A person who establishes business or business is taking the financial risk in the hope of profit. An entrepreneur is a person who instead of working as an employee. Believing all the risks and prizes of the enterprise, establishes and runs a small business. Entrepreneurs generally see them as an innovator, the source of new ideas, goods, services and business / or processes.
Entrepreneurs play an important role in any economy, such as those who have the requisite skills and initiatives. Current and future needs and will bring good new ideas to the market. Entrepreneurs who prove to be successful in raising the risk of start-up, are rewards with benefits, fame and sustainable development opportunities. People who suffer from losses and are less prevalent in markets.
Leadership and Entrepreneurship Difference; Sometimes, an entrepreneur and a leader, or say, leadership and entrepreneurship consider as a synonym, i.e. meaning the same thing. But, these two terms mean quite different meanings. Entrepreneurship means a set of attributes that an entrepreneur possesses and practices in starting his /her enterprises. But, leadership is the process of influencing people and providing an environment for them to achieve organizational objectives.
Learn & Explanation, What is the Difference between Leadership and Entrepreneurship?
Thus, leadership is quite different from entrepreneurship. Entrepreneurship can include leadership, but not leadership in entrepreneurship. Also, Learn about the Difference Between Management and Leadership!
Leadershiphas also implications for entrepreneurial behavior. People with leadership qualities, for example, influencing ability, are found more. Prone to become entrepreneurs and perform entrepreneurial functions more effectively. Research studies (Burns 1978) report that entrepreneurs who blend with leadership attribute often emerge as ‘transformational entrepreneurs. Who replace old and routine things with altogether new sets and standards of work performance.Are Entrepreneurs Made or Born! Explanation Why?
They work for change rather than stability. This is because leadership involves a drive, i.e. (high) need for achievement, the most important antecedent to entrepreneurship. This drive represents the inner motivations that entrepreneurs with leadership qualities possess to pursue their goals and encourage others to willingly and enthusiastically move forward to achieve the set goals.
The relevant leadership qualities or competencies influencing entrepreneurial behavior are inner drives, integrity, self-confidence, intelligence, knowledge concerning the business, and emotional intelligence. One way to distinguish entrepreneurship from leadership can be in terms of their task demands and personal dispositions.
Difference between Leadership and Entrepreneurship:
The Following difference is:
To compare or the difference between leadership and entrepreneurship, we may want to do so in four dimensions already addressed before (and following Cogliser and Bringham, Vecchio): Vision, Influence, Leading in the Context of Innovation/Creativity, and Planning.
Vision (followers/larger constituency)!
A Vision is the main component when inspiring followers toward exemplary performance or other goal-directed behavior as well as organizational performance.
The Vision attributes (brevity, clarity, abstractness, challenge, future orientation, stability, and desirability or ability to inspire) and content (growth imagery) are related to new venture growth. Followers need to motivate through involvement, participation, and a professionally meaningful mission.
Influence!
A commonality across many of the various definitions of leadership is the ability to influence others toward a goal. Rational persuasion widely uses for both upward, lateral, and downward influence.
Entrepreneurs not only see opportunities (understand the ways and means) but can marshal resources to carry out their vision. The use of rational persuasion and inspirational appeals is likely to be effective when the request is legitimate and in line with the entrepreneur’s values and the constituencies’ needs.
Leading in the context of Innovation!
Leading creative people requires technical expertise and creativity, employing several direct and indirect influence tactics.
Entrepreneurial leadership should involve idea generation, idea structuring, and idea promotion.
In complex, dynamic environments where people must coordinate their activities, planning represents a key influence on performance.
Entrepreneurs have a clear need for the mental awareness of future actions to anticipate potential reactions to strategic choices.
Entrepreneurship is all about a set of skills and abilities to be as self-sufficient as possible when it comes to business. Meaning that entrepreneurship more focuses on risk-taking, recognizing opportunities, and the ability to be a self-starter.
Whereas, leadership is about effectively managing the people and resources around you. A great leader isn’t necessarily focused on being a risk-taker, nor are they require to be visionaries. All a leader is primarily focus on bringing people together to execute a common goal.
Difference between Leadership and Entrepreneurship
The word entrepreneur derives from the French words entre, meaning “between,” and Prendre, meaning “to take”. The word originally used to describe people who “take on the risk” between buyers and sellers or who “undertake” a task such as starting a new venture. Inventors and entrepreneurs differ from each other. An inventor creates something new. This article explains to Entrepreneurship Meaning and Definition. An entrepreneur assembles and then integrates. All the resources needed the money, the people, the business model, the strategy, and the risk-bearing ability to transform the invention into a viable business.
Learn and understand, Explains to Entrepreneurship Meaning and Definition.
Entrepreneurship is defined as the process by which individuals pursue opportunities without regard to resources they currently control. Others such as venture capitalist Fred Wilson define it more simply, seeing entrepreneurship as the art of turning an idea into a business.
Meaning of Entrepreneurship:
Entrepreneurship is the process of designing, launching and running a new business, which is often initially small. The people who create these businesses are called entrepreneurs. Entrepreneurship has described as the “capacity and willingness to develop, organize and manage a business venture along with any of its risks to make a profit”.
While definitions of entrepreneurship typically focus on the launching and running of businesses, due to the high risks involved in launching a start-up. A significant proportion of start-up businesses have to close due to “lack of funding, bad business decisions, an economic crisis, lack of market demand—or a combination of all of these.
Definition of Entrepreneurship:
The capacity and willingness to develop, organize and manage a business venture along with any of its risks to make a profit. The most obvious example of entrepreneurship is the starting of new businesses. Also learn,What is the Difference between Leadership and Entrepreneurship?
In economics, entrepreneurship combined with the land, labor, natural resources, and capital can produce the profit. The entrepreneurial spirit is characterizing by innovation and risk-taking and is an essential part of a nation’s ability to succeed in an ever-changing and increasingly competitive global marketplace.
Explaining are entrepreneurship by Example:
In essence, an entrepreneur’s behavior finds him or her trying to identify opportunities and putting useful ideas into practice. After the meaning and definition of entrepreneurship, you need to know better by Best entrepreneurs example. The tasks called for by this behavior can accomplish by either an individual or a group and typically require creativity, drive, and a willingness to take risks.
First Things:
Sam Hogg, the co-founder of GiftZip.com, exemplifies all these qualities. Hogg saw an opportunity to create a single place for people to shop for electronic gift cards, he risked his career by passing up alternatives to work on GiftZip.com full-time, and he’s now working hard to put GiftZip.com in a position to deliver a creative and useful service to its customers. However, ongoing firms can also behave entrepreneurially.
Second Things:
Typically, establish firms with an entrepreneurial emphasis are proactive, innovative, and risk-taking. For example, Apple Inc. is widely recognizing as a firm in which entrepreneurial behaviors are evident. Steve Jobs is at the heart of Apple’s entrepreneurial culture. With his ability to persuade and motivate others’ imaginations; Jobs continues to inspire Apple’s employees as they develop innovative products after an innovative product.
To consider the penetration Apple has with some of its innovations; think of how many of your friends own an iPhone, iPad, or Macintosh computer. Similarly, studying Facebook or Zynga’s ability to grow and succeed reveals; a history of entrepreneurial behavior at multiple levels within the firms. Also, many of the firm’s trade on the NASDAQ.
Such as Intuit, Amazon, Google, and Research In Motion are commonly thought of as entrepreneurial firms. The NASDAQ is the largest U.S. electronic stock market, with over 2,850 companies listed on the exchange. We want to note here that established firms with an orientation to acting entrepreneurially practice corporate entrepreneurship. Also, know about corporate entrepreneurship.
