The Economics and Management of Small Business - Assignment Example

Introduction It is evident that the life style of people all over the world has gone through so many changes. The changes in people's lives have been due to the vast changes in technology. Moreover, there has been the issue of globalisation that all countries need to join hands to fight against poverty and to ensure equal access of resources all over the world. This has not left the government sectors out as they have continuously changed their form of governance in every country to cope with the changes that are being experienced in the people's everyday life. The business entity has been affected highly by the fact that the lifestyle, efficiency of the people and the government support system has changed over years. It is important to look at how the people have changed over the years and how the business sectors in North America, Western Europe, Japan, and Australia have been affected. Lifestyle The people's lifestyle change can be seen through the change in culture. Culture can be defined as a way of life or the people's beliefs in commanding their everyday life. It is evident that the people's culture is tending to that of a global culture. This is because there has been so much interaction around the world that people are now appreciating other cultures. In addition, people are now copying different cultures as they find them to be very attractive. On the contrary, people are abandoning some of their cultural beliefs as they find them primitive and a hindrance towards economic and social growth. The changes in people's lifestyle have seen small business either closed down or make more profits. For rigid companies that are not yet ready to adhere to the changes of the people, have been ignored as people try to look for businesses that can provide what they really need currently. This has not only affected the small businesses but also the international companies that are found in the developing areas like North America, Western Europe, Japan, and Australia. Such companies produce goods and services targeting people all over the world. Thus they have to know what cultures people hold in the different areas so that their products can be marketable. This has led to so many companies conducting research before implementing any project within a country (Starkey, 2001). Even though culture is becoming global, there are some countries where people have decided to hold their cultures and all business entities have to be put such things in to consideration. Countries like Japan hold their cultures strictly thus it is hard for an American company to ignore such issues while it is exporting its products or services to Japan. It has to put the Japanese culture in consideration so that the businesses can sell their products and services successfully. Moreover, the businesses have learnt to be a little bit flexible as they export their goods, they also consider that other people with different cultural backgrounds can be found in specific areas. For example, a company built in London will produce goods that will definitely put the Japanese culture in consideration but it will also consider the Europeans who are living in Japan. Thus the country will tend to export more of the Japanese oriented goods and at the same time some for those Europeans. Thus small entities are now growing because they have become very flexible in adapting their production of goods and services to the lifestyle changes of the people. This has also increased the competitiveness of the small businesses making them to expand and thus becoming big. Marketing strategies are now changing and the companies are now implementing new strategies. Due to the changes in people's lifestyles, companies need to implement new communication strategies to ensure that they reach their customers effectively. People have become very computer oriented thus communication today is mostly through the use of computers and mobile phones that have features of the computer. For this reason, businesses have their own websites that provide information on the services they provide. Some even transact their businesses via the internet. They also allow customers to ask questions on issues that they do not understand. This has seen so many businesses flourish by using the current technologies (Starkey, 2001). Working environment The working environment has highly changed and this is because the reasons for working have also changed. Currently, people look for employment in companies where they can highly use their skills and knowledge without any kind of hindrance. This has forced very many business entities in the different countries to change their management styles in order to make their employees comfortable so as to increase the production rates. Before, very many people practised the scientific modes and bureaucratic ways of running a business. Despite the rigidity of culture in Japan, companies in Japan have changed their management strategies by including one extra department which is the human resources management. This department has become very famous in very many companies because businesses have realised that employees are a very important in put in ensuring that the production increases and there are efficient use of raw materials. This prevents wastage thus the company makes more profit by producing more goods while utilising less of raw materials (Madeley, 1999). Japan was among the first countries that appreciated the importance of group work. It put workers in circular groups and noticed that when people are left in groups to work without supervision, they produce more than the management expected. The issue of group work is found under motivational theories which are the responsibility of the human resource department. The department is responsible to in training the employees so that they can be equipped with the current skills and knowledge. Businesses have become very flexible in ensuring that their employees have the current skills instead of firing them and hiring other people. The other reason to this is that people would not want to be employed in companies which keep firing people whenever there is a small change. Today people need security at their job areas thus the employers are working on ensuring that their employees feel at home at their work places. The word can spread that the company does not treat its employees well thus people will avoid looking for employment in that company. Moreover, today employees can file law suits if the employer does not adhere to the employment contract. Businesses have learnt that they are making losses through law suits thus to avoid this they are now implementing the laws by having the human resources department making sure that the companies adhere to the employment laws. In addition, high employee turnover is very expensive to the organisations thus companies in such countries want to avoid the costs of turnover rates. Thus they need to implement the human resource strategies to ensure that they avoid costs of recruiting and selecting new workers every time (Storey, 2000). People have also increased their skills in different fields. Today, very many people appreciate education and can stop at nothing to make sure that they have gained the necessary skills and knowledge in different fields. This has become very easy for businesses as they can no longer incur expenses brought about by training employees on things they are expected to have learnt in school. More so, professionalism has increased in the different business entities. Education on different kinds of technologies and philosophies has become world wide. This has highly contributed to businesses gaining the morale to expand by opening their branches in different countries. For instance, the United Kingdom's Tesco supermarket has branches in Japan, America, Australia and different African countries. It expanded that much because it saw the availability of skilled labour that could be found in those countries. Readily available labour is a motivation for different businesses in North America, Western Europe, Japan, and Australia to expand among themselves and in other countries world wide. The availability of skilled labour has also made companies of different countries to merge. This makes the companies to increase their profit margins and more so create employment in different countries thus reducing the poverty levels (Storey, 2000). Government support The government is known to play a very important role in developing a country and more so influencing a people's lifestyle and the business entities. The government is responsible in setting up different laws that influence the flow of raw materials, entries of companies from other countries, employment laws and so on. The governments were much more rigid before. So many governments were protecting their own from outsiders to run away from killing their cultures and to avoid economic exploitation from other countries. Today, the governments have become flexible though they have to hold some rules to prevent encroachment of other government's culture and exploitation. The issue of globalisation has led t so many businesses expanding as they can now freely move to many countries as long as they adhere to the rules of the country. The rules have become les restrictive in the respective countries. North America, Japan and the Western Europe countries have used this chance to expand their businesses in various countries. This has made the businesses to grow over the years. It should be noted that Japan has a very rigid government. This is because it still wants to keep its culture and it fears if it open ups to other countries, its companies can highly be overtaken. Thus it has very strict regulations for any company from outside its country to join. It is characterised by high and very strict employment contracts that highly discourage other companies from different countries to venture in to its market. There are negotiations going on to convince the government of Japan to relax laws (Bannock, 2005). Companies which have been monopolies for years are now facing competition from other small companies that can now freely venture in to the market of the once monopolistic goods. This is because the governments are now focussed in reducing the levels of poverty in their respective countries thus allow other small businesses to produce such products to control the prices. When very many people venture in the production of a good then the prices the product becomes cheaper because of competition. This makes tit easier for the people to afford the product thus equal distribution of resources in eradicating poverty (Bannock, 2005). References Bannock, G., 2005.The Economics and Management of Small Business, Routledge, London. Chapters 1, 3, 4 and 5. Madeley J., 1999.Big Business Poor Peoples: The Impact of Transnational Corporations on the Worlds Poor, Zed, London, Starkey, R. and Welford, R., 2001. The Earthscan Reader in Business and Sustainable Development, Earthscan. Section 1 and 4. Storey D.J., 2000. Understanding the Small Business Sector, Thomson, London. Chapters 2 and 5. Read More