Business World Today
Modern business operations are gradually transforming their systems, structures and policies to comply with the competitive initiatives. This implies that a business should streamline operations to not only satisfy customers, but compete favourably in their environment. I think a business manager should invent various ways of shaping his business to match the emerging trends that are coming up. Key developments that define business in the 21st Century are numerous and need to be tackled independently to ensure that vital concepts put in place. Technology is a significant development that needs substantial investments and expertise to improve the quality of services and efficiency. A business must consider all the benefits and cons that staffs and management will attain using technology. Therefore, business development in the current century involves diverse levels of development. However, a business can only operate successfully if financial budget maintained is free of unexpected expenses. This is prudent because of the prevailing financial crisis that affects operations of firms and can lead to closure of the firm. Financial crisis affects several firms in an industry and should be used, as an advantage, to counter diseconomies of scale that other firms might face in the long run. At this level, firms are seeking financial assistances from financial institutions, but face challenges in servicing the loans back. Current financial reflections indicate situations where business corporations cannot sustain their recurrent expenditures.
Levels of business development
Product level
I believe that this is the crucial level since it encompasses introduction and development of new products of technology. Just like a new product, a business also needs to undergo transformations that shall improve public reputation and promotions. This is the level that a business can be disruptive or incremental because developments can either increase the functionality of a current technology or introduce new elements developed from scratch.
According to my observation, I think the best option would be starting from fresh ideas and building different concepts in the industry. This indicates that an incremental constant development is an addition to already existing products. For instance, I may add some distinctive features to a product to make it put a mark in the market. Discontinue developments normally change the method people use their business in the future since it affects the overall industry. I normally like advertisements because they are always creative and influence undecided clients to embrace a company’s new products. This is an example of an incremental level since the contents of the advertisements may entail different ideas that are unique in that industry. Since products or services are the main operations that generate revenue to a business, it should have a persuasive and aggressive plan of development that is technologically inclined. Therefore, development in this era requires active participation in the affairs that will influence customers to like products from a company. To me this is a better perspective as it is crucial in enhancing sales and productivity of a company. Product level of technology is also dependent on other salient aspects that must be incorporated in the development of firms.
Commercial level
This level happens to be the simplest approach as it entails searching pure and new clients in different market segments by cold contact. It is a strategic system that requires sensitively driven work using strong sales personalities who are capable of managing numerous tasks. This is due to the reality that not all market segments will offer similar reactions to a product or a service, so the facilitators should be ready to push for customers to consider their products. My conviction is that a business is defined by the market share that they command in that industry. Therefore, for a business to develop it must control several market shares that make it a marker price setter in all products and different segments. This will make the business survival through the three cycles of a product. This is achieved by organizing channels or sales groups in all-inclusive structure to allow them cover a large geographical area. A business can employ the services of middlemen to offer information on the different preferences of customers in the localities. The middlemen can consist of distributors, wholesalers or franchisees that are close to the final consumers.
This is the vital level of penetrating all sections that shall ensure greater returns and better study of competitors and their products. Development of a business takes different phases and transformational strategies in the current century. However, in most cases these representatives are called resellers or dealers because they occupy functional position in the channel linkage. Another level includes value chain level, which is about creating fresh merchandise. Value chain level can be effective if technology is developed properly in the organization to facilitate integration of platforms to create other products. This happens because a whole product is made up of multiple technologies that enable it produce high quality services to clients. It is essential that technologies are outsourced, from other competent firms, to save time for concentration of other areas of product development.
Corporate level
Sometimes it is always difficult for organizations to choose the best alternatives regarding services to use. This arises due to financial constraints or shortage of suitable competencies that can deliver favourable development strategies. I understand that this level involves strategic decision making organs that entail top management personnel. This is the corporate development phase, and it focuses on not at the product or commercial level, but the entire business, financial and legal levels.
