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This hypothetical case study aims to revisit the classical model given by Henri Fayol whereby he put forward a set of 14 principles to guide managers in decision-making across organizations. The case study showcases the dilemma in which the top manager of an automobile company finds himself when some of the very basic principles – on which the whole discipline of management is founded – are ignored. It will also serve as an aid for faculty members in B-Schools to teach students the significance of basic management principles postulated many years back which stand relevant even in contemporary times.

This case study is based on a hypothetical scenario in the corporate world. Different incidents in a fictitious automobile manufacturing firm are presented and the corresponding principles given by Henri Fayol are inferred.

This case study highlights that decision-making gets complicated if fundamental principles of management are not complied with. The decision taken during each and every situation which has been discussed in this case study is contrary to the correct course of action as propounded by Fayol. Modern-day managers must acknowledge the relevance and importance of these principles for achieving success in business.

This case study underscores that even in this volatile business environment where most of the management practices are technology-driven, we cannot disregard the most elementary rules of management. The managers working at different levels in the organizational hierarchy may be guided to make the right decisions in situations similar to the ones described.

Drawing on the knowledge-based view (KBV), the purpose of the study is to examine the impact of collaborative culture (CC) on frugal innovation (FI). It also advances insight into the pathways for stimulating distinct aspects of innovation capacity by assessing the mediating effects of knowledge management (KM) processes and the moderating role of perceived organizational support (POS).

Based on the data gathered from 430 participants from 80 Pakistani manufacturing and service firms, this study used structural equation modeling to evaluate hypotheses in the established research model.

The findings reveal that CC positively fosters the KM processes and different aspects of FI. The results indicated the positive direct impact of KM processes on frugal functionality (FF) and frugal cost (FC) while insignificant on the frugal ecosystem (FE). This study found partial mediation of KM processes on the relationship among CC, FF and FC, but the KM process does not mediate the relationship between CC and FE. The results also demonstrated that POS moderation enhances the impacts of CC on KM processes and FF while notably weakening the impacts of CC on FC and FE.

To understand the crucial role of knowledge capital in companies’ innovation capability, future research should examine the mediating function of KM capability (knowledge process capability and knowledge infrastructure capability) and moderating role of environmental turbulence in the relationship between CC and different aspects of innovation capability.

This study significantly advances a better understanding of the relationship between CC and specific facets of innovation capacity by emphasizing the importance of driving the KM process and improving POS.

This study has contributed to the theoretical and practical efforts on KBV, emphasizing the critical importance of CC in fostering a conducive environment for KM processes and innovation.