Entrepreneur Asg 2
Content
Entrepreneurship (193)
Assignment # 02
Q1 a
Although it’s a business management concept, Entrepreneurship can be best understood in terms of languages used in history. Believe me, you would find it more interesting to read about entrepreneurship and the whole story behind it. It is a point where motivation, innovation and money intersect. To become an entrepreneur one has to assume the risk of a business or enterprise and organize and manage it so that it gives the return on the capital employed. An entrepreneur does not have to arrange capital as this could be beyond your expertise. However, successful entrepreneurs of the past have been able to convince the financiers or venture capitalists that their idea and business practices are sound and that they in partnership, proper returns on the money invested can be gained. One of the first entrepreneurs was Marco Polo. He had ideas of trading with Asia in the 13th century and was sure of how he could get there and the materials he could trade. His expeditions were financed by venture capitalists in Venice with an assurance that he would share his profits with them. These loose associations continued to flourish in Europe and other parts of the world where people with money were willing to back ideas and new schemes when they were convinced that there was some pecuniary advantage in the end. Entrepreneurship first took off when production levels exceeded local consumption and people were left with surpluses of the things they produced, whether in the form of agricultural produce, dairy products, livestock and quite a few manufactured items. This initially led to a barter system that allowed people exchanged things to satisfy their own requirements. This further led to the development of the market place where people gathered to barter or sell their excess production in order to profit themselves. This came about with the realization that they could not wait indefinitely for a coincidence of wants before they could barter their own products. Government agencies stepped into the act in the 17th century and made capital available to people to finance production ventures. The risk involved in such ventures was the sole responsibility of the entrepreneur and they had to make a fixed payment to the government, irrespective of any profit they made from the venture. Governments considered this as a source of revenue. The economist, Cantillon, opined that in the 17th century an entrepreneur was a risk taker. In the 18thcentury, an entrepreneur was one who ran huge production projects without any financial risk and with finance provided by others, notably the government. A clear distinction was made between the entrepreneur and the capital provider. This change in thinking was necessitated by the industrialization that made its effect felt in that century. Even Thomas Edison ran into a huge financial crunch when he wanted to finance his ideas and inventions and
1
Entrepreneurship (193)
Assignment # 02
had to get his capital from private sources. He was a complete entrepreneur and left the financing of his ventures to others. The present development of entrepreneurship started after the Second World War in the 1950’s when nations were looking to build up their economies from the ravages of the war. People had new ideas for business or jobs as individuals and started in small ways with limited capital to form businesses which went on to challenge the well established companies. The Internet has led to a virtual explosion of new ventures and entrepreneurs who have found newer and easier ways to do business are taking advantage of the ease of communication. Nowadays, an entrepreneur is regarded as one who organizes, controls, purchases raw materials, arranges materials and machinery to produce the goods. An entrepreneur is also one who throws in their own expertise and inventiveness and also administers the venture. A venture capitalist helps the entrepreneur with the capital to set up the venture but also takes the risk of its failure. If the entrepreneur succeeds the venture capitalist takes his/her own share of the profit which has been earlier negotiated. These returns are necessarily high to cover the risks
Q1 b
A small business is a business that is privately owned and operated, with a small number of employees and relatively low volume of sales. Small businesses are normally privately ownedcorporations, partnerships, or sole proprietorships. The legal definition of "small" varies by country and by industry. In the United States the Small Business Administration establishes small business size standards on an industry-by-industry basis, but generally specifies a small business as having fewer than 100 employees.[1] In the European Union, a small business generally has under 50 employees. An entrepreneur is one who organizes a new business venture in the hopes of making a profit. Entrepreneurship is the process of being an entrepreneur, of gathering and allocating the resources—financial, creative, managerial, or technological—necessary for a new venture's success. One engages in entrepreneurship when one begins to plan an organization that uses diverse resources in an effort to take advantage of the newly found opportunity. It usually involves hard work, long hours, and, usually, the hope of significant financial return. Relation between Small Business and Entrepreneurship The lens mentions the relation between small business and entrepreneurship. Furthermore, the point here is to look for is the advantages and disadvantages of having small business entrepreneurs.
2
Entrepreneurship (193)
Assignment # 02
Small Business owner to a Successful Entrepreneurship Where does an Entrepreneur come from ? Can we say it is a small business owner who could take his business to the next level? Entrepreneurs are not necessarily big, it ranges in scale from solo projects to major undertakings creating huge job opportunity. A small business owner is often satisfied in his small craftsmanship. However, an entrepreneur exploits his talent and has constant urge to evolve his business, keeping aside the monetary interest remains constant while the business grows. A small business owner needs to be inspired and have the constant drive to grow himself into an entrepreneur. Running a one-person business is a creative, flexible and challenging way to become your own boss and chart your own future. It is about creating a life, as it is about making a living. It takes courage, determination and foresight to decide to become an entrepreneur. From the relatively safe cocoon of the corporate world, where pay checks arrive regularly, an entrepreneur ventures into the unchartered territories of business. Here are a few points which shows the connection between small business andentrepreneurship. The Meaning
Lets first know what these two terms mean. Small business is a business with comprises of few number of employees. For a company to be termed as a small business depends in different countries. For example, in United States a company is generally under 100 employees and in Australia it should be under 20 employees. These businesses are generally privately owned soleproprietorships, corporations or partnership. On the other hand, entrepreneurshipmeans starting new organizations or revitalizing mature organizations, particularly new businesses generally in response to identify opportunities. It's a difficult undertaking, because most of these businesses fail at a very early stage. In the beginning of the business the term "Small Business Owner" and "Entrepreneur" are interchangeable. Advantages Every business has its own advantages and disadvantages. As for talking about small business, it requires less initial capital to start the business. Its sources of funding can be self financing, loans from friends and relatives, private stock issue, forming partnerships and SME finance which includes collateral based funding or venture capital . The owner can keep a close check on the accounts and books. Also, a small business owner can build intimate relations with his clients which results in better creditability and responsiveness. For a Entrepreneur, has the inclination to grow his business to the highest level, which in turns leads to high quality products and better job opportunity. As a bigger organization, it encourages use of modern technology with research activity for quality improvement. Innovative and strategic ideas are developed to enhance product quality. Contributes to theeconomy by giving better quality products for export. Healthy competition lets the entrepreneur work towards better quality services
3
Entrepreneurship (193)
Assignment # 02
constantly. Disadvantages The typical entrepreneurship is a small business. The success of any business is measured by its financial growth. This also applies to large businesses who wish to start up a new business within the current corporate framework. Small business often faces problems related to their size like these businesses fail because of undercapitalization. The owner, before starting the business, needs to make sure he has access to enough capital to support his project for at least one year, anticipating his expenses. Another problem that is often realized in small business is the "Entrepreneurial Myth", which means any person who is technically trained in any field, has a myth he can run the business efficiently. However, additional management skills are required to run the business. A small business owner, who wants to survive in the competition, not only needs to take care of the above listed issues but also what a bigger entrepreneur would face. An entrepreneur needs to carry total load of debts, long works hours are required to keep up with no additional overtime or holiday pay which affects an individuals personal and social life. Apart from these an entrepreneur also needs to assume all risks from start up through operations and customer satisfaction, he also needs to maintain and improve his expertise for continues growth for which business concepts and marketing strategies are required. Needs to anticipate competition and have strategies ready to face them. Small Business owner to a Successful Entrepreneurship
First of all a small business owner needs to have a vision and passion to succeed. There are several points that needs to be kept in mind to drive a small business to the heights of roaring success. Starting with having the right attitude, an entrepreneur needs to be optimistic, open to new ideas and be willing to research , ask questions and reflect on mistakes to learn better. Secondly, Customer Focus. Study the market your business is catering to. Learn their demands, the quality they are looking for and monitor the customer traffic. Thirdly, getting feedback. This is one important tool which helps you measure your standing with the customer. An entrepreneur should keep in contact with an expert for constant feedback on what is going right or what needs to be done improve a particular section. Not only this, customer feedback also needs to be in the limelight, which helps an entrepreneur use innovative ideas, for his product according to the demand. Fourthly, Networking. In business you are judged by the company you keep. Small businesses always need assistance. It is important to cash every opportunity. An entrepreneur can make contact through the business meetings or parties which lets you meet important people from different aspects of business who can help a business grow. Concluding the discussion. For an entrepreneurship his business is a vehicle for discovering and
4
Entrepreneurship (193)
Assignment # 02
expressing his unique talent and his passion to succeed. For a small business ownerneeds more drive and a successful entrepreneur to have the constant determination to achieve success for his business.