Extra Information:
All firms fall along a conceptual continuum that ranges from highly conservative to highly entrepreneurial. The position of a firm on this continuum is referring to as its entrepreneurial intensity. As we mentioned previously, entrepreneurial firms are typically proactive innovators and are not averse to taking calculated risks. In contrast, conservative firms take a more “wait and see” posture, are less innovative, and are risk-averse.
One of the most persuasive indications of entrepreneurship’s importance to an individual or a firm is the degree of effort undertaken to behave in an entrepreneurial manner. Firms with higher entrepreneurial intensity regularly look for ways to cut bureaucracy. For example, Virgin Group, the large British conglomerate, works hard to keep; its units small and instill in them an entrepreneurial spirit. Virgin is one of the most recognizing brands in Britain and is involving in businesses as diverse as airlines and music. In the following quote, Sir Richard Branson, the founder, and CEO of Virgin describes; how his company operates in an entrepreneurial manner:
Convention . . . dictates that “big is beautiful,” but every time one of our ventures gets too big we divide it up into smaller units. I go to the deputy managing director, the deputy sales director, and the deputy marketing director and say, “Congratulations. You’re now MD [managing director], sales director and marketing director of a new company.” Each time we’ve done this, the people involved haven’t had much more work to do, but necessarily they have a greater incentive to perform and a greater zeal for their work. The results for us have been terrific. By the time we sold Virgin Music; we had as many as 50 subsidiary record companies, and not one of them had more than 60 employees.
What is Entrepreneurship? Meaning and Definition. Also, the Image from the Internet.
Really want? The Do and Don’t in Diversity Management
What is a Diversity Management? As we have discussed above, there are perceive advantages and disadvantages of embracing diversity in workplace. It seems that there are evidences and cases indicating that diversity are possible source of competitive advantage and superior performance for businesses. But, the implementation and the management of diversity is not an easy one. Apparently, the mismanagement of diversity or inability of the leader. Or, manager to outline and execute and effective diversity management program will cause troubles to the organization with diverse workforce. In fact, for inexperience mangers, diversity indeed looks more like a curse than a blessing.
If the presence of diversity is well-manage, it can create synergy and improve organizational performances. It is believe that diversity is a powerful strategy as managers can leverage on the strengths of some people in the team while making the weaknesses of some others irrelevant. The strengths in a person can compensate for the weaknesses of others. While his weaknesses are cover by others’ strengths, and this is essential for a high performing team. Consistent with such a view, this section will outline some do and don’t for practitioners to follow. It may serve as a general guideline for managers to refer to in applying the concept of diversity management to daily management tasks.
The first thing the manager should perform in managing diversity is that to ensure effectiveness of the diversity management program. The managers should communicate constantly to employees, managers, customers, shareholders, and other stakeholders at all stages of the program. It is vital to keep people inform as their support is necessary for the successful implementation of a diversity management program. The execution should involve everyone; as such a program is not an issue for only the personnel department or a responsibility of senior managers.
Besides, it is also critically important to apply a change management processes to implement the program. The leader driving the changes should aware that a long term perspective is require in implementation. A diversity management program (i.e., changes involves attitudes and don’t happen overnight. And leaders have to expect that the program will last for years rather than a few weeks or months). Last but not least, the leaders must also have the correct expectations that resources are require for the program. Leaders must prepare to invest money, time and resources to achieve successful diversity management program.
On the other hand, there are two general don’t rules to aware of by managers.Firstly, managers should not confuse equal opportunities with diversity management. The equal opportunity approach can be part of any diversity initiative. But a successful diversity management program should go far beyond traditional equal opportunity issues. Secondly, managers should not design the diversity goals and policies for “them” (i.e., referring to the minorities). But they should instead think of “us” (i.e., everyone involve in the organization).
Within the S&P 100, 96 companies now maintain some type of internal diversity initiative. And with diversity issues now grabbing national headlines, it’s never been more important for employers to take a stance.
If you’ve yet to develop diversity training, mentoring, recruiting, and other such programs, this post will help you learn from the lessons of companies before you.
Keep reading for the do’s and don’ts of workplace diversity initiatives.
Do emphasize inclusion
Though often used when discussing diversity, inclusion is not the same thing. The Society for Human Resources Management (SHRM) defines inclusion as, “The achievement of a work environment in which all individuals are treated fairly and respectfully, have equal access to opportunities and resources, and can contribute fully to the organization’s success.” Make sure your organization is one where employees feel they can contribute to the success of your company, regardless of race, gender, creed, sexual orientation, or physical ability.
Do survey employees for feedback on diversity and inclusion
An annual engagement survey is the perfect time to ask your employees about diversity and inclusion. Surveying your employees will help you establish a baseline and allow you to gauge employees’ views on existing initiatives. This data can also be used when forming additional diversity and inclusions efforts. As Boris Groysberg and Katherine Connolly said in a Harvard Business Review article about workplace diversity, “metrics are key because, as we know, what gets measured gets done.”
Do use benchmarks
Speaking of engagement surveys, make sure yours includes industry benchmarks. Industry benchmarks can help shape your diversity and inclusion efforts because they provide an opportunity to know where you stand relative to other organizations in your industry, size category, or region. It’s like a built-in competitor analysis.
Don’t treat diversity as an internal, “HR issue”
Diversity is an issue that affects the entire company, and attitudes toward it start at the top and funnel down. Make sure your organization incorporates diversity into every aspect of its purpose and function.
Don’t neglect any employee group
Diversifying your workplace takes more than hiring a few people who aren’t the same race as the majority of your employees. Too often, diversity and inclusion efforts center around employees of color and neglect other aspects that make organizations diverse, like gender and sexual orientation, religious beliefs, physical ability, economic status, and creed. For example, the Center for American Progress reports that anywhere from 25 to 43 percent of gay people have experienced some form of discrimination in the workplace, and 90 percent of trans-gender employees have experienced some form of harassment or mistreatment at work. Make sure your diversity and inclusion efforts encourage an attitude of openness toward all employees in your organization. Your employees should feel freedom to express their opinions and ideas with equal weight given to all.
Don’t overlook senior leadership and board representation as areas that need improvement
Even if your organization has some phenomenal diversity initiatives in play, they’re not going to matter if the board of directors is made up of a homogeneous group. The same goes for company leaders. A diverse board and leadership team helps manifest the benefits of diversity in the workplace.
In an article about diversity in the workplace, Paul Block, CEO of the U.S. sweetener manufacturer Merisant Company, had this to say about diversity: “People with different lifestyles and different backgrounds challenge each other more. Diversity creates dissent, and you need that. Without it, you’re not going to get any deep inquiry or breakthroughs.”
How are your organization’s diversity and inclusion initiatives working? Don’t put it off any longer. Survey your employees today to find out how your organization is fairing with workplace diversity and where it needs to improve.
How to Start and Run your Own Business with Successful Entrepreneurs?
Successful Entrepreneurs were asked “What do you wish you knew before you started a business?” Here are there answers. 5 Best Tips and nine characteristics for Stat up with Video Clip of 11 Steps to Starting a Successful Business in Your 20s.When you start your own business, you’re certain to hear a lot of different advice. Most of it will come from people who don’t know the first thing about running a successful company. Turn to the Internet, and you’ll be overwhelmed by a multitude of articles and lengthy lists on the subject. Don’t make the mistake of over-thinking and over-analyzing it all. A few simple steps now can start your business down the path toward success. Why are the Need Entrepreneurship for Small Business?
