Creativity and Innovation of FRACINO

Assignment

Entrepreneurship is explained as a procedure adopted for carrying out activities for launching operations of a new business. It requires that a systematic approach be followed for starting a small new enterprise. A person who is involved in the process of manufacturing, offering, selling, and distributing products is known as an entrepreneur. Entrepreneurship is about launching a new business to earn profit and financial revenue (Bridge and O'Neill, 2012). A new business is developed by the willingness and desire of an entrepreneur, and all the operations of the business are managed by the entrepreneur.

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It is vital that a strategic vision be set for starting a new business, and it should provide directions for running business functions. FRACINO is a leading British manufacturer of coffee machines, and the management of the company is planning to expand its business operations in the European market. SMEs have contributed to the growth of the UK economy, and the infrastructure of the nation has been developed due to it. SMEs have played a significant role in the social and economic development of countries, and these organizations are the backbone that is driving the growth of nations. Employment opportunities are created for people, and a wide variety of products and services are made available in the market for people (Davenport, 2013). Expansion in operational activities of SME's aids in opening new markets and enhancing competition in the market area. Taxes and revenues provided by SMEs support increasing government funding, which is spent on providing better public services to people. Small business enterprises help in the proper contribution of products and services as they help in the proper contribution to the community in the different ways in which they can facilitate job opportunities.

Some external and internal factors have an impact on the growth and development of local small and medium enterprises. These factors are as mentioned:

Internal Factors:-

1. Management capacities and leadership provided by managers: The top management of FRACINO provides directions and instructions to subordinates, and it supports giving better directions to subordinates. The leadership provided by management will not be as good as it will be due to the difficulties that will be faced in executing the day-to-day operations of the business. Managerial skills shown by managers play a significant role in rendering better instructions and commands to subordinates (Carland and Carland, 2015). The growth and development of enterprises get affected when there is a lack of proper leadership, which affects the activities of enterprises.

Managerial capacities of top management are associated with growth patterns, and due to that, the overall success of the enterprise is affected. If there is a lack of core competence and managerial skills, then proper commands will not be given to subordinates. If subordinates do not get proper commands and instructions, then the daily functioning of the entity will be affected (Simons, 2013). Managerial skills are a significant factor that has an impact on the growth and success of SME's. Positive support shown by leaders aids in enhancing the morale and motivational level of staff members. However, if managers do not provide proper commands and orders to subordinates, the enthusiasm of employees will decrease, and they will show less effectiveness toward completing their work.

Managers must render better and more effective leadership to subordinates so that the required function of the entity can be completed on time. Proper leadership provided by managers enhances the quality of work procedures, and desired functions are completed on time with great efficiency (Johnston and Bate, 2013). The motivation provided by managers enhances the morale of staff members, and they complete their assigned tasks more effectively.

Seminars and conferences can be organized for top management people so that their managerial capacity and capabilities can be enhanced. In addition to this, management games and role-playing sessions can be organized in an entity so that the leadership skills of managers can be developed. All the methods will support the development of leadership skills, and managers will become capable of rendering better directions to subordinates.

2. Human Resources: Employees are the most significant stakeholders that support accomplishing set targets of SME's by rendering their positive support. All the strategies and action plans formulated by top management are executed and implemented with the effectiveness shown by staff members of FRACINO. If employees in the entity are not skilled and experienced, they won't be able to complete their assigned tasks properly.

It is assertive that workers should have capabilities and competence for productively completing their assigned tasks. A well-educated and skilled workforce supports meeting the desired goals of the entity successfully. Positive effects are shown on the growth and success of the firm by effective and productive work shown by staff members. Training and development programs organized in enterprises help in imparting necessary skills and capabilities to staff members (Konsti Laakso, Pihkala, and Kraus, 2012). They become capable of performing their assigned work in a more effective and better way, and the daily operational activities of the enterprise get executed productively. The innovative abilities and capabilities of staff members increase when a conducive work environment is provided to them. If workers lack sufficient technical and other required skills, they will face difficulty and trouble in performing their assigned tasks. Significant initiatives can be taken by top management for imparting required skills to employees. Training and development programs can be organized so that staff members can acquire the required skills. In addition to this, online learning material can also be provided to employees so that they can learn new knowledge and capabilities.

External Factors:-

Economic factors are the biggest factor of the external factors which affect the business. By this factor, the market fluctuates, and it is based on politics, wars, the attack that is done by terrorists, and the devaluation of currency so that they can attain success in the competitive market. It affects consumer buyer behavior and also affects the environment. At the time of recession, employees face a problem of unemployment, and by that, consumers cannot purchase the products (Anderson, PotočNik, and Zhou, J., 2014). This factor is related to the changes, which include the cost and price of products and the exchange rates along with the rate of inflation. This affects the ability of the business so that they can generate profits and need close monitoring. Inflation and deflation situations in the country also have an impact on the growth and success of FRACINO. At the time of inflation, the purchasing power of people decreases, and due to that, the business of SMEs gets affected. On the other hand, at times of inflation, the purchasing power of people is enhanced, and they have more preferences for purchasing products that are of higher quality, which enhances the business of SMEs. Changes in the taxation policy of the government also have an impact on the growth and success of enterprises, and due to that, the total financial revenues of the entity are affected.

