new products with unique selling propositions while targeting attractive segments to ensure healthy revenue streams can prove beneficial to a business or new start-up.

United States government promoted uniformity in commercial laws from State to State even before formulation of Uniform Computer Information Transaction Act (UCITA) and Uniform Commercial Code (UCC). The government was able to regulate commerce by taking in to considerations of demands and supplies. The control was applicable to the states which were trading with each other which enforced the goods which were to be traded on and the quantity traded to prevent over or under supply of the commodity in the market.
The major differences between Uniform Commercial Code and the Uniform Computer Information are that Uniform Commercial Code is much broad and has standardized laws which govern financial contracts, negotiable instruments, bank collection and deposits, how to deal with credit letters, documents and warehouse receipts and how to deal with secured loans (Anderson, 2003). While, Uniform Computer Information Transactions Act are regulations which are narrowed down to computational transactions such as transactions in computer, online accessibility and software licensing (Virginia, 2000).
The legal distinction between selling a product and licensing it, when selling of a product the owner gives away all the rights of ownership to the buyer in terms of deign, usage and all attributes which the product has. While, licensing the person licensing it allows the person to pay for the license and use products or services fully while its ownership such as the design and concepts of the products or services are owned by the licensee.
The drafters decided to propose UCITA as distinct and separate uniform act despite of provisions that it was a modification of Article 2 of UCC. The drafters would have emphasized on UCITA being distinct so that it would be accorded independency which would enforce its implementation and be accorded seriousness by the stakeholders who shall be adopting it. Being distinct and separate gives it independence for traders to study and understand it hence implement it successfully because if it was implemented as a modification many people would have ignored it.

Business Identification Freeman  Co. is an accounting firm that operates in the Southern California. It serves to the personal and business needs of the individuals from the Southern California. Since it caters to a number of needs, the market for its goods and services is huge. The accounting firm carries out a number of activities. Its major business activities include providing accounting products and services to corporations all over the area it operates in. The accounting products provided by Freeman  Co. include different accounting softwares and program applications. These softwares or applications can be off the shelf or personalized according to the needs of the customers. The services include assisting the organization in carrying out a number of accounting tasks. Such services include bookkeeping, specialized and advisory services. Further details of the business will be discussed in the coming portions of this business plan.

This business plan will outline these products and services thoroughly. It will describe in detail the organization and its operations. It will carry out various analyses which will help understand the market and the industry the business will operate in. As we move on, this plan will outline the strategy that will be adopted by the business over the introductory period. Towards the end, forecasted financial statements will be developed which will enable us to have a clear idea of what the business will be financially over different time periods in the next couple of years. 

A2. Mission, Goals and Objectives There are a number of goals and objectives that have been set for the organization. Before we move on the goals, we must understand the organizations mission. Its mission is to serve and cater to the accounting needs of its customers profitably. The goals and objectives of the organization are as follows.

To breakeven in the first year and earn a profit in the following years
Growth of at least 5 percent over the first 4 years
Capture an 11 percent market share after the first 5 years of operation
Be in a position to give back to the society by the end of the first 3 years of operation
Innovate and come up with the newest services and programs for the customers over the years

A3. Keys to Success There are a number of strength and opportunities that we plan on cashing upon. These will become our keys to success over the years. These include a strong team with who understand how to run a business and at the same time have accounting knowledge and hence can contribute to the business. Second key to success is the potential that lies in the market. The market for accounting products and services is huge. There are a number of medium and small businesses that do not take professional help for their accounts. These businesses can be targeted and hence the results can be great for our business. The third key to success is the nature of the business. Accounting has an ever growing nature. The scope of the business is very vast therefore there is a lot that can be targeted and hence this becomes an opportunity for us.
B- Company Summary
B1. Industry History Accounting has been used by businesses since a very long time. Businesses use this to record various transactions and keep track of their business. However, very recently, accounting has been incorporated with information technology. Before this, all the accounting processes were manual. As information technology was incorporated with accounting procedures, a number of companies switched over to make use of the benefits of such methods (Miller Center for Undergraduate Career Service, 2008).
In addition to this, the culture of outsourcing various departments to outside companies also increased in the market. Therefore more and more companies are now outsourcing functions like accounts and human resource to external organizations. This also increases the size of the market for us.
In the industry, there are a number of businesses that have been operating. These range from small to large accounting firms. The large ones have majority of the market share. The small ones target smaller amount of companies and hence end up capturing a relatively smaller market share. Our direct competitors will be the large ones considering the size and operations of our Freeman  Co. These are relatively fewer in number, however, they have become very strong and known in the market therefore creating a name and space for us will be a challenge over the years.
B2.  Legal Form of Ownership The form of ownership will initially be a partnership. A total of 6 partners will contribute to the organization in the beginning. However, since there are plans to grow in future, the organization is expected to turn into a corporation as soon as the operations become large enough.

