The impact of technological changes on business management
Question:
Discuss about the Business Models Strategy and Innovation System.
Investment is the major thing that is becoming popular in the world as it is seen as a way to multiply one’s wealth. People have been searching for areas to invest to get high returns and majority have settled in starting businesses. The business world has been viewed as lucrative for people who need a significant amount of money from their investments. Many people have channelled their money in business hoping for increasing their wealth within a short period. However, one thing they do not realize is that business activities are risky investments which may not give them the returns they expect but make them lose their money. The business world has changed tremendously due to the stiff competition in the market (Chi, Kilduff, & Gargeya, 2009, pp. 645-669).
Managers have an obligation to be creative and innovative in the activities they undertake to ensure uniqueness in the products and goods they produce. Uniqueness will attract many customers who will make increase the sale of the firm. In this case, huge profits are assured to the enterprise. Technological changes are the factors attributed to the modification of business management, ownership, and operations in the world. There are many problems that companies face in the world any management should be cautious and careful when dealing with them to enable the business to succeed and meet its goals of high returns. The purpose of this report is to follow the stages used in problem-solving to identify a particular issue in the business environment, generate, evaluate solutions and devices an implementation plan to counter the problem (Teece, 2010, pp. 172-194).
Business in the world is carried in different ways by different entrepreneurs; all these methods are aimed at obtaining high sales. There are restrictions as to how business activities are to be executed globally. There is the need for governments and appropriate bodies to put guidelines of how business operations are to be implemented to ensure fairness to all. Due to the high competitions, the businessmen may tend to use unfair means to meet their targets and also avoid the competition in the market. The regulation of businesses brings order in the business world and ensures that business must develop ethical ways to get the competitive edge over the competitors. There are many obstacles in achieving business targets, and the managers have a responsibility to tackle this obstacle and ensure business success. Success can be accomplished by managers properly doing market research to come up with the best strategies to put into actions (Michalski, Carbonell, & Mitchell, 2013).
However, business is faced with many challenges in the world which include; high competition, lack of adequate personnel to execute its duties, inadequate resources to fund its operations, rivalry in business, small numbers of customers, etc. These are the problems that every business must encounter in its functioning. Therefore, different companies adopt various methods to curb the problems in the environment. The methods used to determine the life of the firm whether it will be successful in the market or it will be a failure. How the job is executed in business will determine the possible expected outcomes. The duty to oversee the activities is in the hands of the managers who manage the business on behalf of the shareholders. They are therefore expected to propel the organization to success by all means, but the small insists that the means must follow the set rules and regulations (Bowen, Morara, & Mureithi, 2009, pp. 16-31).
Overcoming challenges in business operations
Problem definition is the ability to find out in detail the main issue that you are trying to solve. It is irrelevant and useless to address or correct something you do not know. This attempt may end up to wrong solutions to the issue at hand thus not solving it (Wood et al., 2009, p.3). When an organization is exposed to a problem, the managers should try and find more about the issue which includes the cause. Any decision made by a manager must be well researched, and high reasoning must be utilized before implementing it in the organization. Managers are responsible and accountable for all the decisions the team makes. They can be sued by the owners if they make poor decisions which threaten the existing of the firm. Some of the methods that managers can use in the problem definition stage are SWOT Analysis, PEST Analysis, 5Ws, cause Analysis, and Value Chain Analysis. However, to define the business problems all over the world I will concentrate on PEST Analysis and SWOT Analysis.
The PEST Analysis is an acronym which stands for political factors, economic factors, socio-cultural factors and the technological factors that affect the business. These factors form the external business environment and managers must put them into consideration when making any decisions. Political factors are the factors that try to explain the political systems in the location of the business. These factors can affect the business positively and also negatively. When there is political stability in the country the business is located, it means that the business will succeed. However, political instability and political interference will make the business fail in its operation. These are the time when there is no peace in the environment, and also the politics are used to impose restrictions on the businesses like quotas (Koumparoulis, 2013, pp. 31-36).
Economic factors deal with the economic growth and development of the country of business location. The economy is defined by factors such as inflation rates, exchange rates, interests’ rate, etc. When the inflation rates are high, they make business operations impossible due to the high costs involved. High-interest rates mean that acquisition of loans from the bank will lead to massive debts due to the interest accrued thus making business shun from loans. Also, when the exchange rates are high, the importation of business products such as raw material, cheap labour, machinery, etc. becomes very costly making them not able to afford. The above factors must be average or small to ensure that the business succeeds in its operations (Coale, & Hoover, 2015).
