Identifying Themes and Concerns for the Benefit of the Individual Business Manager - Literature review Example

Identifying Themes and Concerns for the Benefit of the Individual Business Manager Introduction In the highly competitive environment of global business, organizations need to evolve innovative mechanisms and develop business capabilities to gain leverage or to maintain their competitive advantage. The onus of responsibility and strategic planning of the business manager therefore, becomes a highly pertinent issue for the managerial leadership. Organizational performance becomes the key motivating factor that is significantly driven by internal and external issues. Indeed, while internal factors and issues are intrinsically linked to organizational productivity, the external elements and unstructured issues pose serious challenges to the managerial effectiveness. It is vital for business manager to anticipate and identify them so that they can be exploited as new opportunities of growth. Thus, business managers are important linkages that integrate external opportunities and organizational growth by identifying themes and concerns for the benefit of the organizations. The paper would be discussing four major themes that have emerged as critical external factors which considerably influence the productive outcome of the firms and help it to maintain market leverage. 2. Thematic connection of external issues/factors that influence organizational performance The characteristics of emerging external and unstructured issues are essential paradigms that need to be identified and evaluated for evolving effective strategies so that issues can be resolved early and turn impending failure into stepping-stones of success. The tangible and intangible elements of external environment often create hassles that adversely impact organizational growth. They become major contributor for its deteriorating performance. Slater and Narver (1995) believe that firms which constantly make efforts to acquire, process, and circulate information across the organization about markets, products, technologies, and business processes etc., tend to succeed in anticipating changes and meeting them with creative and flexible approach. Consequently, managerial leadership of business managers become key enabling element that helps firms to maintain its leverage in the market against all odds. The following four themes are critical factors that influence organizational performance. 2.1 Globalization Globalization has emerged as one of the most important external issues that has long term cascading impact on the organizational processes and performance. Globalization can be broadly defined as ‘the diffusion of goods, services, capital, technology, and people (workers) across national borders’ (Sirgy et al., 2004: 253). Technology has been major facilitator that has accelerated the pace of globalization and expanded business potential across wider geographical boundaries. It has expedited economic liberalization, thereby greatly expanding scope for international businesses through foreign direct investment in various sectors in foreign countries, promoted cross border mergers and acquisitions, partnership, export and import of goods and services (Hill, 2009). Most importantly, regional and local interests of people have been brought into the centre-stage of world market which has become crucial inputs for firms to go global expansion. Globalization has also brought into the forefront the issue of inter-dependency of resources across nations and how they can become critical inputs for organizations that can be exploited for mutual gain. The paradigm shift in the development processes and agenda of organizations has been influenced by the globalization as various resources; including human resources have made significant contribution to the productive outcome of firms. It has provided firms with plethora of choices for effective supply chain management as well as creating huge market for goods and services. Foreign firms contribute significantly to the development processes of the host nations through generation of employment and using local resources. A the same time, foreign firms are able to get cheap labor and raw material at competitive prices which help them to maintain their niche position in global market. Thus, globalization promotes mutually beneficial platform for people and business across the globe. Globalization is also an important facilitator for business managers to explore and exploit fresh opportunities of growth. Moreover, in the era of economic downturn, it can provide firms with new channels of revenue as they can not only create demands for their goods and services in foreign locations but can explore new market conditions and resources for improving and improvising their business processes. Firms can develop competitive supply chain; explore new product development for meeting the needs and requirements of new market etc.; promote new agenda for environment, CSR, intellectual property etc. which would give them leadership position and help them to maintain competitive edge in the global market (Wall, Minocha and Rees, 2010). Various paradigms of globalization therefore become important issues for managerial leadership to critically evaluate and adopt for enhancing organizational productivity and performance. Public image and social issues have also become necessary external factors that impact firms’ credibility and performance. The corporate social responsibility and firms’ contribution to the society within which it operates has increasing become vital issue that influences customers’ purchase decisions (Porter & Kraner, 2006). The firms’ activities, risks and most importantly, their proactive participation in the development of the society through tangible and intangible means tends to create a facilitating and friendly image that endorses their credibility amongst the customers. It is reflected in the customers’ committed loyalty towards the products and creation of strong brand identity across the globe. Globalization therefore forces firms to promote ethically delivered goals and create credible market image. 2.2 Change management Bateman and Snell (2009) assert that it is vital for organizations to change and keep pace with the changing times because the environment within which they operate is in a state of constant flux. The internal and external demands influence the performance of the firms. The constraints of external environment are important factors which need to be analyzed, evaluated and exploited for gaining leverage against one’s rivals in the industry. Managerial initiatives in the areas become major drivers of success as the firms can fail in the competitive market if change is not anticipated and exploited for new opportunities (Drucker, 1999). External environment is intrinsically linked to a firm’s performance and therefore change management needs to be evolved as key strategic issue within the broader spectrum of organizational vision, mission and strategic planning. Montgomery (2004) strongly believes that flexibility of approach and dynamic strategies must become integral part of business goals and objectives as it would constantly motivate firms to be prepared for changes and meet them with creative input. The changing dynamics of the global business necessitate development of distinctive