Here, we outline the five basic tips we’ve followed to help us run our company.
Begin with a detailed plan
This one is a must: Develop an in-depth plan that fully details how you’ll attack the challenge ahead. Your plan should define any opportunities you’ve identified, clearly state your mission, describe your target, establish measurable goals, and set deadlines for each milestone along the way. Remember that while it’s important to have a plan, it’s equally vital to be flexible enough to pivot when needed.
Get out there and network
Our business would not be where it is today without all the professional networking we did when we first started. We continue to emphasize networking today. Until you’ve established your business, you’ll need to create your own word-of-mouth. Be your own brand ambassador, touting the benefits of working with your business and showing why people should give you a chance.
Start your own momentum. A wealth of events, trade shows, and networking groups exist to connect you with other professionals. These initial connections can lead to future business prospects, mentors, and strategic partners with the capacity to help grow your business.
Surround yourself with the right people
The right mentors and strategic partners aren’t the only people with whom you’ll need to align. Surrounding yourself with a great team is equally important. Build your staff with smart, talented, and driven employees who share your vision. They can not only transform your business but also accelerate its growth. Hiring positive, can-do employees helps create a culture that encourages teamwork. Foster an environment in which everyone participates, so you can collectively celebrate your company’s successes.
Stay ahead of the curve
You can’t afford to be rooted in the present and solely focused on the day-to-day. It’s crucial to keep one eye focused on the future, including upcoming movement in your industry. If you aren’t anticipating the next big thing, you’re destined to fall behind. Successful business owners study trends and anticipate what’s coming around the bend. This allows them to nimbly adapt and evolve.
Stay current on emerging issues in your field by faithfully reading trade magazines and websites. Keeping pace as your industry changes assures you’ll have your finger on the pulse to predict what customers will want — and which direction your competition might move.
Find a healthy work-life balance
Running a successful business requires an inordinate amount of time and energy. It’s paramount to find a healthy work-life balance, even though it can be a challenge to do so. It’s easy to let work dominate your life. Don’t. It could result in your losing touch with those whom you consider most important. It’s also crucial to take care of your own health and well-being. Your business can’t run without you. You might believe you need that perpetual hustle to stay sharp and succeed. But that pace can and will burn you out, ultimately limiting how much you can achieve if you don’t take time for yourself.
Find ways to maintain perspective and preserve healthy relationships outside of work. Set aside time to get your body active in ways that energize and invigorate you, and schedule catch-up time with friends and family. They’ll help recharge your batteries and inspire you to persevere as you dream even bigger.
Here are Best characteristics you should ideally possess to start and run your own business:
Motivation
Entrepreneurs are enthusiastic, optimistic and future-oriented. They believe they’ll be successful and are willing to risk their resources in pursuit of profit. High energy levels and are sometimes impatient. Always thinking about their business and how to increase their market share. Are you self-motivated enough to do this, and can you stay motivated for extended periods of time? Can you bounce back in the face of challenges?
Creativity and Persuasiveness
Successful entrepreneurs have the creative capacity to recognize and pursue opportunities. They possess strong selling skills and are both persuasive and persistent. Are you willing to promote your business tirelessly and look for new ways to get the word out about your product or service?
Versatility
Company workers can usually rely on a staff or colleagues to provide service or support. As an entrepreneur, you’ll typically start out as a “solopreneur,” meaning you will be on your own for a while. You may not have the luxury of hiring a support staff initially. Therefore, you will end up wearing several different hats, including secretary, bookkeeper and so on. You need to be mentally prepared to take on all these tasks at the beginning. Can you do that?
Superb Business Skills
Entrepreneurs are naturally capable of setting up the internal systems, procedures and processes necessary to operate a business. They are focused on cash flow, sales and revenue at all times. Successful entrepreneurs rely on their business skills, know-how and contacts. Evaluate your current talents and professional network. Will your skills, contacts and experience readily transfer to the business idea you want to pursue?
Risk Tolerance
Launching any entrepreneurial venture is risky. Are you willing to assume that risk? You can reduce your risk by thoroughly researching your business concept, industry and market. You can also test your concept on a small scale. Can you get a letter of intent from prospective customers to purchase? If so, do you think customers would actually go through with their transaction?
Drive
As an entrepreneur, you are in the driver’s seat, so you must be proactive in your approaches to everything. Are you a doer — someone willing to take the reins — or would you rather someone else do things for you?
Vision
One of your responsibilities as founder and head of your company is deciding where your business should go. That requires vision. Without it, your boat will be lost at sea. Are you the type of person who looks ahead and can see the big picture?
Flexibility and Open-Mindedness
While entrepreneurs need a steadfast vision and direction, they will face a lot of unknowns. You will need to be ready to tweak any initial plans and strategies. New and better ways of doing things may come along as well. Can you be open-minded and flexible in the face of change?
Decisiveness
As an entrepreneur, you won’t have room for procrastination or indecision. Not only will these traits stall progress, but they can also cause you to miss crucial opportunities that could move you toward success. Can you make decisions quickly and seize the moment? In Business World Best Characteristics of Successful Entrepreneurs.
Best Common Characteristics of Successful Entrepreneurs in Business World
All of these world famous entrepreneurs are unique in that they believed in themselves mostly since they were kids and worked towards that goal to success and fame. All successful entrepreneurs take their work very seriously. Have you ever thought about striking out on your own? After all, being your own boss can be an exciting prospect. However, owning a business isn’t for everyone. To be a successful entrepreneur, you must have or develop certain personality traits. Entrepreneurship is itself a process through which the entrepreneur allocate the resources available to the business in a way or in other words in a systematic manner that the entrepreneur can meet the requisites of the business and achieve the objectives of the business as well as of his own.
Now a days businesses are being done on large scale or more businesses are being run in one organization therefore, the executive management or the entrepreneurs has to adopt the ways and system through which they can not even secure their time but to save their resources from drain. How Do You Know Your Company Wants Help From The Outside?
Entrepreneurship is the process of innovation that reallocates resources to new opportunities, often creating new opportunities through unusual combination of resources and skills of risk taking. The entrepreneurs some time has to face the problems because they prepare their plans personally and create innovations and believe that they are doing the best and when the problem in the market has to be faced by them, then they suffer losses and face the rejection of their self develop ideas, innovations, inventions or creations on the basis of incomplete information and evaluation of the factors because they personally believe in strategies and plans.
The success is behind the criticism because when the entrepreneur of such kind prepare plans for business before going to other persons, he himself cities his ideas, innovations, creations and plans which he develop and get the answer to check his satisfaction. Why are the Need Entrepreneurship for Small Business?
The entrepreneurs of successful type take and evaluate constructive and realistic criticism of their business on the basis of past and previous plan/strategies being adopted by them and others and before adoptions to any of them constructively consider the positive and negative possibility of such adoptions.
In summary, entrepreneurs are the persons who develop ideas of the business, invest their saving in the business, fulfill the demands of the customers, helps the government in developing the economic stability or satisfying of economic crisis, paid taxes to the government and finally perform all sort of activities in lieu of their business primarily for earning profits and secondly to satisfy the demand so the customers.
Characteristics of Successful Entrepreneurs
As we know the most important person for every business is the entrepreneur who develops the idea of the business, start it by using his resources of all kinds and run the business activities to achieve his personal objectives by achieving the organization objectives. Entrepreneurship is the such process which helps the entrepreneur in all respect of the business through which he can assess his plans possibilities and predict on the basis of collected information and plan for future if he possess the following characteristics;
1. Creative Mind
Creativity is the major characteristic of a successful entrepreneur. He should have the ability to create more value for their product and services. The business opportunity, creative imagination is regarded a unique asset in the business world.
