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BW Businessworld

A Full-proof Plan For Business

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"People Don't Plan To Fail, They Fail To Plan"
Organisations are set up with the prime motto of success. However, this motto in many situations would not become a reality. This is because of the challenges which the organisations face both internally and externally which often result in a huge economic loss. This loss not only affects the entire organisation but also the country as whole. Thus there is a need for the organisations to take measures to restore their health.  As the saying goes, “Prevention is better than cure”, it is crucial for organisations to take appropriate steps to combat the problems faced by them. Certain aspects which entrepreneurs need to look into before setting up their businesses. The reason being both success and failure are prevalent in a business. In difficult situations it is essential for entrepreneurs not lose their enthusiasm. However, enthusiasm is not the only weapon to fight this malady. This is because there is no short cut to hard work and determination.

Reasons Of Organisational Decline
When we look at the various factors that affect the organisational performance we find there are very interesting reasons for organisational failures. We find that internal reasons for failure outperform the external reasons. In USA four cases out of five declines was due to internal and external policies and one out of five due to external factors.

Eminent researchers like Balgobin, & Pandit, (2001), Carmeli, & Sheaffer, (2009), Morrow et al., (2007), and Mariani, & Marsili, (2011) have stated their opinions on organisational failures and have identified following factors which are responsible for the same.
 
  • Inability of top management team
  • Poor economic performance
  • Operational inefficiency
  • Non availability of resources
  • Ineffective cost management
  • Non- synergetic mergers and acquisitions    

While the internal inefficiencies are in themselves debilitating for the organisation, the tendency to cause organisation decline will depend largely on emerging external environment. If an organisation is weak in its functional areas, there is a greater chance of it getting adversely affected by the constraining external environmental factors. The various external factors of an organisation decline are increased domestic and foreign competition, product or service innovations by competitors, changes in customer expectations, innovations and technology, recessionary conditions and so on.

The reasons for organisation decline may not be just limited to the above mentioned factors. There for an entrepreneur while running his business must consider the factors of failure. And also identify & incorporate those strategies which are needed for the success of the organisation.

Turnaround Strategies
  • The process of bringing an organisation from decline to health is known as turnaround.
  • The following strategies have been considered for organisational success/ turnarounds.
  • Employee engagement strategy
  • Cost management strategy
  • Operational efficiency
  • Customer refocusing strategy
  • Corporate restructuring strategy

From the above it is evident that the entrepreneurs can solve the decline factors by a multi pronged remedial actions using several strategies. These strategies are indeed an essential ingredient for stabilizing the impact of turnaround success. This is perfectly in line with what happens in case of physical recovery from illness. 

The authors are Dr Sunita Panicker, Associate Professor, Christ University, Bengaluru & Veerappayya Hiremath, Research associate, Christ University, Bengaluru.


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magazine manufacturing defence gaar magazine 23 march 2015