At this stage, in order for a business to expand to other areas, it might consider mergers and acquisitions (M&A), combined ventures, direct equity outlay and strategic pacts. I doubt if a business that cannot perform in the domestic market can do well in other markets. The only benefit that can occur is if the other business in the pact commands a sizeable market share in the new segment. This indicates that, in this venture business program, firms are dealing with portfolio inquiry, corporate investment, contract law, fiscal policies, social law, anti-trust law, and change controlling and culture supervision. The business must scrutinize the different elements of the new market prospects concerning legal formalities, cultural inclinations in regard to the product introduced. Other aspects may include the amount of financial investment to be relayed in the entire project and the contractual laws binding the two organizations. These are vital aspects because they may also turn out to produce losses to the business yet other favourable local competencies were viable for considerations.
Similarly, I think that organizations can have other various motives to hire organizational capabilities. For examples time to break the market admission blockades, patent security, legal restrictions, business or application complementation, cash flow and return variation. These are challenges that can jeopardize operations of a business and negatively affect growth proposals of the firm. Formation or expansion of business output requires comprehensive plans that cannot fail during execution. However, I observed that the levels of above can contribute to the development of a business, and it depends on the strategies that a unit decides to employ for the long and short terms. The options also depend on the objectives and capital outlay of the firms in establishing good customer satisfaction and productivity.
Competition
Competition determines the performance of a business in the market and can significantly influence development potential of a firm. I find it possible for all businesses to be ready for competition because it ensures production of high quality services and client contentment. Competition is also a factor that is closely related to technological advancement of the corporation. I realize that technology is a vital component in the 21st Century and is significant in all business operations from production, advertisement to sales. International competition is the most challenging because of the varied formalities, cultural perceptions and investment proposals. Therefore, global market place and the workforce variations in terms of payments and earnings are among the common facets of this situation. This is because the global market and constantly changing labour force have created the necessity for organizations to embrace human capitals practices, which recognize their human resources as their main competitive advantage. The current trends highlight the growing need for effective, resourceful staffing and retention initiatives. Most human personnel managers will spot the necessity to stay viable with this inventiveness as one of their prevalent challenges. This implies that one of the basic values to assist with this encounter is to apply pro-active and, tactical career management activities that can deliver a strong base for gaining a competitive superiority.
The global marketplace and ever-transforming personnel have created the necessity for organizations to appoint human resources activities, which recognize their human capital as their chief competitive benefit. All organizations ought to identify the ability to develop, execute and manage career administration initiatives, which are associated with their logistics culture and linked into their business policy, goals, and management program. Selecting the exact practices that are suitable for the company involves a persistence process, which should contain the commitment and participation of the senior administration team. Therefore, I would consider it appropriate that once a company has assessed needs and created the initiatives, the management should be well- promoted, advertised and connected with a competent administrative procedure that ensures reliability and consistency of the purpose. Improved conditions for staffs will encourage them to stay at the firm and enhance efficiency in productivity. The current century demands highly skilled personnel who attract favourable wages with matching services offered to the organizations. This will form a competitive edge over firms with inferior and unskilled workers because of labour redundancy. Global markets require experienced workers who can understand varied cultures and adapt to different market expectations. I think this happens better when workers are sourced from numerous companies where they can share skills and ideas through organizational interaction.
Development programs
Investing in developing programs and enterprises that are intended to improve all of the prevailing skill-sets and those necessary for an organization requires establishment. The management should investigate the trends, designs and practices within the industry and make programs that allow staffs to gain the skills needed to be competitive within these areas.
It involves preparing workers with the required talents and knowledge to do their part in attaining the leverage for keeping ahead of their co-workers within the business.
This is because the significance with development is to be devoted during the tough and trying times as during the flourishing periods. However, this requires a constant commitment to formal expansion plans. It should start from within the organizations through the process of in-house, which focuses on the development and training of servant’s growth and progression. This ensures that companies that pro-actively absorb employee in uninterrupted learning creativities in a manner that maintains their involvement and participation increase their loyalty and obligation. To me, cross-functional choices, divisional flexibility, short-term and durable plans for classifying and distinguishing potential are crucial for employee maintenance. The most significant aspect of planning for the prospect and creating a growth plan that recognizes worker’s interests, potential and progress, is essential and can leverage a company from the competition. Organizations having current performance supervision programs are advanced, implemented and performed in a way that is recommended by senior management. This requires consistent and steady feedback in the plan to evaluate the performance of the company in the market. Managers should also measure their ability to give reaction and assess staff presentation with clear aims, and attainable goals since responsibility are the core focus.
