Business Development Foundations
The speed of change in virtually all industries has increased exponentially over the past decades – and conventional wisdom proves that the trend will continue. In this fast-paced global business environment, the ability to possess fact-based strategic foresight, deliver systematic exploration of new growth opportunities and to institutionalize a continuous drive to improve internal business practices is more important than ever. Many companies have responded to the new clock speed challenge, and we have witnessed the emergence of a new corporate support function labelled “business development”.
Business development has become a way for top management to dedicate a permanent team of capable professionals to explore new growth and diversification opportunities and deliver accelerated development of their existing business. A recent sample of the top-500 companies in Scandinavia shows that more than 65% of these companies have invested or plan to invest in building inhouse business development capabilities.
Businesses all over the world hire talented people to occupy positions with a short reporting route to the top management and close proximity to the strategic management of the company. Typically, they are highly capable people with a successful track record from management consulting or other professional services. They are asked to take charge of or participate in some of the most important strategic initiatives and apply their analytical rigor, strong personalities and execution power to deliver lasting improvements to overall business performance. Due to globalisation and modern technologies as internet, companies need to continuously develop new business opportunities to maintain sustainable competitive advantage.
However, most organizations highly focus on their core business and not ready to explore new business opportunities. In short, new business development (NBD) is in the literature described as a certain process of developing a new business opportunity. The dictionary describes NBD as a process where systematic series of actions are directed to some end. These actions can simultaneously be translated to NBD, for instance these systematic actions start with the recognition of a business opportunity in form of an idea and follow with certain other systematic actions that eventually lead to new business.
Business development is defined as finding new strategic opportunities for the company and start the company on the path to execute (incubation). It is not uncommon for business developers to have a combination of strategy, marketing & sales, finance, legal, and operations background”. The search for new strategic opportunities can better be described as the generation of ideas, initiatives and activities aimed towards making a business better, stable and financially healthy. The process of NBD is difficult, since decisions are mostly made in dynamic and increasingly rapidly changing environments. To conquer and to survive in this world full of rapid developments, business models can be considered as a valuable tool in NBD to determine the strategic position and offer a certain support to the manager involved in the decision-making process.
Business models are a conceptual tool that contains a set of elements and their relationships and allows expressing a company’s logic of earning money. Business models can be seen as critical constructs for understanding value creation, delivery, and capture mechanisms it employs. Besides that, a business model defines the manner by which the company delivers value to customers, entices customers to pay for value, and converts those payments to profit. Overall, a business model reflects the hypothesis about what customers want, how they want it, and how the company can organize the best to meet those needs, get paid for doing so, and make a profit.
Firms could rely on such kind of systematic NBD methods to control risk within NBD and to avoid situations where they have more risk of failure. Besides, not every firm is able to systemise the process of NBD. Some firms make decisions that are based on gut feeling and bricolage. Therefore, this study distinguishes two different approaches of new business development: systematic NBD and business development driven by gut feeling and bricolage. Following developing new business opportunities using briolage can be seen as using resources at hand and apply them in combinations in order to solve problems and create opportunities.
In general, it can be assumed that larger firms possess sufficient resources and sophisticated procedures to systematically develop new businesses. On the other hand, start-ups are more flexible, because they are not having yet a cash cow to focus on. Therefore, startups are usually more successful in the NBD process. Which seems to be necessary to survive as a start-up. Moreover, small and medium sized enterprises (SMEs), which are firms with a maximum amount of 250 employees and a total balance sheet of max 43 million euro, lack some important resources such as money, time and knowledge to systematically develop new businesses. These SMEs frequently lack the resources for using business models, therefore they mostly must rely on bricolage or gut feeling. The existing literature mainly focuses on NBD for new and large firms, although NBD is hardly important for all kind of firms. Obviously, NBD is of main importance in order to compete with other firms and to strive for competitive advantage. Business a continuous activity is part of our daily lives and is capitalist in nature –Profit.