There are a number of benefits that partnerships will bring to the organization. The 6 partners that will come together will bring in capital to the organization therefore increasing the capital employed amount and making the introductory survival easier. In addition to this, the various partners have different backgrounds and skills and once they come together under a partnership, these skills and backgrounds will translate into a successful profitable accounting firm.B3. Location and Facilities As mentioned before in the summary, the business will operate in Southern California. This is where the business will start from. There are a number of reasons why this area has been selected. First of all, the owners of the business have a number of contacts in this area which increases the market ready to consume our products and services. Also, since the accounting industry work on the basis of referrals to a great extent, these contacts will become beneficial for the organization in the long run. The details of the products will be discussed in the coming portions. However, the majority of the products will be produced in house. These softwares will be developed by developers working internally. In the beginning some of the work may be outsourced, however, we ultimately aim to become independent as time passes therefore all of the outsourced functions will be internalized in the future.

There are a number of accounting firms that are operating in this region before us, however, since this is not the cosmopolitan area of the United States, the competition is relatively weaker her. This makes this geographic location more suitable for us.

When we talk about the regulations that have been imposed in the region, there are not many that apply to us therefore we do not need to be bothered about that. Since we help organizations with taxation, we need to consider the tax policies of the area where we are conducting business. This was done in this case as well and we found out that there are no additional tax policies in this region which make it ideal location for our business to start
. B4 Management Structure The management structure of any organization is very important because this determines the business will operate in the future. As mentioned before, the business is a partnership with 6 partners in all. Out of these 6 partners, 2 will be sleeping partners. This means that these partners will not be directly involved with the business and they will only be providing the financial support and will supervise the operations of the business as and when the need arises. The other four partners will head various departments and areas of the business. These four partners will also make up the board of directors for the organization. These four individuals have different backgrounds and the area of business they will be handling is decided based in this background.

The four departments that will be headed by these four partners will be Human Resource, Accounting  Finance, IT development, and Sales  Marketing. Each of these four departments will have a manager and employees working in it. In addition to this, a general manager position will be there which will monitor all the departments as a whole. If a large project that needs individual attention arises, a project manager will be selected from within the organization to manage and look after the project. The structure will have minimal chain of commands and a wide span of control. This will ensure effective communication and motivation throughout the organization.

B5. Products and Services- There are a number of products and services that Freeman  Co. will offer to the market. These will be discussed in this section.

When we talk about products, these include accounting program applications and softwares. These programs carry out various accounting transactions and functions for organizations that implement them in their organization.

In services, Freeman  Co. will provide basic accounting services like Bookkeeping to the organizations. In addition to this, it will also be involved in more specialized services like taxation planning, preparation, control and management. Lastly, it will also provide advisory services to organizations. For instance, it could advice the organizations regarding various accounting issues that and organization may be facing. 60 percent of the firms revenue comes to the large range of services it provides to its customers (Taxwise, 2009).

There are a number of businesses that are involved in such products and services. What makes Freeman  Co. different from others in the market is the fact that all these products and services are being provided by the same accounting firm. Usually, businesses have to go to a number of accounting firm to satisfy their accounting needs, however, when we talk about Freeman  Co., the customers can obtain all the accounting products and services under one roof.

 Market Analysis

C1 Target Market- Freeman  Co. will provide a number of products and services for its customers. Its target market includes most businesses. Since Freeman  Co. will produce and provide a range of products and services, it targets a range of businesses. These businesses are therefore of all sizes. The small businesses largely use off the shelf products that are relatively cheaper than other customized products produced by Freeman  Co.

Freeman  Co.s main target market are medium to large sized businesses. These businesses go for customized products and services. They outsource their accounting functions to accounting firms like Freeman  Co. and use software and program applications to manage their accounting transactions. These businesses generally have employees more than 40. All these businesses have a motive to grow and this is the reason why they hire Freeman  Co. There are no specific industries that are targeted. The reason behind this is that accounting procedures are used in all industries and because of the vast experience of the team at Freeman  Co., there was no point in restricting the target market to a specific industry. More than 80 percent of the firms revenue will come from products and services provided to these businesses.

