ADM Building and Property Services - Essay Example

? Managing Small Businesses: An In-depth Look at ADM Building and Property Services Introduction Despite the considerable economic contributions fromsmall and medium-sized enterprises (SMEs), numerous researchers have pointed out that there is limited evidence with regards to the management of small businesses, such as the management of quality or human resources (Baron 2003; Mayson and Barrett 2006). The management of small businesses, however, has emerged to be a very important concern for owners and managers alike, thus the need to gather further evidence on how businesses of smaller size have been able to manage and facilitate their operations. Previous studies that have indicated specific activities in small businesses, such as formalized business planning, employee training, managing of product/service quality, and improvement of managerial behaviour, have all been associated with enhanced firm performance (Ibrahim, Angelidis, and Parsa 2004; Pajo, Coetzer, and Guenole 2010). The current paper, therefore, aims to look into the working environment of ADM Building and Property Services, a small-sized business in London, and identify their business behaviours and practises in relation to small business management. Primary Research: Interviews with ADM Building and Property Services Employees The following interviews were conducted among 5 employees, 4 managers, and the owner himself, and aimed to determine how business management has been integrated into their overall system, particularly their actual practises and attitudes. Opportunities and Challenges Presented by Small Business Management The first two questions were, however, focused on both the opportunities and challenges that are brought about by being in a small business. According to their responses: “Small businesses can be established at a low cost and even on a part-time basis. Because these businesses that are smaller in size, such as ours, have begun to adopt Internet marketing and have taken full advantage of the benefits that this offers, we have been to respond to specialized niches. Thus, we have been able to take action for what the marketplace demands of us”. “We have established strong relationships with our clients and customers; we have also been capable of identifying their needs and preferences so we can provide more individualized services. Due to such, we have attained a significant increase in development and accountability as well”. “Independence is a very important factor to consider when establishing a small business; this comes with the freedom to make our own decisions, take our own risks, and obtain the rewards for our efforts. There is the lack of constraints that are brought about by economic and other external factors. Nonetheless, allocating long hours for work and understanding that our clients are our bosses have always been a top priority”. “Most often, the problems we encounter are brought about by the pressures from competing with larger businesses. For instance, to find new customers has always been a great challenge for us. To establish a continual flow of business, it has always been very important to focus on marketing the services that we offer”. The Importance of Branding to Small Businesses The next questions focused on the actual management of business, including the importance of branding and the strategies that they use to develop their brand. Their responses included: “Branding is the image that the public has of our business; it does not necessarily refer to the brand that we aim to create but rather the perception of what others have of us. This perception can be affected by various aspects of our business, from the products and services that we offer to the marketing tools that we use”. “Internet usage has been of great importance to us, such as through social media and online search engines. Aside from reinforcing our brand, we also provide clear, relevant, and engaging information to our target audience. Marketing and advertising activities should always be integrated with the brand and the message that we aim to deliver”. “Recognition of brands should also be linked to employee performance; a brand should always be reinforced in the organisation in order for workers to deliver what the brand has promised to current and potential customers”. “A brand proposition that is easily understood and offers solutions to the needs and preferences of the public can improve their perceptions of the brand, thus a possible rise in the number of new customers. However, following through with a high-quality product or service along with continual support for customers may be an unforgettable experience for existing customers. This can consequently allow the business to establish brand loyalty among customers and obtain brand strength”. Marketing Activities and their Impact on Customer and Firm Performance In relation to branding, the participants were also asked about the marketing activities that have been employed and their impact on customers and firm performance. According to the responses: “Through marketing operations, we aim to attract more customers and persuade them to purchase products and services. However, we have been facing the challenge of attracting the most appropriate target population. We believe that the economic performance of the firm can be further enhanced if we are able to conduct target marketing with which we can reach out to customers that we are currently not attracting”. “We have been including offers when we make advertisements to increase the chances of new customers responding to these. Special deals with current customers have also been relevant for us along with setting up joint promotions with other non-competitive small businesses. We publicize their products and services to our customers in exchange for them publicizing our products and services to their customers”. Start-up Strategies Start-up strategies were also included with which the participants, particularly the owner and managers, were asked as to how the business was started in the first place (e.g. start-up strategies). Their statements included: “Defining our business vision was the most important step and has become the strongest driving force for our business to remain. It was our objectives to identify the type of business that was to be established, the products and services that are to be sold, and the plans for achieving growth and competitive advantage”. “Business planning was the sole strategy used to start up the business with which we defined both our short-term and long-term goals. Both our personal and business goals have always been of great importance; these included our desired size of the business or the employment of other individuals to assist us in our daily operations. Financial matters, such