Business is the melting Pot for other factors of Production and Business organization indulges productive activities. The overall idea of every business enterprise is for satisfaction of human needs. Man is business and Business is man. This means that business revolves around economic activities where goods and services are exchanged for one another or for money. Similarly, every business requires some form of investment and enough customers to whom its output can be sold on a consistent basis in other to make profit.
Businesses can be of various types with a common objective of earning profit and acquiring wealth through satisfaction of human wants. Industry” refers to production of goods by manufacturing or processing. It converts raw materials into finished goods and thus creates form utility. Industry could be genetic, extractive, construction and manufacturing.
Business administration in simple terms, is everything that encompasses a business while the concept of business administration is the process of managing every different angle of a business so it can run, expand, grow and succeed. Today, you will find wealth and job creation in business, medicine, government, law enforcement, agriculture, academics, entertainment, and many other fields.
This course introduces you to the fundamental concepts of Business, nature, scope, elements, environment, corporate social responsibility, and business communications for beginners in the area of Business development.
Upon completion of this course, you should be able to;
- Explain Business and Entrepreneurship
- Understand the different Types of Business
- Know what Business risk means
- Understand Business development processes
- Define the concept and various kinds of Business
- Understand Ethics and Business Characters
- Understand the Elements of Accounting, Marketing, Insurance and their Roles in Busines
- Apply the concept of Effective communication in Business
- Understand Business and Nigerian Business Environment
- Understand Social Responsibility of Business
- And many more
SECTION 1: INTRODUCTION TO BUSINESS
Overview of Business
Business is an economic activity, which is related with continuous and regular production and distribution of goods and services for satisfying human wants. All of us need food, clothing and shelter. We also have many other household requirements to be satisfied in our daily lives. We get these requirements from the shopkeeper. The shopkeeper gets them from the wholesaler. The wholesaler gets them from manufacturers. The shopkeeper, the wholesaler, and the manufacturer are doing business, and therefore they are called Businessmen. Business is a set of interrelated activities carried out with a view to make profit. The basic economic unit in which this set of activities is performed is the business enterprise.
Types of Business Organizations
A business is an organization that uses economic resources or inputs to provide goods or services to customers in exchange for money or other goods and services. Business organizations come in different types and forms.
A service type of business provides intangible products (products with no physical form). Service type firms offer professional skills, expertise, advice, and other similar products. Examples of service businesses are: schools, repair shops, hair salons, banks, accounting firms, and law firms.
Partnerships can be classified on the basis of two factors, viz., duration and liability. On the basis of duration, there can be two types of partnerships : ‘partnership at will’ and ‘particular partnership’. On the basis of liability, the two types of partnership include: one ‘with limited liability’ and the other one ‘with unlimited liability’. These types are described in the following sections.
Cooperative Society is defined as “a society, which has its objectives for the promotion of economic interests of its members in accordance with cooperative principles. “A cooperative is a business organization owned by a group of individuals and is operated for their mutual benefit. The persons making up the group are called members. Cooperatives may be incorporated or unincorporated. Some examples of cooperatives are: water and electricity (utility) cooperatives, cooperative banking, credit unions, and housing cooperatives. The word cooperative means working together and with others for a common purpose.
Joint Stock Company
A company is an association of persons formed for carrying out business activities and has a legal status independent of its members. A company can be described as an artificial person having a separate legal entity, perpetual succession and a common seal. The company form of organization is governed by The Companies Act, 2013. As per section 2(20) of Act 2013, a company means company incorporated under this Act or any other previous company law. The shareholders are the owners of the company while the Board of Directors is the chief managing body elected by the shareholders. Usually, the owners exercise an indirect control over the business. The capital of the company is divided into smaller parts called ‘shares’ which can be transferred freely from one shareholder to another person (except in a private company).
A company can be either a private or a public company. These two types of companies are discussed in detail in the following paragraphs.
A private company means a company which:
(a) restricts the right of members to transfer its shares;
(b) has a minimum of 2 and a maximum of 200 members, excluding the present and past employees;
(c) does not invite public to subscribe to its securities and It is necessary for a private company to use the word private limited after its name.
