Why Many Firms Fail
More than half of the firms that are developed have been discovered that they fail when they are in their early ages of development. According to Shapiro there are some changes that should be looked at else the firm will definitely collapse due to several things. Shapiro has pointed out eight main things are supposed to be considered but in our essay we are going to look at four main changes that if not taken care of at the early ages of the organization, there will be a great impact on the operations of the company. We are going to discuss political, economical, social, and technology milieu of a business, (Shapiro, 2004).
Technology environment of a business is one of the most important aspects which should be taken care of by the directors of a business. If you want your organization to be successful, an individual should ensure that he or she does comply with the technological aspects that affect the business. Currently we are in a world where technology is growing day after another. This counts that the business should be developed in a manner that it is flexible to any given technology that has emerged. Technology helps an organization to be completive as well as be innovative. When an organization requires making some sort of change, it is the mandate of the directors to ensure that technology used is current and valid for the intended purpose, (Kotter, 1996).
Economic situation of a business counts a lot whether the firm will fail or become successful. If the current economic status of the market is not good, there are chances that the development of the firm is minor. Economic affects the firm in so many ways simply because if the status of the economy is not good, the firm will lack the development idea whereby it will be required to improve its operations so as to cope with any of the difficult situations that might develop in the process of running the business. In order for a business to be innovative, there is always the aspect of economic to be good else the firm will fail to be innovative like others, (Tushman & O’Reilly, 2002).
Political aspect of a firm should favor the operations of the firm so as to enable the firm to operate effectively. In order to bring about change so that the status of the firm favors its operations, the political environment of the firm must revolve around the operations of the organization. Political environment of an organization enables the operations of firms’ activities simply because of the labor force. Since labor is the backbone of the organization, political environment of the organization should be taken care of in order to allow the organization exercise the issue of innovation in the direction the organization wants to develop. In most cases when the firm refused to deploy the aspect labor then it gradually fails instead of developing. Wages and salaries of employee counts to the political environment which affects the operations thus assist in the innovation of the firm or the organization, (Shapiro, 2004).
We have the social environment of the organization which also counts to the firms change for improving its level of failure. If the firm has not yet understood the social environment which it works on, it is very impossible for the organization to make any development. Directors should ensure that they are socially equipped with anything that the organization may want so as to make its development thus create a foundation which prevents its failure. If the leading authority of the organization is poorly created, then the firm then develops a low rate of development. The authority in charge of the firms operations should ensure that there are strategies developed for making some innovation which guarantees the survival of the firm, (Kotter, 1996).
In any given organization setting, there are different types of individuals who help in developing the status and operations of the organization. According Shapiro there different categories of the people in a business environment but we shall look at the apathetic, advocate, resister and incubator. We have the advocate type of individuals. They are activist who lobby in the business thus they create an environment which is better for the development of the organization. Apathetic of the organization acts totally different from advocators, (Tushman & O’Reilly, 2002).
They have no concern of the organization and even though they may be in one way or the other associated with the firm, they have less concern towards the operations of the organization. Companies which want to develop require individuals who support the firm instead of those who criticizes the operations of the firm. Resisters are present in organizations and them in one way or the other play major roles in the development and failure of the firms operations. This type of individuals goes contrary with the expectations of the organization thus they are always burdens to the operation of the success, (Kotter, 1996).
Reference:
Kotter, J. P. (1996). Leading change Boston, MA: Harvard Business School Press.
Tushman, M. L., & O’Reilly, C. A. (2002). Inning through innovation. Boston, MA: Harvard Business School Press
Shapiro, A. (2004). Creating contagious commitment: Applying the tipping point to organizational change. Hillsbourough, NC: Strategy Perspective.
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