Q2 a
Entrepreneurship pertains to businesses which are designed to address particular opportunities. Entrepreneurship is also defined as the process of determining, assessing and utilizing opportunities. Webster defined an entrepreneur as “one who undertakes to start and conduct an enterprise or business, usually assuming full control and risk." Business is the social science of managing people to direct their collective efforts towards accomplishing organization goals and to earn profits. It is derived from the word “busy” which is often perceived as doing something productive commercially. Since a number of new businesses fail, an integral part of entrepreneurship then is taking risks. Entrepreneurs deal with these risks by creating solutions to problems. The vision of an entrepreneur is what drives the entrepreneurship. It also takes a lot of hard work and determination to grow an entrepreneurship. Concept of Quality The concept of quality is defined differently by various people. According to Gitlow et al., 1989 or Ozeki and Asaka, 1990, quality means the expectations that accompany a product or service being delivered which are: 1) is at par with customer standards, 2) meets and satisfy the needs of the customer, 3) meets the customer level of expectations, and 4) will meet unforeseen needs and aims in the future. Management Process in an Entrepreneurship Management refers to the ways of the personnel in charge of directing the organization, which in this instance is an entrepreneurship, through the utilization of resources such as labor, capital and assets whether tangible or intangible. Being in the management connotes power and influence for the person. It is not unusual for an entrepreneur to do all the management functions at the start of the business. It is only later when the business grows that proper designation of functions can be made. Managing an entrepreneurship means overseeing various functions such as:
5
Entrepreneurship (193)
Assignment # 02
Planning - making decisions with regards to the future and making those plans happen. Organizing - utilizing the fullest potential of resources – people, capital and assets to ensure the success of the plans. Leading/Motivating - inspiring others to do their part effectively in carrying out the organization’s plans. Controlling - step by step monitoring of the implementation process to see if changes are necessary to be made on the plans. Entrepreneurs should establish and maintain an environment within the business to encourage efficiency among employees. The functions of management involve planning, organizing, directing, and controlling of resources. These functions are influenced by objectives set by the entrepreneur. They are closely related to each other and interdependent. Planning pertains to arriving at an efficient process to attain the objectives of the company. It leads the company towards its goals. Organizing coordinates the resources that needed to implement the plan. In organizing, company structure is established, relationships are formed and resources are allotted appropriately to realize the objectives sought for. Directing refers to leading and supervising employees to attain the company objectives. Finally, controlling is confirming if the plan is carried out in actual situation. Quality Management in an Entrepreneurship Fundamentals of business include proper planning, setting up objectives, promoting customer relationship, promoting supplier relationship, dealing with competition and use of accounting. Knowing all these aspects could greatly facilitate the flow of the business. Managing these aspects well or quality management would spell the difference between success and failure in business. It is also important to know the legal aspects affecting the business and the need to adhere to business ethics. An entrepreneur needs to know the business fundamentals so it can manage the business well. Fundamentals of business include proper planning, setting up objectives, promoting customer relationship, promoting supplier relationship, dealing with competition and proper use of accounting. Having a plan and setting up objectives before embarking on a business or during business is essential because it would be hard to provide a direction with which the business will follow without vision. Customer relationship is very essential to the business. How well you relate to the customers could translate to profits in the income statement. Choosing the target market also falls under
6
Entrepreneurship (193)
Assignment # 02
this. The target market must reflect the style, image and price point of the product you are selling. Supplier relationship is important because without suppliers securing raw materials to create the finish product would be impossible. It is always good to establish good rapport with supplier as this would greatly facilitate the production process. Competition is one of the threats to business. It is important to size up the competition to be able to make your products competitive in the market. Allocating proper resources and taking the time are important requirements to remain competitive. Accounting is fundamental to business because it enables you to determine how the entrepreneurship fares. Proper accounting methods enable one to have solid basis in making sound management decisions and adopt necessary changes.
Q2 b
Challenges and Rewards of Becoming an Entrepreneur
The specific challenges and rewards you'll encounter when becoming an entrepreneurwill vary depending upon the nature of the business you intend to launch. Whether you plan to start a home based business, or something on a larger scale, or you plan to launch your business alone or with a partner, or your business falls within an industry that is regulated by specific government legislation, all of these factors will impact the specific challenges you'll face as an entrepreneur. As well as seeking out general information on becoming an entrepreneur, in order to get a good understanding of the the rewards and challenges that are specific to your industry, I'd suggest seeking out advice from someone who has expertise in that industry. Keep in mind, when you are thinking about business challenges, any challenges related to starting a new business do not need to be seen in a negative light. When talking about business start-ups, challenges are also referred to as barriers to entry. Barriers to entry are the things that prevent others from starting a similar type of business. They may include issues like high startup costs, government regulations or specific skill requirements. If you find that your specific business idea carries with it some barriers to entry, that is not necessarily a bad thing. As long as you can find ways around those barriers for your own
7
Entrepreneurship (193)
Assignment # 02
company, the same barriers may keep other potential competitors from launching the same type of business.
Because my space is a bit limited here, I've posted an article that more specifically answers your question about the challenges and rewards of becoming an entrepreneur. You'll find a list of specific rewards and challenges of being an entrepreneur here.
((((Money, money, money, it’s all about money This is obviously the major reward you can receive from your effort. Their world will suddenly change and their financial problem will slowly disappears. More than that, financial opportunities will start to arise like mushroom in a forest. Regarding their own specific situation, they all got a great signing bonus along with important increase in what used to be their salary. In the end, chances are they will also get shares in that company as well. This could only mean good news for all of them. Pride and recognition Do you feel pride of yourself when you conclude a sale for your employer, you win a contract for your employer or you achieve a major projectfor your employer? Imagine the sensation for ones that does it for himself! It must be a great feeling to see your baby, your own creation getting attention from the big guys. Your whole work and talent are being recognize through your company. Being an entrepreneur is more than being your own boss, it is related to have a direct influence on your destiny. Every ideas, every thoughts, every moves are beneficial for your own good. Becoming a successful entrepreneur would allow an individual to fully accomplish himself and being recognize for it. Flexibility and power Hum… making your own working hour, having the power of deciding your way of working, your team mates and which project you will work on; it sounds like the perfect workplace! While you might end up in this Cinderella Story, chances are that you will have to work more than a regular employee and think about your business 24/7. It is true that if you company becomes stable and money is coming in, you will benefit from a lot of flexibility and you will gain power over your environment. However, in order to reach this level, you will have to achieve something that no employee will ever perform; total donation to your company. My friend made a series of continuous efforts over the past two years and was making barely enough to cover for his living expenses. He was working ten hours a day and sometimes over the weekend. He did not really mind as he saw what was coming; he had a plan, he had a vision. Fulfilling your dreams Entrepreneurs are wild beast; they hate to be tamed and put in a cage. They need space so they can think and evolve to something better. Creating your own business is a great way to fulfill your dreams and to grow on a personal level. It is not only about money, it’s about yourself. Through your company, you have a chance to grow and become a better person. While you are
8
Entrepreneurship (193)
Assignment # 02
living your life, you are also creating an alter-ego. Another “me” that will take action by itself and reward you with pride as a son who makes his first touch down. If this post woke up a part of you that wants to be part of the world of entrepreneurship, sit down with a piece of paper and start thinking about what you could do in order to become another man or woman, another entrepreneur.)))
Q3
Introduction The role of the Human Resource Manager is evolving with the change in competitive market environment and the realization that Human Resource Management must play a more strategic role in the success of an organization. Organizations that do not put their emphasis on attracting and retaining talents may find themselves in dire consequences, as their competitors may be outplaying them in the strategic employment of their human resources. With the increase in competition, locally or globally, organizations must become more adaptable, resilient, agile, and customer-focused to succeed. And within this change in environment, the HR professional has to evolve to become a strategic partner, an employee sponsor or advocate, and a change mentor within the organization. In order to succeed, HR must be a business driven function with a thorough understanding of the organization’s big picture and be able to influence key decisions and policies. In general, the focus of today’s HR Manager is on strategic personnel retention and talents development. HR professionals will be coaches, counselors, mentors, and succession planners to help motivate organization’s members and their loyalty. The HR manager will also promote and fight for values, ethics, beliefs, and spirituality within their organizations, especially in the management of workplace diversity. This paper will highlight on how a HR manager can meet the challenges of workplace diversity, how to motivate employees through gain-sharing and executive information system through proper planning, organizing, leading and controlling their human resources. Workplace Diversity According to Thomas (1992), dimensions of workplace diversity include, but are not limited to: age, ethnicity, ancestry, gender, physical abilities/qualities, race, sexual orientation, educational background, geographic location, income, marital status, military experience, religious beliefs, parental status, and work experience.
9
Entrepreneurship (193)
Assignment # 02
The Challenges of Workplace Diversity The future success of any organizations relies on the ability to manage a diverse body of talent that can bring innovative ideas, perspectives and views to their work. The challenge and problems faced of workplace diversity can be turned into a strategic organizational asset if an organization is able to capitalize on this melting pot of diverse talents. With the mixture of talents of diverse cultural backgrounds, genders, ages and lifestyles, an organization can respond to business opportunities more rapidly and creatively, especially in the global arena (Cox, 1993), which must be one of the important organisational goals to be attained. More importantly, if the organizational environment does not support diversity broadly, one risks losing talent to competitors. This is especially true for multinational companies (MNCs) who have operations on a global scale and employ people of different countries, ethical and cultural backgrounds. Thus, a HR manager needs to be mindful and may employ a ‘Think Global, Act Local’ approach in most circumstances. The challenge of workplace diversity is also prevalent amongst Singapore’s Small and Medium Enterprises (SMEs). With a population of only four million people and the nation’s strive towards high technology and knowledge-based economy; foreign talents are lured to share their expertise in these areas. Thus, many local HR managers have to undergo cultural-based Human Resource Management training to further their abilities to motivate a group of professional that are highly qualified but culturally diverse. Furthermore, the HR professional must assure the local professionals that these foreign talents are not a threat to their career advancement (Toh, 1993). In many ways, the effectiveness of workplace diversity management is dependent on the skilful balancing act of the HR manager. One of the main reasons for ineffective workplace diversity management is the predisposition to pigeonhole employees, placing them in a different silo based on their diversity profile (Thomas, 1992). In the real world, diversity cannot be easily categorized and those organizations that respond to human complexity by leveraging the talents of a broad workforce will be the most effective in growing their businesses and their customer base. The Management of Workplace Diversity In order to effectively manage workplace diversity, Cox (1993) suggests that a HR Manager needs to change from an ethnocentric view ("our way is the best way") to a culturally relative perspective ("let's take the best of a variety of ways"). This shift in philosophy has to be ingrained in the managerial framework of the HR Manager in his/her planning, organizing, leading and controlling of organizational resources.
