CURRENT ISSUES IN ENTREPRENEURSHIP QUESTION AND ANSWERS

QUESTION ONE

In relation to global entrepreneurship define the term “gazelle”

A gazelle is an extremely fast-growing company, which maintains consistent expansion of both employment and turnover over a prolonged, period. There is no single definition, of what constitutes an “exceptional” growth rate, but20% and more per annum is a common definition.

As very small companies are almost bound to grow fast from a tiny base, they are usually excluded from discussions of gazelles. Some consider as potential gazelles only fast-growing companies which have already reached some turnover threshold.

Gazelles are quite scarce in most economies, comprising about 5% – arid at the most 10% – of all new entrants in a given cohort entry. They are of major political and economic interest because they are seen as potential large employers and wealth creators of the future.

However, research shows that most gazelles .have a major problem sustaining growth over more than-five years.

Example

High-tech and internet companies furnish many examples of gazelles such as Microsoft Apple, Dell, Yahoo, Google and Cisco were all gazelles in their earlier days. More recently, social networking sites such as Facebook and Twitter have grown their user bases very fast, exhibiting a gazelle-like-performance on this metric, but they have famously struggled to leverage this into spectacular turnover and profit growth.

QUSTION TWO

distinguish between “Business networking” and “business outsourcing”

A network is composed of people or organizations with which an entrepreneur discusses his business and business opportunities. Business networking therefore refers to the development of a link of persons, organizations and information that affect the business enterprise.

Business outsourcing is an arrangement where one company provides the services (that may usually have been provided by the company) to another company. Commonly outsourced, services may include, transport, catering, cleaning, repairs and maintenance, data handling and clerical services.

 

Outline six advantages of business outsourcing to an enterprise

  • It reduces cost          

The competitive nature of modern, day ’market has created a need in many firms to device ways of reducing expenditure. The poor .financial position and the need to increase profits have forced some enterprises to consider outsourcing some services from a supplier who may offer them at lower costs. Examples: repairs and maintenance transport Services, cleaning services and data processing services.     >

  • The organization is able to concentrate on its core functions

Many enterprises today may find themselves, engaged in a variety of activities that are not related to their core business. These activities may take the business resources of labor and facilities and deny the same to the key functions such organizations may outsource, all non-core functions from suppliers who are capable of performing.

  • Leads to the acquisition of new skills

A business enterprise may find that its’ in house skill (labour) is inadequate for a given activity or functions. Such an enterprise may outsource the service from a supplier who has, competent staff e.g. engineering and computer services.

  • Provides assistance in a fast growing situation

Some business enterprises may be growing rapidly and acquiring large market shares expanding their product portfolio and stretching the resources to the limit. Such an enterprise may need additional help in running the activities of business and be able to cope with growth. For example outsourcing customer support services to a supplier who has telephone lines and trade staff who can handle incoming customer calls

  • It prevents the occurrence of labour problems    

A business enterprise may find itself weighed down by problems with its labour force resulting to negative effect on productivity and overall business performance.

Example: Inability by a business, enterprise to motivate or retain a trained labour force. Such an enterprise may use an external supplier’s manpower and facilities for production so that problems with labor are handled by the supplier (external). Such an enterprise may concentrate on marketing activities only and leave production and engagement of labour to a supplier.

  • It leads to better business management

Some enterprises may experience problems of inadequate managers both in number and skill, inadequate management may result to high staff turnover, absenteeism, poor work and missed deadlines. Lack of suitable managers may force an entrepreneur to outsource the function to supplier in order to access, the good management of the supplier. Where this arrangements is not possible a business enterprise may outsource the managers themselves who will only base it to render the service when required.

Example: Outsourcing engineering services of managers that require high levels of expertise

  • It improves flexibility

Some enterprises experience extreme fluctuations in the volume of work due to the seasonal nature of demand. In order to eliminate expenditure during the low season such an enterprise may outsource some activities to a supplier who will, only be paid for the actual work done.

This converts a fixed cost into variable cost where the price paid will depend on the volume of transaction handled.

Flexibility allows a business to turn to other activities when need arises without the fear of previous resource commitment.