Socio-cultural factors are the norms and beliefs of the community near the location of the firm. The community is the direct market of the products or goods of the company. The company must ensure that the goods conform to the needs of the community to attract them to buy. Location in a Muslim community prohibits a company to sell pork meat as they do not consume it. Failure to adhere to these, the firm will make high losses as the consumer will be few if not none (Mellahi, Morrell, & Wood, 2010).
The importance of defining the business problem
Technological factors are concerned with the changes in the ways business activities are undertaken in the world. There are new modes of doing business, and this dictates that the firm should adopt them to be competitive in the environment. The changes promote the ability of the companies to make or produce unique products which attract a high market. Technological changes include better transport and communication, better ways of getting employees and raw materials such as outsourcing, business globalization, etc. Therefore, these factors are the basis of competitive advantage for the firms (Hekkert, & Negro, 2009, pp. 584-594).
SWOT Analysis checks the strengths, weaknesses, opportunities and the threats that businesses are likely to encounter during their operations. Strength and opportunities have positive impacts whereas weaknesses and threats have adverse consequences to the business survival. Strengths denote the areas which the business has control over in the market; they may include; availability of qualified employees, adequate resources, better machinery, right management team, better policies, etc. which give the company advantage over the others. Opportunities are the gaps in the environment which have not be filled by firms. These are the demands of the customers yet fulfilled. Businesses must ensure they have more strength in the markets and also put up measures to identify gaps in the markets to fill them hence have many customers. These may be a method to be unique and avoid competition (Helms, & Nixon, 2010, pp. 215-251).
Weaknesses are the areas that the organizations do not perform well. They may include inadequate workforce, poor decisions, lack of resources to fund its operation, etc. Threats are factors that threaten the life or existence of the business. They include competition in the market, technological changes, political influence, and instability; economic factors, etc. weakness and threats may lead to low performance hence its failure. Managers must look for ways to limit this factor for the continuity of business.
Finally, after checking the SWOT Analysis and the PEST Analysis the biggest problem that business face is a business failure. The failure may be caused by many factors both in the internal and external environment. They include; competition in the environment, poor strategies adoption, inadequate employees without the need skills and knowledge to execute duties, government rules and regulations, poor management, etc. However, the information generated above via SWOT and PEST Analyses can be used to develop a solution to increase strengths and opportunities and minimize the identified weaknesses and threats to the businesses.
Business failure is the biggest problem that many companies face in the markets. Therefore, solution generation stage follows which tries to find ways to curb the problem occurring to businesses. Managers have the obligations to look for the means to solve the identified problem that the firm. The aim of all the activities is to have a continuous existence which can only be guaranteed by high profits made by the businesses. The huge profits will ensure that all the stakeholders are paid in advance, loans settled and the owners left with some cash to grow the business or pay themselves. During the solution generation, there is the need for the managers to find many ways of solving the problem of business failure but choose the best way which is convenient and practical. The tools that can be utilized to aid in the solution generation stage are Brainstorming, Brainwriting, Fishbone Diagram, Six Thinking Hats, and Mind Mapping (Jeppesen, & Lakhani, 2010, pp. 1016-1033).
Analyzing the external business environment using PEST Analysis
Nevertheless, I am going to use the Brainstorming and Brainwriting methods to try and find solutions to the reason for business failures in the world. Brainstorming is creativity and innovative technique which is used to get ideas or solution to a problem by gathering the ideas of the members of the group. In this case, it implies business managers are getting ideas from the business stakeholders for the reasons they think the business is failing in its operation. All the business stakeholders must be consulted in the decision-making process by the managers to ensure that the best decisions are adopted. Also when a crisis arises which threatens is the company they should give views on how to remedy the situation. The ideas the managers get from the stakeholders may be used to rescue the organization from failure. It is important to note that managers may not have total knowledge of the businesses world and some stakeholder’s ideas may be very vital (Litchfield, 2008, pp. 649-668).
Brainwriting is also same as Brainstorming, but it is executed differently. Both methods aim at getting information from the stakeholders of the business. Brainwriting involves the members writing down on the paper the ideas they think can be used by the management to avoid market failure. The plans after that are submitted to the manager. In this method, the administrator can examine the ideas and take the most appropriate ones. The manager is the only person who can make the decisions of the organization but in consultation with the owners of the business. These are because the manager is accountable and responsible for the outcomes of their decisions. The two methods will provide the managers with various methods to remedy the situation (Linsey, & Becker, 2011, pp. 165-171).
Solution evaluation is examining the outcomes of the solutions given if the managers implement them. The manager should check the long term and short term effects of the solutions given to the achievement of the business goals and objectives. The tools available in the Solution Evaluation stage are Categorisation, Elimination and Ranking, Affinity Diagram, Screening Matrix, Decision Matrix, and Pareto Analysis (Walraven, Brand-Gruwel, & Boshuizen, 2008, pp. 623-648).