There is no universal consensus on defining entrepreneurship. Enormous number of definitions has been forwarded by the researchers in the recent academic studies on the area of entrepreneurship. Despite the fact that defining entrepreneurship has occupied the scholars for years, yet there is lack of consensus on its exact meaning. This lack of consistent definition of the term entrepreneurship has been a challenge to the researches in the field. Entrepreneurship is defined as a creation of new business or any attempt to do it, expansion of existing one, new business organization, or established businesses. Personality trait definitions of entrepreneurship stress on personality traits and life experiences of the entrepreneur. They argue that attitudinal and behavioral factors serve the dividing line between entrepreneurs and non-entrepreneurs. Individual entrepreneur is the focus of their definitions.
This is the Assessment Stage for this Section.
SECTION 2: INTRODUCTION TO BUSINESS GROWTH
Business Growth is a stage where the business reaches the point for expansion and seeks additional options to generate more profit. Business growth is a function of the business lifecycle, industry growth trends, and the owners desire for equity value creation. Business growth capital is critical for all scale-up minded businesses. Choosing the right business growth capital for your business takes expertise and market knowledge- as no two companies are the same. Choose correctly, and your growth takes off. Choose unwisely and it could be a disaster. Rather than fit your capital need to a pre-existing structure, smart companies design their own structure to mitigate risk. Business growth is a function of resource availability and often requires up-front investment. Whether an acquisition or business investment, it pays to be conservative in projecting returns over time.
If you've exhausted all steps along the Intensive Growth Strategy path, you can then consider growth through acquisition or Integrative Growth Strategies. The problem is that some 75 percent of all acquisitions fail to deliver on the value or efficiencies that were predicted for them. In some cases, a merger can end in total disaster, as in the case of the AOL-Time Warner deal. Nevertheless, there are three viable alternatives when it comes to an implementing an Integrative Growth Strategy.
Various researchers over the years have developed models for examining businesses (see Exhibit 1). Each uses business size as one dimension and company maturity or the stage of growth as a second dimension. While useful in many respects, these frameworks are inappropriate for small businesses on at least three counts.
Growth is crucial to the long-term survival of a business. It makes it easier to acquire assets, attract new talent and fund investments. It also drives business performance and profit.
Growth can also boost your business' credibility, allow you to broaden your supply base and increase stability and profits. However, to be successful and sustainable, growth has to be strategic and has to happen for the right reasons. Before taking any action to grow your business, you may want to consider is your business ready to grow.
SMEs have become an increasingly important component of economic development which represents a substantial proportion of the national economies all around the world. In this context, SMEs can be defined as the major engine of economic growth. SMEs, or small and medium-sized enterprises, are defined differently around the world. The country a company operates in provides the specifics on the defined size of an SME. The sizing or categorization of a company as an SME, depending on the country, can be based on a number of characteristics. The traits include annual sales, number of employees, the amount of assets owned by the company, market capitalization, or any combination of these features. The United States also defines SMEs differently from one industry to another.
Generally, risk is the possibility for danger, negatively unexpected circumstance to occur. In most of economic publications, risk refers to the negative deviation from the plan. In finance, risk is related to the hazard towards an investment, or loan. In terms of corporate and business, risk is the possibility that an event, either expect or unexpected, may create an unfavorable effect on the organizations. Corporate risks are classified by the impact they might create on different business operational activities. This means that a risk can be repeatedly divided into different classes.
Risk management is vital in securing the business’s capitals and other properties. However, as discussed, risk accompanies with the business’s opportunities to grow. Therefore, it is often emphasized in business strategies that risk management is not to prohibit taking risks entirely, but to understand the levels of risks, and to properly engage risks into development and growth. On applying into operations, risk management contains a set of continuous actions: awareness, identification, evaluation, and development of risk management methods, decision making of suitable methods, implementation, and post management. While the workload increases, it is not necessary for the outcome to be excelled.
