Theories, models and techniques on Business Environment, Marketing and Human Resources - Assignment Example

? Business environment, marketing and human resources Table of contents Executive Summary 3 Introduction 3 2. Theories, models and techniques on Business Environment, Marketing and Human Resources 5 2.1 Business Environment 5 2.1.1. Porter’s Five Forces Model 5 2.1.2 SWOT analysis 8 2.2. Human Resources 9 2.2.1 Maslow Theory 9 2.2.2 Resource-based model 10 2.3 Marketing 11 2.3.1 Deductive reasoning 11 2.3.2 Game Theory 12 3. Summary - Critique of the theories, models and techniques 12 References Appendix Executive Summary Current report aims to present and analyze the relationship between three particular aspects of business operations: business environment, marketing and human resources. The key characteristics of the above frameworks are identified and explained trying to check the potential interaction between these frameworks in order for the business activity across a particular region to be improved. The targets of the study – as set in its beginning – have been fully achieved. The most important elements of the above frameworks are presented below; it has been proved that the examination of the aspects of business activities can be a challenging task, a problem resulting mostly by the high variety of models/ theories and techniques used for supporting business activities. 1. Introduction The growth of businesses in the modern market is depended on their ability to face the market’s pressures – as these pressures are reflected to the delays and the difficulties each organization faces when trying to secure its position towards its rivals. Current paper is important for the following reason: it explains the potential relationship among key organizational aspects, such as business environment, marketing and human resources. Moreover, it clarifies the terms under which the above frameworks can be developed. At this point, the reference to the theories and the techniques used for promoting organizational growth – especially in regard to the above frameworks – has been considered as necessary for highlighting the following issue: organization is a complex entity – meaning its processes but also its needs. For responding to the needs of organizations, as parts of the business environment in all markets worldwide, theorists and researchers have developed appropriate theoretical and practical models. It has been proved that the management of critical organizational factors can be based on tools and theories which have similar characteristics; however, the level at which these theories and techniques are effective is not standardized. The literature published in the specific organizational sectors, those mentioned above, has been carefully reviewed – as possible. It has been proved that even if business operations are likely to be equally addressed – in terms of their needs – there are organizational sectors which are likely to attract more the attention of organization’s management team – for example HR needs are often set as a priority when designing the organizational plans while other aspects of the organization are not given equal attention, for example, the marketing of the firm’s products/ services. Such phenomenon is explained by the following fact: all firms are likely to be based on certain sectors/ operations. These sectors are not equal, in terms of their contribution in the development of daily organizational tasks. For instance, employees are traditionally considered as being the most important organizational asset; however, today, the role of employees within organizations has been changed – not only financially. The theories, models and techniques presented below reflect this inequality but at the same time they highlight the following problem: the monitoring on the firm’s practices is often problematic, meaning that employees are not always aware of their obligations towards the organization. The use of the theories, models and techniques suggested above could help to the increase of effectiveness of organizational plans – since the planners of the organization’s plans would become aware of the actual status of the organization, but also of its prospects. 2. Theories, models and techniques on Business Environment, Marketing and Human Resources 2.1 Business Environment The evaluation of business environment is based on models and techniques, which have been used in practice and which have been proved to be effective even when the organizational characteristics are strongly differentiated. The most common frameworks of such kind are the Porter’s Five Forces model, a model used for evaluating the status of the industry in which a firm operates, and the SWOT analysis, a technique for identifying an organization’s strengths, weaknesses, opportunities and threats, aiming to design plans the prospects of which will be significant. 2.1.1. Porter’s Five Forces Model The Five Forces model of Porter is based on the following idea: each firm operating in the modern market is likely to face the pressure of five forces: a) customers, b) suppliers, c) substitute products, d) entries of new firms, e) competition – meaning the increase of competitiveness of the firm’s existing rivals. These pressures are usually standardized, meaning that they are expected to exist for firms operating in all industries. The size of a firm is usually irrelevant to its exposure to these forces. In the context of the above model, businesses cannot increase their profitability, unless they identify a strategy for managing effectively the five forces described above (Hill et al. 2009). The parts of the above model could be analyzed as follows: a) customers; within each market customers have the power to influence the prices of products/ services in the following way: by bargaining for low prices, customers can force firms in a particular industry to reduce their prices in order to keep their competitiveness; however, the power of customers to affect the prices of products/ services is depended on the following conditions: a1) the products/ services involved are available for many organizations – otherwise, the power of customers to press for reduce of prices of products/ services is limited, a2) the market conditions allow for such decisions; in periods of economic crisis the power of customers to ask for low prices is usually higher compared to the periods where economic problems are controlled and when the prospects for the local economy are significant; b) suppliers; in order for suppliers to be able to press firm to increase the suppliers’ fees, the following terms have to exist: b1) the material involved – meaning the material