However, a business must strategize for the constantly varying policies and regulations placed by the regime and other agencies. This could entail the growth of tax on introducing goods or services, the implementation of harsh labour regulations or even the prohibition of some goods or services. Ethical factors are also crucial in development programs of a business because they entail perception and reputation on the eyes of the publics. A business cannot expand if it does not have a suitable place to dump waste materials or offer customer relation supports. Ethics incorporates the manners that employees should display within and outside the organization. This maintains perfect relationship between the management, staffs, shareholders and customers. This applies to all firms that engage workers in product development and education. An organization should offer goods that are of substantial quality and price without exploiting customers. Ethical and legal considerations can affect operations and expansion of a business because of stiff competition and formalities. Therefore, a business must plan to perform in agreement with the ethical outlooks of the stakeholders and the society in general. This is frequently changing, and a corporate must make essential to plan for effectiveness.
Hindrances to Business Development
Key developments of a business, however, face some shortcomings in dispelling their operations, which make it hard to develop or attain their targets. A business manager should be ready to identify the shortcomings in good time to avoid experiencing difficult situations and losses. One of the challenges entails insufficient experience about the market or training to implement necessary development strategies. I suppose that a manager should not rush to expand operations without proper consideration of the market circumstances. This exposes the business to risks of experience. The majority of the business owners use a process of experimental and fault. This style can apply when undertaking daily operations, but should not be considered for long term basis. This is only valid at start up phase since a lot of creativity is required and cannot be applied when making challenging decisions. This places most businesses in difficult managerial decisions to identify new trends in the market.
Shortage of experience is mostly due to inadequate education and skills needed to run businesses to prosperity. Majority of the business proprietors lack training and entrepreneurial skills. Education is crucial because people need to be well conversant in terms of skills and administration. This involves employment of technological services that are necessary in the business. A manger or staffs in the management should acquire managerial skills that will enable them to make strategic and analytic decisions.
Investing in the global market expects high capital outlay, which most business in this era is always incapable to raise. This pulls the organizations out of expansion plans since business expansions that do not involve size of the organization, but the output of services or products. I identified that lack of access to finance is a problem for businesses in the world to widen their operations to new untapped regions. It affects selection of technology, which leads to application of inappropriate skill. Similarly, at times, an entrepreneur is required to employ heavy, fixed equipment so that it can serve as a guarantee for credit. There are also emergent capital markets, which leave capitalists with self-financing or contributions from helpers or relatives as an option. This happens because long-term financing is hard to access; hence, no enjoyment of economies of scale. Therefore, the financial challenges include high charge of securing credit, high bank duties and fees.
Another challenge that faces nearly all businesses from developing is due to frequent changes and innovations of new technological advancement. This can arise if business administrators appear to be ignorant of original technologies. The problems of technology are due to lack of exposure to managers who do not inquire on modern information about technology. The other challenge is the cost of acquiring a modern technological skill that can be instrumental in expanding productivity. A company that cannot afford modern technologies cannot compete in the markets and face high chances of losing market shares that they initially owned. Technology is a crucial component towards all development programs of an organization and should be adopted through all strategies.
It is always common for managers to initiate development plans before conducting comprehensive market researches. This ability of having scanty information about the market can lead to poor decisions or sacking of workers. I cannot recommend a business to expand before involving marketing research. There is a vast volume of trade-related evidence available and the opportunity of accessing national and global databanks, but many corporates are not capable to understand statistical data. Since data is available, but businesses cannot interpret them implies that the businesses cannot also prospect their operations in the future. A business should have the capacity to foresee the future prospects without making long-term commitments. I would like to advise managers that modern century exposes business with more challenges and benefits, which they suppose and so it would be practical to engage professionals for consultation services.