This is the Assessment Stage for this Section.
SECTION 3: BUSINESS PLANNING AND ETHICS
Definitions of a Marketing Plan
Marketing has different definitions depending on the person you ask. Many people define marketing as selling and advertising; however, marketing is much more than just selling and advertising. Concentrating only on selling (closing the deal) will not ensure that you develop a long-term customer base. Marketing is about discovering and satisfying your customers’ needs and wants while earning a profit. This involves attracting and retaining customers. You attract customers by promising and delivering better value than your competitors. You retain customers by continuing to deliver satisfaction. Marketing is creating value for your customers while extracting value from them. How do you create value for and extract value from customers? Without getting too theoretical, it involves creating the best mix of what is known as the 4Ps so that the customer realizes the highest level of benefits per unit of cost (Value = Benefits/Cost).
New Product Development Process
Suppose that there is a business which produces doors and has an idea of producing a door that opens with a face recognition system. The stages of the marketing process for this door should be planned and implemented following the new product development process categorized below.
Stage 1: Generation of new product ideas
To initiate a new product development, first, there has to be an idea beforehand to create it. A lot of ideas are generated till the business finds the most suitable ones. Businesses use internal sources like R&D department, external sources like customers and competitors and other sources like seminars, universities, investors, etc. to generate ideas for new product development. It was shown in a survey including 750 interviews of CEOs in global businesses that 41% of new product ideas were generated by employees, 36% of ideas were generated by customers and only 14% of ideas were generated by R&D department..
Business ethics is the written and unwritten principles and values that govern decisions and actions within companies. Ethics is the branch of philosophy concerned with the meaning of all aspects of human behavior. Theoretical ethics, sometimes called normative ethics, is about delineating right from wrong. It is supremely intellectual and, as a branch of philosophy, rational in nature. It is the reflection on and definition of what is right, what is wrong, what is just, what is unjust, what is good, and what is bad in terms of human behavior. It helps us develop the rules and principles (norms) by which we judge and guide meaningful decision-making. Business ethics, also called corporate ethics, is a form of applied ethics or professional ethics that examines the ethical and moral principles and problems that arise in a business environment. It can also be defined as the written and unwritten codes of principles and values, determined by an organization’s culture, that govern decisions and actions within that organization. It applies to all aspects of business conduct on behalf of both individuals and the entire company. In the most basic terms, a definition for business ethics boils down to knowing the difference between right and wrong and choosing to do what is right. There are three parts to the discipline of business ethics: personal (on a micro scale), professional (on an intermediate scale), and corporate (on a macro scale). All three are intricately related. It is helpful to distinguish among them because each rests on a slightly different set of assumptions and requires a slightly different focus in order to be understood.
Ethical Issues in Human Resource Management
Human resource (HR) management involves recruitment selection, orientation, performance appraisal, training and development, industrial relations and health and safety issues. Discrimination by age (preferring the young or the old), gender, sexual orientation, race, religion, disability, weight, and attractiveness are all ethical issues that the HR manager must deal with.
Ethical Issues in Sales and Marketing
Ethics in marketing deals with the principles, values, and/or ideals by which marketers and marketing institutions ought to act. Ethical marketing issues include marketing redundant or dangerous products /services; transparency about environmental risks, product ingredients (genetically modified organisms), possible health risks, or financial risks; respect for consumer privacy and autonomy; advertising truthfulness; and fairness in pricing and distribution. Some argue that marketing can influence individuals’ perceptions of and interactions with other people, implying an ethical responsibility to avoid distorting those perceptions and interactions.
Conflicts of Interest
A situation in which someone in a position of trust has competing professional or personal interests is known as a conflict of interest. Conflict of interest (COI) occurs when an individual or organization is involved in multiple interests, one of which could possibly corrupt the motivation for an act in the other. The presence of a conflict of interest is independent from the execution of impropriety. Therefore, it can be discovered and voluntarily defused before any corruption occurs. In fact, for many professionals, it is virtually impossible to avoid having conflicts of interest from time to time. It can, however, become a legal matter for example when an individual try (and/or succeeds in) influencing the outcome of a decision, for personal benefit. A director or executive of a corporation will be subject to legal liability if a conflict of interest breaches his/her Duty of Loyalty.