2. Confidence to Take Initiatives
The business world of today is moving at a very fast speed and require timely and more effective decisions, planning and controlling to overcome the sudden challenges therefore, a successful entrepreneur should have the ability to take initiatives by producing new things, new methods of marketing the product and service as per expectation of the target customer.
3. Ethical Standard
The ethical standard of the business is that there should not be cheating, fraud and other commercial bribery in business. A good entrepreneur has the social, moral, and religious responsibility to follow the ethical standard of the business to earn profit and stay long in the market.
4. Conceptual Skill
Effective entrepreneur are characterized by their conceptual skills. Conceptual skills are specific abilities to analyze a situation, decision making, determine the root of any problem or opportunities and devise an appropriate plan. What are Managerial Skills?
5. Versatile Knowledge
A successful entrepreneur should have a versatile knowledge of his business as well as adequate knowledge of trade, finance, marketing, legal management issues, technical management concern, and other business areas.
6. Knowledge of Market
A successful entrepreneur should have sufficient knowledge of market as well as finding new market for expand their business. He should know the geographic, demographic, psycho-graphics and behavioral changes in the market. Entrepreneur should be honest in dealing with others. He should provide qualitative product and services to their customer. He doesn’t make any anti-social practices such as black marketing, smuggling, overcharging to earn profit.
7. Energetic and Diligent
A successful entrepreneur should be energetic and diligent person. He should complete their work in time. He must believe in this phrase “Don’t put of till tomorrow what you can do today”. They are hardworking person and complete their all task as soon as possible.
8. Responsive To Criticism and Suggestions
A successful entrepreneur should response to criticism intelligently. He should concentrate on customer criticism or complaints. He accepts criticism for their product and services and responds positively to overcome these complaints. An entrepreneur should have the aptitude for research and adaptability to apply scientific findings to complete and stay in business. He should be able to adopt the new technologies for producing the product or services and new method of marketing the product & services. Entrepreneur pays their attention toward suggestion from their co-workers, customer, suppliers, or venture distributes. If he collects any best idea from these resources, he should be carefully tried to implement these suggestion.
9. Eligible to Evaluate Risks
Although every business has some internal and external risk. But entrepreneur carefully evaluate these risks and implement their plan. Although there is no guaranty for success but the chances of success are more due to calculated venture planning.
10. Self-Confident and Optimistic
Effective entrepreneur are characterizable by self-confident and optimism quality. He is confident about their plans for their venture. Sometime he may due to some critical situation in their venture. But he faces these situations confidently.
The major characteristics of the entrepreneur are the commitment toward organization goals. He is willing to do anything and respond positively to venture challenges. Demanding challenge motivate entrepreneurs to achieve results and developing their own managerial skills and capabilities. An entrepreneur maintains a professional relation with their staff. He believes that business activity is carry on by the workers. Should be aware of the temperament, aptitude and belief of the staff working with him. Also know the limitation and feelings of the individual. The ability to solve any misunderstanding or conflict between the staff.
Why are the Need Entrepreneurship for Small Business?
Entrepreneurship is the act of being an entrepreneur, which is a French word meaning “one who undertakes an endeavor”. Entrepreneursassemble resources including innovations, finance and business acumen in an effort to transform innovations into economic goods. The most obvious form of entrepreneurship is that of starting new Businesses; however, in recent years, the term has been extended to include social and political forms of entrepreneurial activity.
The concept of entrepreneurship has a wide range of meanings. On the one extreme an entrepreneur is a person of very high aptitude who pioneers change, possessing characteristics found in only a very small fraction of the population.
According to A.H. Cole, “Entrepreneurship is the purposeful activity of an individual or group of associated individuals, undertaken to initiate, maintain or aggrandize profit by production or distribution of economic goods or services”.
Entrepreneurship promotes small business in the society. Government has accepted the fact that small firms have a crucial role to play in the economic development of the country. Most economists today agree that entrepreneurship is a necessary ingredient for stimulating economic growth and employment opportunities in all societies.
Small businesses are an essential part of our future economic prosperity because of the following reasons;
Employment generation
Entrepreneurial development is look at as a vehicle for employment generation through promotion of small business. India, being far more develop and forward looking country than some of the third world countries, can provide lead to entrepreneurial development activities. However, India can benefit from the well- documented success experiences of developed countries like USA, Japan and UK in the field of employment generation and small business promotion. Steady growth in consumer spending, expanding retail sales, a strong housing market, continued expansion of the service sector, low rates of inflation and of labor cost increases and failing interest rates contributed to a healthy environment for small business. In India, the government policies, political and economic environment greatly encourage the establishment of new and small enterprises. Self- employment and small scale industry schemes have further liberalized during the last decade.
Small business dynamism
Great dynamism is one of the qualities of the small and medium enterprises. This quality of dynamism originates in the inherent nature of the Small Business. The structure of small and medium enterprises is less complex than that of large enterprises and therefore facilitates quicker, and smoother communication and decision- making. This allows for the greater flexibility and mobility of small business management. Also, small enterprises, more often make it possible for owners. Who have a stronger entrepreneurial spirit than employed mangers, to undertake risk and challenges. New Roles of Human Resource Management in Business Development.
Balanced economic development
Small business promotion needs relatively low investment and therefore can easily undertaken in rural and semi-urban areas. This in turn creates additional employment in these areas and prevents migration of people from rural to urban areas. Since majority of the people are living in the rural areas. Therefore, more of our development efforts should be direct towards this sector. Small enterprises use local resources and are best suit to rural and underdeveloped sector. This in turn will also lead to dispersal of industries. Reduction in concentration of economic power and balanced regional development.
Innovations in enterprises
Business enterprises need to be innovative for survival and better performance. It is believe that smaller firms have a relatively higher necessity and capability to innovate. The smaller firms do not face the constraints imposed by large investment in existing technology. They are both free and compellable to innovate. Entrepreneurship development is accelerating the pace of small firm’s growth in India. An increased number of small firms are expects to result in more innovations. And make the Indian industry compete in the international market.
Entrepreneurs are Born or Made; Since the late 18th century, the business has constituted the main component of modern society. As the success of Steve Jobs, Bill Gates and Warren Buffet, many people start their own business in chase of profit. An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards. Entrepreneurs are growing every day while others bankrupting.
Here are explain common questions in Corporate, Are Entrepreneurs Made or Born?
You may think that entrepreneurs are born successful, and they owned an enormous business. Why Become an Entrepreneur? However, the entrepreneur does not define as the one who has made their business tremendous, but the one who starts his own company and employs himself. Therefore, anyone can become an entrepreneur if he or she starts his or her own business and works for himself or herself.
There are no boundaries among people, but your working position determines whether you are an entrepreneur. Entrepreneurs are not naturally born, but naturally made. Entrepreneurship is not a destiny, but a qualification. It is the qualities that make entrepreneurs successful. Moreover, the qualities are not inherent but gotten through education and experiences.
Are Entrepreneurs Made or Born?
Here are below explain;
Entrepreneurs are not born,
Entrepreneurs are not like athletes, they don’t need a natural inherent body and muscles. An athlete’s child may grow up an athlete, but it would not happen in an entrepreneur’s family. Many businesses bankrupt every day, including some entrepreneur’s families. However, entrepreneurs are naturally made, and they own some special qualities and also need some training and experiences as athletes. Many people from non-entrepreneurs families start their own business and become entrepreneurs every day.