Reflection on the Financial Crisis
The recession has had a significant influence in the lives of all Americans. The impact is evident in the corporate world and the daily endeavors of individuals globally. However, the impact of the financial crisis appeared to be fictional and farfetched among the American population. Despite this, the American public was exposed to adverse effects, which manifested the effects of the crisis to the society. In order to comprehend the effects of the financial crisis, there are several perspectives, which can, be employed by individuals. When I look back at the economic recession, the onset appears to be less scary. This feeling can be attributed to the reassurance by the stock market that most of the financial institutions would wither the challenges of the crisis. This resulted in complacency among the public whereby individuals did not strive to avoid the effects of the financial crisis, which was impending. When reflecting on the effects of the recession, it is essential to consider several aspects concerning the crisis.
Observations
One of the issues, which were prominent in my reflection of the financial crisis, was the individuals who were responsible for the crisis. The underlying borrowers in the market appeared to be reckless prior to the recession and the consequent financial crisis. After the financial crisis, the situation changed with the borrowers in the market appearing to be concerned with the effects of the crisis. For instance, individuals who can borrow are not willing to do so while the individuals who were required to obtain loans did not have the capacity be successful when borrowing. When considering the institutions, which were active in the financial sector, it is apparent that the buying side of the economy was lazy and cheap. This meant that they were not diligent in ensuring that there were collaterals for the debt obligations. They were also cheap since they did not engage experts to advise them on the endeavors, an actuality which resulted in adverse effects during the crisis. This situation led to the financial meltdown, which spread itself among the essential sector of the economy.
Other observations, which were made apparent to me during the recession, include the following. The mortgage market had a significant influence in the American economy. This is due to the financial market’s dependence on mortgage securities. In addition, despite the American economy appearing to be growing at power with other economic leaders globally, there is a large disparity in the foreign debt among the countries. For instance, the American economy is plagued by foreign debt that is exuberant when compared to other leading economies. This means that the U.S. economy needs to increase the exports I the global market in order to reduce this dept. This are the sentiments of most Americans who feel that the only way America can recover is to dethrone China as the leading export company. However, when considering the increased costs of consumption expenditure in the U.S. market, it is essential for the population to learn to persevere the turbulent times. However, this actuality will require political intervention, a feat that will not be easy to accomplish by the political class, especially the president who has to see the period through successfully.
During the recession, it is common to encounter questions about deflation. However, considering the sentiments of the public concerning the phenomenon, it is evident that individuals are misinformed, or they do not have adequate information. During the recession, I research on the issue of depression and this led me to the knowledge about the differences between maintained rates and one-time changes. This is essential considering that during the recession; the population experienced a change in oil and food prices. Therefore, in order to comprehend deflation, it is essential to consider is there is sustained change in the prices of the aforementioned commodities. Therefore, considering the history of the Federal Reserve, it is apparent that the American society has experienced seven periods whereby there was depression. The period of the Great depression is the most significant due to the effects of the period on the American economy. The period was disastrous for the economy since deflation was coupled with a failing growth in the money reserves. This showed the vulnerability of the capitalist market
Another observation, which I made during the economic crisis, was that there is plenty of pressure concerning the reevaluation of the bankruptcy law. However, if this is the case, then the significance of the law will be impeded. Individuals should consider the significance of the law since it gives individuals an idea of the possible outcomes to expect in the event of a bankruptcy crisis. If an individual or an organization attempts to alter the predefined actions concerning the event, then the law is contravened. Therefore, the bankruptcy law cannot be influenced by individuals in order to suit their situations in the market.
Considering the actions of the congress and the administration concerning the mortgage market, it is apparent that the stakeholders were concentrating on the wrong problem. This is due to the approach of these bodies to attempt of these stakeholders in order to solve the housing crisis using the strategy of adjusting the market. It is possible to solve the crisis experienced in the mortgage industry by addressing the issues experienced in housing. The point I am making becomes more apparent when I explore the subject more comprehensively. The issue, which the American, market concerning the housing sector is that the decline in the price of houses stimulated the occurrence of defaults. This means that the decrease of the housing sector which was experienced during the economic crisis increased the number of defaults in the, in the market. This is augmented when the prices of houses were below the mortgage value of the properties. This means that the individuals who had placed their securities in the housing market experienced significance losses during the period.
