Management and the Cultural Industries - Essay Example

?Management and the Cultural Industries Is there still a place in the contemporary cultural industries for small, independent producers, or is it only possible for large conglomerates to compete effectively in today’s globalized cultural marketplace? What are the implications of your answer for cultural workers? With the advent of globalization all over the world, companies of all sizes have becoming competition for each other. The debate over the positive and negative effects of globalization is a hot topic for many individuals, agencies, organizations and government departments who find themselves in a position to defend or attack the current globalization trends (Foss, 2005). Most experts say that larger corporations have the resources to cater to a large target market; it is the smaller independent producers who are responsible for catering to all the individual needs of the community. To understand this concept we will first look at the importance of this sector in the US economy. The US economy has been chosen because it has an abundance of small individual producers as well as large organizations and both have a significant impact on the consumption patterns of the population. Small businesses are generally the driving force behind most local economies. They contribute to the society by selling their products to customers, products that people need. They also provide employment opportunities to people, which can become reasonable career paths and choices. "Small business drives the American economy," said Dr. Chad Moutray, Chief Economist for the Office of Advocacy in a press release. "Main Street provides the jobs and spurs our economic growth. American entrepreneurs are creative and productive, and these numbers prove it." The cultural workers and their understandings are also very quintessential within the relevant scheme of things because these bring about a vital change in the working dynamics of the business realms and discuss how success could be made a vital part of the organizational setups (Logue, 2001). The argument against this is that large businesses have the financial backing to keep the business profitable even in the face of intense competition. Larger companies are more prepared to take on risk and are prepared to fail. This tendency allows them to make bolder decisions and be more aggressive in tackling opportunities. Successful businesspeople invest in expert advice. As a result, they make better decisions and take the right actions, for what they need to achieve. This investment allows them to not only learn from their past mistakes but make the best possible decisions in the future. Whatever differentiates the large businesses from the small ones, the fact remains that the businesses need to be run in a manner that incites growth, development and productivity across the board. This shall bear a great amount of positive results at the end of the day. Small businesses often are underestimated for the revenue they generate, and therefore they are considered inferior to the large conglomerates. This is however still questionable and we can see how exactly small companies benefit from this increased competition. The small business realms are large ones if they are handled in a proper way. What this implies is the fact that whole-hearted and concerted efforts and endeavors will win the small businesses what they aspire the most, and how success will come about with the advent of change within the technological manifestations which are taking place on a constant basis. How Small Businesses can effectively compete with the Larger Corporations? As we have seen above, the small business sector is really competitive even in this global economy, however now we must identify how this is possible. One of the biggest resources that companies can use is information technology, where companies can seem more professional to their customers. Using proper information technology tools and resources even small business can expand their customer base and carry out business outside their own comfort zone. Small businesses are making smaller investment in technologies such as email, video-conferencing, etc., all to make them more competitive in the global arena. In addition to the social networking sites, blogs have become a highly effective way for small businesses to position themselves as experts on issues that are important to their customers. This can be done with a proprietary blog and/or by using a backlink strategy wherein the marketer comments on other blogs and leaves a link to the small business' own website. Another major benefit of operating a small business can be the focus on a niche segment of the market. Large companies may not have the resources to cater to all different markets individually and hence they may not remain appealing to most consumers. The smaller companies have a more targeted approach, and consumers feel that they are being catered to. It is this individual attention that becomes the unique selling proposition of the company which it must hold onto if it is to remain profitable and have continued growth (Bridge, 2003). As you research and gain knowledge in your niche market you will also build your confidence, both in your niche marketing strategies and in your business in general. Not only does this build your knowledge of the niche market but it also builds the visitors confidence that they are dealing with an expert on the subject and this will keep them coming back for more. It gives your business more credibility and greater confidence among the consumers. Adapting to change is another factor that is more suited to smaller firms. Since they do not have a lot of capital tied up in items such as inventory and other balance sheet items, they can easily mold their production and other business practices to suit those required by the market. This greater flexibility