Starting a Business
Startingone’s own business may be stressful, but a brilliant career choicethat address the issue of unemployment. Starting a new businessbegins with the conception of a viable idea that can be turned intoservices ad or products. Commercialization of a realistic ideademands the focus and time of the business owner in order to ensurethat the idea materializes. This means that the owners of thebusiness idea should play the major role in bringing the ideas fromtheir minds into reality. The present study addresses differentaspects of the management functions (including planning, organizing,leading, and controlling) that can help in starting one’s ownbusiness.
Typeof organization culture
Organizationalculture encompasses the values, symbols, beliefs, and behavior thatguide individual actions and decision at an unconscious level. Clanculture is the most appropriate type of organizational culture forthe business that seeks to establish a lasting relationship with itsemployees. According to Ubius & Alas (2009) the clan culture ischaracterized by employee involvement, teamwork, and corporatecommitment to employees. The clan culture will help the new businessto manage its environment through staff development, teamwork,considering customers as partners, and developing a humane workingenvironment. This means that the firm will focus on long-term meritsof development at the individual level where morale and cohesion ofall the stakeholders will be highly valued.
Keyfactors in the business environment
Thenew business will be affected by both internal and external factors.Internal factors include those that influence the business and arepresent within the business (Pujari, 2014). There are four internalfactors that are more relevant to the microcredit firm. First, theobjectives of the business will determine the direction and the paceat which the business will grow. Secondly, an effective managementinformation system will facilitate both operational and strategicfunctions, which will help in the realization of pre-determinedgoals. Third, employee participation in the decision making processwill enhance their commitment towards the accomplishment oforganizational goals. Fourth, employee competence is an importantfactor, which can be enhanced through staff training and development.
Themicrocredit business will also be affected by four factors of theexternal environment. First, the type of market segments that thebusiness will target will determine the number of customers that thefirm will get. Targeting different market segments help business inattracting a larger number of customers with varying business cycles,which increases the capacity to operate and remain productivethroughout the year (Pujari, 2014). Secondly, the new business islikely to face stiff competition from well established financialinstitutions (including the large banks), which will subject it tothe hard task of getting a market share. Third, rapid change intechnology is an external factor that will increase the risk ofbecoming obsolete. For example, if the bank fails to adopt andintegrate the new technology (such as m-banking services) inenhancing service delivery, customers might for firms that give themmore convenient services.
Thecompetitive advantage will be achieved through innovation,operational efficiency, and cost leadership strategies. The adoptionof new technology and its integration into the business operationswill help the microcredit firm in disrupting the current marketplaceand render the existing practices obsolete. For example, the use of aCRM based on cloud computing will help the microcredit applying thelatest technology in service delivery. This will also enhance theoperational efficiency because the firm will enable the customers toreach transact with the microcredit without necessarily having totravel to its physical location. The differentiation strategy willenable the microcredit to offer credit services to customers who arerarely assisted by established firms. For example, targetingitinerant traders and peasant farmer by giving them small loans ataffordable rates will boost their businesses and enhance theirloyalty with the microcredit. However, this will be coupled with freeadvisory services, which will be offered at personal level to ensurethat the owners of small business use the loan funds to expand thebusiness. These strategies will attract a large number of small scaleentrepreneurs, thus creating a superior value for customers andsuperior financial gains for the microcredit (Michael, 2010).
Althoughstarting a new business involve making a series of many decisions,three of them are critical and determine the success of a givenproject. First, selecting the best name of the firm gives thebusiness owner a good start. Factors that will be considered whenselecting the business name include the originality of the name andpresence of sensitive words (Friend, 2014). Secondly, the decision onbusiness location will be made depending on the nearness to thetarget customers. The most appropriate place for business locationwill be urban areas where most itinerant and small scale traders dotheir business. Third, the financing decision will be made on thebasis of the cost of finance. The cheapest sources of finance includepersonal savings, borrowing from relatives and friends, and otherfinancial institutions that give loans at low interest rates.
SWOTis the most appropriate planning tool that will be used in makingstrategic plans for the new business. This is because a SWOT analysishelps in the identification of business objectives as well asexternal and internal factors that are either favorable orunfavorable for realization of predetermined objectives (Boundless,2014). This will be achieved through the evaluation of the businessstrengths, weaknesses, opportunities as well as threats of theventure.
Thedesign of an organizational structure will involve four steps. Thefirst step will involve the definition of departments and units aswell as their responsibilities and goals. The second step willinvolve the determination of the organization structure that fits thebusiness needs. The best structure should facilitate reporting,business expansion, change when necessary, organization of talents,cohesion between the management and members of staff (Friend, 2014).The third step will involve the definition of executive managementand executive teams. The teams should help the business realize itsgoals. The last step will involve the definition of compensation andperformance metrics. This will be accomplished by describing andranking all jobs to ensure that compensation is commensurate with theresponsibilities of each type of job.
Thereare different types of communication methods that will be useddepending on the type of message and the targeted recipient. One waymessages will be conveyed through the written methods, includingpress release, memos, newsletters, and formal letters. Telephonecommunication will be appropriate for brainstorming recipient andconversation that require recipient input throughout the chat.Meetings will be organized when there will be a need for the audienceto raise its issues and the management to respond to its concern. Inaddition, face-to-face communication will be used whenever there willbe the need to clear misunderstandings, build relationships(especially with customers), and combine body language with verbalcommunication.
