Discussion about Small Medium Sized Enterprise and Large Companies - Assignment Example

Section/# It is without question that one of the defining aspects of business, both large and small, is that fact that the business environment is continually shifting. These shifts create the need for the business entity to change as a means of integrating with the market and continuing to accrue a profit from the goods or services that they provide to the ultimate consumer. Market changes can either prove to be advantageous for the entity or potentially destructive. However, the ultimate determining factor is the manner through which the entity seeks to evolve as a means of engaging with the business environment and forcing the situation to their competitive advantage. Yet, it must not be understood that large corporations are able to benefit from international business at the expense of the smaller firm. The fact of the matter is that globalization and the era of increased technology has created a situation in which even smaller firms have the potential to penetrate deeply into foreign markets and integrate the respective consumers with their good or service (Holburn & Zelner, 2010). Whereas it is of course true that certain large corporations have the financial capital to present products or services more rapidly and to a greater degree of depth, many small firms have seen rapid and exponential growth as a result of effective integration with international markets; effecting a situation in which these firms are oftentimes able to eventually become larger, more dynamic, and more powerful both within their own domestic market as well as the regions that they provide goods or services (Gupta, 2013). Although there are many areas of dissimilarity that exist between small and large firms, within the arena of business strategy, both of these entities behave in somewhat similar ways. For instance, the choices and decision matrices that these respective firms must engage in as a means of staying relevant and profitable are almost identical (Ainsworth, 2013). A quick review of the Ansoff Matrix reveals the fact that whether or not a firm is considered as large or small, it must continually make the decision on whether it is within its best interests to diversify, proceed with market development, engage with market penetration, or focus upon product development. In this way, the overall approach with regards to business strategy can be seen as not contingent upon overall size or financial wherewithal; instead, it is contingent upon the immediate needs that exist within the market. Further considerations can be predicated on cost advantage, market dominance, price leadership or other approaches. Again, a determination based upon strategy is not contingent upon the overall size of the firm; instead, it is shared between both large and small firms. International business and multinational enterprise faces a litany of different challenges. Obviously, one of the first challenges is with respect to integrating with a broad demographic and promoting a given product or service in a unified manner; while at the same time being cognizant of unique cultural and ethnic differentials that promote a different understanding of the product or service within different groups. Furthermore, before any of these considerations can or should be made, there is a simple process of business development that must be engaged (Lucea & Doh, 2012). This necessarily refers to the process of decision-making. Naturally, before any choice can be promoted or any particular approach can be champions, and decision-making structure must first be engaged in order for the respective stakeholders to determine which path forward promotes the best interest for all individuals involved. Accordingly, the discussion that will follow will engage the reader with an overview and analysis of many of the decision-making concerns, approaches, concepts, and realities that face individuals within the realm of multinational/international business enterprise and decision-making (Wijen & Tulder, 2011). It is the further hope of this author that such a level of engagement will further the understanding of these concepts and promote a more readily identifiable metrics through which decision-making can take place irrespective of what particular group or enterprise engages in. Depending on the situation, one of the first concerns that a multinational or international firm must engage is whether or not a given approach is in the best interests of profitability, longevity, and/or promotion of core business interests. As a function of this concern, businesses must engage in the following as a core complement of their decision-making structure: Defining and measuring the alternatives and potential decisions as compared to immediate and long-term profitability issues Weighing the past decisions, both within and without of the firm in question, as they relate to how future performance within a given scenario might be reflected Engaging stakeholders as a means of delineating a strategic approach towards the decision structure and ensuring that all relevant information that can be gathered within reasonable period of time is However, beyond merely the realm of profitability, international and multinational firms must also be concerned with ethics (Zhing, 2004). The recent past has indicated that a litany of different firms have abided by ethical standards within their home country; only to find themselves at fault of violating an ethical standard in one of the markets that they operate in (Eden et al. ,2010). Oftentimes, this violation of ethical standards is not intentional and is the product of a situation in which a court level of research is conducted and/ or a level of assumption is promoted with regards to the