Explain and summarise the main reasons why such a large firms fail to Essay

Explain and summarise the main reasons why such a large firms fail to grow - Essay Example The point of concern is that in the today’s world, most of the entrepreneurs do not possess these characteristics and that is the reason why they are not able to grow their businesses successfully. An entrepreneur should be able to understand all business practices and cross-cultural issues in order to make a permanent place in the market. Understanding of the cultural, political, and economic environments of the country is also very important for an entrepreneur to be successful. There exist many reasons, which stop the firms from making a rapid growth. Some of the most significant reasons include poor execution of strategies, improper management structure, unfriendly economic environment, unskilled staff, lack of capital, lack of quality services, improper use of profits, overhead costs, unavailability of the technology, overexpansion, and ineffective marketing planning. These factors make it very difficult for most of the firms to grow rapidly and successfully in the market . Let us discuss all of these factors in some detail in order to get a better understanding of the issue. Improper Management Structure Improper management structure is one of the reasons behind the failure of most of the firms. A firm needs appropriate management structure not only to grow but also to survive in a market. ... Management of a business cannot be done by one or two individuals rather a business requires the efforts of all of the employees working for the firm in order to be successful. A proper management structure is very critical for the growth of a business. A single person cannot control a firm employing a large number of people. The managers of the businesses need to transfer controls to the employees in order to motivate them and also to make them feel valued. In this way, the employees begin to work hard for the firm, which results in increasing the productivity and profitability of the business. A single person does not have all required skills and abilities to run a business. For the proper management of a new business, different areas of a business such as finance, purchasing, selling, production, and hiring and managing employees require the efforts of different people having relevant educational and professional backgrounds. Therefore, the managers should not only empower the emp loyees but also should make them take appropriate decisions for the proper growth and development of the firms. Poor Execution of Strategies One of the main reasons why most of the firms fail to grow in the market is poor execution of business strategies. Most of the managers do not possess the ability to develop and implement appropriate business strategies. A well-developed strategy is a key towards success of a business. A business cannot stand among its competitors without having a well-structured business plan. It is because a business plan includes appropriates set of actions which make a business grow in a market. So without having clear goals and objectives and without looking at different aspects of the business, it becomes very difficult for an entrepreneur to make the