is beneficial because they are in a much better position to cater to the needs of the customer. However, the small business owners must be aware of the changes taking place and give the business a chance to compete, i.e. to take the first step. If the business is not proactive in its approach then larger businesses will use its resources to capitalize on any such situation. Using a proper financing methodology is vital for the existence of the small firms. Often the biggest threat to any small business is running out of finance. This is largely due to the fact that they take up to much debt to compete with the larger firms. A much better approach would be a much safer credit policy which not necessarily mean taken a lower amount of debt but rather using the debt to affectively finance current and future operations. In addition to ensuring that the business has enough capital, the small business owner must also be mindful of contribution margin (sales minus variable costs). To break even, the business must be able to reach a level of sales where the contribution margin equals fixed costs. When they first start out, many small business owners under price their products to a point where even at their maximum capacity, it would be impossible to break even. Cost controls or price increases often resolve this problem. Other than the financing, it is important to keep your overhead low. Overhead includes anything that does not directly relate to earning money, such as office space and supplies. Working at home or sharing an office space will reduce your overhead costs. This is important because this will reduce the overall price of the good and make it profitable in the long run. Another important aspect highlighted by various experts is the mental mindset that the small companies operate with. Experts have seen that most small business owners do not have a visionary outlook and hence fail to capitalize on opportunities. These managers fail to look at competition as an opportunity, rather look at it as a threat (Tremblay, 2009). This negative mindset causes them problems because they do not want to expand or improve their operations and business. Implications for Cultural Workers 1. Provide exceptional customer service. This is the best thing where small business can really capitalize. But customer service can also be the most difficult thing to manage in your operations. The most critical person to hire in the customer service schema is the manager, says Fromm, since employee turnover is directly driven by manager turnover. More companies are now using online customer services to improve the quality of their services. They must remember that the website is usually the customer's first exposure to your company, so here also the homepage should be personal and user-friendly. Using social mediums such as Facebook and Twitter can also be used to enhance the consumers’ experience. Providing focus customer experiences enhances the company’s image and the customers feel the need to spread the word about the excellent services being provided. Trying to make all the customers fell as if they are the most important is the first step in maintaining long term relationships. 2. Pamper your existing customers. Probably the most important step for a small business is to start focusing on the long term relationships. The theory behind pampering your customers is that when your business grows these people will continue to do business with your company (Denison, 2011). For small business, basic client service can be accomplished by a contact manager system: an integrated solution that lets organizations and individuals efficiently track and record interactions, including emails, documents, jobs, faxes, scheduling, and more. These tools usually focus on accounts rather than on individual contacts. They also generally include opportunity insight for tracking sales pipelines plus added functionality for marketing and service. As with larger enterprises, small businesses are finding value in online solutions, especially for mobile and telecommuting workers. The customers should feel that they are being taken care off throughout the transition period of the company (Sims, 2002). If they do feel that they are not been taken care off they can change their preferences to other companies. 3. Consider collaborating with similar businesses. Although they may not seem to be a very good option but when competition is fierce this may be one of the options. Joining with small rivals to form a 'cluster' that can act as one body to rival bigger competitors may be a way to come up with additional resources. Forming an alliance or partnership with other businesses, even your rivals, is one of the best ways to level the playing field and compete with major players without being at a disadvantage because of their superior size (Casey, 2002). This will allow you to cut down your costs and get cheaper inventory. By teaming up with other small operators, you can compete with big rivals by sharing the cost of marketing, such as getting a stand in a major industry trade show ­ something that you may not be able to afford on your own. 4. Use "loss leaders". A “loss leader” is defined as a product on which you lose money-but through which you also generate sales of other products in your mix. The idea is to price selected items at cost (or even below) in order to entice customers to do business with your company; and then hope that these customers will buy more over-time. Another approach would be to sell a product at a loss, bundled with another that is profitable, such as offering “two for the price of one”. The goal is to entice customers in with irresistible offers, that they will buy other things more profitable to your business (Lee, 2004). 