10
Entrepreneurship (193)
Assignment # 02
As suggested by Thomas (1992) and Cox (1993), there are several best practices that a HR manager can adopt in ensuring effective management of workplace diversity in order to attain organizational goals. They are: Planning a Mentoring ProgramOne of the best ways to handle workplace diversity issues is through initiating a Diversity Mentoring Program. This could entail involving different departmental managers in a mentoring program to coach and provide feedback to employees who are different from them. In order for the program to run successfully, it is wise to provide practical training for these managers or seek help from consultants and experts in this field. Usually, such a program will encourage organization’s members to air their opinions and learn how to resolve conflicts due to their diversity. More importantly, the purpose of a Diversity Mentoring Program seeks to encourage members to move beyond their own cultural frame of reference to recognize and take full advantage of the productivity potential inherent in a diverse population. Organizing Talents StrategicallyMany companies are now realizing the advantages of a diverse workplace. As more and more companies are going global in their market expansions either physically or virtually (for example, E-commerce-related companies), there is a necessity to employ diverse talents to understand the various niches of the market. For example, when China was opening up its markets and exporting their products globally in the late 1980s, the Chinese companies (such as China’s electronic giants such as Haier) were seeking the marketing expertise of Singaporeans. This is because Singapore’s marketing talents were able to understand the local China markets relatively well (almost 75% of Singaporeans are of Chinese descent) and as well as being attuned to the markets in the West due to Singapore’s open economic policies and English language abilities. (Toh, R, 1993) With this trend in place, a HR Manager must be able to organize the pool of diverse talents strategically for the organization. He/She must consider how a diverse workforce can enable the company to attain new markets and other organizational goals in order to harness the full potential of workplace diversity. An organization that sees the existence of a diverse workforce as an organizational asset rather than a liability would indirectly help the organization to positively take in its stride some of the less positive aspects of workforce diversity.
11
Entrepreneurship (193)
Assignment # 02
Leading the TalkA HR Manager needs to advocate a diverse workforce by making diversity evident at all organizational levels. Otherwise, some employees will quickly conclude that there is no future for them in the company. As the HR Manager, it is pertinent to show respect for diversity issues and promote clear and positive responses to them. He/She must also show a high level of commitment and be able to resolve issues of workplace diversity in an ethical and responsible manner. Control and Measure ResultsA HR Manager must conduct regular organizational assessments on issues like pay, benefits, work environment, management and promotional opportunities to assess the progress over the long term. There is also a need to develop appropriate measuring tools to measure the impact of diversity initiatives at the organization through organization-wide feedback surveys and other methods. Without proper control and evaluation, some of these diversity initiatives may just fizzle out, without resolving any real problems that may surface due to workplace diversity. Motivational Approaches Workplace motivation can be defined as the influence that makes us do things to achieve organizational goals: this is a result of our individual needs being satisfied (or met) so that we are motivated to complete organizational tasks effectively. As these needs vary from person to person, an organization must be able to utilize different motivational tools to encourage their employees to put in the required effort and increase productivity for the company. Why do we need motivated employees? The answer is survival (Smith, 1994). In our changing workplace and competitive market environments, motivated employees and their contributions are the necessary currency for an organization’s survival and success. Motivational factors in an organizational context include working environment, job characteristics, appropriate organizational reward system and so on. The development of an appropriate organizational reward system is probably one of the strongest motivational factors. This can influence both job satisfaction and employee motivation. The reward system affects job satisfaction by making the employee more comfortable and contented as a result of the rewards received. The reward system influences motivation primarily through the perceived value of the rewards and their contingency on performance (Hickins, 1998).
12
Entrepreneurship (193)
Assignment # 02
To be effective, an organizational reward system should be based on sound understanding of the motivation of people at work. In this paper, I will be touching on the one of the more popular methods of reward systems, gain-sharing. Gain-sharing: Gain-sharing programs generally refer to incentive plans that involve employees in a common effort to improve organizational performance, and are based on the concept that the resulting incremental economic gains are shared among employees and the company. In most cases, workers voluntarily participate in management to accept responsibility for major reforms. This type of pay is based on factors directly under a worker’s control (i.e., productivity or costs). Gains are measured and distributions are made frequently through a predetermined formula. Because this pay is only implemented when gains are achieved, gainsharing plans do not adversely affect company costs (Paulsen, 1991). Managing Gain-sharing In order for a gain-sharing program that meets the minimum requirements for success to be in place, Paulsen (1991) and Boyett (1988) have suggested a few pointers in the effective management of a gain-sharing program. They are as follows:
A HR manager must ensure that the people who will be participating in the plan are influencing the performance measured by the gain-sharing formula in a significant way by changes in their day-to-day behavior. The main idea of the gain sharing is to motivate members to increase productivity through their behavioral changes and working attitudes. If the increase in the performance measurement was due to external factors, then it would have defeated the purpose of having a gain-sharing program. An effective manager must ensure that the gain-sharing targets are challenging but legitimate and attainable. In addition, the targets should be specific and challenging but reasonable and justifiable given the historical performance, the business strategy and the competitive environment. If the gain-sharing participants perceive the target as an impossibility and are not motivated at all, the whole program will be a disaster. A manager must provide useful feedback as a guidance to the gain-sharing participants concerning how they need to change their behavior(s) to realize gain-sharing payouts The feedback should be frequent, objective and clearly based on the members’ performance in relation to the gain-sharing target. A manager must have an effective mechanism in place to allow gain-sharing participants to initiate changes in work procedures and methods and/or requesting new or additional
13
Entrepreneurship (193)
Assignment # 02
resources such as new technology to improve performance and realize gains. Though a manager must have a tight control of company’s resources, reasonable and justifiable requests for additional resources and/or changes in work methods from gain-sharing participants should be considered. Executive Information Systems Executive Information System (EIS) is the most common term used for the unified collections of computer hardware and software that track the essential data of a business' daily performance and present it to managers as an aid to their planning and decision-making (Choo, 1991). With an EIS in place, a company can track inventory, sales, and receivables, compare today's data with historical patterns. In addition, an EIS will aid in spotting significant variations from "normal" trends almost as soon as it develops, giving the company the maximum amount of time to make decisions and implement required changes to put your business back on the right track. This would enable EIS to be a useful tool in an organization’s strategic planning, as well as day-to-day management (Laudon, K and Laudon, J, 2003). Managing EIS As information is the basis of decision-making in an organization, there lies a great need for effective managerial control. A good control system would ensure the communication of the right information at the right time and relayed to the right people to take prompt actions. When managing an Executive Information System, a HR manager must first find out exactly what information decision-makers would like to have available in the field of human resource management, and then to include it in the EIS. This is because having people simply use an EIS that lacks critical information is of no value-add to the organization. In addition, the manager must ensure that the use of information technology has to be brought into alignment with strategic business goals (Laudon, K and Laudon, J, 2003). Conclusion The role of the HR manager must parallel the needs of the changing organization. Successful organizations are becoming more adaptable, resilient, quick to change directions, and customercentered. Within this environment, the HR professional must learn how to manage effectively through planning, organizing, leading and controlling the human resource and be knowledgeable of emerging trends in training and employee development.
14
Entrepreneurship (193)
Assignment # 02
Q4 a
motivation Definition Internal and external factors that stimulate desire and energy in people to be continually interested in and committed to a job, role, or subject, and to exert persistent effort in attaining a goal. Motivation is the energizer of behavior and mother of all action. It results from the interactions among conscious and unconscious factors such as the (1) intensity of desire orneed, (2) incentive or reward value of the goal, and (3) expectations of the individual and of his or her significant others.