In addition to businesses, Freeman  Co. also targets individuals who have enough wealth to need external accounting services to manage it. These people are from the highest income level in the region and the services that will be provided to them will basically manage their personal accounts for them. In addition to this, Freeman  Co. is involved in providing such businesses with advice regarding what to do with their income, debts, and how to improve the records etc.

Initially, the entire market that will be targeted by Freeman  Co. will be from Southern California. However, as time will pass, Freeman  Co. plans on growing and hence the target market will increase over the years.
C2 Industry Analysis- When discussing a business plan, it is imperative that we take into consideration the industry in which the business will operate in. The reason behind this is that the industry greatly affects the operations of the business. To understand these effects, industry analysis is very important.
When we talk about growth trends, there are a number of things that we need to consider. First of all, we need to consider the fact that this industry only started growing as information technology became common. This was when businesses switched from manual recording of transactions to using accounting products. In addition to this, there was no concept such as outsourcing different functions in the past. Very recently, have organizations started to outsource various functions to external organizations. These factors increased the opportunities for accounting firms like Freeman  Co. and this is when this industry started to grow.
The industry will grow as more and more medium to large sized businesses increase in number. We expect the number of such businesses to grow by 8 percent annually. If this is accurate, the growth of the industry will be at least 8 percent or more.
It is very important to consider the labor market when we talk about industry. There are not too many accounting graduates in the country. As a result, there is a shortage of people who can carry out the services that we will be providing. This is an opportunity for accounting firms like us because such conditions result in businesses coming to us for accounting assistance. However, this can also become a challenge for accounting firms like us because we will have a hard time finding suitable people who will be able to provide such services effectively. Once we can overcome this challenge, we will be in a very strong position in the market.
C3 Competitive Analysis- The competition is very strong when it comes to this industry. All the accounting firms try to gain as many customers as possible. Since the relationship between the customer and the company is usually long term, the marketing of the accounting firms has to be very strong and effective.
The industry, as mentioned before, has a lot of potential because of its nature. There are not many accounting firms that are in the region. These accounting firms are of different sizes. Our main competitors include the accounting firms our size or larger. However, since the smaller ones also make up a significant portion of the industry, it is important that we consider them.
Our direct competitors that include the relatively larger accounting firms have a total of 57 percent market share. These organizations have a reputation in the market of being the best and hence it will be challenging to create a position for ourselves in the market. We believe this will be possible because of the quality or innovativeness of the products and services that we offer to the customers. Also, since the industry works on referrals and since we have a number of contacts in the market, we believe that further referrals will help us gain a market share in the first few years of operation.
 Market Strategy

D1 4 Ps- The first P that will be discussed is the product. As mentioned before, the products that we will be offering to the customer would include various accounting softwares, applications, and programs to the businesses. These products will digitalize the accounting procedures and transactions for the organization and will make their operations more efficient. These products can be off the shelf or customized according to the needs and description of the customer.

In addition to this, Freeman  Co. will also be providing a range of services to its customers. These services include carrying out basic accounting transactions. This could include bookkeeping or similar accounting transactions. Besides this, specialized accounting services will also be provided to the customers. This would include tax preparation and planning. This is a rather complicated procedure therefore organizations mostly consult an outside specialist to help them out with this. This is the reason why most of our revenue comes from such specialized services. Lastly, we will also provide advisory services to our customers. 

The second P that will be discussed is the pricing of the products. We have priced our products after keeping a number of factors into account. The detailed pricing of the products will be given in the next section however, the factors and methods used to decide on a price will be discussed here. The pricing of the products has been done by keeping the costs, positioning and the competitors in mind. We will charge a relatively higher price for our products and services and this high price will reflect the quality in them. When compared to the direct competitors, the price charged by us will be almost the same.

The third P that we will be discussing is promotion. When we talk about an accounting firm, most of the promotion is done mouth to mouth. This industry works on the basis of referrals to a great extent. Therefore the best form of promotion is a good reputation in the market. However, there is always a need for other forms of promotion that will use various mediums. These other forms include advertising in business magazines. Also, one of one presentation is a very important method of promotion that we will be using. This will allow us to customize our approach towards every large business which could possible become a major customer in the future. Another very important touch point between the customer and us will be our company website. This website will promote the various products and services that are provide by our organization and different benefits businesses could obtain by hiring us for their accounts handling.

Lastly, Place or distribution will be the last P discussed in this section. There will be central head office in the middle of the city which will be the main point of interaction between the customer and us. In addition to this, since we are providing a service, there will be no specific place.

D2 Price List- The pricing of the products and services that will be provided by us will be mostly premium. The prices will be high compared to others in the industry. These high prices will reflect the high quality of the products and services that will be produced and provided by us. One challenge will be to ensure that the customers see the value for the money they are paying for the products and services.  

