Strategies and policies
The major reason why organizations outsource is to obtain skills, expertise, and technologies that are not available within their organization. Organizations also do so to reduce overhead costs, save money, and concentrate on their core business. There exist alternatives to outsourcing such as building an in-house operation, even though this might prove expensive. Another alternative is co-sourcing, which gives firms the ability to use existing teams based on a partnership approach. Outsourcing will definitely increase in the next five years. This is because key markets such as the US and the Euro have placed emphasis on cost reduction because of the increasing economic pressure from both regions.
Frequent interactions between business and its potential and current customers are essentially in knowing what the customers want. Businesses interact with customers with the intention of providing them with information about services and product, usage of product, and assistance in choice of products and services. These interactions include encounters and relationships between the business and customers. These interactions are achieved through direct communication, social media, organized events, and telephony.
A competitor is an entity or person rivaling against another. In the business world, a competitor is a firm in the same industry offering similar product or service. In order to predict and understand their competitors, they must collect information about important competitors, and use that information to analyze and predict the behavior of that competitor. Through competitor analysis, a firm gets to understand: competitors’ planned actions and strategies; how competitors might react to company’s actions; firm to compete; and how to influence behavior of competitors to the company’s advantage (Hatten, 2011).
Companies diversify for various reasons, which include getting new market opportunities, reducing financial risks, and seeking new challenging business environments. Companies create value through achieving economies of scale and scope, and extension of product offerings in a wide geographic area, while still using the same resources. Companies also create value by achieving efficient allocation of resources since most assets in acquired firms are undervalued. In addition, firm get the opportunity to use same resources in different locations.
Companies may decide to pursue merger and/or acquisition strategy in order to compete since it provides companies with a chance of gaining some experience and knowledge that will definitely provide a source of competitive advantage. Mergers and acquisition provide a source of innovation that can enable a firm venture into new and existing markets with a competitive edge. Pursuing consolidation increases a firm’s size and scope as it provides economies of scale. There is no wiser choice between merger or acquisition since in both case, there are tradeoffs involved.
Benefits that accrue to a U.S company considering international strategy include low cost of operation considering the high cost business operation in the U.S. international strategy also helps in getting new market opportunities and gain knowledge of international culture and customs. Risks involved in international strategy include unpredictable economic conditions, lack of skilled workers in some regions, inadequate transport network, and political instability. Operational and strategic risk may also compromise the ability of a firm to succeed in the international market.
Strategic alliance is an arrangement between two firms that have come into an agreement to share resources and initiatives to carry out a specific and beneficial venture for the sole reason of gaining a mutual competitive advantage. A strategic alliance may be of value when two firms come together to for marketing purposes when they notice that they are losing their market share (Park, 2007) (. For example, British Airline and United Airline formed a strategic alliance in 1988 to market their European and American routes, however, they terminated the agreement when the routes shifted. There exist different types of strategic alliances and they include outsourcing, joint ventures, technology licensing, affiliate marketing, franchising, research and development, distributions, and distribution relationships.
Corporate governance should have a positive impact on the ethical behavior of business, its leaders, and rank-and-file employees. Corporate governance should provide guidelines on how a company is controlled or directed in order to achieve its objectives and goals in manners that is beneficial to all stakeholders and adds value to the company. Such guidelines should provide directions on ensuring ethical behavior to the organization and all stakeholders.
Organizational structure helps everyone within an organization know who does what. It helps in achieving a properly and efficiently functioning business since it is essential delegate resources and people toward achieving organizational goals. The role of organization controls in organization structure is to provide processes and procedures that define the roles and responsibilities of people within an organization.
Organizational culture is those values and practices that make up the unique psychological and social environment of an organization. It is made up of shared beliefs, values, behaviors, culture, and symbols that direct individual actions and decisions at the uncontrollable levels. Organizational culture provides a common ground for decision making and acts as a glue that brings people together. Culture within an organization is created through communication and is kept through defining the culture to be created from the beginning and integrating it into how you hire and treat employees, serve your customers, and the general environment of the organization. Leaders play the role of creating and changing culture within an organization.
Entrepreneurship the willingness and ability to start a new venture or rejuvenate an existing enterprise with the aim of capitalizing on new found opportunities. Entrepreneurial opportunities are identified through observation of trends such as social factors, economic factors, technological advancement, and regulatory statutes; solving problems by observing challenges that people face; and finding gaps in the market place (Hatten, 2011). Entrepreneurship is important in business today since small businesses are critical to the success of the 21st century economy. Small businesses provide services and products that meet the local needs in addition to solving the problems of larger businesses such as routine maintenance, printed stationary, and photography services.
Organization can offer prizes to their employees in order to promote innovate within their organizations. Providing a good atmosphere that encourages and nature innovation and creativity is beneficial to an organization. Internal communication provides everyone within a company the opportunity to clearly understand the objectives and goals of an organization. The management team should encourage innovation by providing challenging environment to innovative employees. It is also essential to give innovators room to play. There exist top innovative companies and these include Cbrite, Amyris, SolaCity, and Apple. These companies have developed top of the range technologies that help in improving people’s life.
The single most important lesson that I have learned from this course is entrepreneurship. The lesson on entrepreneurship will help me after completing school to start my own business. I was happy after attending the lesson since I got new ideas on how I can handle life without the need to look for employment.
Park, S. (2007). Strategies and policies in digital convergence. Idea Group Inc (IGI).
Hatten, T.S. (2011). Small business management: entrepreneurship and beyond. Connecticut, U.S.: Pennsylvania: Cengage Learning.