Assignment Sample on Comparative Analysis of Traditional Profit
Introduction
A business may effectively and efficiently achieve all the business objectives with the help of a proper business model with the help of internal and external stakeholders in a business management. The significant way to reach business success may be determined by the business model, more specifically, in the UK there are several businesses which may maintain different types of business models. However, all the business models play a vital role for expanding the business for success. In this essay, the effectiveness of traditional profit-centric and employee owned business models will be discussed along with its impact on commercial success.
Comparative analysis of traditional profit centric enterprise and employee owned enterprise with reference to real examples
Traditional profit centric enterprise model refers to an ideal business model through which the business management may direct their strategic ways to develop the business for only business profit. Traditional profit-centric business models may create an effective outline regarding the business plan through which the delivery of the products and the services along with the best quality may be done. In addition to that, the business management may provide basic management rules which are definitely maintained by all the employees in this business. In order to fulfil all the customers’ needs, it is necessary to implement effective rules to control the business operation which may help to improve the business. Traditional profit-centric business model innovation may be considered a key factor for sustainability and financial performances through which the business may achieve its target on time (Geissdoerfer et al., 2018). The main motive of this model is profit from the businesses, more specifically, the customers’ satisfaction is more important in this business model as the customer satisfaction may help to expand a small business. On the other hand, it may be stated that for surviving in the global competition, business needs a traditional profit-centric business model which creates value in a particular business by improving the quality of the services and the products.
In an organization, particularly a business model needs to be implemented as a combination of different models in a particular business may create conflicts among the stakeholders in a particular business (Armour and Sako, 2020). On the contrary, it may be argued that the traditional profit-centric model may only concentrate on the profit, however, this business model may not concentrate on the employees, as a result, and this has a negative impact on the business to achieve the business targets. In a business where the traditional profit-centric model has been implemented, employee satisfaction is needed as the business depends on the customer value. The employees perform well if the employees are motivated towards the business objectives, on the other hand, it may be argued that according to the traditional profit-centric model, profit is only the main factor, therefore, the employees may not be satisfied which has an effect on the business productivity. Small clothing retail company in the UK, MatchesFashion may operate their business with the help of traditional profit-centric enterprise business model where expanding the profitable business in the UK is the important factor for MatchesFashion (Matchesfashion.org 2021). For commercial success through traditional profit-centric enterprise business models, it is highly necessary to provide employees satisfaction with a positive motivation through which the motivated employees may help to fulfil all the customers’ demands on time.
In case of decision making procedures in Matches Fashion, the employees who are involved in this business have no right to keep their opinions regarding the business related activities. Therefore, it may decrease the employees’ satisfaction which is necessary to meet all the business goals. Apart from this, customer satisfaction may improve the values of the products delivered by a business that means business may exist for the customers and without customers, business may not sustain globally (Ilias and Shamsudin, 2020). The employees are not free to exchange their thoughts and ideas in front of the business management and the employees only perform the work regarding activities according to the business management in the traditional profit-centric enterprise business model. Along with this, this business model has a lack of individual authority which has an adverse effect on the business success according to the traditional profit-centric enterprise business model. The other disadvantage of the traditional profit-centric enterprise business model is over specialisation, more specifically if a business has rigid job specialization then the employees may limit their skills and responsibilities as the requirements of the tasks. In addition to that, the employees may not improve their personal development skills as the employees may not utilize their own thoughts in their work.
Along with this, the creativity of a particular task may also decrease as the employees perform according to the instruction in case of traditional profit-centric enterprise business models. The traditional profit-centric enterprise business model may not maintain global sustainability because the performance rate by this model may decrease as a result, traditional profit-centric enterprise business model may not hold the competitive market in the UK. An effective business model such as employee owned enterprise model may help to improve the business as well as the business may hold its position in the UK market. In employee owned enterprise model, the employees may be considered as the shareholders, therefore, their contribution in the decision making process may be effective to control the business significantly. On the other hand, it may be stated that entrepreneurship educators may provide their experiences, skills and knowledge to motivate the employees regarding the tasks which may be helpful for the traditional profit-centric enterprise business model (Ibidunni et al., 2017). Although the employee owned enterprise has several financial risks regarding the business activities, however, employee owned enterprise may be considered as an effective business model for the business in comparison to the traditional profit-centric enterprise business model.
In addition to that, employee owned enterprises may focus on the employees’ satisfaction as well as the business objectives through which this business model is more effective than the traditional profit-centric enterprise business model. One of the prominent examples of employee owned enterprise is Apple where employees of the enterprise hold a significant share of the company’s overall profit. Furthermore, it definitely needs to be mentioned that due to employee owned enterprise the managers of this enterprise has witnessed significant commercial success within a short period of time. Moreover, the managers of Apple may have given adequate independence to all the subordinates regarding their particular tasks which have definitely added to the commercial success (Apple. 2021). Supreme satisfaction which all the subordinates receive from their tasks holds a major significance towards commercial success as commercial success as supreme job satisfaction leads towards better quality of the performance. In addition to that, the management of the company provided a significant scope for all the employers to put forth their innovative ideas in a particular task which has led to better outcome of particular products or services. The managers of the company focus on the democratic leadership style rather than autocratic leadership style which enables them to engage every employee in particular tasks.