Basic Economic Concepts
It is important to understand some basic economic concepts that have an influence on the economic decisions not only of businesses but also of individuals, such as what to offer (to sell) and what to purchase, how to manage the available resources and how to finance the expenditures.
Scarcity of Resources and Opportunity Cost
Both households and businesses only have limited resources to pursue their goals: businesses have a certain number of machines and tools and a limited amount of material and financial resources to produce their goods and provide their services. Likewise, households only have a certain income that they are able to spend on purchasing goods and services, with maybe a part of that income left for saving. Resources are always scarce, and this scarcity of resources forces businesses as well as individuals to make decisions on how to use those limited resources: what and how to produce, what to buy, how much to spend. It is a basic economic problem of households, businesses and the government to decide how to use their limited resources and to make choices when allocating these scarce resources between different options. Opportunity cost is the (financial) benefit of the (next best) alternative that is lost or given up in order to choose or achieve something else.
This is the Assessment Stage for this Section.
SECTION 4: BUSINESS DEVELOPMENT PROCESS
Introduction to Business Development
A business enterprise usually consists of a number of these elemental businesses and ventures. Enterprises are organized around missions, directions, or functions that they perform. They are effectively organized if that selection generates commonalty, synergy, and unity of purpose that allow efficient economics and renewal. The business development tools focus on elemental businesses. These businesses are viewed as the building blocks of the enterprises and the corporation as a whole. Business development, in this context, has only one purpose: The successful creation of profitable business ventures. It is not product development, market development, nor Research, but bridges all. Business development encompasses the definition, evaluation, and direction leading to profitable business ventures.
New Product Development
The Need for New Products
In dynamic markets companies must constantly introduce new products and services to keep up with changing consumer wants and needs.
The marketplace is never static: it is dynamic and fast changing, and demand for products is constantly shifting as needs, wants, and technology all change. As a result, companies must always evaluate their existing product line and look for ways to ensure that it is up to date and in line with consumer desires. Continuous decisions must be made about whether new products should be added (and whether old products should be removed).
For instance, the graph in shows how an organization must establish a series of successful products if it wants to maintain a consistent stream of sales, or grow sales over time. As shown in the graph, no product lasts forever, and sales levels can fluctuate dramatically over time. This fictitious company has marketed eight different products over time.
New Product Development in Portfolio Management
New product development is usually done by the businesses in the kind of significant improvement or modified products which are explained in the previous section. For example, Sony’s over 80% of new products are improvements of existing products. Similar to Sony, Nike started with running shoes in the beginning and then enlarged its product range to a whole range of sports apparel with constant improvements. Therefore, the place of new product developments among existing products, product line or portfolio has to be carefully assessed during the initial stages of new product development. Product line can be defined as a product group which consists of several products related to each other because of being sold by same type of marketing tools to the same customers, functioning in a similar way or priced similarly. For example, Apple produces different kinds of computers, and Nike produces several types of sports shoes. Both businesses aim to address the needs of different kinds of customers. Assessment of how many related products will be produced or in other words what the length of product line will be and how each product in line will contribute to the profit periodically is an important subject for businesses to observe profit variations. If product line is too short, there is a potential to increase profit by adding new product into the line, or if the line is too long, a poor performing product can be excluded from the line to increase profit.
New Product Development and Meeting Customer Needs or Requirements (CRs)
Competition in global market is quite high which makes businesses to give more concern to meeting customer needs. It is really difficult for businesses to be successful in global market by depending only on high-volume production and low cost. Having a desirable position in highly competitive markets requires making effort to produce products (NPD) which will meet the customer needs and satisfy them. There are several models created to be useful for businesses to understand customer requirements (CRs). Some models categorized below promote innovation during NPD’s first stage (generating idea) and therefore are useful at making cost-effective decisions.