way in which an international market operates as compared to the legalities and ethics of the manner in which the domestic market operates (Gabrielsson & Gabrielsson, 2012). As a function of this ethical consideration and the need for an ethical response framework towards decision-making, it is incumbent that international and multinational firms engaged in the following aspects of ethical decision-making: Defining what stakeholders are involved and determining the impact of these involvements Asking the proverbial question of, if this information or publicly available in printed on the front page of every newspaper, would we be comfortable with such an eventuality” What ethical direction does the choice or choices that are indicated within a given situation promote for future development of the firm Attempting to promote the needs of the client, the supplier, and the employee without engendering any degree of ethical conflict in decision making amongst and between these stakeholders Although there is most certainly a plethora of decision-making structures that can be leveraged in attempting to engage thoughtful change in an organization, perhaps the most simplistic and ineffective is with regards to Hodgson’s Three Stage Framework (Grimsby, 2010). Within this three stage framework, the first stage of decision-making is necessarily: Examining the situation, getting critical facts, identifying key stakeholders, and identifying the options that face of the stakeholders. The second step involves identifying the norms that surround each principle, projection of possible outcomes for the stakeholders involved, a determination of the actions necessary to produce a given outcome, and stating the dilemma. Finally, the third level of engagement, according to Hodgson, begins with identifying principles behind its option, comparing these principles, and finally choosing the option that represents the most responsible principles as the final decision. Although Hodgson’s approach to decision-making might appear as overly formulaic and/or scientific, the fact of the matter is that decision-making structures within multinational, international, and even small enterprises should necessarily follow a similar approach. All too often, decision-making structure follows the rigid approach. Invariably, such an approach does not factor in all of the variables or consider the need for maintaining ethics and/or promoting the most responsible principles in the final decision (Verreynne & Meyer, 2010). Whereas performing business at international level creates a litany of different problems and issues that stakeholders must be aware of, it should not be automatically assumed that the decision-making structure that exists within these entities is necessarily completely dissimilar to the decision-making structure that should exist for a domestic small enterprise. Ultimately, concerns and stakeholder’s impact, profitability, ethics, principle, and a litany of other factors all must be engaged in each and every decision that is made. The end take away from all of this is not necessarily the fact that each and every organization must have a rigid structure through which the engage decisions; rather, a far more actionable understanding is with respect to the fact that a culture that promotes a structured response to decisions is ultimately far more likely to experience a level of success in the business environment as compared to a culture that makes each and every decision based upon a different set of metrics. References Ainsworth, J 2013, Business Languages for Intercultural and International Business Communication: A Canadian Case Study,Business Communication Quarterly, 76, 1, pp. 28-50, Business Source Complete, EBSCOhost, viewed 31 January 2014. Eden, L, Dai, L, & Li, D 2010, International Business, International Management, and International Strategy, International Studies Of Management & Organization, 40, 4, pp. 54-68, Business Source Complete, EBSCOhost, viewed 31 January 2014. Gabrielsson, P, Gabrielsson, M, & Seppäl, T 2012, Marketing Strategies for Foreign Expansion of Companies Originating in Small and Open Economies: The Consequences of Strategic Fit and Performance, Journal Of International Marketing, 20, 2, pp. 25-48, Business Source Complete, EBSCOhost, viewed 31 January 2014. GUPTA, A 2013, STRATEGIC ALLIANCE: INTERNATIONAL BUSINESS STRATEGY, Asia Pacific Journal Of Research In Business Management, 4, 7, p. 1, Business Source Complete, EBSCOhost, viewed 31 January 2014. Grimsby, B 2010, BUSINESS POLICY & STRATEGY Conference Paper Abstracts, Academy Of Management Annual Meeting Proceedings, pp. 1-152, Business Source Complete, EBSCOhost, viewed 31 January 2014. Holburn, G, & Zelner, B 2010, Political capabilities, policy risk, and international investment strategy: evidence from the global electric power generation industry, Strategic Management Journal, 31, 12, pp. 1290-1315, Business Source Complete, EBSCOhost, viewed 31 January 2014. Lucea, R, & Doh, J 2012, International strategy for the nonmarket context: stakeholders, issues, networks, and geography, Business & Politics, 14, 3, pp. 1-30, Business Source Complete, EBSCOhost, viewed 31 January 2014. Verreynne, M, & Meyer, D 2010, Small business strategy and the industry life cycle, Small Business Economics, 35, 4, pp. 399-416, Business Source Complete, EBSCOhost, viewed 31 January 2014. Wijen, F, & van Tulder, R 2011, Integrating Environmental and International Strategies in a World of Regulatory Turbulence,California Management Review, 53, 4, pp. 23-46, Business Source Complete, EBSCOhost, viewed 31 January 2014. Zhing, C 2004, INTERNATIONAL MANAGEMENT Conference Paper Abstracts, Academy Of Management Proceedings, pp. 1-69, Business Source Complete, EBSCOhost, viewed 31 January 2014. Read More