Dhirubhai Ambani, the most enterprising businessman in India who’s father is a school teacher, started his business on his own. Warren Buffett is not born as an entrepreneur either. He started his company when he was 27 years old using his earns from his previous investments, made a great profit from his unique and accurate opinion on the stock market, and his Berkshire industrial Kingdom became a famous huge business in the world. There are many examples of entrepreneurs who started their businesses as a green hand, instead of inheriting from their families. Thus we could not say that entrepreneurs are born, however, the entrepreneurs acquired many qualities that made them successful.
The main quality of entrepreneurship is innovation,
Which is not obtained naturally. Innovation is a new product, a new technology, a news source, and a new market. There are many examples of entrepreneurs bankrupted due to a lack of innovation. The famous company, Apple, make its success by innovation. As we all know, Apple will release his new product or innovation of its existing products every year, and the big success of the iPhone, iPad, iPod, and iMac make Steve Jobs the most well-known famous entrepreneur. After all, the sense of innovation is not grown naturally, it comes from opportunities. When there is a problem, there are opportunities.
Several years ago, there is no software’s in the computer, and Bill Gates made his entrepreneurship from creating the first software, Windows. The Body Shop International was created by Anita Roddick because ” she was tired of paying for unnecessary perfume and fancy packaging when she bought makeup”. The problem that Anita faced made her start her own business to solve the problem. The problem finding quality is the quality that everyone was born with, and the opportunity is just coming from those problems.
The second quality of entrepreneurship experiences,
Which is exactly extracted from posteriority. About 60 percent of the entrepreneurial leaders are “transitioned”, and the number one ranking factor of success is the experience as the employee. People can learn terminologies and skills for business evoked as their language, and the procedures of running a business become his or her conditional reflex, which will make their future operating business effectively and efficiently. From the previous experience, the entrepreneur can easily tackle the key to a problem and forecasting the development of his or her business. Yu Minhong, a great entrepreneur, started his tutoring school, New Oriental, after his experience of teaching and tutoring at Peking University.
He extracted his way of teaching from his previous experience of teaching and used the teaching method in his company. The big success of New Oriental makes Yu Minhong one of the greatest entrepreneurs in China, and his method of teaching spreads all over the country. The rules of business are simple, making a business plan, ordinating your customers, operating and developing the business. From your previous experience, you will have the blueprint of your business, and you have already had your customers when you start. Thus with your employment experience, you are jumping the first two steps, which are making a business plan and ordinating customers, and directly shortcut into the third step – operating and developing the business.
The third quality of entrepreneurship is knowledge,
Which is not inborn but acquired from education. Entrepreneurs are facing various challenges from finance, operation, organization, and laws. Operating the business requires you to understand financial statements. Financial statements, consisting of income statement, cash flow statement and balance sheet, is a tool for entrepreneurs to track their operations. The knowledge of financial statement is not acquired naturally, it is obtained from the study. Not only the understanding of the financial statement but also the financial ratio analysis are needed as an entrepreneur. To cooperate with the government, the entrepreneur needs to know the regulations such as taxes and franchising.
The lack of financial knowledge may be fatal. Henry Ford surrendered most of his stocks for the demanded capital, and he spent even more years than he expected to receive money to buy back his stocks. Some of the entrepreneurs even gain returns from investing in using finance knowledge. Warren Buffet-“The Oracle of Omaha”, Peter Lynch-mutual fund manager, Benjamin Graham-“The Father of Value Investing”, give us vivid instances of making money just through their wisdom of investing strategy driven from their solid knowledge obtained in school. The knowledge will drive the entrepreneurs to make the right decision for their business and operate better. How To Make Your Small Business Stand Out? Many Ways You Can Try IT!
The fourth quality of an entrepreneur is a good sense of dealing with people, communication,
People are not born with good communication since we all start learning languages, but they can start learning communication skills at an early age. Communicating well means the entrepreneurs will get their potential customers and gained more customers from fabulous customer service. Salespeople will probably become successful entrepreneurs since they will touch the customers directly and know their needs. Great entrepreneurs in the U.S. such as Ray Kroc -founder of McDonald’s, Aristotle Onassis and King C. Gillette start from sales. They sensed people’s need and started their entrepreneurship. Good communication prepare, not born, to sell your product. The entrepreneurs need to know their products, their business field, as well as their customers.
Extra things;
Apart from innovation, experience, knowledge, and communication, qualities such as teamwork & leadership, integrity, and passion are also important. Teamwork and leadership is an essential ability that was gained from life, not born. Successful Characteristics of an Entrepreneur. It required the entrepreneur to address complex problems by utilizing the strengths of different group members and create a synergy that increases innovation and successful outcomes. The team has a big impact on the business, so the entrepreneur needs to organize his team well. It is the entrepreneur and leader’s task to communicate and listen, ask questions and summarize, articulate a goal, and build a member’s confidence.
These tasks like communication are not born, however, they are trained through tasks and group projects. That’s why the business schools are teaching and training students the above skills. In addition to it, integrity, which leads to honest business, is also a personal skill that was highly influenced by the living environment, not born. The business would not exist long if it cheated its customers. The entrepreneurs need to convince the clients to buy their product or invest their companies through the method of integrity; so, that they will gain profit and get funding for their business.
Passion, similar to ambition in entrepreneurship, makes your employment and business experience upgrade into entrepreneurship level. Everyone has passion, and passion makes entrepreneurs start and grow their businesses. Passion is a personal quality that was acquired from experience. It is a kind of confidence in your business you alight with. Only when the entrepreneur targets his or her goal, will he or she have passion in the business. Thus, teamwork and leadership, integrity and passion are not made but acquired after born.
Final things;
To conclude, there are many people become entrepreneurs. A good sense of innovation will survive a business from a crisis and make it the leader of its field; and, the entrepreneurs find opportunities from problems and make innovations. Rich experience, ranking number one of the factor of entrepreneurship; will make the entrepreneurs easily overcome some business crises and forecast its development. Common Myths About Entrepreneurs, Well-rounded knowledge in the field, like the application of financial statements, knowing the government regulations is essential for the entrepreneurs to operate their business.
Good communication skills, gained from experience of dealing with people will get potential customers and gained a huge profit from it. In addition to all the above, teamwork and leadership, integrity, and passion are also keys to entrepreneurship which are acquired through training and practice. Moreover, these qualities are acquired, not born. One can achieve a good sense of entrepreneurship by tempered himself through practice; and, could gain the qualities in the tempering.
Are Entrepreneurs Made or Born! Explanation Why? Image from online.
Why To Be a Best Leader become, First Be a Great Follower?
To differentiate leader from follower is difficult; they have several similarities as well as also have some differences. In leadership, one should have to take risk and lead the team; have ability to see opportunity that other cannot see. Both should be able to learn from someone or something. Leaders must be independent and isolated and should not rely on anyone but himself and have to be entrepreneurial, and make workplace culture better by working with generous purpose. So Now talking about, Why To Be a Best Leader become First Be a Great Follower?
Good leadership is needed to solve problems and to navigate unexpected circumstances Followers only need to be competent during the battle and must be able to carry out orders by their leader, with their own ability while at other times; they have no need to be that competent. They could ask for help from their friends but in contrast, Leader cannot ask for help from his followers or else his followers would consider him incompetent. Being a follower is easier than being a leader because leader has to be isolated and should have ability to solve his own problems.