The prices of the products will depend whether they are off the shelf or not. The off the shelf products will be cheaper because there is no customization involved. When the products are customized, it will take more time on the part of our agents and hence it will be expensive. This is the reason why the prices of these products cannot be listed here.

The services will be charged on an hourly basis. They will be as following.

ItemBasis of PricePriceFull-time Accounting PartnerHourly160CPA Accounting StaffHourly105Lower Level Accounting StaffHourly50-60Staff for BookkeepingHourly40-50

D3 Selling Strategy- There will be a number of steps that will have to be taken in order to increase the sales of our business. As it is mentioned again and again throughout this plan, the business depends largely on referrals. Therefore it is very important that each and every customer is 100 percent satisfied with the products and services that we are providing to them. Then only will we get positive referrals and the market will grow. For this, we will have to work on making the customer happy from the first point of interaction we have with them.

It is known to all that it is much more expensive to attract a new customer compared to retaining an old one. Therefore this will be kept in mind throughout the time we will be carrying out business. The service provided to old customers will not be compromised in any way. Long term relationship will be developed by customers and this will automatically help up get new ones in the future.

As mentioned before, a very significant portion of our income comes from the services that we provide to the customers therefore we have to make sure that the amount of service increases. Therefore we will have to make sure that the number of billing hours are increased with every customer. However, at the same time, we have to ensure that the value to the customer also increases because then only will the customer remain satisfied.

D4 Sales Forecast-

20092010LargeMedium Sized Businesses 1.3 Million 1.3 MillionSmall Businesses 0.2 Million 0.3 MillionPrivate Individuals 0.1 Million 0.1 MillionTotal Sales 1.6 Million 1.7 Million
    The sales forecast has been developed on the total sales and has been broken down on the basis of different customer as well. As mentioned before, majority of these sales will be from medium sized and large customers. Individual private customers will make the smallest amount of the total revenue earned.

 Implementation Strategy

E1. Overall Strategy- As mentioned before, there will be 6 different partners. Out of these 6 partners, 2 will be non working partners while the other 4 partners will be working partners. These 4 partners will handle the 4 different portfolios on which the entire business will run. It will have to be ensured that all 4 departments of the business effectively communicate with each other. These 4 departments have to be aligned in terms of their operations and future plans. Then only will the entire business function properly as a whole.

In addition to this, another strategy of the implementation of the business will be to build upon the contacts each of the partners has over the years. The partners will have to dig up their contacts, use their referrals to gain more contacts and grow in this manner. Since long term relationships are the core essence of the business, this will be worked upon once a contact is turned into a customer.

Another factor that will have to be kept in mind is that the name of the business will be established before the operations of the business will start. This would give the businesses a chance to think about what accounting firm they will be using over the next financial year and hence we will have a higher chance is they know about it from before hand. 

E2. Implementation.- The following is a timeline which will be followed when the time for implementation comes. Before we start with this, we must keep in mind that the business will start from July 2009. This is when the financial year of most businesses starts and hence this would give us ample time to create a name in the market, build upon our contacts and prepare for the normal operations of the business.

1st January, 2009 Finalize the business plan15th January, 2009 Website development and design complete
20th January Start advertising in business magazines and brochures and other methods decided by the marketing department
2nd March, 2009 Obtain the location for the head office that was decided upon
5st March, 2009 Finalize the entire workforce and develop the final structure
1st April, 2009 Develop samples for the products that will be offered in the market.
15th April, 2009 Finalize the range of products and services that will be offered.
1st June, 2009 Start normal business operations and understand how the operations work and different possible problems that might rise
1st July, 2009 Formally launch


E3. Control Plan- There are a number of control measures that will be taken by the business in order to make sure that the implementation is going as it was scheduled initially. A detailed timeline will be developed once this business plan is approved. This timeline will be documented and each and every member of the organization who will be responsible during the implementation phase will have this timeline available. 

Each department will contribute to the making of this timeline and each department will present when its functions will fulfilled. Once this timeline is finalized, each department would be expected to ensure that their department has fulfilled their own tasks. The board of directors would meet from time to time to discuss the performance and the implementation schedule. In this meeting any corrective measure that may seem appropriate will be finalized and this measure will be taken in order to ensure that everything goes smoothly.

Lastly, since the timelines extends from the day the business plan is finalized to the official launch, the goals and plans will have to be broken down into further short term goals. Therefore, each department will have shorter term goals which will help in development of the action plans. This is very important as only once the short term goals are met, the bigger picture will be completed.