In the attempt to evaluate the best possible solution to be used solving the problem, I have used the Categorisation and Elimination and Ranking methods. Categorization methods put the solutions into various categories in which they can be used to solve the problem. Business failure can be caused by two factors which are the internal business factors and the external market factors. Putting the solutions in categories will enable the managers to know the solution for internal and external environmental factors (Frensch, & Funke, 2014).
Elimination and ranking methods look the solutions as per their effectiveness to solve the problem. The manager ranks the solutions starting from the best to the least efficient ones. I will, therefore, eliminate the solutions which cannot entirely solve the problem. The aim of this method is to remain with the most suitable solution which can solve the problem of business failure (Hwang, & Yoon, 2012).
Using SWOT Analysis in defining the internal business environment
After getting the solution to the problem causing market failure the final stage is execution and action plan. Implementation if the program requires the manager to get ways and methods to use in making the solution to be adopted in the organization. Tools which can be employed in the Solution Implementation stage are Force Field Analysis, How-how Diagram, and What If Scenarios (Martínez at el., 2008, pp. 181-191).
Here, I have used what if scenarios to try and evaluate solutions that amusing to solve the business failure problem. The solutions are aimed at eliminating the business failure, and I should take the best remedies. Managers have to check whether the solutions will fully solve the problem. These will make me measure the extent which the solution will solve the problem. These will enable me to see the unknowns after implementation of the solution. The action plan is the continuously checking the implemented solutions to determine if they curb the problem. In this case, I will put the measure to ensure the problem is eradicated (Alcamo, & Henrichs, 2008, pp. 13-35).
Conclusion
Finally, managers must be able to make decisions that will enhance the success of the business. The changes in firms bring more advantages as well as demerits to the company. Managers have to ensure that strategic plans are well researched to be implemented. Problems in businesses are familiar but corrective measures must be taken to avoid market failure. Any changes should be applied in the timely manner to be effective (Mintzberg, 2009).
References
Bowen, M., Morara, M., & Mureithi, S. (2009). Management of business challenges among small and micro enterprises in Nairobi-Kenya. KCA journal of business management, 2(1), 16-31.
Chi, T., Kilduff, P. P., & Gargeya, V. B. (2009). Alignment between business environment characteristics, competitive priorities, supply chain structures, and firm business performance. International Journal of productivity and performance management, 58(7), 645-669.
Coale, A. J., & Hoover, E. M. (2015). Population growth and economic development. Princeton University Press.
Frensch, P. A., & Funke, J. (2014). Complex problem solving: The European perspective. Psychology Press.
Hekkert, M. P., & Negro, S. O. (2009). Functions of innovation systems as a framework to understand sustainable technological change: Empirical evidence for earlier claims. Technological forecasting and social change, 76(4), 584-594.
Helms, M. M., & Nixon, J. (2010). Exploring SWOT analysis–where are we now? A review of academic research from the last decade. Journal of strategy and management, 3(3), 215-251.
Hwang, C. L., & Yoon, K. (2012). Multiple attribute decision making: methods and applications a state-of-the-art survey (Vol. 186). Springer Science & Business Media.
Jeppesen, L. B., & Lakhani, K. R. (2010). Marginality and problem-solving effectiveness in broadcast search. Organization science, 21(5), 1016-1033.
Koumparoulis, D. N. (2013). PEST Analysis: The case of E-shop. International Journal of Economy, Management and Social Sciences, 2(2), 31-36.
Linsey, J. S., & Becker, B. (2011). Effectiveness of brainwriting techniques: comparing nominal groups to real teams. In Design Creativity 2010 (pp. 165-171). Springer London.
Litchfield, R. C. (2008). Brainstorming reconsidered: A goal-based view. Academy of Management Review, 33(3), 649-668.
Mellahi, K., Morrell, K., & Wood, G. (2010). The ethical business: Challenges and controversies. Palgrave Macmillan.
Michalski, R. S., Carbonell, J. G., & Mitchell, T. M. (Eds.). (2013). Machine learning: An artificial intelligence approach. Springer Science & Business Media.
Mintzberg, H. (2009). Managing. Berrett-Koehler Publishers.
Teece, D. J. (2010). Business models, business strategy and innovation. Long range planning, 43(2), 172-194.
Walraven, A., Brand-Gruwel, S., & Boshuizen, H. P. (2008). Information-problem solving: A review of problems students encounter and instructional solutions. Computers in Human Behavior, 24(3), 623-648.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