Themanagement of human resource activities
Thehuman resource activities will be managed with the help of threetools. First, the issue of desk manuals will enhance efficiency inthe performance of tasks that are performed by several employees orneed to be done in specific ways. The manual will include thedefinition of processes, instructions for use and information aboutthe place to get help from (UCSF Human Resources, 2014). Secondly,work rules will provide direct guidance to employees and ease themanagement of their daily responsibilities. Work rules will beavailed in the form of contracts, policies, regulations, procedures,mandates, and laws. Third, clearly defined work hours will reduceregular conflicts with employees because they will know the start andstop time, breaks, and lunch hours.
TheManagement of change and innovation
Changeand innovation in the present business environment are inevitable andthe question should not be whether to manage them, but how to managethem. These will start by accepting the fact that the business isoperating in a global economy that is driven by technology, whichmeans that the business should not expect that the rate oftechnological advancement will slow down. This will facilitate thepractice of openness, which is important in the determination of theimpact of innovation and change on employees. Openness can beachieved through the open door policies, two-way feedback between themanagement and employees, and the willingness to listen to allfeedbacks. This should be followed by the acceptance of employees’input. This is based on the notion that workers do not resist change,but reject change they have a chance to influence. The managementshould also assess employees’ skills and knowledge in order todetermine their readiness to accept change. Skills and knowledge gapsidentified at this step should be filled with organizing trainingprograms. In addition, should accept failure and celebratesuccessfully implemented change (Richards, 2014).
Democraticleadership style will be more appropriate for the new business. Thistype of leadership involves the sharing of the responsibility andability to make decisions with employees by promoting their interestsand enhancing social equality within the organization (Foster,2002). Thedemocratic style of leadership allows the leader to make the finaldecision, but taking the contribution of employees intoconsideration. This will help the microcredit firm to integrateemployees’ skills and knowledge in the organizational operations.In addition, the democratic style of leadership enhances employeeacceptance and commitment to the final decision because it integratestheir opinions. This means that democratic leadership allowsemployees’ participation, thus providing an opportunity foremployers to tap the wisdom and knowledge of employees.
Dealingwith modern leadership issues
Thenew business should expect to face and manage three major leadershipissues. First, the present business environment is characterized bychanges in demographics and workforce. According to Lerman (2014) theincrease in the rate of immigration will diversify the workforcethrough the integration of multiple cultures, religious beliefs, andvalues. To counter this challenge the business will adopt an equalemployer policy, which will ensure that employees come from differentcultural and religious backgrounds. This will help the firm inaddressing the diverse needs of the target customers who also havevarying cultural and religious backgrounds. Secondly, the firm willaddress the issue of growth in strategic alliance by partnering withother companies (such as providers of telephone and network services)to reach more customers. Third, the firm will deal with the issue ofexpanding requirement for skills by enhancing employees’ trainingand development.
Encouragingand motivating employees
Employeeswill be encouraged and motivated using a combination of differentstrategies. Individuality of employees will be encouraged by helpingthem shine through the will creation of dynamic and a diverseculture. This will create an accepting and an open workplaceenvironment for all individuals irrespective of their cultural andprofessional differences. In addition, creation of attainable goalswill encourage employees to continue working towards theorganizational goals. Appreciating the ideas of each employee willhelp them realize that they are valued by the organization, thusmotivating them to work hard and continue making suggestions for abetter future of the firm. Compensation will also be an importantpart of employee motivation, but the compensation packages will bedetermined on the basis of the responsibilities given to eachemployee and performance of each individual or team.
Mostof the task in the new business will be done in teams that will beformed with the consideration of three things. First, Addair’sapproach will help in the determination of task functions (such asdefinition of tasks), group functions (such as setting of standards),and individual needs (such as training and attending to personalneeds) (Mealiea & Baltazar, 2005). Secondly, the definition ofroles to be played by teams will involve the allocation of functionsto individual members of the team depending on their abilities.Third, the action plan and performance evaluation strategy will beestablished to ensure that teams work towards the achievement ofpre-determined goals. This will help in early detection of challengesfaced by teams and provision of viable solution in time.
Themost effective ways of monitoring performance against pre-setobjectives include observation, reporting back, and feedback(Henshow, 2011). The observation strategy involves watching employeesin action and determining whether the way they are doing job-relatedtasks is in line with what is described in performance objectives.Reporting back involves employee reporting to the management abouttheir own performance, which is measured against objectives that arehave already been agreed upon by employee and the management. Thefeedback strategy involves getting information from customers,suppliers, team members, and other departments about the performanceof employees and the organization as a whole.
Thebusiness will need the use of effective tools for control of financesand tools for the control of management functions. Business financewill be controlled using auditing activities and financial reportingtools. Management functions, on the other hand will be controlledusing performance standards that will be used to gauge employeeperformance as well as the performance of the entire organization.
Theorganization will use the management by objective (MBO) approach inensuring that the organization remains productive and provides highquality services. Thomson (2000) defined MBO as a management modelthat enhances organizational performance through a clear definitionof objectives that has already been agreed upon by the employees andthe management. This model relieves the management the duty ofmonitoring employees regularly and compared their performance withobjectives. This allows the management to focus on other activities,thus enhancing productivity and quality.
Startingone’s own business is challenging and involves a larger number ofdecisions, some of which are difficult because they determine thesuccess of the venture and its going concern. Apart from initialdecisions (such as source of capital and business name), the businessowner should address critical issues (such as performance evaluation,control tools, and type of organization culture) at an early stage inorder to avoid surprises. Although the owner of the business acts asthe vision bearer, it is advisable to accommodate the contribution ofother stakeholders, especially employees in ensuring the success ofthe business.
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