Motivation is a very important for an organization because of the following benefits it provides:1. Puts human resources into action Every concern requires physical, financial and human resources to accomplish the goals. It is through motivation that the human resources can be utilized by making full use of it. This can be done by building willingness in employees to work. This will help the enterprise in securing best possible utilization of resources. 2. Improves level of efficiency of employees The level of a subordinate or a employee does not only depend upon his qualifications and abilities. For getting best of his work performance, the gap between ability and willingness has to be filled which helps in improving the level of performance of subordinates. This will result intoa. Increase in productivity, b. Reducing cost of operations, and c. Improving overall efficiency. 3. Leads to achievement of organizational goals The goals of an enterprise can be achieved only when the following factors take place :a. There is best possible utilization of resources, b. There is a co-operative work environment , c. The employees are goal-directed and they act in a purposive manner,
15
Entrepreneurship (193)
Assignment # 02
d. Goals can be achieved if co-ordination and co-operation takes place simultaneously which can be effectively done through motivation. 4. Builds friendly relationship Motivation is an important factor which brings employees satisfaction. This can be done by keeping into mind and framing an incentive plan for the benefit of the employees. This could initiate the following things: a. Monetary and non-monetary incentives, b. Promotion opportunities for employees, c. Disincentives for inefficient employees. In order to build a cordial, friendly atmosphere in a concern, the above steps should be taken by a manager. This would help in: d. Effective co-operation which brings stability, e. Industrial dispute and unrest in employees will reduce, f. The employees will be adaptable to the changes and there will be no resistance to the change, g. This will help in providing a smooth and sound concern in which individual interests will coincide with the organizational interests, h. This will result in profit maximization through increased productivity. 5. Leads to stability of work force Stability of workforce is very important from the point of view of reputation and goodwill of a concern. The employees can remain loyal to the enterprise only when they have a feeling of participation in the management. The skills and efficiency of employees will always be of advantage to employees as well as employees. This will lead to a good public image in the market which will attract competent and qualified people into a concern. As it is said, “Old is gold” which suffices with the role of motivation here, the older the people, more the experience and their adjustment into a concern which can be of benefit to the enterprise. From the above discussion, we can say that motivation is an internal feeling which can be understood only by manager since he is in close contact with the employees. Needs, wants and desires are inter-related and they are the driving force to act. These needs can be understood by the manager and he can frame motivation plans accordingly. We can say that motivation therefore is a continuous process since motivation process is based on needs which are unlimited. The process has to be continued throughout.
16
Entrepreneurship (193)
Assignment # 02
We can summarize by saying that motivation is important both to an individual and a business. Motivation is important to an individual as: 1. 2. 3. 4. Motivation will help him achieve his personal goals. If an individual is motivated, he will have job satisfaction. Motivation will help in self-development of individual. An individual would always gain by working with a dynamic team.
Similarly, motivation is important to a business as: 1. The more motivated the employees are, the more empowered the team is. 2. The more is the team work and individual employee contribution, more profitable and successful is the business. 3. During period of amendments, there will be more adaptability and creativity. 4. Motivation will lead to an optimistic and challenging attitude at work place.
Q4 b
How to Motivate Employees Motivated employees can work wonders on your business. This article explains how to motivate your employees. To be sure, happy and enthused employees will lead to triumph. As a small business owner, you are the boss. But being the boss doesn't mean that you have to act like a tyrant to get things done. When it comes to motivating your employees, it really is true that you can get more done with a carrot than with a stick. (article continues below) The art of employee motivation really boils down to learning and practicing people skills. Your ability to interact with your employees on a relational level will largely determine how effectively you are able to motivate them to make your business a success. (1) Demonstrate enthusiasm In many ways, you set the tone for your employees. If you are unmotivated, expect your employees to be unmotivated, too. Likewise, if you demonstrate enthusiasm for your work, it will carry over to your employees. (2) Interface with your employees
17
Entrepreneurship (193)
Assignment # 02
It's important that you interact directly with your employees on a regular basis. A prolonged pattern of distance between you and your employees creates the perception of a cold, uncaring autocrat rather than the caring, compassionate leader you want to be. Step out from behind that desk periodically and let your employees interact with you face to face. (3) Celebrate accomplishments Take time out to celebrate accomplishments as a company. When you've asked your employees to go the extra mile to complete a major project, it's not unreasonable for them to expect to celebrate a little bit. This can be as simple as ordering a pizza or as extravagant as organizing an annual holiday party outside of the office. What you do isn't as important recognizing a job well done. (4) Offer incentives With incentives, cash isn't always king. Sometimes the best incentives require a little creativity on your part. In addition to offering flex time for employees who demonstrate outstanding service and performance, you can do things like offer theater tickets or restaurant gift certificates to the "employee of the month". Part of the fun is creating an atmosphere where your employees don't know what their reward will be until they have achieved their goal. (5) Treat your employees with kindness Kindness and understanding on your part will go a long way toward motivating your employees to help you achieve your goals as an entrepreneur. Unexpected events such as sick kids or other personal crises can interfere with the daily flow of the workplace. But no matter how many problems these occurrences cause for you, you can be guaranteed that they have created many more problems for your employee. As much as possible, try to give your employees the space they need to care for their families. The result will be happier employees who are more likely to give you all they've got once their family crisis has subsided. (6) Listen Above all else, listen to what your employees' have to say and let them know how much you value their input. The loyalty it inspires in your employees will make it well worth your while.
Q5
20 challenges faced by a family owned business
18
Entrepreneurship (193)
Assignment # 02
Every business organization has a unique set of challenges and problems. The family business is no different. Many of these problems exist in corporate business environments, but can be exaggerated in a family business. Family business go through various stages of growth and development over time. Many of these challenges will be found once the second and subsequent generations enter the business. A famous saying about family owned business in Mexico is “Father, founder of the company, son rich, and grandson poor” (Padre noble, hijo rico, nieto pobre). The founder works and builds a business, the son takes it over and is poorly prepared to manage and make it grow but enjoys the wealth, and the grandson inherits a dead business and and empty bank account. Prepare now and help your grandson avoid the poorhouse. 20 challenges for the family business 1. Emotions. Family problems will affect the business. Divorce, separations, health or financial problems also create difficult political situations for the family members. 2. Informality. Absence of clear policies and business norms for family members 3. Tunnel vision. Lack of outside opinions and diversity on how to operate the business. 4. Lack of written strategy. No documented plan or long term planning. 5. Compensation problems for family members. Dividends, salaries, benefits and compensation for non-participating family members are not clearly defined and justified. 6. Role confusion. Roles and responsibilities must be clearly defined. 7. Lack of talent. Hiring family members who are not qualified or lack the skills and abilities for the organization. Inability to fire them when it is clear they are not working out. 8. High turnover of non-family members. When employees feel that the family “mafia” will always advance over outsiders and when employees realize that management is incompetent. 9. Succession Planning. Most family organizations do not have a plan for handing the power to the next generation, leading to great political conflicts and divisions. 10. Retirement and estate planning. Long term planning to cover the necessities and realities of older members when they leave the company. 11. Training. There should be a specific training program when you integrate family members into the company. This should provide specific information that related to the goals, expectations and obligations of the position. 12. Paternalistic. Control is centralized and influenced by tradition instead of good management practices. 13. Overly Conservative. Older family members try to preserve the status quo and resist change. Especially resistance to ideas and change proposed by the younger generation.
19
Entrepreneurship (193)
Assignment # 02
14. Communication problems. Provoked by role confusion, emotions (envy, fear, anger), political divisions or other relationship problems. 15. Systematic thinking. Decisions are made day-to-day in response to problems. No longterm planning or strategic planning. 16. Exit strategy. No clear plan on how to sell, close or walk away from the business. 17. Business valuation. No knowledge of the worth of the business, and the factors that make it valuable or decrease its value. 18. Growth. Problems due to lack of capital and new investment or resistance to reinvestment in the business. 19. Vision. Each family member has a different vision of the business and different goals. 20.Control of operations. Difficult to control other members of the family. Lack of participation in the day-to-day work and supervision required Turning Challenges into Victories There are unique family business challenges that non-family owned companies do not face. Yet when the strong family ties are directed towards a common vision, a family owned business can achieve impressive success. There is no question that family business challenges can be daunting, yet when converted into success the results can be impressive. In a family business, there are emotional issues usually not found in non-family owned businesses, and it is important to confront these issues and lay them to rest. For example, many family owned businesses were started by the patriarch or matriarch of the family, and the second generation now feels it is time for him or her to retire. These kinds of issues can hold a company back from moving ahead in a competitive business environment. The key to dealing with the issues related to a family business is to take those challenges and turn them into victories. Though a family owned business has a management structure that has a whole different dimension from other companies, the generations have a unique opportunity to use those strong bonds to create a company with a vision for the future. In other words, a family business can, and should, create a viable company mission supported by strategic planning with the goal of strengthening the company for future generations. The Family Vision The family that creates and expands a business knows they want the business to be long-lasting for generations to come. The development of a clear mission is critical to success. Yet there
20
Family
Business
Entrepreneurship (193)
Assignment # 02
are plenty of family owned businesses that have just gone with the flow, so to speak. The company started small and then grew through demand for its products or services, but there is no real long-term planning that has taken place. Thiscan cause the emotional issues to take a front seat to the strategic operation of the business. That is why many family owned businesses have turned to business consultants for assistance with long term planning. A management consultant that understands the special emotional issues involved in a family owned business can work with management to develop or refine a mission statement, establish specific goals, and create a strategic plan for reaching those goals. It is like having a dispassionate consultant who assists the family management by focusing on the real issues related to long term growth and economic health. Mastering the Future Family business challenges can be turned into long term victories that equate to a thriving business enterprise for many generations to come. Family businesses can capitalize on the strengths that family members bring to the company, and use those strengths to create a strong mission statement that provides future direction. With everyone on the same path, the family management team becomes one of the company's strongest assets.