The policy makers were instrumental in easing the market pressures during the fall of the housing sector. However, there was a paradox during this endeavor. It was apparent that if the policymakers were inclined to ensure that people benefit the population through the reduction of the mortgage value or the interest rate associated to the value, then the rest of the market would be encouraged to ask for the policymakers’ help. I believe the most effective approach of solving the housing problem due to decreasing prices, is if the policy makers ensure that the demand for houses is increased in the market. For instance, when considering the housing market in 2008, only 500,000 houses were sold amounting to only a third of the potential sales. This means that there was room for policymakers to exploit during the crisis.
My proposal for the situation experienced during the crisis is straightforward and transparent. Instead of the public relying totally on the bureaucrats and politicians, individuals should be proactive in attempting to remedy the economic challenges experienced during a recession. This means that individuals should be able to make a decision on how to handle the crisis brought about by the recession. For instance, when an individual decides to make a down payment for a house during the period of crisis, he or she should be legible for a tax credit equivalent to the down payment. If this is not possible, the relevant stakeholders should make the credit attractive for the market. This action will be instrumental in reducing the housing excess, which was experienced in the market. Therefore, it should not matter if an individual is a multiple buyer in order for the market to have a steady demand for houses. If the excess supply in the housing market was handled during the financial crisis, then there could have been two potential outcomes. The first outcome is that the decrease in the housing prices would have been addressed. This will ensure that defaults in the housing sector are decreased significantly. If this were achieved, the housing sector would be revitalized ensuring that the economy is stabilized. This is significant since the housing sector is a key contributor for the American economy.
Another problem in the mortgage market was that the mortgages were being sold at prices, which were extremely low. Some of the portfolios in the market fell to as low as $45. This means that individuals who had purchased the mortgages at higher prices were in danger of becoming bankrupt.
Deregulation and the Financial Crisis
Another realization, which I will forward in this journal, is the role of the congress on the financial crisis. The congress appears to be active in blaming other parties for the effects of the financial crisis. A prominent mention by the congress is the phenomenon of deregulation. However, it is apparent that there has been minimal deregulation over the past years. The last deregulation, which can be, accounted for the in the American economy was under President Clinton in 1999. This involved the signing off, for the removal of glass-Steagall provisions in order to separate investment and commercial banking. This action was taken despite the lack of concrete information that the combination of investment and commercial banking was a cause of the great depression. The U.S. is the only country, which has separated these aspects of banking. It has become apparent that the Federal Reserve can be attributed as the cause of the depression period and not the combination of the two banking modes. Therefore, deregulation cannot be cited as a factor that caused the crisis.
Proposed Changes
When reflecting on the recent financial crisis, it is crucial to determine steps, which are effective in addressing the issue. For instance, it is essential to reevaluate the sponsorship of the government on organizations. The decision to pass the act on community reinvestment (CRA) became harmful for the economy over time. This is because the CRA regulations became easier for homeowners hence affected detrimentally the economic environment. This is evident in the encouragement for the market to use mortgages, which did not require down payment. This was due to the political pressure, which was existent in the American market to put potential buyers in houses, regardless of their potential to pay for the mortgages. This resulted in the purchase of subprime loans in order to facilitate the political vision of the housing sector. Therefore, it is apparent that political pressure had a crucial contribution in the progression of the crisis in the housing sector and consequently the financial crisis. This is evident in the activities of Fannie and Freddie in the housing market during the purchase of subprime loans. Prior to the crisis, the value of mortgage required by the government backed organization rose from $ 200 million to $4 trillion. This manifests the problem the housing market plunged in during the financial crisis. Reflecting on this development, it is apparent that the incentives provided in the housing market need in order to be reevaluated. If the government is seeking to ensure that the housing market is subsidized to make accessible for the poor, it is crucial to budget carefully as opposed to using approaches, which are not feasible due to political pressure. Despite this actuality, I believe that the congress is not willing to remove all the off-budget agencies. The votes of congress to keep these agencies should ensure direct appropriations.
