Monthly Archives: September 2013

The secrets of HRM revealed

As an entrepreneur, it’s our job to make our customers happy with our own inventions that could bring great benefit for them. But aside from that lies different departments on a firm with various functions such as operations management, marketing, finance and Human Resource Management or HRM for short. Though these branches have diverse uses, each has its own strengths and weaknesses that will help a small firm grow and be successful. One of them is Human Resource management which we will be discussing in the next few paragraphs that includes the big question every business people wants to know which is how it is considered to be an important asset in the business world.

So what is Human Resource Management? According to the article of The ‘science’ and ‘practice’ of HRM in small firms written by Susan Mayson and Rowena Barrett: “It allows us to view a firm’s employees as a source of value and, combined with the systems used to manage them, as a source of competitive advantage.” Another quote from the article states: “It is concerned with understanding how a firm’s human resources can contribute to firm performance and sustainability through the achievement of sustained competitive advantage (Barney & Wright et al., 2001, 2005).” It also implies that: “employees are a source of strategic value and their development, deployment and organization all contribute to firm performance and sustainability.” From the definitions and quotes mentioned earlier, HRM is about making the employees feel important or rather than be a significant member of your company instead of merely treating them as just workers that you often discriminate or ridicule because of their position.

In order to apply Human Resource Management, one must remember to hire your future employees based on their strengths and weaknesses in improving your business. You must make sure that the person you hire is the right man for that kind of particular job who will make you, the boss and your company proud. Aside from that, it is not only your employees who need to adjust to their new workplace, but you, yourself must do the same for the sake of your new workers. Just like what the article says about having new strategies which is: “the ability of small firm owner-manager to develop strategic awareness capabilities contributes to firm survival and success.” By having new strategies for the benefit of your company and your employees it will lessen the tension between two bosses and will have greater probability to go to the road towards success. This is a-must for both positions to be able to avoid the downfall of it which is: “Indeed Scase (1995) argues that those small firm-owner-managers who are unable to change their style act as a barrier to firm growth” (see Penrose, 1959).

I think the most important thing that we must remember as future entrepreneurs is that we must not forget our manners in learning to respect our employees for us to bring satisfaction to our customers with their help and to gain loyalty towards our workers. Better yet, treat them like a friend or a member of your family for them to loyalty towards you and your company in order to avoid problems concerning work.

By applying HRM in business, we can learn how to manage our people in our company through respecting our fellow employees for they are the vital part in the company wherein they are also responsible in serving the customers in meeting up their expectations and in helping us entrepreneurs in making our new ideas into a reality that people could use in their everyday life. Without them, we may not be able to do all our tasks needed ahead of time since it is part of their job to help us entrepreneurs in our work in order for our business to grow and expand into a larger firm.

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Comparing Angel Investor and Venture Capital: Which one’s better?

According to Stephen Prowse’s article about Angel investors and the market for investments, The Angel Market is a very distinct and localized market. It is also a provider to small, private firms, more on to private equity capital. Most of these angels often have entrepreneurial backgrounds so they tend to have start-ups in investments and other small companies. They have ownership in this firm and is also active in giving out advice that can bring benefit for the company.

There are also two kinds of Angels which is the active and passive investors. Active being the one who monitors the company they invest in and gives advice to workers on different situations while the passive is the one who only provide money and rarely monitors the company they are in unlike the active ones. The active angels are also known for their knowledge on entrepreneurial backgrounds since they themselves are ex-entrepreneurs who still have a knack on management and on other related stuff in this subject.

On the other hand, as Paul Burmeister stated in his article entitled: What to present to Venture Capitalists, enumerates the rules needed in making a good impression towards the capitalists in order for you to succeed and to have a possibility that you may get hired by these brilliant people. It is really important for you to give satisfaction to your soon-to-be coworkers or rather future bosses because they will play a big role in helping you get successful in the future.

The anomaly between the two is that angel investors are more likely to be staying on your side for it is their job to mold you into becoming an entrepreneur like them while the venture capitalists tend to give advice but on various things which could help you to succeed.

Though both may seem a great tool in starting up your business and be successful, I choose the Angel Investors than the Venture Capitalists because I wanted to have someone who’s like a teacher with past experiences towards entrepreneurship which could be an advantage for me to achieve my goals I wanted to accomplish in the near future.

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Business: Its Importance and benefits

Creative destruction was first used by Joseph Schumpeter by means of describing the way how the free market delivers its progress. He also stated that it is applied on businesses especially when it comes on improving one’s economic structure, then replacing the old one thus creative destruction was revealed. Meanwhile, strategy involves a variety of activities in which companies must compete with its rivals in making sure that their products meet up with the customer’s needs and wants. On the other hand, opportunities are present in starting one’s business since it involves encountering an unsatisfied need that we may or may not realize at first, but will eventually allude itself after some time.

Problems in growth system such as lost jobs, ruined companies and vanishing industries are all normal in trying to maintain one’s organization and prevent it from going bankrupt.  In this kind of case, creative destruction will be of great use on operating your job since there will be a possibility that your business will prosper, increase its production and your customers get to see it’s benefits and to make things better for them, they will also have shorter work sheets, better jobs and higher living standards. For instance, as stated in the book of creative destruction by W. Michael Cox and Richard Alm the evolution of transportation starting from the 19th century up to the 1920’s is a great example on how creative destruction is applied. Starting out as railroads for it is famous back in the 19th century up to automobiles in the 1920’s for car makers are famous on their time, then finally, the invention of flying vehicles such as the airplane set out in the world giving out the opportunity that people will be able to make a living out of it by working as a pilot. From the example given earlier, this proves that creative destruction is already present even in the old days evolving from one vehicle to another, which pretty much sums up the purpose of creative destruction which is to change the economic structure inside, destroying the existing one and creating a new one.

Making trade-offs is one of the requirements in strategy when it comes to competing with your rivals. One of its uses is choosing what not to do. Instead it requires in being quickly imitated so as not having trouble in developing new ideas for your business since your performance depends entirely on operational effectiveness. For example, as stated in the book “What is Strategy” written by Michael E. Porter, it is pointed out that trade-offs creates a need for customers in making choices and is also a protection against repostioners and straddlers. Think about the Neutrogena soap for instance. Their goal is to make a product “kind to the skin”. To strengthen its meaning, they focused in distributing their product to drug stores and avoided price promotions and also refused deodorants, the kind that customers want in their soap to which Neutrogena refused to make since it gave up the large volume potential of selling and using promotions through supermarkets.  This shows that trade-offs may bring great benefit for your business, but there’s an issue for that since it has limits when it comes on creating a need that meets up the customer’s needs and wants.

The saying “opportunities come and go” is quite accurate in comprehending what opportunity is all about. It is not often recognized since most of us are often too worried about our problems that we didn’t have time to see the silver lining in our situation. For us to be able to identify a new opportunity in our case, we must know the following four things:  a need; the way that need is currently being satisfies; the cost of supply and; and the economics of supply as stated in the book “Towards an understanding of opportunity by Ben Hulbert, Reva Berman Brown and Sophie Adams. This explains that by knowing these four things, we will be able to change our perspective in seeing situations as opportunity or threat and at the same time, transform ourselves in becoming optimist instead of elephant thinkers/pessimists.

From what I’ve been telling you about the importance and benefits on one’s business, we need to be practical on how we see things or rather than on other people’s point of view in order to understand their needs, wants, expectations and satisfaction which are the most important factor of all in having a job in the future. Not to mention the fact that we must always keep in mind to be tactical on important things because we’ll be on our own and pretty much will have to be independent in having a successful business.

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