Life Cycle Perspective in New Product Development
Each product has a life cycle similar to the living creatures: it is born, grows and dies. Eventually, all products will complete the cycle at a time and will die. However, the time the new product will come to the end of the cycle is important for businesses because the main reason behind developing any product is making profit. If the cycle is not sufficiently long to cover any costs endured and make decent profit to the businesses, all the efforts to develop new product will be worthless. Therefore, businesses make an expectation for a desirable life cycle for their new products. The product life cycle has stages similar to the life forms.
Success and Failure in New Product Development
The interrelation of the market environment, new product strategy and development process that influences the success of a new product. When new product concept is developed, the introduction of it to the market has to be made in an effective and efficient way. For this purpose, organizational factors such as inter-functional coordination, structure and leadership must be involved in the process heavily Literature has shown that there are various elements affecting success of a new product.
This is the Assessment Stage for this Section.
SECTION 5: INTRODUCTION TO BUSINESS ANALYSIS
The output of the business analysis stage is a prediction about whether the product is likely to be profitable or not if ultimately produced. After the initial screening stage, the number of viable proposals available to progress to the next stage will have decreased significantly. However, before the company begins the development of prototypes, there is one more evaluation process that must take place, and this is the business analysis stage. In this stage, additional information is gathered on the remaining innovations in order to decide whether the significant costs that development will require are justified.
Business Model Development
To develop an effective business model for your company, draw a picture that establishes a structure so your employees can produce products or services for customers in a profitable way. A business model typically includes a description of your customers, how customers use your product, how you distribute your product and details about how you promote your business. The model also describes key operational tasks, staffing and other resource requirements as well as details about how business is conducted. A business model describes your business using visual images, typically on a single page, while a business plan describes your business in a lengthier document
Understanding the problem you are solving for your customers is undoubtedly the biggest challenge you’ll face when you’re starting a business. Customers need to want what you are selling and your product needs to solve a real problem. But, ensuring that your product fits the needs of the market is only one part of starting a successful business. The other key ingredient is figuring out how you’re going to make money. This is where your business model comes into play. Business development (BD) is the process that is used to identify, nurture and acquire new clients and business opportunities to drive growth and profitability. A business development strategy is a document that describes the strategy you will use to accomplish that goal. The scope of business development can be wide ranging and vary a lot from organization to organization. Consider the model of how professional services organizations get new business
Understanding Business Models
A business model is a high-level plan for profitably operating a business in a specific marketplace. A primary component of the business model is the value proposition. This is a description of the goods or services that a company offers and why they are desirable to customers or clients, ideally stated in a way that differentiates the product or service from its competitors. A new enterprise's business model should also cover projected startup costs and financing sources, the target customer base for the business, marketing strategy, a review of the competition, and projections of revenues and expenses. The plan may also define opportunities in which the business can partner with other established companies. For example, the business model for an advertising business may identify benefits from an arrangement for referrals to and from a printing company. Successful businesses have business models that allow them to fulfill client needs at a competitive price and a sustainable cost. Over time, many businesses revise their business models from time to time to reflect changing business environments and market demands.
Business Model Development
Creating a business model isn’t simply about completing your business plan or determining which products to pursue. It’s about mapping out how you will create ongoing value for your customers. Where will your business idea start, how should it progress, and when will you know you’ve been successful? How will you create value for customers? Follow these simple steps to securing a strong business model.
1. Identify your specific audience.
Targeting a wide audience won’t allow your business to hone in on customers who truly need and want your product or service. Instead, when creating your business model, narrow your audience down to two or three detailed buyer personas. Outline each persona’s demographics, common challenges and the solutions your company will offer. As an example, Home Depot might appeal to everyone or carry a product the average person needs, but the company’s primary target market is homeowners and builders.
