Strategies for Entrepreneurs during Economic Resurgence


By

Prof. C. Ramalingam
M.Com, M.B.A., M.Phil, (Ph.D)
Professor
Department of Management Studies
Rajalakshmi Engineering College
Thandalam-602105, Sriperumbudur Taluk, Kancheepuram District
 


In and around Chennai, we find lot of small businesses carried on by small entrepreneurs. After having discussions with those entrepreneurs it was found that during Resurgence, Entrepreneurs need to be creative and bring in new ideas to benefit the customers. This effort also needs to have more number of meetings with his employees and stakeholders. In this direction also entrepreneurs are guided by economical way doing things without affecting the cost of production too much. Constantly the business leader need to encourage their employees to come out with new and innovative ideas and solutions on various functions of management  ; so that the  organization could with stand the hurdles of recession and resurgence.

The man power strength needs to be optimized and take all the strategic initiatives to increase the productivity and efficiency of the entire organization. According to the market conditions, flexible scheduling of work would be the right for the organization and during recession; it is better to save money to the organization. Review of employee performance and free flow of correct information must be ensured right from the top management to down the line in the organization.  There should be good morale in the enterprise for every one to share their innovative ideas and to create a high morale; company need to spend on few welfare measures and get the views of all employees for survival in the business. When the employees are enthusiastic and when there is a conducive atmosphere in the organization; new and new ideas would germinate. Even brain storming sessions could also be arranged to increase the contribution of each and every employee.

During recession and during resurgence periods, employees need to be motivated highly by non- financial methods; so that the employees stick to the organization even during the tough times and put in extra effort required for the organization growth and survival. Certain strategies need to be organized for cutting the costs; and postponing the additional recruitment of work force. Sometimes canceling holiday party, reducing some extra benefits to employees. This would make them to feel the pinch of the business condition and even try to find out ways to survive. At the same time; entrepreneurs also need to identify key employees and to keep them in the organization and strengthen their real potentials. This could be done by sending the key persons for a special training programs organized by Chamber of Commerce and Industry or by the Confederation of Indian Industries. Even the District Industries centre and the Ministry of Small and Medium Industries do organize programs to manage the change during recession periods.

In most of the organizations the labour cost is found to be on the higher side. Entrepreneurs need to be cautious in taking steps to reduce the labour cost. Even though it is a good option for an entrepreneur; he has to see the pay scales related to the market conditions. Is the organization willing to risk losing an employee whose talents may be required badly later in the organization has to be gauged by the entrepreneurs? The employees whose  performance is found to be poor or minimal ; they could be relieved and down sizing does require internal document maintenance for the orgnisation and jobs are modified and responsibilities are increased due to changes in the economic condition, The entrepreneurs need to advise almost all the employees and key managers about the changes in the economy and make everyone to contribute their innovative ideas to make the organizations survive , By this type the voluntary cooperation can also be got from each and everyone in the organization.

Managing employees is a difficult task and that too during turbulent economic conditions is still more a demanding to make the workers to work for rapid improvements and innovations with very few expenditures. Hence the task of entrepreneurs was found to be very important for maintaining the equilibrium through out the organization.

Running the business during recession is very tough due to significant hurdles in attracting the low cost funds and it would also be very difficult to attract capital. So, entrepreneurs need to focus on markets and customers and offer products or services which must be a clear competitive advantage,

Developing the work force by experts and inculcating a habit of innovation among the people in the organization is of paramount importance. To attract capital many entrepreneurs tie up with the enterprises that are fleshed with funds by innovative partnership for successful development of business; so that the hurdles in the business are minimized to a larger extent.

Even though entrepreneurs pursue a wide range of strategies in supporting the small business enterprises; many research reports have found that entrepreneurs have to address similar set of issues in training the employees to face the resurgence in a bold manner.

Entrepreneurs need to identify each neighborhoods competitive advantage and understand the impact of competitor's strategies in the market. He should also closely understand the way in which economic trend is moving; whether it is beneficial to the orgnisation or not. Based on this he is supposed to determine whether to create any new programs to form an alliance with an existing company which is performing better or he himself could manage the situation in a better way.

Another strategy could be trust building exercise with the employees by the entrepreneur. The trust could be built in the minds of employees be openly discussing the various measures taken during the recession period for improving the performance of the orgnisation. The patience and hard work pf entrepreneurs must be made known to all the employees

Entrepreneurs also need to demand accountability from each and every one in the orgnisation for developing them as well to contribute their best to the organization and also take preventive measures to detect the problem well in advance. This would help the members in the organization to combat the difficult situations boldly.

Technical Assistance Program and Technological up gradation funds could also be tapped to give employees and neighborhood community a better confidence level about the initiatives taken by the organization. These types of strategies would also motivate them to be innovative and creative in their working environment. This would also produce good results to withstand the economic down turn.

Another strategy is when the entrepreneur is found socially excluded from group of his own industry community; Then entrepreneur have to have a good net work with other entrepreneurs in the same field so that they can frequently exchange their ideas and strategies for the betterment of the company.

Many steps need to be taken to enhance the competitiveness of product by doing test marketing and by proper positioning of the product. Also few try to invest in other sectors which gives higher returns and entrepreneurs use strategy of investing in real estates or in other business ventures if the existing business is not doing well and they go about reducing the production and various other factors of production. So a business enterprise must function must work in a dynamic way and see the demand for the products do not decrease; if the entrepreneur or employees sense these catastrophical events    ; preventive measures must be done; so that business continues for a long time with the hope of getting profits and doing service to all the stake holders.

Conclusion:

During the resurgence period; an entrepreneur has to be very cautious and take into account the various factors which make the organization grow. The main factors are increasing productivity and hiring the eminent persons; using good quality materials; delivering the output to the entire satisfaction of customers are some of the most important strategies to survive in the repression or in resurgence period. One has to be innovative and creative in designing the product and servicing them with great care and concern will pave way for fighting competiton during the resurgence period.

Reference:

Entrepreneur Press is a provider of books, information, and guidance for entrepreneurs and small business on all aspects of business: www.entrepreneurpress.com

Entrepreneurship.org is the website of the Ewing Marion Kaufman Foundation and the US Commerce Department's International Trade Administration's public–private partnership. The focus is on encouraging best practices in entrepreneurial leadership, to promote economic growth around the world, and to assist all nations in developing the environment to allow entrepreneurs to organize and operate business ventures, create wealth, and employ people: www.entrepreneurship.org

International Entrepreneurship provides entrepreneurs from around the world with access to import and export information, general business data, financing sources, and entrepreneurial success stories for over 100 countries. Links to domestic entrepreneur help sites are provided for each country: www.internationalentrepreneurship.com

MarketResearch.com has the world's largest and continuously updated collection of market research, with more than 160,000 market research reports from over 600 leading global publishers. Country reports provide strategic insight into geographic, political, and business environments and their effects on economic performance and potential: www.marketresearch.com

The Indus Entrepreneurs' (TiE) mission is to foster conscious entrepreneurship globally by educating, mentoring, and networking: www.tie.org

World Franchising's website provides a comprehensive directory of franchise opportunities, leading you to the most up-to-date franchise information available on the internet: www.worldfranchising.com
 


Prof. C. Ramalingam
M.Com, M.B.A., M.Phil, (Ph.D)
Professor
Department of Management Studies
Rajalakshmi Engineering College
Thandalam-602105, Sriperumbudur Taluk, Kancheepuram District
 

Source: E-mail April 19, 2010

          

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