Leadership can be as successful or effective or both
Successful leadership but not effective: In this pattern, leader’s style may not compatible; but follower does the job because of leader’s power and position. They obey the command and follow his idea.
Effective leadership: the followers may do the job willingly to cooperate because the leader’s request satisfies the follower’s needs or goal.
Successful leadership: it emphasizes upon position, power and close supervision.
Characteristics of Good Followers
As leader, it is very important to know about that how to follow and how to lead. Many people believe that if you want to become a good leader then you must be a good follower.
Some characteristic about good follower:
Well finisher: Good followers always concentrate on their task and complete their task according to preplanned.
Clear vision: they understand their power and position and it is equally important to understand their role as a leader.
Loyalty: Good followers always try to avoid telling bad things about their boss/leader in public. It does not means that they are completely agree with their boss/leader but only do not want to do things in public because to influence the public it is needed to become public loyal.
Good followers are obedient enough and humble.
Awareness of surrounding: Good follower is well aware of surrounding situations and people. They always try to learn about people behavior and their thinking and how they affect in his work and what is going wrong and then make changes according to demands.
Own thinking: To becomes a good follower, you are able to think on your own and decide what is right and what is wrong. Good followers always take side to leader and support them when they are doing right.
A Great Leader as a Good Follower
Many qualities are same between leaders and followers. A great leader follows the same trait as followers do but change their style and do some modification in it. Great leader knows their boundary and limitation very well.
Good leadership is the golden key to get best performance. Need to imply your own clear sets of values and belief and also have to make clear vision for all. Develop some creative ideas for the organization to make changes and reach up to desire goal. From this perspective, leaders are always try that people follow the process and in this way leader always think themselves as a follower.
There is very important reason to leaders that they have to follow because no one can do it alone and have to create and utilize the energy, ideas and full potential of everyone.
Leadership requires a close study of human behavior. It is the people who are the factors of importance. There are many different points of view about leadership. One belief is that leadership has to be taught while some are of the view that leaders can’t be made by teaching or training. New Roles of Human Resource Management in Business Development.
In this modern age, new leaders are coming but most of them fail to cultivate their inner strength, ability to guide the people, to lead the people. There are three basic steps which are followed mostly in the process of training. Information is the first step, gets from simple reading and continuous study which then converted into knowledge.
Wisdom is the transformation of knowledge. Trained person has to be able to transfer the knowledge into the practice. As a result of training, one should become more self-confident. On receiving training, knowledgeable person becomes capable of taking his own decisions and at this stage; person visualizes the truth-real understanding.
There are few requirements to reach to the truth, in ascending direction that are desire to learn, listening to the teacher, learning, retention, understanding, reflection, rejection of false views and truth.
Human relationship gains the most attraction for a leader for the obvious reasons that the leader leads people. For any business, workforce is the basic requirement and for accomplishment leader has to understand people.
Common logic reason behind the successful leader is the development of proper appreciation human nature. For this, one should have enough confidence and has to explain to other members about task and targets and how that can be accomplished.
Leader should also explain the subordinates about their position and also impact of success or failure on the ultimate goal. If the goal achieved, that is a success of team not a success of leader alone. Leadership Explained by the Internet.
The leader has to do the required morale boosting apart from handling the work and must to be in touch with his people. It is necessary to show adequate interest in their personal problems. It is better for his people must perceive as their leader becomes the real guardian of their interests.
This is necessity to do this as it helps to maintain respective distance from the people. This concept of distant has been mostly appreciated, and understood by successful leader.
Thus, taking an overall view, the leader has to be a dynamic person and should have capability to turn the adversity in his favors and to gain this. The leader must have the capacity to concentrate, and focus attention on the goal with an aptitude to take timely decisions and have to be sincere in his dealing. He has to show his faithfulness and loyalty towards his mission and the people, and should possess a fair knowledge of his job and profession. Be The Change You Want to See in The World.
So what does a great follower look like? I would suggest great followers share at least five characteristics:
They are clear: They understand their role, You can’t be a good follower unless you have clearly identified the leader. While you may be a leader in your own realm, everyone has a boss including you. Great followers not only accept this fact, they embrace it.
They are obedient: While obedience may be a politically incorrect concept, it is essential for organizational effectiveness. No one should be allowed to give orders who can’t obey orders. This is how great leaders model the standards of acceptable behavior to their own followers.
They are servants: This is crucial, Great followers are observant. They notice what needs to be done to help the leader accomplish his or her goals. Then they do it joyfully, without grumbling or complaining.
They are humble: Great followers don’t make it about them, he/she also to be humble, shine the light on the leader, make their own boss look good especially in front of his or her boss.
They are loyal: I have written on this before, Great followers never speak ill of their boss in public. This doesn’t mean they can’t disagree or even criticize. “Yes” people aren’t very helpful in the long run. It just means that they don’t do it in public. Great followers understand that public loyalty leads to private influence.
Many Thinks, Why To Be a Best Leader become First Be a Great Follower?
The Mark Zuckerberg’s of this world corporate leaders propelled into their positions because of what they created are few and far between. Most leaders start in much humbler, entry-level positions and work their way up the corporate ladder, and this is a good thing. Emerging leaders who work their way up learn about what motivates them and their co-workers. They also learn about what makes a team work well together to achieve goals. They also learn what good and not so good leadership is, and this allows them to develop empathy and compassion for those they will one day lead. In essence, they learn key “follower-ship” lessons that will serve them well when they become leaders.
According to Barbara Kellerman, a leadership lecturer at Harvard University, there is a lot a person can learn about being a good leader by being a good follower. Good followers, she says, are passionately committed and deeply involved. They actively support a good leader (one who is effective and ethical). Do Good Always!Bad followers, on the other hand, do nothing to contribute to the group or the organization.
Good followers learn to “read” their colleagues, co-workers, customers, and other audiences. They understand what motivates them and what upsets them, skills that they can use when they become leaders. Good followers also learn important diplomacy skills, like the ability to get along well with others while not ignoring differences for example, working well with a colleague who has different political beliefs. Good followers also need to learn to be courageous. Kellerman notes that good followers can aid the leader when he or she is doing the right thing but they also have to have the courage to stand up to the leader if he or she is doing something wrong (Moran, 2014).
Good followers also learn important collaboration skills that will serve them well as leaders-Good followers and good leaders understand that followers (good and bad) can make or break a leader by influencing how and what goals get achieved-Good followers will assist their leaders in achieving goals. Bad followers can actively sabotage the achievement of goals (Moran, 2014). Good followers also learn to think for themselves and will stand up to a leader who may be heading in the wrong direction (Moran, 2014).
Being a good follower does not end when one becomes a leader. It is important that emerging leaders understand that they must continue to practice good follower-ship in their leadership roles; they become good follower-ship leaders. During a keynote speech in 2012, former HP executive vice president Vyomesh Joshi said the key to being a great leader was to practice good follower-ship. In other words, leaders who have been good followers and who practice good follower-ship principles as leaders understand how to work with people to bring out the best in them.
The Steps with Advantages and Disadvantages of Strategic Management; Strategy: The word “strategy” derives from the Greek word “stratçgos”; stratus (meaning army) and “ago” (meaning leading/moving). A strategy is an action that managers take to attain one or more of the organization’s goals. The strategy can also be defined as “A general direction set for the company and its various components to achieve a desired state in the future. Strategy results from the detailed strategic planning process”.
Here explains you’ll read and learn; The Steps with Advantages and Disadvantages of Strategic Management.