In order to comprehend the financial crisis, it is crucial to decipher the role of the Federal Reserve during the crisis. This is due to the mandate of the bank to manipulate interest rates in order to protect the market from deflation. I believe that Alan Greenspan was erroneous when he decided to keep interest rates low for an elongated period. The Federal Reserve chairperson was afraid of the possibility of a deflation, and this was detrimental to the financial situation of America. Considering the budget deficit and the long-term expectations of the dollar decline depicted that the risk of deflation were negligible. The decision by the chair to keep the monetary policy undemanding for the market contributed to the financial situation, which was observed in the American market. In this scenario, the financial institutions and banks could have been encouraged to purchase treasury bills instead of the mortgages. I believe this action would have been instrumental in stemming the occurrence of the financial crisis.
Despite this, it is apparent that the actions of the Federal Reserve were aimed at encouraging an economic environment, which could counter the effects of the market. The organ helped to encourage the market to have an environment, which was rich in credit. However, the decision to over leverage the market resulted in the private sector bearing the burden of the risky loans. In addition, the belief developed by the financial situation concerning bailouts was detrimental since they were expecting federal help during the occurrence of financial trouble. Despite the scanty evidence concerning the aforementioned premise, I believe that this was the perception of financial institutions during the financial crisis.
Considering the history of the Federal Reserve, there is curiosity concerning the bailout plan of the organ. This is due to the different decisions taken by the body in the incidence there is a financial crisis. For instance, the reserve bails out institutions in some situations while it leaves some to fail. This differentiated approach is confusing, and it is not apparent when a bailout will be effected or otherwise. Absence of criteria concerning bailouts during financial crises creates anxiety in the market since financial institutions are not sure of the action of the reserve. This is evident in the recent financial crisis where the Lehman Brothers was left to fail despite the recent involvement of the Federal Reserve in rescuing Bear Stearns. The uncertainty created with this action choice was detrimental for the market. When the Lehman Brothers experienced failure, their first action was to approach the Federal Reserve to ask for help. Failure of the agency to bail out the institution created havoc in the market, since other institutions were unsure of their fate during the financial crisis. Therefore, the federal government needs to be straight concerning their approach when there is a repeat of the financial crisis. This will create stability in the market since the institutions will be aware of their fate. If this was the case during the crisis, the financial institutions could have been better placed to protect themselves from bankruptcy. This will either result in the institutions looking up to the Federal Reserve for help or cushioning themselves from the effects of the crisis using other approaches. Therefore, the ambiguity being practiced by the agency is causing unnecessary anxiety in the market.
During the financial crisis, there was also an issue with the process of compensation. It is apparent that there were financial losses during the crisis period. These losses attracted compensation from various financial institutions. However, it was evident that most of these institutions took the options of releasing the compensation payment over a period, which is spread. Considering that these institutions have also faced crises during their operations, they should be sensitive to the plight of the market during the period. The management of these institutions can address this issue. In addition, I believe that the regulators could have made the market aware of the significance of the Basel accord to the financial problems experienced in the market. This is due to the actuality that the policy makers tried to circumnavigate the expansive clauses of the agreement. For instance, it is expected that if an institution holds risky assets, then they are required to increase their capital. However, during the crisis, banks actively took up assets, which were risky while disregarding the requirement to increase their capital. The banks did not reflect these risky assets in their balance books hence circumventing the aforementioned requirement. Firms in the Wall Street also depicted a disregard for the market through the intervention of defective mortgage instruments. This also contributed significantly to the situation, which affected the American economy detrimentally. These instruments did not have an effective strategy of handling defaults in the housing sector.
Considering the reflection on the effects of the financial crisis, the causes and recommendations about avoiding a repeat of this are apparent. It is essential for the government and other stakeholders to be proactive in the market. These means that they need to work in unity in order to ensure that the interests of the market are considered. This means that the stakeholders should re-evaluate the financial crisis in order to address the impending issues, which allowed the catastrophe to affect the U.S. market.