Refrigerators can range from residential or home use to industrial or commercial purposes. The purpose of this equipment can vary according to its location, such as storage for medicines in hospitals or food freezers in restaurants or stores. Nonetheless, the common denominator that warrants the need for a refrigerator is the need to preserve the food. There is an expiration date followed for each product, regardless of whether it is a medicine or food, that affects its usability and characteristics for consumption. Thus, it is important that an important storage equipment, that is the refrigerator in this case, is equipped with expiration date warning device.
    The teams proposed innovation is a system installed in refrigerators that warns the users of the expiration date of the items. When the expiration data has passed, the system automatically sends out a signal to warn that the product is not suitable for consumption or use according to the date of expiry placed on the product. Moreover, this system will be introduced in to a range of high technology refrigerators manufactured by Electrolux. The products can differ in terms of purpose and size but there is a expiration date system that will fit into each of the products made by Electrolux.
    The ideas are generated through brainstorming. Each of the team members identified important problems within their everyday lives. There are various problems that arose out of the daily activities followed by the team members. However, most of these are found to be practical activities that the members find difficult. Likewise, it is seen that these daily problems would become easier through innovative solutions meant solely for the problems. After deliberating and weighing the feasibility and benefits that could be derived from each problem provided, the members voted upon the best problem based on feasibility, benefits, and interest in the topic. Based on the problem chosen, the members provided innovative solutions. The members took the initiative to incorporate their fields of specialization into providing the answers to the problems. Most of the team members placed emphasis on producing innovation in products. Through product innovation, it is expected that the companies are able to produce and maintain their competitive edge within the industry (Aydogan 2009). The innovation in the refrigerators gives Electrolux an advantage over the others especially for the clients who store as much products as possible inside the refrigerator. To a certain extent, the group also touches on process-related innovations where storage is enhanced through the system.
    In terms of group processes, each of the members perceived it to be a means of reducing the conflict and increasing the harmony and cooperation ( The Process of Innovation in Education  1973). The group processes are deemed to be means of incorporating everyone elses ideas in order for the group to achieve coherence and systematic organization. The importance of a harmonious and cooperative group process lies on the possible conflicts that diversity brings within the team. The multiplicity of ideas and the different sources of creativity and problems leads to the need for a certain binding factor, which in this case is fully satisfied by a cooperative group process.
    The climate of innovation fostered within the group is reflexive. In a reflexive innovation climate, there is a need for rapid reaction towards the barriers faced (Poluyan  Sedova 1994). The difficulty considered by the group for this case is the importance of expiration dates for the products stored in the refrigerator. There is a need for a refrigerator that reminds the people of the expiration dates that has passed in order to enhance the usability of the refrigerator and improve disposal and storage-related processes. The climate has steered the group towards choosing the remedies that can possibly be applied to foster process- and product-related innovation. The climate has improved the direction of the group and their ability to meet the goals required in the project.
    From a personal point of view, the proposal follows the characteristics attached with innovation. There is a technological change involved that relieves the people from insufficiencies related to certain products and enhances the processes involved in activities. The groups cooperation and brainstorming was successful especially with the kind of climate involved and the processes followed. The cooperation between the members resulted to an interesting, feasible, and beneficial innovative expiration date system for Electrolux refrigerators.

