Saturday, August 05, 2006

Technological Impact on Business

What is technology?
Technology is the way in which work is done i.e. the equipment used and the way work is
organised. Improvements in technology often lead to new products and processes.

Firms need to use and adapt to technology because companies compete and the market is both
global and highly sensitive to most products and services.

There are some areas that are affected by technological change:

Communication: Firms interface with suppliers and customers largely through the computer
with the help of Internet. There is a rapid growth in the use of modern IT (Information
Technology) for communicating with and selling to consumers.
Product technology: It can have a great impact on the design (CAD-Computer aided design) or
manufacture (CAM-Computer aided manufacture). It frequently determines the speed and nature of production flow in the line, the quality of product and the disposal of waste.

Cost of production: Technology is complex and expensive. It raises the fixed costs and thus
creates the needs for a very large market in order to spread out the fixed costs over
increased output.

Human Resources:

Technology has led to;

Redundancies, as technology has changed methods and replaced people throughout industry and at all levels in organisation.
Increased unemployment among those with computer and technology related skills.
Deskilling due to not performing old tasks.

The market:
Technology has revolutionized the distribution of products. Internet is used for this
purpose by firms.
Pricing has also changed. Technology creates new products and they are expensive in the
beginning but then they become a throw-away price for customers.
It has also increased the range of products and services.

But, there are also negative effects of technology.
Firstly, it has created the need for data protection. Human relations have also weakened
since some workers need to be made redundant due to introduction of technology.
Firms also need to borrow capital from institutions in order to finance introduction or
development of technology.

Monday, July 17, 2006

Business Ethics

Business Ethics are concerned with the influence of values and beliefs upon the conduct and operation of business.

Business Ethics help firms to decide what actions are right or wrong in certain circumstances.
Ethics may influence business decision making in a number of ways. It may lead the owners of business to accept lower profits in short term by purchasing less-polluting techniques.

A firm which is ethical with regard to society as a whole, and the community within which it is based might be described as "socially responsible".

Benefits of Ethical Behaviour

Firms which act ethical, usually experience a rise in their sales. Since, consumers take into account a firm's behaviour when buying products. Hence, it is good for sales. Also, if firms do not test their products on animals, they may see a good reaction from customers. They may also gain good publicity which is very important to many firms. Since, it takes a lot of time to build reputation in the eyes of customers and society.Government will also support those firms which act ethically.

Those businesses can also recruit well-qualified and motivated staff and also retain their existing staff by caring approach. Employees will also feel commited to the organisation and will help in achieving company's objectives.

But, on the other hand ethical behaviour can result in an increase in costs for a firm. For example, a firm turning down cheaper supplies from a firm, which tests its products on animals. Increased costs can lead to fall in the value of profits. When a firm's overall profitability comes into conflict with its ethical policy, problems may result. Shareholders may object to the ethical policy as the return is harmed.

To conclude, ethical debate is often a good predictor of the social changes that later alter the patterns of economic demand. To be effective, ethical standards need the decisive backing of top management. Moreover, ethical codes should be developed with the involvement and agreement of managers at all levels. Otherwise, subordinate staff may fear the consequences of raising ethical objections to company decisions.

Saturday, July 15, 2006

What is corporate culture?

Corporate culture refers to a company's values, beliefs, business principles, traditions, ways of operating, and internal work environment. There are different questions that need to be considered to fully understand its meaning in business life.
How might corporate culture be packaged?

The company's beliefs, norms and values must be effectively packaged. The corporate culture must be embedded into everyday fabric of the business. It must inform individuals how things are done. It can come in different forms like stories which may help to explain current practices of business. Stories may be used to communicate importance of something in business. Symbols and slogans can also be used as a means of communicating firm's culture. Mission statement often contains information about company's culture.

How might corporate culture be communicated?

The corporate culture of the business must be communicated to employees and other stakeholders. Formal and informal methods can be used to do this. Formal methods are highly visible, consciously designed, regular events and activities. Rites and occasions can be planned to show different aspects of culture. Courses such as induction, orientation and training courses which have the values and beliefs communicated within the firm. Informal way involves the way in which employees communicate and express themselves in the business.

Friday, July 14, 2006

What is online trading?

What is online trading and its benefits to consumers and marketers?

Online marketing is the process of selling and buying goods and services through internet. It is likely to have certain advantages to both consumers and markets.

For customers, shopping may become an easy job. Since, they do not have to battle traffic, find parking space and walk through different stores to find and examine products. They can easily compare brands, check out prices and other merchandise 24 hours a day from any location. So, all these consequences would be eliminated by the usage of internet. The commercial on-line services give abundance of comparative information, about companies’ and competitors’ products. In addition to this, on-line buying is interactive and immediate. Consumers can often interact with the sellers’ site to find exact information, products or services they desire, then order them on the spot. There are also benefits for marketers. Firms can build good customer relationships by communicating with them in their site. So, this brings companies and their customers closer to each other. Company will also get to know the needs and wants of customers so the firm need not spend a lot of money on market research to find out this particular information. They can increase customer value and satisfaction through product and service refinements. The costs may reduce and efficiency may be improved by eliminating the costs of maintaining a store and accompanying rent, insurance etc. Since, customers deal directly with sellers (channel 1 is implemented over here).

Finally, internet is a truly global medium that allows buyers and sellers to click from one country to another in seconds. So, the market for the firms is large therefore they may segment them differently and find gaps and exploit them through the use of internet.

Thursday, July 13, 2006

What is internet?

Internet is a network of network linking many computers to each other. Each runs software to provide or serve information and to access and view information.

Benefits of using internet for the companies:

Internet provides many benefits to firms. It is widely used by firms to link employees in remote offices, distribute sales information more quickly, build closer relationships with customers and suppliers and sell and distribute their products in more efficient and effective manner.

Firms may establish their own site in internet and offer more information on their products and services. So, it can be used as a advertisement tool. Using internet, the firm can also reach more number of customers since people around the globe can connect to internet.
Firms may also have the chance to interact with customers to learn more about specific customer needs and wants so it may be able to adapt to changing market conditions as well as customer tastes.

Friday, July 07, 2006

What is globalisation?

Nowadays, globalisation is the most known word among individuals and people surely would like to know what actually it is.
Globalisation is the trend towards free international trade and free movement of capital between nations. This is resulting in the growth of multinational corporations that seek the widest markets for their uniform products and the cheapest locations for production. It has assisted the companies to invest more in growing markets and it is supported by governments by reducing the barriers towards international marketing.
Consumers like to have access to wide choice of products so they even think of buying from outside businesses. This is one of the reasons which firms consider to trade internationally.
Globalisation also offers additional opportunities, international location, for firms. So, they can get long term benefits by using globalisation in the advantage of business.
But, there are also some negative views directed towards globalisation. It is always exact that businesses usually consider their own interests and objectives therefore they may not invest the profits earned back into that country. They also pollute the environment that operate in. So, any objections by government may drive them away from the country leading to currency fluctuations.
Therefore, to fully analyse whether globalisation sounds great, it is preferable to find out the benefits and demerits resulting from it.

Thursday, July 06, 2006

What is Business Environment?

Today, i would like to start with Business environment topic which is a far-reaching concept.

What is meant by business environment?
It is the environment in which firms try to survive to operate profitably as well as efficiently. There are different groups which influence the business activity carried out by individuals. These are pressure groups, government, tax authorities, consumers, competitors, world affairs. They will be explained more in future under different topics.