Assignment 2

Contemporary Management Issues in the 21st Century

Case Study:

Strategic Insights into AI Integration: A Study of Contemporary

Management Issues through Hill's Framework and Tesla's AI-driven

Strategy

BA in Business Studies (Foundation Year)

University of Suffolk
Date of Submission:< 02 of April 2024>
Student ID:<s226608>
Word count:1623

I declare that this assignment is all my own work and that I have acknowledged all materials
used from the published or unpublished works of other people. All references have been
duly cited

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 Abstract
The assessment of current management concerns using Hill's Four Building Blocks of
Strategy offers a comprehensive framework for examining the impact of artificial intelligence
on business plans. This methodology comprises several elements such as arenas, vehicles,
differentiators, and staging. The advent of AI-driven marketplaces presents a range of
prospects and obstacles, encompassing ethical implications and the possibility of job
displacement. Artificial intelligence (AI) facilitates the emergence of novel business models,
tailored customer experiences, and competitive advantages by enhancing operational
efficiency and fostering creativity. Nevertheless, the successful execution necessitates
meticulous deliberation of data administration and ethical considerations.
The use of artificial intelligence (AI) into business strategy carries significant ramifications
for decision-making processes, worker dynamics, organisational agility, and ethical
considerations. Artificial intelligence improves analytical abilities, alters the dynamics of the
workforce, and requires flexible change management. The deployment of artificial
intelligence (AI) necessitates careful attention to ethical problems, such as data privacy and
algorithmic prejudice.
The integration of AI in Tesla serves as a prime example of successful implementation,
resulting in improved goods, enhanced customer experiences, and a competitive edge. The
application of artificial intelligence (AI) encompasses various areas like as operational
efficiency, personalisation of customer experience, innovation, and competitive intelligence,
hence generating sustainable value across multiple domains.

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 Table of Contents
Introduction…………………………………………………………………………………..3
Evaluate a wide range of contemporary management issues Through Theories...............4
Theoretical Foundation: Hill's Four Building Blocks of Strategy...................................4
Arenas and the Emergence of AI-driven Markets.........................................................4
Vehicles and AI-enabled Business Models......................................................................5
Differentiators and AI-driven Competitive Advantage.................................................5
Staging and Strategic Implementation of AI..................................................................5
Assess and critically evaluate the significance of contemporary change............................6
Implications for Decisions, Behaviors, Human Capital, and Organizational
Configuration........................................................................................................................6
Decision-making and Analytical Capabilities.................................................................6
Workforce Dynamics and Skill Requirements...............................................................6
Organizational Agility and Change Management.........................................................6
Ethical Considerations and Responsible AI Practices...................................................7
Critically analyze and evaluate an organizational situation................................................7
Case Study: Tesla’s Inc. AI-driven Strategy......................................................................7
Enhancing Performance and Creating Value through AI................................................7
Operational Efficiency and Cost Optimization..............................................................7
Customer Experience and Personalization.....................................................................7
Innovation and New Business Models.............................................................................7
Competitive Intelligence and Strategic Foresight..........................................................8
Autonomous Learning Skills, Problem Solving, and The Ability........................................8
Critical Skills.........................................................................................................................8
Recommendations.................................................................................................................8
Conclusion.................................................................................................................................9
References.................................................................................................................................9

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 Introduction
In today's chaotic, ever-changing corporate environment, AI transforms strategy basics and
how it is applied and performed. Thorough studies of scientific publications, strategic
industry reports, and reputable sources showed intelligence artificial's deep influence, making
this a competent and sophisticated strategic study. This article uses Hill's four strategic
formulation pillars—arena, vehicle, differentiator, and staging—to resolve AI integration in
business. The visit to Tesla shows how AI-powered automatic driving software and
manufacturing system improvement will provide consumers personalised remote updates and
a sustained competitive advantage. However, understanding AI's ramifications in choices,
behaviours, human capital, organisation agility, and ethical concerns related to data
protection, algorithmic bias, and governance is essential to realising its promise.

Evaluate a wide range of contemporary management issues Through

Theories

Theoretical Foundation: Hill's Four Building Blocks of Strategy

To provide a robust framework for analyzing the influence of AI on business strategy,