PART B Organizational Climate, Organizational Culture, and Operating Routines
    There are three aspects in organizations that affect the process of innovation. These factors include organizational climate, organizational culture, and operating routines. Each of these aspects have their related impact on the innovation process where some are similar but still bear differences. For each of these spheres, a discussion on innovation is presented.
Organizational Culture
    Organizational culture is characterized to be shared experiences that lead to certain interpretations and shared meanings (Hutchison 2003). It is composed of the  slogans, evocative language, symbols, stories, myths, ceremonies, rituals, and patterns of tribal behavior  (as cited in Hutchinson 2003 489). The concept is considered as a tie that binds the people within a group together through the aspects of culture that they share. These aspects can be related to how they do things within the organization. More often than not, the concept of organizational culture is considered as something that is passed on from one level of cohort to another through their leaders. More so, it affects the individuals within the organization as much as these individuals affect the organizational culture. Through this particular characteristic, every individual is considered as an active contributor that shapes the organizational culture, which can be for improvement or for permanent changes.
    There is an increasing number of literature that ties the concept of innovation with that of organizational culture. According to Harris and Moran (2004 123),  there needs to be a culture of innovation embedded into an institution  and it is expected that individuals involved within the organization becomes receptive of change, goes for creativity in solving problems, and takes the initiative to lead. In order to introduce a culture of organization, it is necessary to induce changes within the organizational culture of the company. As noted by Ashkanasy, Wilderom, and Peterson (2000), introducing the culture of innovation means changes within the previous identity, values, habits, and beliefs of the people within the organization. In this case, the organizational culture becomes the avenue through which the process of innovation can take place. The tenets of innovation should be incorporated within the larger organizational culture to enable a working environment where innovation can exist and continuously transcend towards the different levels within the organization.
Organizational Climate
    The concept of organizational climate, as cited in Smart (2003 161), is defined as the  patterns of important dimensions of organizational life or its members perceptions of and attitudes towards them.  In more simple terms, it is the way the members perceive their organizational life or the meanings that they attach to the elements of the organization. The organizational climate affects the way they see innovation in relation to the problems within the organization. In relation to innovation, any improvement in the organizational climate for innovation can contribute to the ability of the company to solve their problems and increase their competitive edge in comparison to other companies (Dubina 2007). A creative climate fostered within the workplace can lead to characteristics of innovation among the employees that allows them to think of solutions that are outside the usual routine processes. In doing this, the organizational climate can serve as the means for introducing changes within the way employees perceive their position within the organization. The meanings they attach to the work processes can involve greater degrees of innovation through the creative climate that is implemented within the organization.
Operating Routines
    Lastly, the operating routines can also affect the process of innovation. The operating routines involve the processes that are followed within an organization that helps in the completion of the organizational goals. The processes can be administrative- or production-related that are characterized by the need for continuity and coherence towards a certain goal. Apart from the work process, operating routines can also include maintenance procedures that are needed in order for the organization to continuously operate and maintain the reliability and maintainability of the parts, components, or subcomponents within the work processes.
    Considering that innovation comes in different forms, it can be introduced in several aspects of the operating routines and be affected by the procedures involved within it. First, different forms of innovation can be implemented in order to enhance or change a particular work process. It can be a major or minor work process within the work flow that has the purpose of increasing the levels of effectiveness and output. It can also serve as a means of changing the way things flow from one process to another, which also affects the aspect of organizational culture. Second, the element of innovation can also be introduced in the sphere of products or equipment used. It has the same purpose as that of introducing innovation in the work processes, which is that of improving effectiveness and output. The innovation can be introduced in order to improve how a particular tool is used and impact on its contribution to everyday work processes.
    On the other hand, the operating routines can also affect the level of innovation that can be introduced within the organization. The flexibility of the operating routines can affect the extent of change. Moreover, it can also affect the costs and the profitability of the undertaking. More often than not, innovation can involve changes in the skills required to use the product or the process because of the changes. Aside from training, there are also other things that can affect the introduction of innovation, which also affects the decisions to change the operating routines.
Convergence among the Three Spheres
    These three spheres converge in certain aspects. One, all of these serve as tools for change. The three aspects can work together towards an enabling environment for innovation. These serve as the points where innovation can be implemented and, more importantly, how these could be implemented. Second, these are aspects of the organization that can lead to the receptiveness of employees towards change and its impact. These three can dictate the level of acceptance and the degree to which change is present throughout the organization.
    The organizational culture and organizational climate are essentially the same with the latter serving as deeper roots for the former. The organizational climate can affect the attached meanings, which are present in the organizational culture. In relation to innovation, the climate can serve as the means for a successful change in the culture of the people and their ability to attach a more positive meaning to innovation. The positive change can then flow into the operating routines within the organization that allows for the materialization of the innovation procedures that have been planned. The interrelationship between the three can be seen as a sequential and linear form where organizational climate serve as the catalyst for changing the organizational culture. In line with this, the organizational culture serves as the enabling factor in introducing changes to how things are done within the organization. The concept of  how things are done  can be seen in line with the operating routines, which include both the processes and the tools. The end result of the innovation plans can be materialized through an integration into the last concept, which is the operating routines. Thus, it can be seen that these three factors are interrelated with one another. The sequential  relationship can affect the success of implementing innovation within the organization and in fostering the attitude of innovation within the employees. Indeed, these three spheres can be used in order to better understand the process of implementing innovation and harvesting the benefits that can be derived from the process. Likewise, it serves as the guide of organization for increasing the positive attitude and encouraging creative solutions to organizational problems.