21
Assignment # 02
Q1 a
Although it’s a business management concept, Entrepreneurship can be best understood in terms of languages used in history. Believe me, you would find it more interesting to read about entrepreneurship and the whole story behind it. It is a point where motivation, innovation and money intersect. To become an entrepreneur one has to assume the risk of a business or enterprise and organize and manage it so that it gives the return on the capital employed. An entrepreneur does not have to arrange capital as this could be beyond your expertise. However, successful entrepreneurs of the past have been able to convince the financiers or venture capitalists that their idea and business practices are sound and that they in partnership, proper returns on the money invested can be gained. One of the first entrepreneurs was Marco Polo. He had ideas of trading with Asia in the 13th century and was sure of how he could get there and the materials he could trade. His expeditions were financed by venture capitalists in Venice with an assurance that he would share his profits with them. These loose associations continued to flourish in Europe and other parts of the world where people with money were willing to back ideas and new schemes when they were convinced that there was some pecuniary advantage in the end. Entrepreneurship first took off when production levels exceeded local consumption and people were left with surpluses of the things they produced, whether in the form of agricultural produce, dairy products, livestock and quite a few manufactured items. This initially led to a barter system that allowed people exchanged things to satisfy their own requirements. This further led to the development of the market place where people gathered to barter or sell their excess production in order to profit themselves. This came about with the realization that they could not wait indefinitely for a coincidence of wants before they could barter their own products. Government agencies stepped into the act in the 17th century and made capital available to people to finance production ventures. The risk involved in such ventures was the sole responsibility of the entrepreneur and they had to make a fixed payment to the government, irrespective of any profit they made from the venture. Governments considered this as a source of revenue. The economist, Cantillon, opined that in the 17th century an entrepreneur was a risk taker. In the 18thcentury, an entrepreneur was one who ran huge production projects without any financial risk and with finance provided by others, notably the government. A clear distinction was made between the entrepreneur and the capital provider. This change in thinking was necessitated by the industrialization that made its effect felt in that century. Even Thomas Edison ran into a huge financial crunch when he wanted to finance his ideas and inventions and
1
Entrepreneurship (193)
Assignment # 02
had to get his capital from private sources. He was a complete entrepreneur and left the financing of his ventures to others. The present development of entrepreneurship started after the Second World War in the 1950’s when nations were looking to build up their economies from the ravages of the war. People had new ideas for business or jobs as individuals and started in small ways with limited capital to form businesses which went on to challenge the well established companies. The Internet has led to a virtual explosion of new ventures and entrepreneurs who have found newer and easier ways to do business are taking advantage of the ease of communication. Nowadays, an entrepreneur is regarded as one who organizes, controls, purchases raw materials, arranges materials and machinery to produce the goods. An entrepreneur is also one who throws in their own expertise and inventiveness and also administers the venture. A venture capitalist helps the entrepreneur with the capital to set up the venture but also takes the risk of its failure. If the entrepreneur succeeds the venture capitalist takes his/her own share of the profit which has been earlier negotiated. These returns are necessarily high to cover the risks
Q1 b
A small business is a business that is privately owned and operated, with a small number of employees and relatively low volume of sales. Small businesses are normally privately ownedcorporations, partnerships, or sole proprietorships. The legal definition of "small" varies by country and by industry. In the United States the Small Business Administration establishes small business size standards on an industry-by-industry basis, but generally specifies a small business as having fewer than 100 employees.[1] In the European Union, a small business generally has under 50 employees. An entrepreneur is one who organizes a new business venture in the hopes of making a profit. Entrepreneurship is the process of being an entrepreneur, of gathering and allocating the resources—financial, creative, managerial, or technological—necessary for a new venture's success. One engages in entrepreneurship when one begins to plan an organization that uses diverse resources in an effort to take advantage of the newly found opportunity. It usually involves hard work, long hours, and, usually, the hope of significant financial return. Relation between Small Business and Entrepreneurship The lens mentions the relation between small business and entrepreneurship. Furthermore, the point here is to look for is the advantages and disadvantages of having small business entrepreneurs.
2
Entrepreneurship (193)
Assignment # 02
Small Business owner to a Successful Entrepreneurship Where does an Entrepreneur come from ? Can we say it is a small business owner who could take his business to the next level? Entrepreneurs are not necessarily big, it ranges in scale from solo projects to major undertakings creating huge job opportunity. A small business owner is often satisfied in his small craftsmanship. However, an entrepreneur exploits his talent and has constant urge to evolve his business, keeping aside the monetary interest remains constant while the business grows. A small business owner needs to be inspired and have the constant drive to grow himself into an entrepreneur. Running a one-person business is a creative, flexible and challenging way to become your own boss and chart your own future. It is about creating a life, as it is about making a living. It takes courage, determination and foresight to decide to become an entrepreneur. From the relatively safe cocoon of the corporate world, where pay checks arrive regularly, an entrepreneur ventures into the unchartered territories of business. Here are a few points which shows the connection between small business andentrepreneurship. The Meaning
Lets first know what these two terms mean. Small business is a business with comprises of few number of employees. For a company to be termed as a small business depends in different countries. For example, in United States a company is generally under 100 employees and in Australia it should be under 20 employees. These businesses are generally privately owned soleproprietorships, corporations or partnership. On the other hand, entrepreneurshipmeans starting new organizations or revitalizing mature organizations, particularly new businesses generally in response to identify opportunities. It's a difficult undertaking, because most of these businesses fail at a very early stage. In the beginning of the business the term "Small Business Owner" and "Entrepreneur" are interchangeable. Advantages Every business has its own advantages and disadvantages. As for talking about small business, it requires less initial capital to start the business. Its sources of funding can be self financing, loans from friends and relatives, private stock issue, forming partnerships and SME finance which includes collateral based funding or venture capital . The owner can keep a close check on the accounts and books. Also, a small business owner can build intimate relations with his clients which results in better creditability and responsiveness. For a Entrepreneur, has the inclination to grow his business to the highest level, which in turns leads to high quality products and better job opportunity. As a bigger organization, it encourages use of modern technology with research activity for quality improvement. Innovative and strategic ideas are developed to enhance product quality. Contributes to theeconomy by giving better quality products for export. Healthy competition lets the entrepreneur work towards better quality services
3
Entrepreneurship (193)
Assignment # 02
constantly. Disadvantages The typical entrepreneurship is a small business. The success of any business is measured by its financial growth. This also applies to large businesses who wish to start up a new business within the current corporate framework. Small business often faces problems related to their size like these businesses fail because of undercapitalization. The owner, before starting the business, needs to make sure he has access to enough capital to support his project for at least one year, anticipating his expenses. Another problem that is often realized in small business is the "Entrepreneurial Myth", which means any person who is technically trained in any field, has a myth he can run the business efficiently. However, additional management skills are required to run the business. A small business owner, who wants to survive in the competition, not only needs to take care of the above listed issues but also what a bigger entrepreneur would face. An entrepreneur needs to carry total load of debts, long works hours are required to keep up with no additional overtime or holiday pay which affects an individuals personal and social life. Apart from these an entrepreneur also needs to assume all risks from start up through operations and customer satisfaction, he also needs to maintain and improve his expertise for continues growth for which business concepts and marketing strategies are required. Needs to anticipate competition and have strategies ready to face them. Small Business owner to a Successful Entrepreneurship
First of all a small business owner needs to have a vision and passion to succeed. There are several points that needs to be kept in mind to drive a small business to the heights of roaring success. Starting with having the right attitude, an entrepreneur needs to be optimistic, open to new ideas and be willing to research , ask questions and reflect on mistakes to learn better. Secondly, Customer Focus. Study the market your business is catering to. Learn their demands, the quality they are looking for and monitor the customer traffic. Thirdly, getting feedback. This is one important tool which helps you measure your standing with the customer. An entrepreneur should keep in contact with an expert for constant feedback on what is going right or what needs to be done improve a particular section. Not only this, customer feedback also needs to be in the limelight, which helps an entrepreneur use innovative ideas, for his product according to the demand. Fourthly, Networking. In business you are judged by the company you keep. Small businesses always need assistance. It is important to cash every opportunity. An entrepreneur can make contact through the business meetings or parties which lets you meet important people from different aspects of business who can help a business grow. Concluding the discussion. For an entrepreneurship his business is a vehicle for discovering and
4
Entrepreneurship (193)
Assignment # 02
expressing his unique talent and his passion to succeed. For a small business ownerneeds more drive and a successful entrepreneur to have the constant determination to achieve success for his business.