this paper draws upon Hill's four building blocks of methods, which are indicated below.
Arenas and the Emergence of AI-driven Markets
Further developing brilliant arenas and AI is the next step towards creating more
advanced, intelligent, humanized markets. AI is using its ability to change the fields where
businesses compete (Gruetzemacher & Whittlestone, 2022). It enables the creation of new
products and services in the new market, but on the other hand, an existing market also exists.
AI-adopted organizations can remain competitive by exploiting the power of data-enhanced
insights, replacing processes with automation, and upgrading decision-making operations
simultaneously (Kikani, P, 2021). On the other hand, adapting AI creates new problems, such
as how we define AI, moral and data privacy concerns, and whether or not it will replace
human workers.
Vehicles and AI-enabled Business Models
AI came up with a new way of business to carry out various operations. Suddenly, the
age-old frameworks are ceasing to work, and new AI-driven models are rising. Organizations
can utilize AI to provide personalized products and services, smarten supply chains, and more
(Hill et al., 2020). AI makes it possible to collect relevant data, analyze it, and then apply it to
predict the best action.
Differentiators and AI-driven Competitive Advantage
AI can be a controller, helping businesses set themselves apart. Businesses that use AI
properly stand a chance to have an edge in the market through the operational efficiency it
creates, a better decision-making process, and new innovative product and service
development (Hill et al., 2020). Thus, the process of building this competitive edge is
ongoing due to the necessity to innovate and to adapt one's own AI solutions to the increasing
speed of development of AI technologies.

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Staging and Strategic Implementation of AI
AI's early approach and planting of the idea in the early stages can still help the
planting strategy to dominate the digital sector. However, the rollout of AI implementation is
a vital core subject for companies to be on the lookout for. AI adoption calls for an
organization's capacity to manage data effectively and consider the moral issues of this
disruptive technology while facilitating a cultural transition (Ashok et al., 2022). Companies
should know the time and monetary resources required and the capabilities to implement AI
in their operations and strategies.
Diagram 1: Application of Hill's Four Building Blocks of Strategy in Business AI
model

Assess and critically evaluate the significance of contemporary change

Implications for Decisions, Behaviors, Human Capital, and Organizational
Configuration
Integrating AI's business strategy has a far-reaching impact on organizational
operations and human capital management.
Decision-making and Analytical Capabilities
AI-engines-driven analytics and predictive modeling improve management abilities
through data-meandered understandings and forecasting capabilities. This, in turn, empowers
enterprises to arrive at more sensible decisions and take preventive measures, consciously
and optimally allocating resources and strategic planning (Ashok et al., 2022).
Workforce Dynamics and Skill Requirements
Staff transformations and skill retention. The AI sector in the workplace has pushed
traditional employment standards aside only for highly resourceful people with skills that fit
into the new work models (Burström et al., 2021). On the one hand, AI AI automates some of

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the tasks and eliminates the need for a few jobs. However, it also helps to build the
collaboration of humans and machines alongside a unique opportunity for developing
specialized skills needed in data analysis, AI AI development, and ethical AI governance.
Organizational Agility and Change Management
Successful adoption is an oblique phenomenon that requires agility of organizations
and strategic and effective change management. Businesses must implement AI-enabled tools
and processes to speed up their work and change the current structures and cultures to make
space for AI-powered change (Burström et al., 2021). Such an effort may establish new roles,
accelerate human skills, and encourage a data-driven approach everywhere in the enterprise.
Ethical Considerations and Responsible AI Practices
AI momentum in every business process has accentuated the need for ethics and
responsible AI AI activities. AI systems' development should be given the attention that it
deserves (Fountaine et al., 2019). Different issues must be tackled, including data privacy,
algorithmic bias, AI transparency, and accountability, etc.

Critically analyze and evaluate an organizational situation

Case Study: Tesla’s Inc. AI-driven Strategy
Tesla shows how AI can improve products and customer experience, giving it sustainable
competitive advantages and a lasting impact (Kumari & Bhat, 2021). AI advancements
include Autopilot and Full Self-Driving, which use computer vision and deep learning. Robot
movement optimisation, maintenance prediction, and logistic data streamlining helped Tesla
ease production ramps (Ahmad & Khan, 2019). Tesla users can receive software updates over
the air using AI connectivity. Different apps can leverage driving data to personalise user
experience throughout the product's lifecycle. These AI objects help Hill's plan by focusing
on mobility services, AI-based business models, the AI as the critical position, and the first
stage of integration across working areas (Ajitha & Nagra, 2021). Tesla has disrupted the
automotive business with innovative driver assistance technologies, scalable electric vehicle
production models, performance improvements, and billions in regulatory credit income.
While accidents, production challenges, and new players remain impediments, EV adoption
is rising. Tesla, a prominent AI AI firm, must attract the greatest specialists and develop AI in
a transparent, unbiased, and responsible manner to protect its cars' safety-critical self-driving
capabilities (Kumari & Bhat, 2021). Technically, AI can help launch new technologies,
methods, and competitive advantages.
Enhancing Performance and Creating Value through AI
AI application creates improvements and create sustainable value across various
domains by strategically leveraging AI. Some of the domain include
Operational Efficiency and Cost Optimization
AI-powered process automation, condition-based maintenance, and supply chain
optimization are some tools that can revolutionize how production and assembly processes
run and even reduce costs. Companies can practice working flowlines, avoid downtime, and
optimize resource usage, resulting in their productivity and profitability becoming productive
(Chojecki, 2020).
Customer Experience and Personalization
AI allows businesses to offer their customers the services they need and care for them
in a manner they require and deserve. By analyzing consumers' data and wishes, AI
algorithms may propose individual suggestions to consumers, create personalized ads, and