5. Develop a niche and focus on it. Focusing on your niche is really important for the small business. Large corporations adopt a strategy of mass customization where they want to cater to as much of the population as they can. However, small business can focus on a certain small target audience and in the process have sustainable business in the long run (Kay, 1995). The profitable thing would be developing this niche into a mass market. 6. Take care of your employees. Employees are one of the few elements that can transform a small business into a large one. It is important for any business to employee the right people for the job. They are not only supposed to look after the current position of the business but must ensure long term success and growth of the business. It is important for the top managers of the small business to adequately award the employees so that they may continue the work and keep on improving the status of the company (Cleaver, 2002). But even small companies should have a formalized method of dealing with the employees. The company may choose an individual agreement which sets out the wages and conditions of employment, and written contracts of employment can also be provided for employees not covered by an award or agreement. The employees can also be entitled to leave and holidays, where most workers are paid for public holidays, unless they are contract or casual workers who are only paid for the hours worked (Ardalan, 2009). Most workers, who are not casual or on contract, are also offered, paid annual leave, recreation leave, sick leave and long service leave. These and other policies ensure that the employees are reluctant to leave the organization in the future. 7. Use technology to your advantage. Technology is the key thing that has given small companies the ability to effectively compete with larger firms. Technology can give a business a professional outlook without using as many resources (Smith, 2002). Common examples used by experts is the increase of use of email, video-conferencing and the use of handheld devices such as PDAs and Blackberries which give the employees of small business to get more work done in lesser amount of time. 8. Present a very professional image. Small firms competing with big businesses will find that first impressions are vital. Image is crucial to winning the trust of potential customers and retaining the ones that you have. You must be professional, even if you are working from your kitchen table. Professionalism should be seen from every aspect of your business ­ from the way you dress, answer the phone, or design your business cards. Plus, always give the impression that your business is thriving, well established and efficient. Many customers do not mind that they are dealing with small specialist firms; as long as the business has the credibility that they are looking for. Think big and chances are your customers will too. 9. Emphasize the uniqueness of your products. People are often attracted to the idea of getting something unique from a smaller, independently owned business, but are used to the larger selection a corporation can offer. In your marketing and advertising messages, highlight the originality of your stock as compared to the universal stock the larger companies. If you can't compete on price - and most new businesses cannot - then you have to compete with the product itself. And that means positioning it as somehow different from and better than other products of its kind (Stopper, 2004). You do that by establishing a "unique selling proposition" (USP) - identifying a feature or benefit of the product and presenting it as if it were unavailable anywhere else. 10. Give your company character. Most big companies have the same corporate look, often impersonal. Small businesses can focus on making their business stand out by giving it an inviting character. Greet customers as they enter the door, and let them know that the whole staff are nearby if they need any help. Never let them have the feeling that you are inadequate and are lacking in certain areas. Developing a corporate mascot can help in this process. Once you have established an icon for your company, business mascots can be used in all of your marketing materials and advertisements. They can be positioned specifically to help direct the eyes of the reader where you want them to go in a printed advertisement (Covin, 1991). Conclusion We have seen above that although globalization has made smaller companies more vulnerable however if they use their resources more wisely they can compete and have a bigger market share than the larger corporations. Large companies can learn from the smaller companies and make themselves more flexible. The smaller companies must not be scared of these larger corporations and by following the guidelines stated above they can make a sizable profit and make continuous growth. It is a fact that the today’s globally changing landscape has excited individuals and companies left, right and center (Galbraith, 2000). It has given the smaller companies a chance to outshine the bigger competitors, who want to have the larger share due to their immense size and the resources that are available within their fore. What best can be done under such domains is to grow out of proportions and understand the market well, before moving ahead any further. Bibliography Ardalan, K., 2009. Globalization and culture: four paradigmatic views. International Journal of Social Economics, 36(5) Bridge, S., 2003. Understanding Enterprise, Entrepreneurship and Small Business. Palgrave Casey, M., 2002. How to Think about Globalization. First Things: A Monthly Journal of Religion and Public Life Cleaver, T., 2002. Understanding the World Economy. Routledge Covin, J., 1991. Corporate Entrepreneurship and the Pursuit of Competitive Advantage. Entrepreneurship: Theory and Practice, 23 Denison, D., 2011. Managing cultural integration in cross-border mergers and acquisitions. Advances in Global Leadership, 6 Foss, N., 2005. 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