Q2 a
Entrepreneurship pertains to businesses which are designed to address particular opportunities. Entrepreneurship is also defined as the process of determining, assessing and utilizing opportunities. Webster defined an entrepreneur as “one who undertakes to start and conduct an enterprise or business, usually assuming full control and risk." Business is the social science of managing people to direct their collective efforts towards accomplishing organization goals and to earn profits. It is derived from the word “busy” which is often perceived as doing something productive commercially. Since a number of new businesses fail, an integral part of entrepreneurship then is taking risks. Entrepreneurs deal with these risks by creating solutions to problems. The vision of an entrepreneur is what drives the entrepreneurship. It also takes a lot of hard work and determination to grow an entrepreneurship. Concept of Quality The concept of quality is defined differently by various people. According to Gitlow et al., 1989 or Ozeki and Asaka, 1990, quality means the expectations that accompany a product or service being delivered which are: 1) is at par with customer standards, 2) meets and satisfy the needs of the customer, 3) meets the customer level of expectations, and 4) will meet unforeseen needs and aims in the future. Management Process in an Entrepreneurship Management refers to the ways of the personnel in charge of directing the organization, which in this instance is an entrepreneurship, through the utilization of resources such as labor, capital and assets whether tangible or intangible. Being in the management connotes power and influence for the person. It is not unusual for an entrepreneur to do all the management functions at the start of the business. It is only later when the business grows that proper designation of functions can be made. Managing an entrepreneurship means overseeing various functions such as:
5
Entrepreneurship (193)
Assignment # 02
Planning - making decisions with regards to the future and making those plans happen. Organizing - utilizing the fullest potential of resources – people, capital and assets to ensure the success of the plans. Leading/Motivating - inspiring others to do their part effectively in carrying out the organization’s plans. Controlling - step by step monitoring of the implementation process to see if changes are necessary to be made on the plans. Entrepreneurs should establish and maintain an environment within the business to encourage efficiency among employees. The functions of management involve planning, organizing, directing, and controlling of resources. These functions are influenced by objectives set by the entrepreneur. They are closely related to each other and interdependent. Planning pertains to arriving at an efficient process to attain the objectives of the company. It leads the company towards its goals. Organizing coordinates the resources that needed to implement the plan. In organizing, company structure is established, relationships are formed and resources are allotted appropriately to realize the objectives sought for. Directing refers to leading and supervising employees to attain the company objectives. Finally, controlling is confirming if the plan is carried out in actual situation. Quality Management in an Entrepreneurship Fundamentals of business include proper planning, setting up objectives, promoting customer relationship, promoting supplier relationship, dealing with competition and use of accounting. Knowing all these aspects could greatly facilitate the flow of the business. Managing these aspects well or quality management would spell the difference between success and failure in business. It is also important to know the legal aspects affecting the business and the need to adhere to business ethics. An entrepreneur needs to know the business fundamentals so it can manage the business well. Fundamentals of business include proper planning, setting up objectives, promoting customer relationship, promoting supplier relationship, dealing with competition and proper use of accounting. Having a plan and setting up objectives before embarking on a business or during business is essential because it would be hard to provide a direction with which the business will follow without vision. Customer relationship is very essential to the business. How well you relate to the customers could translate to profits in the income statement. Choosing the target market also falls under
6
Entrepreneurship (193)
Assignment # 02
this. The target market must reflect the style, image and price point of the product you are selling. Supplier relationship is important because without suppliers securing raw materials to create the finish product would be impossible. It is always good to establish good rapport with supplier as this would greatly facilitate the production process. Competition is one of the threats to business. It is important to size up the competition to be able to make your products competitive in the market. Allocating proper resources and taking the time are important requirements to remain competitive. Accounting is fundamental to business because it enables you to determine how the entrepreneurship fares. Proper accounting methods enable one to have solid basis in making sound management decisions and adopt necessary changes.
Q2 b
Challenges and Rewards of Becoming an Entrepreneur
The specific challenges and rewards you'll encounter when becoming an entrepreneurwill vary depending upon the nature of the business you intend to launch. Whether you plan to start a home based business, or something on a larger scale, or you plan to launch your business alone or with a partner, or your business falls within an industry that is regulated by specific government legislation, all of these factors will impact the specific challenges you'll face as an entrepreneur. As well as seeking out general information on becoming an entrepreneur, in order to get a good understanding of the the rewards and challenges that are specific to your industry, I'd suggest seeking out advice from someone who has expertise in that industry. Keep in mind, when you are thinking about business challenges, any challenges related to starting a new business do not need to be seen in a negative light. When talking about business start-ups, challenges are also referred to as barriers to entry. Barriers to entry are the things that prevent others from starting a similar type of business. They may include issues like high startup costs, government regulations or specific skill requirements. If you find that your specific business idea carries with it some barriers to entry, that is not necessarily a bad thing. As long as you can find ways around those barriers for your own
7
Entrepreneurship (193)
Assignment # 02
company, the same barriers may keep other potential competitors from launching the same type of business.
Because my space is a bit limited here, I've posted an article that more specifically answers your question about the challenges and rewards of becoming an entrepreneur. You'll find a list of specific rewards and challenges of being an entrepreneur here.
((((Money, money, money, it’s all about money This is obviously the major reward you can receive from your effort. Their world will suddenly change and their financial problem will slowly disappears. More than that, financial opportunities will start to arise like mushroom in a forest. Regarding their own specific situation, they all got a great signing bonus along with important increase in what used to be their salary. In the end, chances are they will also get shares in that company as well. This could only mean good news for all of them. Pride and recognition Do you feel pride of yourself when you conclude a sale for your employer, you win a contract for your employer or you achieve a major projectfor your employer? Imagine the sensation for ones that does it for himself! It must be a great feeling to see your baby, your own creation getting attention from the big guys. Your whole work and talent are being recognize through your company. Being an entrepreneur is more than being your own boss, it is related to have a direct influence on your destiny. Every ideas, every thoughts, every moves are beneficial for your own good. Becoming a successful entrepreneur would allow an individual to fully accomplish himself and being recognize for it. Flexibility and power Hum… making your own working hour, having the power of deciding your way of working, your team mates and which project you will work on; it sounds like the perfect workplace! While you might end up in this Cinderella Story, chances are that you will have to work more than a regular employee and think about your business 24/7. It is true that if you company becomes stable and money is coming in, you will benefit from a lot of flexibility and you will gain power over your environment. However, in order to reach this level, you will have to achieve something that no employee will ever perform; total donation to your company. My friend made a series of continuous efforts over the past two years and was making barely enough to cover for his living expenses. He was working ten hours a day and sometimes over the weekend. He did not really mind as he saw what was coming; he had a plan, he had a vision. Fulfilling your dreams Entrepreneurs are wild beast; they hate to be tamed and put in a cage. They need space so they can think and evolve to something better. Creating your own business is a great way to fulfill your dreams and to grow on a personal level. It is not only about money, it’s about yourself. Through your company, you have a chance to grow and become a better person. While you are
8
Entrepreneurship (193)
Assignment # 02
living your life, you are also creating an alter-ego. Another “me” that will take action by itself and reward you with pride as a son who makes his first touch down. If this post woke up a part of you that wants to be part of the world of entrepreneurship, sit down with a piece of paper and start thinking about what you could do in order to become another man or woman, another entrepreneur.)))
Q3
Introduction The role of the Human Resource Manager is evolving with the change in competitive market environment and the realization that Human Resource Management must play a more strategic role in the success of an organization. Organizations that do not put their emphasis on attracting and retaining talents may find themselves in dire consequences, as their competitors may be outplaying them in the strategic employment of their human resources. With the increase in competition, locally or globally, organizations must become more adaptable, resilient, agile, and customer-focused to succeed. And within this change in environment, the HR professional has to evolve to become a strategic partner, an employee sponsor or advocate, and a change mentor within the organization. In order to succeed, HR must be a business driven function with a thorough understanding of the organization’s big picture and be able to influence key decisions and policies. In general, the focus of today’s HR Manager is on strategic personnel retention and talents development. HR professionals will be coaches, counselors, mentors, and succession planners to help motivate organization’s members and their loyalty. The HR manager will also promote and fight for values, ethics, beliefs, and spirituality within their organizations, especially in the management of workplace diversity. This paper will highlight on how a HR manager can meet the challenges of workplace diversity, how to motivate employees through gain-sharing and executive information system through proper planning, organizing, leading and controlling their human resources. Workplace Diversity According to Thomas (1992), dimensions of workplace diversity include, but are not limited to: age, ethnicity, ancestry, gender, physical abilities/qualities, race, sexual orientation, educational background, geographic location, income, marital status, military experience, religious beliefs, parental status, and work experience.
9
Entrepreneurship (193)
Assignment # 02
The Challenges of Workplace Diversity The future success of any organizations relies on the ability to manage a diverse body of talent that can bring innovative ideas, perspectives and views to their work. The challenge and problems faced of workplace diversity can be turned into a strategic organizational asset if an organization is able to capitalize on this melting pot of diverse talents. With the mixture of talents of diverse cultural backgrounds, genders, ages and lifestyles, an organization can respond to business opportunities more rapidly and creatively, especially in the global arena (Cox, 1993), which must be one of the important organisational goals to be attained. More importantly, if the organizational environment does not support diversity broadly, one risks losing talent to competitors. This is especially true for multinational companies (MNCs) who have operations on a global scale and employ people of different countries, ethical and cultural backgrounds. Thus, a HR manager needs to be mindful and may employ a ‘Think Global, Act Local’ approach in most circumstances. The challenge of workplace diversity is also prevalent amongst Singapore’s Small and Medium Enterprises (SMEs). With a population of only four million people and the nation’s strive towards high technology and knowledge-based economy; foreign talents are lured to share their expertise in these areas. Thus, many local HR managers have to undergo cultural-based Human Resource Management training to further their abilities to motivate a group of professional that are highly qualified but culturally diverse. Furthermore, the HR professional must assure the local professionals that these foreign talents are not a threat to their career advancement (Toh, 1993). In many ways, the effectiveness of workplace diversity management is dependent on the skilful balancing act of the HR manager. One of the main reasons for ineffective workplace diversity management is the predisposition to pigeonhole employees, placing them in a different silo based on their diversity profile (Thomas, 1992). In the real world, diversity cannot be easily categorized and those organizations that respond to human complexity by leveraging the talents of a broad workforce will be the most effective in growing their businesses and their customer base. The Management of Workplace Diversity In order to effectively manage workplace diversity, Cox (1993) suggests that a HR Manager needs to change from an ethnocentric view ("our way is the best way") to a culturally relative perspective ("let's take the best of a variety of ways"). This shift in philosophy has to be ingrained in the managerial framework of the HR Manager in his/her planning, organizing, leading and controlling of organizational resources.