provided by suppliers to the organizations – should be rather difficult to be identified, i.e. it should not be easily available in the market, otherwise a supplier could not press an organization to increase the supplier’s fees; in the above case reference is made to the quality/ characteristics of the material provided by suppliers to a particular organization, b2) the performance of the firm in the market to be positive, meaning that there are many prospects for the further growth of the firm or, at least, that the chances that the chances for severe failures are minimized, otherwise the negotiations between the firm and its suppliers would be of no value (Hill et al. 2009); c) substitute products; reference is made to those products which are identical, or even similar, to the products of a particular organization; substitute products have become a common problem in markets worldwide. Because the price of raw sources is differentiated globally, countries with easy access to such sources have developed their manufacturing industry aiming to produce products of high quality – based on the quality/ characteristics of products which are already well known (Hill et al. 2009). In many cases, this target is achieved only partially. Indeed, substitute products appear in the market at low price but their quality, commonly, is quite poor exposing the organizations to severe market sanctions, even if the relevant activity was developed with no intention by the actor’s side, d) entry of new firms; in all markets, the entry of new firms is always possible; in fact, there are no markets totally closed, meaning that the access of enterprises in one or more of these markets’ industries is not allowed. Most commonly, the entrance of new competitors is considered as a threat for the firms that already operate in the particular industry. On the other hand, when the industry involved is closely related to national interests, for instance, the processing of oil or other source of energy, or when an industry is still under development and the high concentration of firms would cause delays in the industry’s establishment in the global market, then, it would be decided that the entrance of new firms in this industry is not permittable unless if specific criteria are met; e) competition: in each country, measures have to be taken so that competition is kept at high levels; the reduction of competition below a particular level means that a country’s market suffers from monopolistic practices, a condition which usually results to high concentration of firms within each industrial sector – a problem which cannot be easily controlled. 2.1.2 SWOT analysis The key characteristics of SWOT analysis are the following one: a) the SWOT analysis refer to particular elements/ aspects of the organization, i.e. its strengths, weaknesses, opportunities and threats, b) usually, the SWOT analysis is used in order to check the potential effectiveness of a particular organizational strategy, i.e. before developing a key organizational plan or when this plan is ready, less commonly, the expected success of this plan is checked using current market conditions as the basis for making the relevant evaluation, c) the findings of the SWOT analysis are usually credible for up to a particular time period; after a particular point of time, SWOT analysis would have to be developed again, taking into consideration the new conditions/ criteria in the organization’s internal and external environment. In the context of the SWOT analysis, the following elements of the organizational environment are examined and evaluated: a) strengths; the firm’s strengths compared to its competitors; usually reference is made to the communication and cooperation within the organization, innovation, funds available for the realization of organizational projects, strategic alliances, employees’ skills and so on, b) weaknesses; reference is made to facts that can set obstacles to the organization’s performance; common elements of this type are: the lack of skills of employees, the existence of conflicts in the organizational environment, the lack of appropriate technology and the inability to promote innovation; c) opportunities; it is possible for the global market to offer chances for the products/ services of the organization, for instance when the demand for the firm’s products/ services is high in a particular market; usually, opportunities for firms in its local or the global market are not expected to last for an extended period of time; for this reason, when they are identified, they should be taken into consideration, meaning that appropriate organizational plans should be promoted for increasing the firm’s performance; d) threats; usually, threats as an element analyzed in the SWOT analysis refers to the risks related to the firm’s operation in the local or the international market. Most commonly, these threats are not clearly identifiable; they can be assumed by observing specific organizational activities or specific market conditions, for instance the continuous decrease of profitability of firms operating in the same industry. Threats would be evaluated in combination with opportunities in order to decide whether the realization of an organizational plan is going to support the organization’s growth or not. 2.2. Human Resources 2.2.1 Maslow Theory The Maslow Theory – also known as the hierarchy of needs theory – is based on the view that motivation is increased only when unsatisfied needs are involved. This theory is used for evaluating the human resources of a particular organization – meaning especially the employees’ performance. In accordance with Maslow, only those needs cause the increase of employee motivation, i.e. the increase of employees’ performance (Montana et al. 2008). In the context of this theory, the needs of employees are put in hierarchy as follows: a) at the bottom of the pyramid there are the basic needs for living; these are the physiological needs which are absolutely necessary for the survival of all humans; if only these employees’ needs are addressed within a particular organization, then the performance of employees is expected to be low – there are no incentives offered for self-development, b) the safety needs; the term safety reflects the sense of protection from all potential threats, including not only threats for the life but also, threats for the work; in an organization where employees have to cope, constantly, with the threat of losing their position, employee performance is expected to be low (Schermenhorn, 2010); c) the belonging; meaning the desire for being part of a team, meaning an equal member of a group; the sense of belonging increases the confidence of employees and thus, their performance, d) the ego-status; this part of the hierarchy refers to the efforts made by an employee in order to achieve the targets set in regard to its position waiting to be rewarded fairly for his efforts and e) at the top of the hierarchy is self-actualization; at this level, the employee has managed to effectively use his skills, to cooperate and communicate with others across the organization without worrying for potential internal or external pressures on the organization (Schermenhorn, 2010); at this level, employee has managed to continuously pursue his personal development and growth, a fact that benefits also his organization. 