capabilities that can give the company market leadership. In the current environment of cutting edge competition, firms need to continuously make effort to identify factors and issues that would help produce the desired outcome with efficiency. An innovative approach and greater flexibility facilitate firms to evolve new mechanisms of identifying critical factors that impact performance. It enables firms to exploit the issues and factors for sustainable performance. Rockart (1959) had conceptualized critical success factors which provide firms with distinct capabilities and resources for maintaining their competitive advantage. He believed that market volatility and changing dynamics of business, demand innovative approach that would help firms to constantly identify factors that are essential to the success of the firms. Change management is inherently linked to managerial leadership initiatives. Business managers test new approaches by exploiting changes in external environment that can boost their performance, profit and market credibility. While technology has accelerated development processes of the firms, dynamic leadership of managers helps firms to create new ways of competing. They diversify and introduce new products and services that can meet the changing demands of the people. Indeed, in the hyper competitive market, the short life cycle of the products and services have emerged as crucial issues which force firms to be on the edge and innovate to give something new to customers (D’Aveni, 1997). They do so through value addition or by new product development that anticipates customers’ requirements and needs. 2.3 Diversity Diversity has evolved as essential paradigm of a firm’s success mainly due to rapid globalization and technology advancements that has resulted in multicultural societies. Business primarily caters to the demands of the customers. Consequently, companies need to take into considerations the changing socio-cultural equations and meet the demands of people coming from different race, color and nationality. The diverse populace and their changing perspectives and preferences are new challenges that firms meet through myriad ways (Baker & Hart, 2007). Understanding cultural differences helps firms to redefine their market strategies and target new customer segment that can give them fresh incentive and new market for maintaining market leverage. Another aspect of diversity that firms are exploiting is the cultural competencies of the diversity. The changing cultural dynamics are strong facilitator of change and significantly impact international businesses (Ghauri, Pervez and Cateora, 2010). Cultural competencies often provide firms with unique capabilities and knowledge that provides them with market leverage. At the same time, expansion across borders necessitates cross-cultural understanding which is important to understand the cultural dynamics of the region so that effective strategies could be developed in order to exploit the vast potential of the emerging markets (Korkman, 2006). Understanding the value system of the diverse populace within and outside the firms not only contribute to the success of the firm but also demonstrate the importance of external environment that significantly determines the success and failure of firms in changing business dynamics. 2.4 Sustainable development Sustainable development and sustainability of resources have emerged as powerful determinants of success in the contemporary times. The environmental issues and maintenance of ecosystem so that future generation can continue to enjoy natural resources and benefit, have become hugely pertinent issues for organizations. The sustainability of resources has wide ramifications for the businesses and the society at large. The technology has empowered people and provided them with huge information that they are increasingly using within their purchase decisions (Kashani, 2005). The awareness regarding sustainable practices of businesses are influencing consumption habits of the customers across the globe. Handgraaf and van Raaij (2005) claim that products that endorse value system which contribute to quality of life and promote sustainability of resources, significantly improve wellbeing of consumers. This is important revelation that shows people’s increasing preferences for goods and services that are produced through sustainable business practices. Thus, business managers are using sustainable business practices to influence customer purchase behaviour. 3. Conclusion The awareness of external environment is essential ingredient of managerial leadership that enables it to identify new and unstructured external factors that could adversely impact firms’ performance. The four external thematic issues as discussed above are highly relevant as they provide managers with fundamental understanding of issues which impact performance. This helps them to be prepared to meet any new challenges with critical thinking and evolve innovative solutions. Indeed, the leadership initiatives of the managers become the key strategic tool that turns adverse situations into new opportunities of growth. It capitalizes on its strength to meet turbulent issues and explores change for new opportunities that can be generated through it for developing business scope. Thus, the four themes encompass unstructured issues also which can be anticipated and evaluated for factors that contribute to their success. Reflection The four issues are hugely relevant for organizational success in the current times. As a mechanical engineer with wide experience across the auto industry, I believe that these four thematic issues significantly influence organizational performance. I am presently working in VTL which had started as a small UK firm that has now become a global player. It had explored and exploited potential of emerging markets like India and Japan to create a niche place in the global market. It was able to succeed in the highly competitive industry in the automobile segment because it shrewdly exploited and applied the issues within its business processes. Moreover, it used local resources and exploited cultural competencies to produce world-class products at competitive costs. VTL’s global presence is distinct in its cultural diversity and evolving global values that meet the demands of the diverse clients. The managerial leadership at VTL promotes sustainability of resources within its business operations which has lent it a global credibility. Indeed, the effective organizational leadership promotes innovative approach. The four external issues have provided the firm with broader framework of understanding that help it to challenge the status quo within industry and meet the challenges of 21st century. (words: 2007) Reference Baker, M.J. and Hart S.J. (eds) (2007) The Marketing Book, 6th edition, Butterworth-Heinemann. Bateman and Snell. (2009) Management: Leading and Collaborating in a Competitive World, 8th edition, London: McGraw hill. D’Aveni, Richard. (1997) ‘Waking Up to New Era of Hypercompetition’, The Washington Quarterly, vol. 21, no.1, pp.183-195. Drucker,P. (1999) Management Challenges for the 21th Century, New York: Harper. Ghauri, Pervez N. and Cateora, Philip R. (2010) International Marketing, 3rd edition, London: McGraw-Hill. Handgraaf, Michel J. J. and W. 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