In today’s time when businesses are developing and there is increasing competition in both the services as well as the business sector many small to mid size enterprises are struggling for survival. In most cases, the first generation of entrepreneurs spend a large part of their time setting up the business and the next generation has the responsibility to carry the business forward and the aspiration to take it to the next level. The management style in small businesses is generally personalised and has minimum formalisation. There is little differentiation in job content and final authority is with the manager who in most cases is the owner or family member. However, with changing market conditions, businesses that wish to improve their position vis-a-vis competitors need to introduce formal management practices to run the business in a consistent and viable manner in a growth oriented direction. For businesses that aspire for success, decisions must be taken based on opportunities, expertise and strength rather than on assumptions and situational misperceptions. From decisions such as the number of work hours per employee per week to pricing of a product or service to considering the financial feasibility of a new business idea, the introduction of management principles can greatly improve the performance of the enterprise.
Formal education and knowledge in some of the areas that can help an entrepreneur run his business better are finance and accounting, marketing, organisation development, human resources management, economics, public speaking, business writing and computer science to name a few. The problems of existence and development can be overcome by inculcating vital managerial skills and management knowledge in successors of the business.
While we all are aware of famous exceptions such as Bill Gates and Subhash Chandra who chose to be fully involved in business from an early age, with changing times having individuals in the business with a formal education and the knowledge of managerial principles can not only increase the market value of the business itself but can also be a stepping stone to making it a world-class organisation for the future.
published in DNA Ahmedabad – June 2015