Importance of Creativity

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Why is creativity an important aspect of business organization? Explain the major issues facing the manager in encouraging creativity in the organization and supporting creative people in order to improve performance.
Creativity is an important aspect of business organization. This is particularly important as companies are facing continuous changes in the global economy. Change is a continuously phenomenon which happens to the organizations both internally and externally that organizations need to make creative plans and reactions towards predictable or unpredictable challenges.

The organizational environment has been changing rapidly. It is a set of forces and conditions outside the organization’s boundaries that have the potential to affect the way the organizations operates (George and Jones, 2006, p.157). An organization interacts with its immediate task environment and is affected by the general environment. The task environment includes the suppliers, distributors, competitors and customers, while the general environment includes forces that are economic, technological, sociocultural, demographic, political and legal and global. The external environment has been becoming more turbulent as most companies are now competing in the global market where changes are not only common but substantial. Some changes are catastrophic such as economic depression and introduction of new technology. During poor economic times, managers may need to come up with creative strategy to reduce costs such as reducing the number of employees on the one hand, and to increase the motivation of the remaining employees. Managers may also need to identify ways to acquire and utilize resources more efficiently. Technological forces can have profound implications for organizations that it can make established products obsolete. Examples such as typewriters, black-and-white televisions, film cameras. The changes force managers to find new ways to satisfy customer needs.

Other changes are more gradual such as demographic trends and sociocultural trends. For example, people have become increasingly interested in their personal health and fitness. PepsiCo used the opportunity presented by the fitness trend and took market share from Coca-Cola by being the first to introduce diet colas and fruit-based soft drinks. On the contrary, tobacco companies came under intense pressure due to consumers’ increasing awareness of negative health impacts from smoking. One prominent demographic force is the problem of aging population in most industrialized countries. It poses opportunities to medical and health care businesses on the one hand, but it is a threat to businesses whose products are mainly targeted at the younger customers.

In addition to these external environment, organizations need to cope with changes in company culture, motivation of staff and relocation of production bases, etc. Hence, all organizations need to adopt some forms of creativity in any or all of their functional departments to cope with these continuous changes.

Creativity, as Proctor suggests, involves the breaking down of the existing knowledge base and restructuring it, and the coming up with new and different viewpoints on a subject (as cited in University of Leicester, 2007, p.88). Also, Henry states that creativity is about the quality of originality which leads to new way of seeing and novel ideas. It is a thinking process associated with imagination, insight, invention, innovation and ingenuity, intuition, inspiration and illumination. The related term innovation is usually used to describe the process whereby creative ideas are developed into something tangible, like a new product or practice. With creative ideas and innovations, organizations could become the market leader to penetrate new market and establish market share earlier than the competitors. Hence, many organization leaders argue that creativity is the key to business...
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