as the profit potential of the business, were also considered along with the marketing strategies that were to be carried out to improve our reputation as well as increase sales and the number of customers”. When asked about the involvement of family members in the business, the owner believed that it would be a great challenge to integrate family roles with business demands. As he has stated: “Conflicts are inevitable when family members are involved with business and financial matters. Family demands should also not interfere with business goals; accommodating the needs of one system when the other one is faced with heavy demands can be a challenge for all of us”. Human Resource Management Practises Human resource management practises were also taken into consideration as it can have a significant impact on firm performance, despite the small number of employees. According to the participants: “Finding the right staff and retaining the most capable members are of great importance to the company. We aim to exemplify the notion that quality is more relevant than quantity; however, despite this very important goal, it has been difficult for the firm to provide training and development opportunities for existing employees. This reluctance to invest in training has driven the business to rely on the recruitment of capable individuals who are perceived to make long-term contributions for the group”. “The firm has not been able to establish a working environment with which we, as employees, will be motivated to work. Although meaningful feedback has always been provided to improve our performance, compensation is not satisfactory. Moreover, because we provide building and property services, it is essential that continual training programs are provided to us to remain viable”. “On the whole, believe that the owner and managers of the company have limited knowledge when it comes to managing employees. Fair treatment is not demonstrated in the workplace and opportunities for career advancement are low. I also observe the unjust performance appraisals that point out our needs to increase our competencies; they do not, however, offer development opportunities with which we can increase our skills and knowledge for work. Compensation is also low and does not address my personal needs”. Discussion of Primary Research Findings vs. Theory The responses of the participants exhibited similarities and differences between their opinions regarding the management of ADM Building and Property Services. Findings pointed out that establishing the business entailed business planning with which specific goals and objectives were set. However, dissimilar to the findings of Ibrahim et al (2004) that business planning can result to increased financial performance, the small company was not able to successfully achieve all their goals, such as reaching out to customers to increase customer database and increase profitability. Nonetheless, the ADM management aimed to improve customer service, enhance efficiency, and effectively manage employees, all of which have been identified by Beheshti and Lollar (2003) as important goals for to manage quality in small businesses. Certain aspects of firm orientation, such as a focus on customers and focus on operations, as identified by Reed and Lemak (1996), were relatively addressed by the management. While branding and marketing activities were in constant operation, reaching out to customers, especially target populations, have not been successfully carried out. It was stated by Reed, Lemak and Mero (2000) that managing businesses should emphasize both customers and operations as customers identify quality and quality leads to customer satisfaction, consequently enhancing competitive position. Branding was taken into consideration with which the participants regarding the importance of brands along with the strategies that they have been using to develop brand strength. Due to their resource limitations along with the owner/manager’s influence on making decisions, smaller firms may have been branding patterns that are different from those of larger organisations (McCartan-Quinn and Carson 2003). Similar to the statement of Inskip (2004) with which the importance of brand identity was identified, the participants reinforced the idea of branding, as a strategy for consumer goods marketing, to provide a competitive advantage when appropriately used. Through the establishment of a strong brand identity, the brand becomes distinct and conveys its uniqueness. Large organisations are known to carry out well-planned strategies with regards to managing their brands on both a local and international level. In SMEs, however, branding may not be a main priority and may be viewed as a concept that only involves the logo, the products, and the services that they offer. While findings from the interviews indicated the great importance that the participants associated with brands, they did not mention the relevance of visionary management that serves as a guide for making brand decisions and ensures the consistency of marketing actions overtime (De Chernatony 2001). Brands should be linked to the values and culture of the organisation; most often, entrepreneurs become the foundation for building a brand and creating identity; thus, there should be a clear association with the character of the entrepreneur and the brand that he/she is establishing. A positive brand image that customers perceive can often lead to high levels of brand equity and loyalty. High brand equity refers to the enhanced value of the product/service when it is linked to a certain brand name along with the meanings connected to it. This can include the awareness of the brand among the customers and their unique associations. However, an important factor to be considered in branding is the delivery of products and services with which the employees should effectively provide the products and services that their brand promises to deliver. This can influence both the quality of the commodities and the perceptions of customers in relation to the brand, and may consequently have an impact on customer preferences, satisfaction, and purchase intentions (Keller 2003). It is also valuable to have these brand associations be related to the needs of customers, whether these are consumption-related or symbolic needs (e.g. group affiliation, self-improvement). On the whole, entrepreneurs play the most important role in conveying the brand and its message; thus, it is important to demonstrate a high level of consistency between the individuality that they exemplify and the brand associations which are suggested. Moreover, there is also a need for entrepreneurs of small businesses to reinforce and develop their reputations to the same level as the CEOs of their larger counterparts. The inclusion of family