Business opportunities and factors that influence the growth of the business.
There are the following types of business opportunities and factors that influence the growth of the business described below:
In most of these companies, to keep up with whatever real growth had occurred, leadership started looking at acquisitions to maintain their growth percentages. The downside of this rapid expansion did not allow for sufficient managerial oversight to develop and stabilize operations, leaving key performance indicators overlooked.
Subsequent analysis of these companies after their failures indicates that they could have safely grown 7.5 per cent annually – enough to keep many stockholders happy. Thirty per cent annually over a five year period is just too much.
The ability to adapt to changes is one of the most vital of all company survivability attributes. Yet excessive diversification coupled with too much attention devoted to new business ideas can starve a company’s core business strategy. The result of over-diversification is a lost corporate identity.
For example, although the digital communications company Qualcomm Incorporated is not a failure and has not declared any form of bankruptcy, some of their top personnel wrestled with a key question during the company’s phenomenal growth years in the mid-1990s: “Are we a telecommunication company that makes chips or are we a chip company that’s also involved with telecommunications?”
Top executives with strong visions are great to have onboard. But those who gain too much power often become dangerous to a company’s survivability. According to the study, firms were more likely to achieve and sustain superior performance when powerful board members were able to keep powerful leaders in check.
Autocratic leaders pursuing lofty goals can take companies away from their core business and blur a corporation’s identity.
Competitive reward systems were common in these business crashes. Such systems are powerful in spurring success, but they often remove a balanced management approach. As a result, employee trust begins to wane. Lower trust levels lead to subjective communication, which leads to poor decisions.
Essentially, imbalanced management leads to severely weakened performance that many can’t see until it’s too late. Interestingly, successful companies weren’t the only ones that suffered crashes from extremes in these four areas.