A business is similar to any other organisation and is made up of various groups of people. Business operates in a dynamic environment and this impacts upon relationships. The world of business is changing rapidly with the emergence of new organisational forms, new management approaches, rapid technological innovations and most importantly more demanding customer expectations. The fast changing business world can cause relationships to compete against each other and can ultimately cause conflict and friction. The efficient management of these relationships is essential for future business success. Change faces managers on a daily basis and must be managed effectively for business success. In this context, managers must assess the need for change, understand what the driving forces for change are and communicate the desired future direction to all concerned.
Some of the relationships
will be directed by legal principles where two parties may enter into a
legal contract. Other relationships may also be guided within the context
of the law such as the relationship between employees and employers being
subject to Industrial Relations legislation. However most relationships
are based upon mutual trust and commitment. With workforces being better
educated today, many employers have moved towards giving greater responsibility
to employees as a result of much improved relationships. When a higher
degree of trust enters the relationship, there is less need for employers
to exercise control mechanisms such as supervision. This changing process
has seen the emergence of empowerment which involves giving subordinates
more responsibility. This allows for better services to customers and a
better job satisfaction for employees who in many firms today are organised
in teams. For a business to be successful, careful management of both the
internal and external relationships must be exercised. Recognition must
also be given to the changing nature of these relationships and the need
for these businesses to constantly adapt.
The key people a business depends upon are as follows:
| Interest Groups
These are groups that wish to influence the political and decision making process but are not part of the accepted political structures of the country- examples include farmers, trade unions and Greenpeace. They have recognised their potential power, and have become more active politically in trying to influence the decision making process. They organise letter writing campaigns to editors, legislators and business executives. Prior to formulation of a Budget, many interest groups exert pressure on the Minister of Finance. Interest groups are also known as lobbyists.
Business needs to be aware of the actions and strategies of their major competitors and determine how those strategies affect their own. It should also be recognised that it is not enough just to analyse available information as a business should develop the capability for collecting ongoing information about competitors. To gain a competitive edge, a business must engage in benchmarking. This involves adopting best practices from competitors. It is also essential to understand accurately who your competitors are and emphasise your strengths and minimise your weaknesses. In a TQM environment, there should be no weaknesses.
Trade Unions are organisations whose main aim is to represent the interests of employees. The Irish workforce is regarded as still being highly unionised. The profile of the Irish trade union movement has been enhanced over recent years with their participation in Social Partnership. The Social Partnership model has been viewed as the cornerstone of the Celtic Tiger. Modest wage increases have been accepted in return for tax reform and job creation. However, the trade union movement has also come under pressure from firms who refuse trade union recognition.
Employees today are better educated than in the past. Most progressive companies view employees as their most valuable resource and a source of competitive advantage. Successful companies provide excellent working conditions for their employees. As a result their is a greater degree of trust in the employer/employee relationship, leading to greater commitment from employees. This leads to better customer service which results in greater volume of sales and profits.
It is imperative that employers provide a safe and healthy working environment for their employees. In recent years, many of the top employers have adopted HRM strategies as a means of achieving corporate objectives. A workforce that is well cared for, will give greater commitment and loyalty in return. For service businesses, establishing good relationships with customers is an essential ingredient for success.
Successful businesses must be customer oriented rather than producer oriented. Quality and after sales service are now considered just as important as price. It has also become essential for producers to build strong relationships with suppliers and customers. Standards like ISO 9000 are essential to gain a foothold in most foreign markets today.
Governments play an important role in providing supports for business to succeed. Agencies like IDA and Forbairt have played a prominent role in aiding industrial expansion in recent years. Irelandís low corporate tax rate has been of great benefit in attracting foreign industry. The government is also a big customer for business as well as being the largest employer.
Entrepreneurs are the risk takers who start up a business. The rewards come in the form of profit. Entrepreneurs are very optimistic people who have plenty of confidence and drive. They are the innovators who come up with new products and services. An intrapreneur is an employee who comes with new product/service ideas or cost cutting measures that will save the firm a lot of money.
Business must develop good relationships with the local community and be a good neighbour. Many present and future employees come from the community. No business wants to engender bad press with this grouping. The local community can also be important customers. Some firms provide sponsorship for local activities and also invite the community into the firm by way of Open days.