Furthermore, it may be stated that the democratic leadership styles are also known as participative leadership styles which enable the employees to take part in all sorts of decision making processes. Furthermore, with this approach the managers are able to distribute share among the employees which will in turn provide them supreme job satisfaction towards the achievement of much awaited goals. Moreover, it may be stated that democratic leadership suggests that leadership may include employees in an effective decision making process rather than treating them just as the followers of a leader (Woods, 2020). Along with that, the managers of Apple depend on the organizational culture which is open for creative innovation and the managers put focus on the creating mind sets of all the employees. Hence, it may be stated that the subordinates may work harder towards the achievement of much awaited goals with the help of proper organizational culture which will lead towards effective internal communication as well as proper employee engagement. In addition to that, it may be stated that the employees of any employee owned enterprise as well as Apple works for themselves as organizational growth will lead towards employees’ personal growth. Moreover, organizational culture such as cultural safety plays a significant role in leading Apple towards much awaited success as the managers put focus on the mental health and physical health of all the subordinates (Apple. 2021).
However, the organizational structure is divided in two parts, formal and informal and Apple has got both the structure which makes the employees to do certain tasks in a specific manner while keeping room for applying creativity (Tasnim, 2018). Furthermore, the managers of Apple have put focus on employee engagement as well as internal communication with the help of incorporating democratic leadership styles which in turn has led the organization towards much awaited success. In general, it may be mentioned that employee owned enterprises may have certain limitations such as employee’s absenteeism as well as improper attitude of the employees which may directly affect such enterprises. On a contradictory note, it may be argued that in case of Traditional profit centric enterprises absenteeism may take place as employees are not as labourers and they most of the time do not get performance recognition rewards. Hence, it may be stated that these limitations directly make a negative impact on the overall growth of these two types of organizations. Moreover, it may be stated that this makes a huge impact on the commercial success of the business due to various reasons which may or may not lead these two types of enterprises towards commercial success.
The managers of traditional profit centric business only focus on the profit of the business while neglecting the well being of the customers which definitely makes a negative impact on the traditional profit centric businesses. On the other hand, the managers immensely put emphasis on the employees’ engagement as well as effective internal communication as these are main factors behind the quality outcome of a particular task. Furthermore, all the employees of Apple receive supreme job satisfaction as all the employees take part in effective decision making process which in turn boost their confidence and lead the enterprise towards personal development as well as organizational development (Apple. 2021). The subordinates may communicate their innovative as well as effective ideas to the managers which ensure that internal communication is intact and along with internal communication ensures that all the employees are engaged in their given task with complete dedication. Therefore, it may be stated that the managers of employee owned enterprises with the help of proper organizational culture may easily lead towards the accomplishment of much awaited goals within a given period of time.
Furthermore, it needs to be mentioned that the managers use organizational cultures to differentiate its company from other enterprises (Pathiranage, 2019). There are many opportunities for the employees to develop their personal growth with the help of creativity as well as innovativeness which will in turn lead towards the commercial success of any enterprise as well as Apple. Furthermore, it may be mentioned that employees experience a perfect working environment inside the workplace of an employee owned enterprise while in a traditional profit centric workplace the perfect working environment is quite often neglected. Moreover, organizational culture influences innovation as well as creativity inside any enterprises (Upadhyay and Kumar, 2020).
Conclusion
Considering all the information mentioned above, it may be concluded that the employee owned enterprises are way better than traditional profit centric enterprises as the former one leads towards success within a significantly short period of time. Furthermore, it may be concluded that the management of Apple follows democratic leadership style which opens up a huge scope of putting forth innovative ideas of all the subordinates towards achievement of much awaited success. Moreover, it needs to be concluded that an empowered organizational culture will provide all the employees of employee owned enterprises the authority to perform tasks on their own without depending on others.
References
Apple (United Kingdom). 2021. Apple (United Kingdom). [online] Available at: <https://www.apple.com/uk/> [Accessed 26 March 2021].
Armour, J. and Sako, M., 2020. AI-enabled business models in legal services: from traditional law firms to next-generation law companies?. Journal of Professions and Organization, 7(1), pp.27-46.
Geissdoerfer, M., Vladimirova, D. and Evans, S., 2018. Sustainable business model innovation: A review. Journal of cleaner production, 198, pp.401-416.
Ibidunni, A.S., Peter, F. and Ogbari, M., 2017. ENTREPRENEURSHIP EDUCATOR’S COMPETENCEON UNIVERSITY STUDENTS’COMMITMENT TO LEARNING AND BUSINESS PLAN WRITING. Academy of Strategic Management Journal, 16(2), pp.1-10.
Ilias, S. and Shamsudin, M.F., 2020. Customer Satisfaction and Business Growth. Journal of Undergraduate Social Science and Technology, 2(2).
Matchesfashion.org 2021. Matchesfashion. [online] Matchesfashion. Available at: <https://www.matchesfashion.com/intl/> [Accessed 26 March 2021].
Pathiranage, J., 2019. Organizational culture and business performance: an empirical study. International Journal of Economics and Management, 24(2), pp.264-278.
Tasnim, M., 2018. An Organizational Analysis on Apple. European Journal of Business and Management, 10(11).
Upadhyay, P. and Kumar, A., 2020. The intermediating role of organizational culture and internal analytical knowledge between the capability of big data analytics and a firm’s performance. International Journal of Information Management, 52, p.102100.
Woods, P.A., 2020. Democratic leadership. In Oxfor
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