  • It prevents major investment/Heavy investment

A business enterprise may have a function that that is not as efficient as it should be and to modernize it in order to perform to/capacity, may involve a major expenditure.

Example: A transport service providing business may have an aging fleet of vehicles and servicing the same may be difficult while replacing the fleet may be a major investment. Such an enterprise may sell the fleet of vehicles to a supplier who may provide an upgraded fleet to the business a part of its service.

  • It enhances the business image

Some enterprises may use outsourcing as a marketing tool especially where the suppliers are well reputed in the market. outsourcing a service from the best known supplier can assist a small and ill- known company to draw from the supplier’s prestige. A company may also team up with a supplier who is well reputed to make joint product presentations to customers because the presence of the supplier gives the outsourcing company additional credibility in the market.

An enterprise should be socially responsible Argue five cases in support of the above statement

  • Community Development

Companies, businesses and corporations concerned with social responsibility align with appropriate institutions to create a better environment to live and work. For example, a corporation, or business may setup a foundation to assist in learning or education for the public. This action will be viewed as an asset to all of the communities that it serves, while developing a positive public profile.

  • Philanthropy

Businesses involved in- philanthropy make monetary contributions that provide aid to local charitable, educational and health-related organizations to assist under-served or impoverished communities. This action can assist people in acquiring marketable skills to reduce poverty, provide education and help the environment. For example, the Bill and Melinda Gates Foundation focuses of global initiatives for education, agriculture and health issues, donating computers to schools arid funding Work on vaccines to prevent polio and HIV/AIDS.

  • Creating Shared Value

Corporate responsibility interests are often referred to as creating shared value or CSV which is based upon the connection between corporate success and social well-being. Since a business needs a productive workforce to function, health and education are key components to that equation; Profitable and successful businesses must thrive so that society may develop and survive. An example of how CSV works could be a company-sponsored contest involving a project to improve the management and access of water used by a farming community,  to foster public health.

  • Social Education a Awareness

Companies that engage in socially responsible investing use positioning to exert pressure on businesses to adopt socially responsible behavior themselves. To do this, they use media and Internet distribution to expose the potentially harmful activities of organizations. This creates an educational dialogue for the public by developing social community awareness. This kind of collective activism can be affective in reaching social education and awareness goals. Integrating a social awareness-strategy into the business model can also aid companies in monitoring active compliance with ethical business standards and applicable laws.

  • Ethical Labour Practices

Treating employees fairly and ethically are other ways companies can practice corporate social responsibility. This is especially true of businesses that operate in international locations where employees aren’t always treated with the same respect that workers are in the other countries. Research shows that consumers are extremely quick to turn on companies found operating sweatshops or violating other ethical labour practices.

QUSTION THREE

Pollution is a major environment concern today. Suggest six measurement that a manufacturing entity could put in place to minimize pollution.

Waste minimization

Western minimization methods are divided into two primary categories source, reduction and recycling (on-and off-site).

Source Reduction is the preferred option and is defined as any activity that prevents or reduces the generation of waste(s). It does not mean reducing the volume or toxicity of an already generated waste. .

Recycling is the use (directly use waste(s) in a different process), reuse (directly reuse waste £ me process), or reclamation (recover or regenerate a component for reuse) of waste materials constitutes recycling. It is the secondary option in the management hierarchy because the wastes have already been generated, thus representing some hazard to the environment if mismanaged.

 

 Management Initiatives

A successful waste minimization program must have complete management support in order to achieve the ultimate goal of eliminating or minimizing wastes. This commitment must be demonstrated by management and be passed on to employees working in areas that generate wastes. Employees are one of the best resources for waste minimization ideas and should be considered as active participants in the program. Management approaches include:

  • Declaring the waste minimization commitment and goals to employees in-writing.
  • Committing resources to implement changes that will eliminate or minimize wastes.
  • Establishing employee incentive programs such as honorary or monetary awards to encourage employee to develop, arid implement waste minimization options.
  • Providing employee training in waste minimization, hazardous waste and hazardous material handling, and emergency response.
  • Establishing a task force or committee to review or identify-waste minimization opportunities