2.2.2 Resource-based model The resource-based model has been developed in order to offer a framework for identifying the potential value of a firm’s resources. Boxall developed this model in 1996 aiming to give certain directions for the potential increase of organizational effectiveness (Analoui et al. 2003). The specific model emphasizes on the need for developing strategic management processes in the context of which all organizational sectors, including human resources department, would perform better (Analoui et al. 2003). It should be noted that the above model is based on the perception that HR is the most important organizational sector, in terms of its role in organizational growth. Barney introduced the first elements of the above theory in 1991. In accordance with the above theorist, the increase of a firm’s competitiveness can be achieved only by emphasizing on its HR. In fact, the needs and the potentials of the specific organizational sector should be used as the basis for developing the organization’s key strategic plans (Armstrong 2000). 2.3 Marketing 2.3.1 Deductive reasoning The deductive reasoning is a technique used for ‘drawing conclusions through logical reasoning’ (Kitchen et al. 2001, p.76). The above technique is particularly valuable in marketing. After developing a thorough research on the market, marketers are able to decide the methods, which would be most appropriate for promoting effectively the products/ services involved. The key elements of the deductive reasoning are the following: a) a series of facts needs to exist for developing relevant arguments, b) these arguments will be then evaluated using appropriate criteria – in accordance with the internal and external organizational conditions, c) the skills/ abilities of the person developing the deductive reasoning is likely to highly affect the findings. 2.3.2 Game Theory Game theory has been developed in order to explain the potential sequence of initiatives in cases that emergent organizational issues appear. Indeed, when there is no much time for applying carefully designed organizational plans, then certain facts/ events in the internal and the external organizational environment are going to be chosen, randomly, for developing an effective organizational plan (Thomas 2003). The fact that the elements of the strategy are not identified in advance does not influence the fact that the sequence of the activities – included in the plan – is specific. Indeed, the game theory is based on a framework/ structure similar to a game. The participants/ players are defined, the rules are set and then an effort starts for achieving the target, different each time. The game theory is likely to be used in marketing when having to combine a series of strategies for achieving a difficult target. 3. Summary - Critique of the theories, models and techniques In accordance with the issues discussed above, the following issue is made clear: the theories, models and techniques used for resolving various organizational problems are likely to interact for fully develop their potentials. In other words, the theory focusing on a particular organizational sector cannot achieve its target unless if being supported by another theory/ model supporting another part of the organization – under the terms that in this way the chances for success of each organizational plan are increased. However, at this point, the following issue appears: on which criterion the interaction between these theories will be based? In other words, would certain organizational sectors be considered as of higher importance so that emphasis should be given to their growth? If there would be such case, then the theory that would refer to this organizational sector would be the basis for evaluating the performance of the organization in its other operations, a practice however which would introduce inequality in the organization setting its performance in risk. From this point of view it would be noted that the theories, models and techniques mentioned above should be rather used independently, at least initially, meaning that they would be used for developing the organizational sector to which they refer. At the next level, after having achieved their goal, these theories, models and techniques could be compared as of their advantages and disadvantages aiming to emphasize on those organizational elements that would be most likely to result to organizational growth than those which tend to be problematic, meaning that they are likely to perform lower than expected or are likely to cause delays to the organization’s daily operations. In any case, the performance of the theories, models and techniques, as explained above is likely to be influenced by a series of factors. Others of these frameworks are more exposed to market changes (such as the SWOT analysis or the Porter’s Five Forces model) while others are more depended on the personal perceptions of individuals involved (the Maslow theory, the deductive reasoning). This means that each of these theories, models and techniques is likely to perform successfully under different terms and conditions, so that their direct comparison and evaluation to be quite difficult. The review of the theories, models and techniques presented above makes clear that the increase of organizational performance cannot be achieved by developing specific tasks; rather, it can result only by continuous and intensive monitoring of organization’s internal and external environment. Moreover, the use of just one or two theoretical frameworks or techniques cannot particularly help the improvement of the organizational performance – at least, not in the long term. As it has been made clear, these theories and models are likely to perform better when being combined – an issue, which should be taken into consideration by strategic planners in modern organizations. References Alderson, W., Wooliscroft, B., Tamilia, R., Shapiro, S. 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