Entrepreneurship Report
Over the past few years’ significant changes has occurred in the world economy, technology, and business environment. Globalization eliminated boundaries between the states, and companies are allowed to do business across the world. Globalization fueled competition in the world market, and entrepreneurs are required to develop effective marketing strategy in order to deal with the challenges of contemporary business environment. Advancing technology also empowered consumers and communities, and made people much aware about all processes companies are performing. It is a major challenge in front of business executives and leaders to identify problems in the business environment and design effective solutions to those problems (Welter, 2011). This report discusses key business problems and effective solutions of those problems.
Major Problems in Business Environment
Diversity:
Large multinational companies are operating across the globe, and it is important for a company to have diversified workforce in order to deal with different cultures and unique demands of the market. Managing diversified teams is a challenge for the leaders. People from different cultures depicts different behavior, and communication style which sometimes leads to the internal conflict, poor performance, and employee dissatisfaction. However, it is essential for companies to have diversified workforce because lack of diversity restricts companies’ knowledge on changing world (Deshwal & Choudhary, 2011).
Corporate Social Responsibility:
In recent time, the focus of the companies has shifted on sustainable development. Companies now adopt practices are beneficial for the companies as well as for the communities. It is important for the business leaders to minimize their negative impact on the environment, and give back to the communities. Companies focus on CSR to develop a positive image in the market, and to gain competitive advantage (Barkemeyer, 2011).
Supply Chain:
For past few years companies are witnessing significant fluctuations in the demand of the products in different markets. Therefore, the focus is placed on adopting agile and lean production approach, and to carry minimal inventory. Small inventories and demand fluctuations create a major threat to the supply chain. Minimizing cost associated labor, warehouse, and inventory management is also a challenge for the companies.
Change Management:
Advancing technology made execution of various activities easier and quicker. However, it increased the changes took place in the organizations. Globalization of economies across the world created diversified pool of consumers and suppliers, and intensified the competition in the global market. Companies are compelled to bring continuous changes in the organization to respond to the competition and changing demands of the consumers (Anderson & Anderson, 2010).
Human Resource Recruitment and Retention:
Identification, selection, and retention of skilled and experienced employee is one of the biggest problem for the companies. In complex business environment, employees want fair compensation, healthy working environment and fair HR practices. HR managers face challenges in terms of recruiting right employees for the positions, and retaining quality workforce.
Uncertainty:
Uncertainty beleaguers everyone including business people. Business leaders become very distressed due to various kinds of uncertainty including the uncertain economy, uncertain markets, uncertain regulations, and uncertainty regarding the strategy of their competitors. Businessmen are distressed about the use of newly launched technology because they are not aware how technology is going to affect their business. Uncertainty compels businessmen to make their strategies for a short term instead of a long term policy.
Globalization:
Globalization has emerged as one of the major challenges for business houses. Understanding different cultures have become mandatory in order to expand businesses in other countries. A whole new variety of products has to be launched in order to satisfy customers from different cultures. Increasing government intervention is a matter of concern for various business houses across the world (Chaudhary et al., 2012).
Technology:
Advancing technologies are changing the way companies use to perform. Therefore, it is important for the senior executives to keep informed about the upcoming technologies. Companies are required to identify and implement new technology in order to provide customer satisfaction (Berggren et al., 2011).
Government Policies and Laws:
Entrepreneur should run business according to the laws and policies established by the government. Business organizations are always on high risk of attracting litigation. Therefore, Entrepreneurs should perform their business as per laws, and by maintaining full transparency.
Innovation:
Companies are required to focus on innovation in order to address changing requirements of the customers, and also to effectively respond to the competition. Entrepreneurs should facilitate the development of collaborative organizational environment which helps in bringing new ideas forward. Centralize organization structure does not encourage employees to share their ideas with the senior management due to power distance.
Entrepreneurial Solutions to the Business Problems
Entrepreneurs are required to foresee or identify business problems and to design effective solutions to those problems. Executive should analyze the trends in the market in order to assess the problems with the existing products, and changing customer requirements. Technology companies such as Dell, HP and Apple adopt agile production approach in order to respond to the changing needs of the customer, and sudden fluctuations in demand (Prajogo & Sohal, 2013). In the modern world, Innovation is key to the success. Companies such as Apple, Amazon, Sony, Toyota, Honda, P&G, are well known for their innovative products. Continuous innovation helps companies in gaining competitive advantage, responding to the changing needs of the competition, and attracting customers (Koen et al., 2011).
Companies are required to focus on sustainable development in order to gain positive publicity, and also to fulfill social obligations. Google, Nike, PepsiCo and various other companies are running different social programs such as child education, women empowerment, and elimination of child labor, in developing companies. It is important for the senior executives of the company to allocate some percentage of their annual budget for social welfare activities. Companies should also adopt latest technology in order to reduce greenhouse emission, minimize consumption of natural resources such as electricity & water, and protect the environment (Hancock, 2005).
Continuous improvement requires companies to deal effectively with the changes they are bringing in the organization. Employees often resist the changes and prefer to stay with their present role and responsibilities. Leaders should involve employees in decision-making process in order to avoid their resistance. Employee involvement in decision-making process not only empower them, but also make them feel that they are an important part of the company. This attitude helps in employee retention (Gibbs et al., 2012).
Entrepreneurs should adopt organizational structure that support collaborative learning, and generation of new ideas. Power distance and authoritative leadership style often create distance between employee and Entrepreneur. Therefore, Entrepreneur should adopt supportive and transformation leadership style. Leader should also use technology to deal with diversified teams. Good knowledge of different cultures i.e. high context and low context cultures helps the leader in dealing with different challenges posed by diversified team. Company should also adopt latest technologies to manage its supply chain, customer and suppliers database.
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References
Anderson, D., & Anderson, LA, 2010. Beyond change management: How to achieve breakthrough results through conscious change leadership. 2nd ed. San Francisco: John Wiley & Sons.
Barkemeyer, R., 2011. Corporate perceptions of sustainability challenges in developed and developing countries: constituting a CSR divide?. Social Responsibility Journal, 7(2), pp. 257 - 281.
Berggren,C., Bergek, A., Bengtsson, L., Hobday, M., & Soderlund, J., 2011. Knowledge Integration and Innovation: Critical Challenges Facing International Technology-Based Firms. Oxford: Oxford University Press.
Chaudhary, V., Rawat, S.S., & Saxena, P., 2012. Entrepreneurship and Challenges in Global Environment. VSRD-IJBMR, 2(5), pp. 213-222.
Deshwal, P., & Choudhary, S. , 2011. Workforce diversity management: Biggest Challenge for 21 st Century Managers. ZENITH International Journal of Business Economics & Management Research, 1(3), pp. 173-186.
Gibbs, T., Heywood, S., Weiss, L., & Jost, G., 2012. Organizing for an emerging world. McKinsey Quarterly, Volume 3, pp. 81-91.
Hancock, J., 2005. Investing in Corporate Social Responsibility: A Guide to Best Practice, Business Planning & the UK Leading Companies. Sterling, VA: Kogan Page Publishers.
Koen, P. A., Bertels, H. M., & Elsum, I., 2011. The Three Faces of Business Model Innovation: Challenges for Established Firms. Research-Technology Management, 54(3), pp. 52-59.
Prajogo, D., & Sohal, A., 2013. Supply chain professionals: A study of competencies, use of technologies, and future challenges. International Journal of Operations & Production Management, 33(11/12), pp. 1532 - 1554.
Welter, F., 2011. Contextualizing Entrepreneurship—Conceptual Challenges and Ways Forward. Entrepreneurship Theory and Practice, 35(1), p. 165–184.