The behavior of Mr. Davis and the three department heads is described in this section with reference to the Maslows need theory. Mr. Davis was promoted to a higher office which resulted in the satisfaction of his Esteem level needs. It is observed that in most of the companies managers want to get promoted not because there is a high difference in the pay scale but the real charm in holding a higher office lies with the fact that it tends to satisfy the third order need (esteem needs) of an individual. The managers work harder because they want to get to a higher position in the hierarchy this acts as a motivating factor for them the pride and honor associated to a managerial post is what most of the managers aim at. The authority of manager in the organization increases as he moves vertically, this too works as a motivating force for the managers.
Mr. Davis knew that his colleagues did not like the fact that he is being promoted he had been serving the organization for some considerable time thus he would have surely known the reasons behind this attitude of his mates but even then he kept quiet. This behavior of Mr. Davis is completely human he was being promoted so there was no reason for him to refuse the perks that he was about to get he worked hard for the post and if the boss perceived him to be the best choice then why should he bother about what the fellows are saying. This promotion resulted in satisfying the esteem needs of Mr. Davis thus he was glad to accept the post he was promoted which means that he could enjoy a better salary and obviously his span of authority will also grow (Miner, 2007). These are some of the reasons for which he behaved in this manner. The frustration which is depicted at the end of the case is also justifiable Mr. Davis did not want to let the chance go off his hands thus he was trying his level best but the staff was not cooperating with him. He knew that Mr. Hageman wanted results and if he was unable to produce them then his boss will not even hesitate in taking the office back from him. Demotion remains a nightmare for any employee and Mr. Davis too was not an exception downgrading would surely result in dissatisfaction of a higher level need. The behavior of the three department heads was expected as they too were aiming for the slot which was awarded to Mr. Davis they were performing at their full capacity and the motivating force for all of them was the same. All of them wanted to get promoted as this would satisfy their esteem needs. But when Mr. Davis was promoted the motivating force died out and they could not find anything to aim at and to work for. Mr. Davis was also a junior to all of them, thus they also made it an ego issue and felt as if they were being degraded. Furthermore when they discussed the issue with Mr. Hageman he ruled out all their concerns brutally and did not even try to consider their viewpoint. This made the three heads feel as if they were not respected by the boss and as mentioned above they were on a higher level need thus one deliberately started to underperform while the other left the firm as he found nothing to work more for in the organization. The attitude of Mr. Silvermann was interesting and depicts that not all managers are aiming for a higher spot just because to fulfill the higher level (esteem) needs there are some for whom other benefits are more important. Mr. Silvermann was one of those managers who work for money more than anything else, his behavior depicted that fact that he was placed at a lower need level than his fellows unsound financial situation can be a reason for his behavior.
Equity Theory
The behavior of Mr. Davis and the three department heads is described in this section with reference to the Equity Theory. Distribution of perks and other resources has to be done in an immaculate and justified manner by the employer as this is the outcome for which the managers are working. The efforts of the managers is the input for which they expect desired if they do not get the wanted outcome then they find themselves in an inequitable relationship which causes frustration and distress. The attitude of Mr. Davis is so because he thinks that he was given what he worked for and deserved that is why he kept quiet even though he knew that his colleagues had issues with his promotion. But at the end of the case we find Mr. Davis in hot water where his frustration was evident this is because he might be feeling that he was overcompensated by Mr. Hageman and that his colleagues were justified at their viewpoint. Even overcompensation makes an employee find himself in an inequitable situation which results in shame, guilt and annoyance and the behavior of Mr. Davis epitomizes this. The rest of the managers certainly found themselves to be undercompensated and felt that equilibrium was not there in between the inputs and outputs. All of them found themselves in an inequitable situation which caused distress to them. Social comparison was also one factor behind this attitude of the department heads because once they compared their performance and qualification with Mr. Daviss they concluded that Mr. Davis was provided with more perks even though all of them put in the same extent of inputs. This caused further frustration to them, which is why one of them started to distort the input and underperformed while one of them released his distress by leaving the organization.
Expectancy (VIE) Theory
The behavior of Mr. Davis and the three department heads is described in this section with reference to the Expectancy (VIE) theory. The behavior of Mr. Davis could be justified before he got what he expected so he did not consider the issues which were brought forward by his fellow managers (Harold  Heinz, 2006). This was the reason that he started to emphasize more on improving his performance than anything else because he perceived that the better he will perform, the more he will get in return in short he found a positive correlation between performance and rewards. On the other hand, the attitude of three department heads was so because they established a negative relationship between efforts and rewards they were expecting the perquisite to come their way but that did not happen. This was damaging for their motivational level as they perceived the instrumentality to be lower than what they expected.
Answer Two