 

 Improved Operating Practices

Also .known as ‘good housekeeping practices’ improved operating practices are among the least costly and easiest methods to minimize waste(s). when hazardous materials are spilled, mixed with wastes, or become too old to be. used, they are considered hazardous wastes. Such wastes can be minimized through:

  • Careful control, of inventory to avoid overstocking by employing a stockroom attendant and using a “first-in, first-out” materials policy
  • Segregating different types of waste to promote recycling and avoid contaminating non hazardous wastes
  • Preventing spills and leaks by keeping containers covered, inspecting them .regularly and using pumps or spigots to dispense materials.

 

 Waste assessments

Sometimes called a waste audit, a waste assessment is an essential component of a waste minimization program. A waste assessment can also be used for planning and allocating resources, and it can be used to measure waste minimization progress. A waste assessment should at a minimum:

  • Identify the types and amounts of waste(s).generated by the various processes.
  • Identify the major material losses and their causes.
  • Identify and evaluate potential Waste minimization methods.
  • Itemize current waste: management expenditures and estimate the costs of alternative waste minimization practices.

 Material Substitution.

Often a company can minimize wastes or avoid waste generation altogether by using alternative or substitute materials which are non-hazardous to produce products or provide services.

 Product Substitution

In some cases, companies have become so motivated to minimize hazardous wastes that they have actually eliminated products which result in the generation and handling of wastes.

 Technology and Process Modification

Inefficient or high volume waste generating processes can be upgraded or replaced by more efficient processes which minimize the waste(s) generated.

QUSTION FOUR

Highlight the measures that an entrepreneur could take to control environmental pollution

  1. Use of better designed equipment and smokeless fuels, hearths in industries and at home.
  2. Automobiles should be properly maintained and adhere in recent emission-control standards.
  • More trees should be planted along the business buildings and lanes
  1. Renewable energy sources, such as wind, solar energy, ocean currents, should fulfill energy needs.
  2. Tall chimneys should be installed for vertical dispersion of pollutants.
  3. Waste food material, paper, decaying vegetables and plastics should not be thrown into open drains.
  • Effluents from distilleries, and solid wastes containing organic matter should be sent to biogas plants for generation of energy. .
  • Oil slicks should be skimmed off from the surface with suction device. Sawdust may be spread over oil slicks to absorb the oil components.

QUSTION FIVE

Entrepreneurs are supposed to be socially responsible

Briefly explain six areas in which entrepreneurs could exercise social responsibility

  • Safeguard the environment
  • Support human rights
  • Eliminate child labour
  • Adopt codes of ethics
  • Enter into partnerships with NGOs
  • Display openness and transparency in relationships with customers, employees, community groups, and governmental organizations
  • Promote diversity in the workplace
  • Help communities solve their social problems
  • Consult with community residents on business plans and strategies

QUSTION SIX

Explain four environmental factors that should be taken into account when operating a business in a foreign country

  • Tax regulations- whereby the tax rates are different in all countries thus the entrepreneur should familiarise himself with the relevant charges.
  • Foreign exchange fluctuations- the entrepreneur should consider how the fluctuations will affect his returns and make the relevant decisions.
  • Political stability e.g. Somalia-the entrepreneur should consider the political stability of the country he is investing in as a politically unstable country would result in the business incurring huge losses .e.g. In wartime, countries such as Somalia.
  • Legal procedures followed to register businesses- he should ensure that he adheres to all the legal procedures requires to register a business.

QUSTION SEVEN

Summarize five unethical behaviours that could be practiced by entrepreneurs

  • Formation of cartels by firms operating in the same business line in order to make quick profits rather than engaging in healthy competition.
  • Engaging in money laundering. Business may act as avenues to hide money obtained from drug and poaching activities.
  • Fraud in terms of cash and other items of high value.
  • Evasion of taxes by the business either by not disclosing appropriate revenue earned and not keeping proper tax documents.
  • Neglect of social responsibility activities such as cleaning of the environment and provision of basic social services.
  • Discrimination against employees and unethical labour behaviour such as child labour and human trafficking.
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