10
Entrepreneurship (193)
Assignment # 02
As suggested by Thomas (1992) and Cox (1993), there are several best practices that a HR manager can adopt in ensuring effective management of workplace diversity in order to attain organizational goals. They are: Planning a Mentoring ProgramOne of the best ways to handle workplace diversity issues is through initiating a Diversity Mentoring Program. This could entail involving different departmental managers in a mentoring program to coach and provide feedback to employees who are different from them. In order for the program to run successfully, it is wise to provide practical training for these managers or seek help from consultants and experts in this field. Usually, such a program will encourage organization’s members to air their opinions and learn how to resolve conflicts due to their diversity. More importantly, the purpose of a Diversity Mentoring Program seeks to encourage members to move beyond their own cultural frame of reference to recognize and take full advantage of the productivity potential inherent in a diverse population. Organizing Talents StrategicallyMany companies are now realizing the advantages of a diverse workplace. As more and more companies are going global in their market expansions either physically or virtually (for example, E-commerce-related companies), there is a necessity to employ diverse talents to understand the various niches of the market. For example, when China was opening up its markets and exporting their products globally in the late 1980s, the Chinese companies (such as China’s electronic giants such as Haier) were seeking the marketing expertise of Singaporeans. This is because Singapore’s marketing talents were able to understand the local China markets relatively well (almost 75% of Singaporeans are of Chinese descent) and as well as being attuned to the markets in the West due to Singapore’s open economic policies and English language abilities. (Toh, R, 1993) With this trend in place, a HR Manager must be able to organize the pool of diverse talents strategically for the organization. He/She must consider how a diverse workforce can enable the company to attain new markets and other organizational goals in order to harness the full potential of workplace diversity. An organization that sees the existence of a diverse workforce as an organizational asset rather than a liability would indirectly help the organization to positively take in its stride some of the less positive aspects of workforce diversity.
11
Entrepreneurship (193)
Assignment # 02
Leading the TalkA HR Manager needs to advocate a diverse workforce by making diversity evident at all organizational levels. Otherwise, some employees will quickly conclude that there is no future for them in the company. As the HR Manager, it is pertinent to show respect for diversity issues and promote clear and positive responses to them. He/She must also show a high level of commitment and be able to resolve issues of workplace diversity in an ethical and responsible manner. Control and Measure ResultsA HR Manager must conduct regular organizational assessments on issues like pay, benefits, work environment, management and promotional opportunities to assess the progress over the long term. There is also a need to develop appropriate measuring tools to measure the impact of diversity initiatives at the organization through organization-wide feedback surveys and other methods. Without proper control and evaluation, some of these diversity initiatives may just fizzle out, without resolving any real problems that may surface due to workplace diversity. Motivational Approaches Workplace motivation can be defined as the influence that makes us do things to achieve organizational goals: this is a result of our individual needs being satisfied (or met) so that we are motivated to complete organizational tasks effectively. As these needs vary from person to person, an organization must be able to utilize different motivational tools to encourage their employees to put in the required effort and increase productivity for the company. Why do we need motivated employees? The answer is survival (Smith, 1994). In our changing workplace and competitive market environments, motivated employees and their contributions are the necessary currency for an organization’s survival and success. Motivational factors in an organizational context include working environment, job characteristics, appropriate organizational reward system and so on. The development of an appropriate organizational reward system is probably one of the strongest motivational factors. This can influence both job satisfaction and employee motivation. The reward system affects job satisfaction by making the employee more comfortable and contented as a result of the rewards received. The reward system influences motivation primarily through the perceived value of the rewards and their contingency on performance (Hickins, 1998).
12
Entrepreneurship (193)
Assignment # 02
To be effective, an organizational reward system should be based on sound understanding of the motivation of people at work. In this paper, I will be touching on the one of the more popular methods of reward systems, gain-sharing. Gain-sharing: Gain-sharing programs generally refer to incentive plans that involve employees in a common effort to improve organizational performance, and are based on the concept that the resulting incremental economic gains are shared among employees and the company. In most cases, workers voluntarily participate in management to accept responsibility for major reforms. This type of pay is based on factors directly under a worker’s control (i.e., productivity or costs). Gains are measured and distributions are made frequently through a predetermined formula. Because this pay is only implemented when gains are achieved, gainsharing plans do not adversely affect company costs (Paulsen, 1991). Managing Gain-sharing In order for a gain-sharing program that meets the minimum requirements for success to be in place, Paulsen (1991) and Boyett (1988) have suggested a few pointers in the effective management of a gain-sharing program. They are as follows:
A HR manager must ensure that the people who will be participating in the plan are influencing the performance measured by the gain-sharing formula in a significant way by changes in their day-to-day behavior. The main idea of the gain sharing is to motivate members to increase productivity through their behavioral changes and working attitudes. If the increase in the performance measurement was due to external factors, then it would have defeated the purpose of having a gain-sharing program. An effective manager must ensure that the gain-sharing targets are challenging but legitimate and attainable. In addition, the targets should be specific and challenging but reasonable and justifiable given the historical performance, the business strategy and the competitive environment. If the gain-sharing participants perceive the target as an impossibility and are not motivated at all, the whole program will be a disaster. A manager must provide useful feedback as a guidance to the gain-sharing participants concerning how they need to change their behavior(s) to realize gain-sharing payouts The feedback should be frequent, objective and clearly based on the members’ performance in relation to the gain-sharing target. A manager must have an effective mechanism in place to allow gain-sharing participants to initiate changes in work procedures and methods and/or requesting new or additional
13
Entrepreneurship (193)
Assignment # 02
resources such as new technology to improve performance and realize gains. Though a manager must have a tight control of company’s resources, reasonable and justifiable requests for additional resources and/or changes in work methods from gain-sharing participants should be considered. Executive Information Systems Executive Information System (EIS) is the most common term used for the unified collections of computer hardware and software that track the essential data of a business' daily performance and present it to managers as an aid to their planning and decision-making (Choo, 1991). With an EIS in place, a company can track inventory, sales, and receivables, compare today's data with historical patterns. In addition, an EIS will aid in spotting significant variations from "normal" trends almost as soon as it develops, giving the company the maximum amount of time to make decisions and implement required changes to put your business back on the right track. This would enable EIS to be a useful tool in an organization’s strategic planning, as well as day-to-day management (Laudon, K and Laudon, J, 2003). Managing EIS As information is the basis of decision-making in an organization, there lies a great need for effective managerial control. A good control system would ensure the communication of the right information at the right time and relayed to the right people to take prompt actions. When managing an Executive Information System, a HR manager must first find out exactly what information decision-makers would like to have available in the field of human resource management, and then to include it in the EIS. This is because having people simply use an EIS that lacks critical information is of no value-add to the organization. In addition, the manager must ensure that the use of information technology has to be brought into alignment with strategic business goals (Laudon, K and Laudon, J, 2003). Conclusion The role of the HR manager must parallel the needs of the changing organization. Successful organizations are becoming more adaptable, resilient, quick to change directions, and customercentered. Within this environment, the HR professional must learn how to manage effectively through planning, organizing, leading and controlling the human resource and be knowledgeable of emerging trends in training and employee development.
14
Entrepreneurship (193)
Assignment # 02
Q4 a
motivation Definition Internal and external factors that stimulate desire and energy in people to be continually interested in and committed to a job, role, or subject, and to exert persistent effort in attaining a goal. Motivation is the energizer of behavior and mother of all action. It results from the interactions among conscious and unconscious factors such as the (1) intensity of desire orneed, (2) incentive or reward value of the goal, and (3) expectations of the individual and of his or her significant others.