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 provide proactive customer support, making the clients more attractive and loyal (Vasanthi,
2020).
Innovation and New Business Models
Through AI development, companies can start businesses, launch new products and
services, and explore previously unavailable business models. Applying the capabilities of AI,
ranging from machine learning and natural language processing, companies develop
innovative ways to gain early entrances into markets previously reserved for humans and
create more revenue streams (Kikani, P, 2021).
Competitive Intelligence and Strategic Foresight
We hope to remain faithful to our educational goals through one Competitive
Intelligence and other industry practices and two Strategic Foresight and situations
challenging circumferences (Ashok et al., 2022). Advanced systems of AI-based data and
pattern recognition models enable companies with competitive capability in intelligence and
strategic anticipation (Ajitha & Nagra, 2021). This is done by finding out the current state of
the market, consumers' behaviors, and competitor data. These valuation creations are
indicated in the diagram below.
Diagram 1. Valuation Creation Through Artificial Intelligence in Business Operations

Autonomous Learning Skills, Problem Solving, and The Ability

Critical Skills
Throughout this analysis, a range of critical skills has been demonstrated, including:
 The AI age requires sustaining primary competencies and proficiency in learning
autonomously and developing new skills frequently during AI integration and technological
change.

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 Critical thinking through solving problems analytically by proposing solutions to address
challenges, including different perspectives and multidisciplinary knowledge, to shape the
university's future.
 Coherent and efficient verbal skills necessary for delivering complex ideas, insights, and
opinions that guide strategizing based on AI and business, and they are A.I.ways instrumental
in the decision-making process and the communication of stakeholders.
Recommendations
 Reinforce continuous learning and training environment to stay up-to-date with newer AI
developments and implementation.
 Strive for cross-functional teamwork with different views and AI-focused challenges in a
problem-solving approach. Tap into multidisciplinary teams to develop out-of-the-box
solutions.
 Invest in communication skills training to fluently translate AI strategies to everyone
involved. Enhance visual narration capability to make conclusions and data points more
attractive.
 Implement the process of knowledge sharing regarding AI skills should be introduced and
spread throughout the AI infrastructure of the company.

Conclusion
Artificial intelligence disrupts strategy formulation and execution in global business. Enterprises may
proactively tackle the AI-driven environment and maximise AI's potential using Hill's four pillars
method. Tesla Inc. uses AI to innovate, optimise operations, and lead competition. However,
enterprises should employ AI cautiously to avoid unethical usage and potential drawbacks. In a
company environment powered by AI, real-time assessment, continuous improvement, and skills
development will preserve a competitive advantage. Companies that adopt AI, integrate it into their
operations and decision-making, and foster a culture of agility and ethical AI governance will be
ready to weather the endless waves of the future global market.

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References
Ahmad, S., & Khan, M. (2019). Tesla: Disruptor or Sustaining Innovator. Journal of Case
Research, 10(1).

Ajitha, P. V., & Nagra, A. (2021). An Overview of Artificial Intelligence in Automobile

Industry–A Case Study on Tesla Cars. Solid State Technology, 64(2), 503-512.
Ashok, M., Madan, R., Joha, A., & Sivarajah, U. (2022). Ethical framework for Artificial
Intelligence and Digital technologies. International Journal of Information
Management, 62, 102433.
Burström, T., Parida, V., Lahti, T., & Wincent, J. (2021). AI-enabled business-model
innovation and transformation in industrial ecosystems: A framework, model and
outline for further research. Journal of Business Research, 127, 85-95.
Chojecki, P. (2020). Artificial Intelligence Business: How you can profit from AI. Przemek
Chojecki.
Fountaine, T., McCarthy, B., & Saleh, T. (2019). Building the AI-powered
organization. Harvard Business Review, 97(4), 62-73.
Gruetzemacher, R., & Whittlestone, J. (2022). The transformative potential of artificial
intelligence. Futures, 135, 102884.
Hill, C. W., Schilling, M. A., & Jones, G. R. (2020). Strategic management: an integrated
approach: theory and cases. Cengage Learning.
Kikani, P. (2021). Demystifying Artificial intelligence: Simplified AI and Machine Learning
concepts for Everyone (English Edition). BPB Publications.
Kumari, D., & Bhat, S. (2021). Application of artificial intelligence technology in tesla-a case
study. International Journal of Applied Engineering and Management Letters
(IJAEML), 5(2), 205-218.
Ma, A., Ong, J., & Tan, S. S. (2024). AI for Humanity: Building a Sustainable AI for the Future.
John Wiley & Sons.
Palanivelu, V. R., & Vasanthi, B. (2020). Role of artificial intelligence in business
transformation. International journal of advanced science and technology, 29(4), 392-
400.