BUSINESS DYNAMICS AND THEIR REQUIREMENTS 4
Question 1
Challenges associated with expanding business.
By expanding the market that the company will be serving, the company must be prepared to be met with some challenges that need to be addressed to thrive in the new market experience. These challenges include:
Human resource
As the company is expanding, the internal structure of the organization has to change to suit the new responsibilities that the company need to indulge. Since the scope of the market has increased, this market needs to be attended to, meaning that the number of employees will increase to offer satisfactory services to clients. The human resource department also has the obligation to train the existing workforce so that they will possess the necessary skills needed in serving the new market that has different characteristics from the previous market (Zahra, Hayton, Marcel & O’Neill, 2001).
More competition and dealing with different markets.
While operating in the previous coverage may mean that the business had dominated the market, expansion exposes the business to new competition with increased players in the market who are more developed in the market. The new markets mean new services need to be in place to serve the collective needs of the new market (Matthews, 2007).
Ensuring that the business is secured against the risks of expansion.
While expanding the business might seem something to rejoice in, assessment of the risks that might be associated with expansion is paramount. After identifying the risks, the next step involves making sure that the severity of these risks is reduced mostly by having an insurance cover.
How to begin
After assessing the challenges, the business will analyze what they need first which will be in line with the financial capabilities of the company and acquire the essential requirements first to help them survive in the new market.
Question 2
Merger and the role of the human resource.
JAB which is an investment company based in Europe acquired Panera a chain food company that had registered steady sales making food items part of the JAB’s portfolio. The activity that took place where the two businesses came to be under one owner is known as a merger. The human resource department has a role to play in such an event, and these roles include:
Ensuring that the employees adapt to the change that has taken place as well as the new culture that they have been subjected to (Mendenhall, 2005). Training the employees who were working in Panera in our case to adapt to the JAB’s culture is one of the roles of the human resource. Redesigning of the organizational structure to suit the new roles and responsibilities associated with the merger. Looking for competent individuals who will fill the new positions to ensure productivity is maintained. The human resource will be responsible for organizing compensation as well as welfare plans. The records of the individual employees must be kept in order to track the performance which is useful in making important human resource decisions. The human resource will also ensure compliance with the labor laws within the new working environment (Aguilera & Dencker, 2004).
References
Aguilera, R. V., & Dencker, J. C. (2004). The role of human resource management in cross-border mergers and acquisitions. The International Journal of Human Resource Management, 15(8), 1355-1370.
Matthews, P. (2007). ICT assimilation and SME expansion. Journal of International Development: The Journal of the Development Studies Association, 19(6), 817-827.
Mendenhall, M. E. (2005). Mergers and acquisitions: Managing culture and human resources. Stanford University Press.
Zahra, S., Hayton, J., Marcel, J., & O’Neill, H. (2001). Fostering entrepreneurship during international expansion:: Managing key challenges. European Management Journal, 19(4), 359-369.