A strategy is all about integrating organizational activities and utilizing and allocating the scarce resources within the organizational environment to meet the present objectives. While planning a strategy it is essential to consider that decisions do not take in a Vaccum and that any action taken by a firm is likely to be met by a reaction from those affected, competitors, customers, employees or suppliers.
The strategy can also define as knowledge of the goals, the uncertainty of events and the need to take into consideration the likely or actual behavior of others. The strategy is the blueprint of decisions in an organization that shows its objectives and goals, reduces the key policies, and plans for achieving these goals, and defines the business the company is to carry on, the type of economic and human organization it wants to be, and the contribution it plans to make to its shareholders, customers, and society at large.
Steps of Strategic Management:
The strategic management plan has various facets that are being discussed here. The strategies are applied to have proper planning and appropriate allocation of funds for the accomplishment of the goals of the company.
Step 1: Formulation;
The formulation of the strategies essentially involves the environment within which every company has to survive. Here various important decisions make to figure out how the company will reach out to the competition. Here the external environmental analysis is done. The political, economic, legal and social aspects are assessed during the formulation of the strategies.
1. Industry Environment:
The strategic decision-maker checks for the competitor environment. They try to assess the resources available to the rivals and also their bargaining power with the customers. It is also important to understand the trend of the suppliers; check if there are any latest threats of the new entrants in the industry.
2. Internal Environment:
Though most of the companies do not take care of the internal environment this is amongst the most important while implementing strategic management fundamentals. You should have a clear SWOT analysis of your employees, processes, and resources.
Step 2: Implementation;
This is the next important step in strategic management – here the management has to decide as to how the resources will be utilized to reach out to the goals formulated by the company. The implementation phase also checks how the resources of the organization have been structured.
Advantages of Strategic Management Process:
The process of strategic management is a comprehensive collection of different types of continuous activities and also the processes which use in the organization. Strategic management is a way to transform the existing static plan in a proper systematic process. Strategic management can have some immediate changes in the organization. The following mentioned are few advantages of strategic management;
1. Making a better future;
There is always a difference between reactive and proactive actions. When a company practices strategic management – the company will always be on the defensive side and not on the offensive end. You need to come out victorious in the competitive situation and not be a victim of the situation. It is not possible to foresee every situation but if you know that there are chances of certain situations then it is always better to keep your weapons ready to fight the situation.
2. Identifying the directions;
Strategic management essentially and clearly defines the goals and mission of the company. The main purpose of this management is to define realistic objectives and goals – this has to be in line with the vision of the company. Strategic management provides a base for the organization based on which progress can measure and base on the same, the employees can compensate.
3. Better business decisions;
It is important to understand the difference between a great idea and a good idea. If you do have a proper and clear vision of your company – then having a mission and methods to achieve the mission always seems to be a very good idea. It turns into a great idea when you decide what is the type of project that you want to invest your money; how do you plan to invest your time and also utilize the time of your employees. Once you are clear with your ideas about the project and the time each of your employees and you will have to allocate, you will need to focus your attention on the financial and human resources.
4. The longevity of the business;
The times are changing fast and dynamic changes are happening every day. The industries worldwide are changing at a fast pace and hence survival is difficult for those companies which do not have a strong and perfect base in the industry. The strategic management ensures that the company has a thorough stand in the related industry and the experts also make sure that the company is not just surviving on luck and better chances or opportunity.
When you look at various studies you would know that the industries which are not following the strategic management will survive for not more than five years. This suggests that companies should have a powerful focus on the longevity of the business. This suggests that without strategic management, a company can’t survive in the long run.
5. Increasing market share and profitability;
With the help of strategic management, it is possible to increase the market share and also the profitability of the company in the market. If you have a very focused plan and strategic thinking then all the industries can explore better customer segments, products and services and also to understand the market conditions of the industry in which you are operating in. Strategic management skills will help you to approach the right target market. The experts will guide for better sales and marketing approaches. You can also have a better network of distribution and also help you to take business decisions which at the end of the day results in profit.
6. Avoiding competitive convergence;
Most of the companies have become so used to focusing on the competitors that they have started imitating their good practices. It has become so much competition that it is becoming difficult to part the companies or identify them differently. With the help of strategic management this magic is possible; try and learn all the best practices of a company and become a unique identity that will keep you apart from your competitors.
7. Financial advantages;
The firms which follow the process of strategic management prove to have more profits over some time as compared to the companies that do not opt for strategic management decisions. Those firms which involve in using strategic management use the right method of planning; these companies have excellent control over their future. They have a proper budget for their future projects; hence these businesses continue for a long time in the industry.
8. Non-financial advantages;
Besides the financial benefits, the companies using strategic management also provides various non-financial benefits. The experts informed that the firms which practice strategic management are always ready to defeat the external threats. They have a better understanding of the strengths and weaknesses of the competitor and hence they can withstand the competition. This paves way for better performance and rewards for the company over some time. The main feature of this management system is that it has the capacity for problem prevention and problem-solving skills. It also helps in bringing about discipline in the firm for all types of internal and external processes.
Disadvantages of Strategic Management Process:
The process of strategic management includes a set of long-term goals and objectives of the company; using this method helps the company is facing competition in a better manner and also increase its capabilities. These are some of the benefits but every coin has two sides – the same is the case with strategic management. Here are some of the limitations of strategic management;
1. Complex process;
The strategic management includes various types of continuous process which checks all type of major critical components. This includes the internal and external environments, long term and short term goals, strategic control of the company’s resources and last but not least it also has to check the organizational structure. This is a lengthy process because a change in one component can affect all the factors.
Hence one must understand the issues with all the concerned factors. This generally takes time and in the end, the growth of the company affects. Being a complex process it calls for lots of patience and time from the management to implement the strategic management. To have proper strategic management, there should be strong leadership and properly structured resources.
2. Time taking process;
To implement strategic management, the top management must spend proper quality time to get the process right. The managers have to spend a lot of time researching, preparing and informing the employees about this new management. This type of long term and time-consuming training and orientation would hamper the regular activities of the company. The day to day operations are negatively impacted and in the long term, it could affect the business adversely.
E.g. many issues require daily attention but this is not taken care of because they are busy researching the details about strategic management. In case, the proper resolution of the problems is not done on time then there could be a great amount of attrition increase. Besides this, the performance of the employees will also go down; because, they are not getting the required resolution of their problems. This type of situation may lead the management to divert all their critical resources towards employee performance and motivation; while doing this your strategic management process will be sidelined.
3. Tough implementation;
When we speak the word strategic management then it seems to be a huge and large word. But it is also a fact that the implementation of this management system is difficult as compared to other management techniques. The implementation process calls for perfect communication among the employees and employers. Strategic management has to be implemented in such a way that the employees have to remain fully attentive; there should be active participation among the employees and besides this, the employees have to be accountable for their work.
This accountability means not only for the top management but for all employees across the hierarchy. The experts mentioned that implementation is difficult because they have to continuously strive to make the employees aware of the process and benefits of this system. E.g. if a manager was involved in forming the strategic process and he/she has not been involved in the implementation process then the manager will never be accountable for any processes in the company.
4. Proper planning;
When we say management systems then it calls for perfect planning. You just cannot write things on paper and leave them. This calls for proper practical planning. This is not possible by just one person but it is a team effort. When these types of processes are to implement then you need to sideline various regular decision-making activities that would adversely affect the business in the long run.