members was also considered in the interviews with which the owner stated his refusal to allow family members to join the company owing to possible tension and conflicts that can affect either the family or the business. Nonetheless, previous studies have pointed out the contributions of enabling family members to become involved in the business, particularly firm performance and business success. For instance, family members may work without being paid or that family assets can be used for securing a loan. Olson et al (2003) indicated the high level of gross revenues that can be obtained when family members are involved in the business. Technical assistance and emotional support from the family towards the owner can also increase the chances for family success (Danes and Lee 2004). However, small businesses can be adversely affected when heavy family demands are needed to be addressed or when there is a goal conflict between the highly involved and less active members. Nonetheless, the number of generations that are involved in the business can influence the ways with which the owner manages the company and its operation. On the whole, both business management and family interactions can have a significant impact on firm success. Human resource management practises were also considered in the interviews with which employees pointed out the ineffectiveness of such practises. Although it was not necessarily mentioned that the ADM management encountered difficulties in recruiting and finding the right staff members, Barrett and Mayson (2005) found this to be a critical issue in small businesses. For instance, attracting and retaining workers among SMEs are more difficult compared to larger companies as employees to tend to have a less positive perception of employer legitimacy (Williamsoon 2000). Small businesses may be perceived by job seekers and employees alike to have less appropriate or formal employers. Moreover, smaller companies have inadequate financial resources that are necessary for supporting compensation packages that will enable them to directly compete with large organisations (Cardon and Stevens 2004). Similarly, according to the employees, ADM has not been able to provide satisfactory wages that will allow the workers to address their personal needs. Owing to such occurrences, existing and potential employees may view small business employers as less attractive. Aside from compensation, previous studies have also associated training and development with employee turnover. In the case of ADM, there has been a lack of opportunities for employee training and learning with which both the management and the workers are aware of. This occurrence is similar to the findings of Kotey and Folker (2007) with which small businesses are less likely to offer and provide access to formal training among their employees compared to larger firms. Barriers to the provision of adequate training opportunities among small businesses include the costs of training and development events; moreover, similar to the case of ADM, findings of Kitching and Blackburn (2002) indicated the reluctance of SME owners to allocate investments for training as it does not often emphasize organisation-specific problems and practises. Due to such factors, small businesses may tend to rely on informal learning and training activities that are often situational-based. It has become a critical concern as to how the lack of formal training opportunities among smaller firms can create an impact on the motivation, commitment, and retention of employees. Reflection The experience of smaller-sized companies with regards to the managing businesses may have similarities and differences alike when compared to large organisations. While small businesses may be passed down from family generations or be purchased as franchises, an essential component is to conduct business planning with which specific goals and objectives are established. This way, entrepreneurs and their employees follow a common vision and reinforce this goal in all operations and activities. Most often, planning includes the establishment of target objectives that are to be achieved, the specific strategies to realise such goals, financial planning, and the evaluation of all involved factors. The involvement of family members in the business have also been considered as a beneficial strategy as they can provide long-standing help and support for the owner; however, other owners prefer not to involve their family with the business as heavy demands and conflict from each side may negatively affect the other. Marketing strategies have also a great influence on firm success with which target customers can be identified and their needs and preferences be determined. The use of the Internet among small businesses has been prevalent owing to its cost-efficient benefits and reduction of time and efforts necessary for marketing products and services. Social media and online search engines, for instance, have been a common means of advertising one’s commodities. Establishing brand identity through marketing operations have been viewed as a fundamental process that can attract and retain customers, thereby helping increase profitability. It is important to convey the message of a product/service in a clear and precise manner with which potential customers will be encouraged to have a look at the commodities and existing customers be motivated to increase their purchase intentions. Employee performance with which employees should be able to effectively deliver the promised product/service plays an important role in establishing and strengthening the brand. Practises for managing human resources greatly contribute to the performance and success of small businesses, despite the small number of employees. Attracting, selecting, and recruiting the most appropriate staff members have been a challenge to many along with training and developing current employees. Smaller-sized businesses are known to have fewer financial resources for providing training opportunities to their employees, particularly those who are in need of continual education to ensure the quality of their work. Training programs that can help increase learning, especially our skills and knowledge, can further make significant contributions to the company. Moreover, small businesses may be considered by many as less attractive and favorable due to fewer opportunities for career advancement. Compensation is often at a lower level compared to their larger counterparts and may also affect the satisfaction and commitment of employees toward their jobs. Performance appraisals may play an important role for enhancing the performance of employees; however, the lack of training and learning processes can still be an obstructing factor. 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