The behavior of Mr. Hageman was a dictatorial in fact he behaved in a childish manner which resulted in causing more distress and frustration for Mr. Davis who was in reality trying his level best to complete the project within the deadline. The behavior of Mr. Hageman was thoroughly unprofessional firstly he made the decision of promoting Mr. Davis without taking into confidence the key performers of the department who were strong candidates of the position. He must have held a meeting before taking the decision this would have been a better way of dealing with the situation. He must communicate his standpoint to the candidates as they had full right to know the reasons which made him prefer Mr. Davis over them. There is a fair chance that if Mr. Hageman had good reasons to support his choice then the department heads would have agreed to his decision and the things could have been a whole lot better. In addition to this, Mr. Hageman ruled out the concerns of the department heads without even comprehending them even at that stage he would have behaved sensibly the problem could have been solved.  Lack of communication from the part of the employer ignited the situation and hurt the sentiments of the department heads. Goal setting process if was implemented in an adept manner by Mr. Hageman then these issues would have been solved automatically but unprofessional attitude of the employer ruined the whole setting.
Goal setting process at the end makes it easier for the employer as well as for the employees to evaluate their performance. For instance if SMART (short-measurable-achievable-positive-time sensitive) goals are delegated to the staff then there is fair chance that they would them and will work harder as they could see a clear plan of action. On the contrary, in this case Mr. Hageman assigned just a goal to Mr. Davis and did not look into the fact that how will he get this all done. He did not help him when he sought for it, instead left it all on him. This sort of behavior is denting for the confidence level of the subordinate as he perceives the management to be unfair and irrational. Mr. Hageman in the first place must have set up the goal in an adept and diligent manner and should have communicated this to Mr. Davis so that he could come up with any suggestions if he had. The strategy of the firm has to be formulated by the top management while taking into confidence the line managers after that it is the responsibility of these line managers to communicate this all to their subordinates. But in this case even a top level manager was not communicated the plan of action  just assigning targets is not what actually top management does, its span of responsibilities is far more wider than this.
In addition to this, problem solving and decision making is also a responsibility of top management along with the managers but when Mr. Davis went to his boss he did not even look interested in listening to him, instead he just passed on the bucket to him again. The suggestion of Mr. Davis was ruled out by him without giving a rational answer even if budget was not permitting the allocation of overtime then Mr. Hageman should come up with an alternative simply turning down is not what a manager expects from a top level official.
Answer Three
The crux of the theories of frustration and aggression is that if a person is being restrained from getting to his target this causes frustration to him the closer he gets to achieve the target the more the level of frustration increase. Unexpected occurrence of frustration increases the likelihood of aggression. Frustration and aggression can be used in both positive and negative manner depending upon the character a person possesses if a person is one who is willing to take challenges and could turn the tide then there is every likelihood that he could use his aggression in a positive manner and will make the most out of the opportunities presented to him. But on the other hand if the person has weak nerves then the frustration could possibly play on him and all his endeavors will end up in vain. In this case we can clearly see that Mr. Davis was committed to get the desired outcome but unsound organizational atmosphere came in his way and to his dismay even Mr. Hageman passed the bucket back to him. All this was causing frustration even to such a competent and proficient manager and that was the reason that he was unable to find any solution (Myers, 2006). In the case it is clearly stated that Mr. Davis was good at problem solving but this time around he was finding himself in no mans land this depicts what frustration and aggression can do even to the best. Mr. Davis was finding himself in hot water because the nerves started to play on him and as the time was passing by his frustration was mounting.
Answer Four
In order to get the work done in an adept manner Mr. Davis has no option but to motivate his workforce as they are the ones with the support of whom he could fight with this odd situation. First of all Mr. Davis should address the entire workforce irrespective of the hierarchical, and must take all the workers in confidence (Armstrong, 2006). He should present his case in front of his workforce and should ask suggestion from them as this will make the staff men feel confident. In addition to this he must tell the workforce that the budget is not permitting him to allocate overtime to them so he is not in a position to help them in this regard. He should promise the workers that if the project gets completed in time and everything goes in the projected manner then he will ask Mr. Hageman to present some sort of bonus to the workforce this might work as a motivating force for the workers (Lubit, 2004). In addition to this he must use goal setting theory to formulate goals for his men communication again remains the key in this manner as he has to take into confidence each and every person. After doing this he must talk to Mr.Silvermann and Ms. Jefferson and try to reconcile because without their support and assistance it would be impossible for him to accomplish the goal. He must tell them that the decision of his promotion was made by Mr. Hageman even without informing him thus there was nothing much he could do. He must acknowledge the previous performance and efforts of these two managers and should tell them that he needs their support desperately as it is impossible for him to make the things work his way without them.