Short Review:
In recent years, most of the firms have understood the importance of strategic management – it plays a key role in the upbringing and downfall of any company. In a nutshell, we can conclude that the purpose of strategic management is possible if a company can provide dedicated resources; and, staff to formulate and implement the entire system. If strategic management is implemented in the company thoroughly then there is no doubt that the company will survive all types of odds; and, competition and remain in the market for a long period.
This is required in the present situation for all companies. It just calls for proper planning and the right people to implement them in the company. You need to keep a regular check on all external and internal factors affecting your industry; besides this check all your financial resources whether they are enough to expand your business. If you could keep in mind these things the implementation will become very easy and quick for any organization irrespective of their sizes.
The Steps with Advantages and Disadvantages of Strategic Management
What are the Benefits of Strategic Management? Strategic management essentially means the implementation and formulation of various strategies to achieve the goals of the company. This is the detailed initiative that is taken by the top management; these strategic decisions are taken based on available resources; they also take into consideration the effects of the external and internal environment on their decisions.
Here explains read and learn; Benefits of Strategic Management with its advantages and disadvantages:
There are many benefits of strategic management and they include identification, prioritization, and exploration of opportunities. For instance, newer products, newer markets, and newer forays into business lines are only possible if firms indulge in strategic planning. Next, strategic management allows firms to take an objective view of the activities being done by it; and, do a cost-benefit analysis as to whether the firm is profitable.
Just to differentiate, by this, we do not mean the financial benefits alone (which would be discussed below); but, also the assessment of profitability that has to do with evaluating whether the business is strategically aligned to its goals and priorities.
The key point to note here is that strategic management allows a firm to orient itself to its market and consumers; and, ensure that it is actualizing the right strategy.
1] Financial Benefits;
It has been shown in many studies that firms that engage in strategic management are more profitable; and, successful than those that do not have the benefit of strategic planning and strategic management.
When firms engage in forwarding looking planning and careful evaluation of their priorities, they have control over the future; which is necessary for the fast-changing business landscape of the 21st century.
It has been estimated that more than 100,000 businesses fail in the US every year and most of these failures are to do with a lack of strategic focus and strategic direction. Further, high performing firms tend to make more informed decisions; because they have considered both the short-term and long-term consequences and hence, have oriented their strategies accordingly. In contrast, firms that do not engage themselves in meaningful strategic planning are often bogged down by internal problems and lack of focus that leads to failure.
2] Non-Financial Benefits:
The section above discussed some of the tangible benefits of strategic management. Apart from these benefits, firms that engage in strategic management are more aware of external threats; an improved understanding of competitor strengths and weaknesses and increased employee productivity. They also have a lesser resistance to change and a clear understanding of the link between performance and rewards.
The key aspect of strategic management is that the problem solving and problem preventing capabilities of the firms enhance through strategic management. Strategic management is essential as it helps firms to rationalize change and actualize change; and, communicate the need to change better to their employees. Finally, strategic management helps in bringing order and discipline to the activities of the firm in both internal processes and external activities.
3] Closing Thoughts;
In recent years, virtually all firms have realized the importance of strategic management. However, the key difference between those who succeed and those who fail is how strategic management is done and strategic planning is carried out makes the difference between success and failure. Of course, there are still firms that do not engage in strategic planning or where the planners do not receive support from management. As well as, These firms ought to realize the benefits of strategic management and ensure their longer-term viability and success in the marketplace.
The Advantages of Strategic Management;
The following advantages below are;
1] Discharges Board Responsibility;
The first reason that most organizations state for having a strategic management process is that it discharges the responsibility of the Board of Directors.
2] Forces An Objective Assessment;
Strategic management provides a discipline that enables the board; and, senior management to take a step back from the day-to-day business to think about the future of the organization. Without this discipline, the organization can become solely consumed with working through the next issue or problem without consideration of the larger picture.
3] Provides a Framework For Decision-Making;
The strategy provides a framework within which all staff can make day-to-day operational decisions; and, understand that those decisions are all moving the organization in a single direction. It is not possible (nor realistic or appropriate) for the board to know all the decisions the executive director will have to make, nor is it possible (nor realistic or practical) for the executive director to know all the decisions the staff will make.
The strategy provides a vision of the future, confirms the purpose and values of an organization, sets objectives, clarifies threats and opportunities, determines methods to leverage strengths, and mitigate weaknesses (at a minimum). As such, it sets a framework and clear boundaries within which decisions can be made. Also, the cumulative effect of these decisions (which can add up to thousands over the year) can have a significant impact on the success of the organization. Providing a framework within which the executive director and staff can make these decisions helps them better focus their efforts on those things that will best support the organization’s success.
4] Supports Understanding & Buy-In;
Allowing the board and staff participation in the strategic discussion enables them to better understand the direction; why that direction was chosen, and the associated benefits. For some people simply knowing is enough; for many people, to gain their full support requires them to understand.
5] Enables Measurement of Progress;
A strategic management process forces an organization to set objectives and measures of success. Also, the set of measures of success requires that the organization first determine; what is critical to its ongoing success and then force the establishment of objectives and keeps; these critical measures in front of the board and senior management.
6] Provides an Organizational Perspective;
Addressing operational issues rarely looks at the whole organization and the interrelatedness of its varying components. Strategic management takes an organizational perspective and looks at all the components and the interrelationship between those components to develop a strategy that is optimal for the whole organization and not a single component.
The Disadvantages of Strategic Management;
The following disadvantages below are;
1] The Future Doesn’t Unfold As Anticipated;
One of the major criticisms of strategic management is that it requires the organization to anticipate the future environment to develop plans, and as we all know, predicting the future is not an easy undertaking. The belief is that if the future does not unfold as anticipated then it may invalidate the strategy taken. Recent research conducted in the private sector has demonstrated that organizations that use the planning process achieve better performance than those organizations that don’t plan; regardless of whether they achieved their intended objective. Also, there are a variety of approaches to strategic planning that are not as dependent upon the prediction of the future.
2] It Can Be Expensive;
There is no doubt that in the not-for-profit sector there are many organizations that cannot afford to hire an external consultant to help them develop their strategy. As well as, Today many volunteers can help smaller organizations; and, also funding agencies that will support the cost of hiring external consultants in developing a strategy. Regardless, it is important to ensure that the implementation of a strategic management process is consistent with the needs of the organization; and, that appropriate controls are implemented to allow the cost/benefit discussion to be undertaken, before the implementation of a strategic management process.
3] Long Term Benefit vs. Immediate Results;
Strategic management processes design to provide an organization with long-term benefits. If you are looking at the strategic management process to address an immediate crisis within your organization, it won’t. It always makes sense to address the immediate crises before allocating resources (time, money, people, opportunity, cost) to the strategic management process.
4] Impedes Flexibility;
When you undertake a strategic management process; it will result in the organization saying “no” to some of the opportunities that may be available. This inability to choose all of the opportunities presented to an organization is sometimes frustrating. Also, some organizations develop a strategic management process that becomes excessively formal. Processes that become this “established” lack innovation and creativity and can stifle the ability of the organization to develop creative strategies. In this scenario, the strategic management process has become the very tool that now inhibits the organization’s ability to change and adapt.
A third way that flexibility can be impeded is through a well-executed alignment and integration of the strategy within the organization. An organization that is well-aligned with its strategy has addressed its structure, board, staffing, and performance and reward systems. This alignment ensures that the whole organization is pulling in the right direction, but can inhibit the organization’s adaptability. Again, there are a variety of newer approaches to strategy development used in the private sector (they haven’t been widely accepted in the not-for-profit sector yet); that build strategy and address the issues of organizational adaptability.