Motivation is a very important for an organization because of the following benefits it provides:1. Puts human resources into action Every concern requires physical, financial and human resources to accomplish the goals. It is through motivation that the human resources can be utilized by making full use of it. This can be done by building willingness in employees to work. This will help the enterprise in securing best possible utilization of resources. 2. Improves level of efficiency of employees The level of a subordinate or a employee does not only depend upon his qualifications and abilities. For getting best of his work performance, the gap between ability and willingness has to be filled which helps in improving the level of performance of subordinates. This will result intoa. Increase in productivity, b. Reducing cost of operations, and c. Improving overall efficiency. 3. Leads to achievement of organizational goals The goals of an enterprise can be achieved only when the following factors take place :a. There is best possible utilization of resources, b. There is a co-operative work environment , c. The employees are goal-directed and they act in a purposive manner,
15
Entrepreneurship (193)
Assignment # 02
d. Goals can be achieved if co-ordination and co-operation takes place simultaneously which can be effectively done through motivation. 4. Builds friendly relationship Motivation is an important factor which brings employees satisfaction. This can be done by keeping into mind and framing an incentive plan for the benefit of the employees. This could initiate the following things: a. Monetary and non-monetary incentives, b. Promotion opportunities for employees, c. Disincentives for inefficient employees. In order to build a cordial, friendly atmosphere in a concern, the above steps should be taken by a manager. This would help in: d. Effective co-operation which brings stability, e. Industrial dispute and unrest in employees will reduce, f. The employees will be adaptable to the changes and there will be no resistance to the change, g. This will help in providing a smooth and sound concern in which individual interests will coincide with the organizational interests, h. This will result in profit maximization through increased productivity. 5. Leads to stability of work force Stability of workforce is very important from the point of view of reputation and goodwill of a concern. The employees can remain loyal to the enterprise only when they have a feeling of participation in the management. The skills and efficiency of employees will always be of advantage to employees as well as employees. This will lead to a good public image in the market which will attract competent and qualified people into a concern. As it is said, “Old is gold” which suffices with the role of motivation here, the older the people, more the experience and their adjustment into a concern which can be of benefit to the enterprise. From the above discussion, we can say that motivation is an internal feeling which can be understood only by manager since he is in close contact with the employees. Needs, wants and desires are inter-related and they are the driving force to act. These needs can be understood by the manager and he can frame motivation plans accordingly. We can say that motivation therefore is a continuous process since motivation process is based on needs which are unlimited. The process has to be continued throughout.
16
Entrepreneurship (193)
Assignment # 02
We can summarize by saying that motivation is important both to an individual and a business. Motivation is important to an individual as: 1. 2. 3. 4. Motivation will help him achieve his personal goals. If an individual is motivated, he will have job satisfaction. Motivation will help in self-development of individual. An individual would always gain by working with a dynamic team.
Similarly, motivation is important to a business as: 1. The more motivated the employees are, the more empowered the team is. 2. The more is the team work and individual employee contribution, more profitable and successful is the business. 3. During period of amendments, there will be more adaptability and creativity. 4. Motivation will lead to an optimistic and challenging attitude at work place.
Q4 b
How to Motivate Employees Motivated employees can work wonders on your business. This article explains how to motivate your employees. To be sure, happy and enthused employees will lead to triumph. As a small business owner, you are the boss. But being the boss doesn't mean that you have to act like a tyrant to get things done. When it comes to motivating your employees, it really is true that you can get more done with a carrot than with a stick. (article continues below) The art of employee motivation really boils down to learning and practicing people skills. Your ability to interact with your employees on a relational level will largely determine how effectively you are able to motivate them to make your business a success. (1) Demonstrate enthusiasm In many ways, you set the tone for your employees. If you are unmotivated, expect your employees to be unmotivated, too. Likewise, if you demonstrate enthusiasm for your work, it will carry over to your employees. (2) Interface with your employees
17
Entrepreneurship (193)
Assignment # 02
It's important that you interact directly with your employees on a regular basis. A prolonged pattern of distance between you and your employees creates the perception of a cold, uncaring autocrat rather than the caring, compassionate leader you want to be. Step out from behind that desk periodically and let your employees interact with you face to face. (3) Celebrate accomplishments Take time out to celebrate accomplishments as a company. When you've asked your employees to go the extra mile to complete a major project, it's not unreasonable for them to expect to celebrate a little bit. This can be as simple as ordering a pizza or as extravagant as organizing an annual holiday party outside of the office. What you do isn't as important recognizing a job well done. (4) Offer incentives With incentives, cash isn't always king. Sometimes the best incentives require a little creativity on your part. In addition to offering flex time for employees who demonstrate outstanding service and performance, you can do things like offer theater tickets or restaurant gift certificates to the "employee of the month". Part of the fun is creating an atmosphere where your employees don't know what their reward will be until they have achieved their goal. (5) Treat your employees with kindness Kindness and understanding on your part will go a long way toward motivating your employees to help you achieve your goals as an entrepreneur. Unexpected events such as sick kids or other personal crises can interfere with the daily flow of the workplace. But no matter how many problems these occurrences cause for you, you can be guaranteed that they have created many more problems for your employee. As much as possible, try to give your employees the space they need to care for their families. The result will be happier employees who are more likely to give you all they've got once their family crisis has subsided. (6) Listen Above all else, listen to what your employees' have to say and let them know how much you value their input. The loyalty it inspires in your employees will make it well worth your while.
Q5
20 challenges faced by a family owned business
18
Entrepreneurship (193)
Assignment # 02
Every business organization has a unique set of challenges and problems. The family business is no different. Many of these problems exist in corporate business environments, but can be exaggerated in a family business. Family business go through various stages of growth and development over time. Many of these challenges will be found once the second and subsequent generations enter the business. A famous saying about family owned business in Mexico is “Father, founder of the company, son rich, and grandson poor” (Padre noble, hijo rico, nieto pobre). The founder works and builds a business, the son takes it over and is poorly prepared to manage and make it grow but enjoys the wealth, and the grandson inherits a dead business and and empty bank account. Prepare now and help your grandson avoid the poorhouse. 20 challenges for the family business 1. Emotions. Family problems will affect the business. Divorce, separations, health or financial problems also create difficult political situations for the family members. 2. Informality. Absence of clear policies and business norms for family members 3. Tunnel vision. Lack of outside opinions and diversity on how to operate the business. 4. Lack of written strategy. No documented plan or long term planning. 5. Compensation problems for family members. Dividends, salaries, benefits and compensation for non-participating family members are not clearly defined and justified. 6. Role confusion. Roles and responsibilities must be clearly defined. 7. Lack of talent. Hiring family members who are not qualified or lack the skills and abilities for the organization. Inability to fire them when it is clear they are not working out. 8. High turnover of non-family members. When employees feel that the family “mafia” will always advance over outsiders and when employees realize that management is incompetent. 9. Succession Planning. Most family organizations do not have a plan for handing the power to the next generation, leading to great political conflicts and divisions. 10. Retirement and estate planning. Long term planning to cover the necessities and realities of older members when they leave the company. 11. Training. There should be a specific training program when you integrate family members into the company. This should provide specific information that related to the goals, expectations and obligations of the position. 12. Paternalistic. Control is centralized and influenced by tradition instead of good management practices. 13. Overly Conservative. Older family members try to preserve the status quo and resist change. Especially resistance to ideas and change proposed by the younger generation.
19
Entrepreneurship (193)
Assignment # 02
14. Communication problems. Provoked by role confusion, emotions (envy, fear, anger), political divisions or other relationship problems. 15. Systematic thinking. Decisions are made day-to-day in response to problems. No longterm planning or strategic planning. 16. Exit strategy. No clear plan on how to sell, close or walk away from the business. 17. Business valuation. No knowledge of the worth of the business, and the factors that make it valuable or decrease its value. 18. Growth. Problems due to lack of capital and new investment or resistance to reinvestment in the business. 19. Vision. Each family member has a different vision of the business and different goals. 20.Control of operations. Difficult to control other members of the family. Lack of participation in the day-to-day work and supervision required Turning Challenges into Victories There are unique family business challenges that non-family owned companies do not face. Yet when the strong family ties are directed towards a common vision, a family owned business can achieve impressive success. There is no question that family business challenges can be daunting, yet when converted into success the results can be impressive. In a family business, there are emotional issues usually not found in non-family owned businesses, and it is important to confront these issues and lay them to rest. For example, many family owned businesses were started by the patriarch or matriarch of the family, and the second generation now feels it is time for him or her to retire. These kinds of issues can hold a company back from moving ahead in a competitive business environment. The key to dealing with the issues related to a family business is to take those challenges and turn them into victories. Though a family owned business has a management structure that has a whole different dimension from other companies, the generations have a unique opportunity to use those strong bonds to create a company with a vision for the future. In other words, a family business can, and should, create a viable company mission supported by strategic planning with the goal of strengthening the company for future generations. The Family Vision The family that creates and expands a business knows they want the business to be long-lasting for generations to come. The development of a clear mission is critical to success. Yet there
20
Family
Business
Entrepreneurship (193)
Assignment # 02
are plenty of family owned businesses that have just gone with the flow, so to speak. The company started small and then grew through demand for its products or services, but there is no real long-term planning that has taken place. Thiscan cause the emotional issues to take a front seat to the strategic operation of the business. That is why many family owned businesses have turned to business consultants for assistance with long term planning. A management consultant that understands the special emotional issues involved in a family owned business can work with management to develop or refine a mission statement, establish specific goals, and create a strategic plan for reaching those goals. It is like having a dispassionate consultant who assists the family management by focusing on the real issues related to long term growth and economic health. Mastering the Future Family business challenges can be turned into long term victories that equate to a thriving business enterprise for many generations to come. Family businesses can capitalize on the strengths that family members bring to the company, and use those strengths to create a strong mission statement that provides future direction. With everyone on the same path, the family management team becomes one of the company's strongest assets.
21