A PESTEL Analysis
A PESTEL analysis is an acronym for a tool used to identify the macro (external) forces facing an organization. The letters stand for Political, Economic, Social, Technological, Environmental and Legal. Depending on the organization, it can be reduced to PEST or some areas can be added (e.g. Ethical) In marketing, before any kind of strategy or tactical plan can be implemented, it is fundamental to conduct a situational analysis. And the PESTEL forms part of that and should be repeated at regular stages (6 monthly minimum) to identify changes in the macro-environment. Organizations that successfully monitor and respond to changes in the macro-environment are able to differentiate from the competition and create a competitive advantage.
Let’s look at each element of a PESTEL analysis.
These determine the extent to which government and government policy may impact on an organization or a specific industry. This would include political policy and stability as well as trade, fiscal and taxation policies too.
These factors impact on the economy and its performance, which in turn directly impacts on the organization and its profitability. Factors include interest rates, employment or unemployment rates, raw material costs and foreign exchange rates.
These factors focus on the social environment and identify emerging trends. This helps a marketer to further understand their customers’ needs and wants. Factors include changing family demographics, education levels, cultural trends, attitude changes and changes in lifestyles.
This is the Assessment Stage for this Section.
SECTION 6: OVERVIEW OF BUSINESS COMMUNICATIONS
Introduction to Business Communications
Business communication is the process of sharing information between people within and outside a company. Effective business communication is how employees and management interact to reach organizational goals. Its purpose is to improve organizational practices and reduce errors.
The importance of business communication also lies in:
- Presenting options/new business ideas
- Making plans and proposals (business writing)
- Executing decisions
- Reaching agreements
- Sending and fulfilling orders
- Successful selling
- Effective meetings
Steps of Business Communication
The process or steps of communication involves a series of actions and operations undertaken for the fulfillment of a certain end or objective.
The basic communication process involves the following steps:
(i) Clarifying the idea or problem,
(ii) Getting participation in developing a solution to the problem,
(iii) Transmitting the idea or decision,
(iv) Motivating others to take action agreed upon, and
(v) Measuring the effectiveness of communication.
Importance of Business Communication
The significance or importance of business communication is increasing very rapidly day-by-day. The business world of today cannot move smoothly without the help of communication. It makes a business enterprise dynamic and increases its efficiency. It is regarded as the motivating force that leads to industrial harmony. It can be used as a device for controlling the business activities to ensure the achievement of organizational goals. The role of communication in business is as essential as the blood veins or arteries in human body. In its absence, a business organization would cease to exist. Business communication has a significant role to play in management whose objective is to direct the individual efforts for securing overall co-ordination of organizational activities. It performs the energizing function in the organization by transmitting information, facts and ideas and thereby making co-ordinated efforts possible. Communication can, as such, be regarded as basic to the functioning of an organization. The success of management activities, to a great extent, depends on good communication system. Communication creates favourable work environment, motivates the workers to work hard and, thus, management activities become easier.
The Importance of Clarity in Professional Settings
Communication is essential for effective business operation, and clarity leads to effective communication. Business communication is used to promote a product, service, or organization; relay information within a business; or deal with legal and similar issues. It encompasses a variety of topics including: consumer behavior, advertising, public relations, corporate communication, research and measurement, reputation management, and event management. Business communication may also refer to internal communication: a communications director will typically manage internal communication and craft messages sent to employees. It is vital that internal communications are managed properly because a poorly crafted message could foster distrust or hostility among employees. Failures of human communication can become amplified in professional settings. In business transactions, especially those involving large amounts of money, a small miscommunication can have devastating effects. For this reason, clarity is absolutely essential. Communication must be consistent, concise, and honest in order to ensure the intended message is received.
The Role of Effective Communication in Entrepreneurial Success
Effective communication is a pre-requisite trait for every enterprise to taste success at an accelerated pace. Entrepreneurs and businesses often struggle to apprehend their true potential without good communication attributes. Most people negate acquiring good communication skills over the importance of accomplishing technological skills which may impede the business profitability. On the contrary, effective communication overwhelmingly payback a business in lucrative ways impacting both internal and external associations.
This is the Assessment Stage for this Section.