Legal factor: Rules, regulations, policies, and norms formed by the government also have an impact on the growth and success of SMEs. Guidelines given by the government must be followed while carrying out business activities. The company members have to make changes in the laws and policies, and this has a direct impact on the business. These factors are included in the external factors that affect the law and affect how they can operate the business and the behavior of the consumers. It includes the product transportation and profit margin so that the company members can increase productivity and proficiency, and by that, they can attain success. The staff members of FRACINO have to follow the proper rules and regulations. If not, then they affect the performance of the entity in the competitive market (West and Bogers, 2014).

It is assertive that all the business functions should be executed properly so that no unlawful activities should be performed in the enterprise. If there is an unlawful working environment, a negative impact will be observed on the overall performance of the entity. Taxation policy, environmental protection law, and other regulatory mechanisms need to be followed while carrying out business functions. Assistance from a legal professional can be taken for carrying out business activities legally and lawfully. Moreover, a legal advisor can be hired in an enterprise to take advice on various legal matters. All the methods will support the execution of all the business functions legally and lawfully, and the impact of legal factors on the growth and success of SMEs can be reduced by adopting this strategy.

Innovation and Creativity: Innovation refers to implementing the idea into reality through a creative process. Creativity can play a significant role in innovation. It can be useful for the developing SME sector, which can be beneficial for both firms and the economy as well. For example, a creative idea can help FRACINO manage finance to convert these ideas into reality. Another important thing in innovation is the rate of return that can be invested in an idea. Therefore, it is important for the growth of the SME sector to carefully analyze their idea in terms of monetary value. Creativity is the tendency by which staff members of FRACINO have to generate and recognize the ideas and the possibilities that will help in solving the problems as well as proper communication with others. Creativity has three components, which include the creation of knowledge, sharing of knowledge, and reuse of knowledge (Davenport, 2013). The company members can use the theory of creativity, which includes four phases:

• Preparation: In this, they have to define the issue and observation.
• Incubation: In this laying the issue aside for a time.
• Illumination: The company members can use the new idea to make better products.
• Verification: In this last step, they have to verify all the ideas so that they can do further process, and by that, they can attain success (Hatten, 2015).

Innovation is the process by which company members can create or modify the ideas so that they can develop the process, products, and services so that they can manufacture the new product. Innovation is classified into three parts, which include product, process, and market innovation. The employees of FRACINO have to improve the products. In the process of innovation, company members have to change the process of making the products, or they have to change the technology by which they produce the products, which will help the entity attain success. In market innovation, they are concerned with the mix of products and have to serve the best products in the market so that they can achieve the targets (Johnston and Bate, 2013).

Innovation and creativity can help in overcoming the identified 4 external and internal factors that have an impact on the success and performance of FRANICO. Managerial skills of top management people need to be effective so that better directions and instructions can be rendered to subordinates. New creative ideas can be adopted for making modifications to existing leadership skills and capabilities of subordinates. Management games can be organized in the company in which all staff members should be invited to take part (West and Bogers, 2014). Role-playing sessions can also be organized so that managers can develop a better understanding of subordinates.

It will help in enhancing cooperation and coordination with staff members, and due to that, positive relations will be developed among top management people and employees. Some innovative ideas can also be used for developing the managerial skills of managers; seminars and conferences can be organized, and motivational speakers can be invited to give a better understanding to managers on how to give orders and commands to juniors. Another internal factor that affects the growth and performance of FRACINO is human resource capabilities. If workers do not have the required skills to perform their assigned tasks, it will lead to the failure of the enterprise (Kuratko, 2016). On-the-job and off-the-job training can be provided to staff members and training and development programs can be organized for modifying their weak-performing areas. Recommendations and suggestions can be taken from staff members for how to make improvements in their existing skills and capabilities and they can be encouraged to pursue self-learning.

A small library can be opened so that employees can read books, magazines, journals, and other study material and make significant improvements in their existing skills. Innovation and creativity can also be used to overcome the impact of lag factors on the operational activities of the entity. An open discussion session can be organized and staff members can be made aware of their rights. Attractive pamphlets can be designed in which various rules and regulations needed to be followed by staff members can be mentioned. It will support in rendering legal information to staff members innovatively and creatively and they will understand it in an impelling manner (Davenport, 2013). Some innovative concepts can be used to meet the challenges that are imposed by economic factors. A risk assessment process can be conducted to assess the threats that are imposed by economic factors. It will aid in overcoming the challenges that are created for business by a diverse range of economic factors and the growth and success of the entity can be ensured.

Innovations and creativity that can be adopted in FRACINO: There are so many challenges that the entity is facing in the global business environment, which includes energy and environmental security. In this company, members have to provide the proper security to their consumers, which helps FRACINO to achieve long-term success in economic and national security so that they can make the proper improvements in technology so that they can manufacture the proper products so that they can attain success in the markets. Another challenge is conflict. In this, staff members of FRACINO have to do the proper communication so that conflicts can not occur.

When an entity has to start a new business in a new market, they have to bring about new products and services which help in attaining success and achieving the leading position in the competitive market. If they are facing conflicts, then they have to use the proper policies so that they can resolve the conflicts, which helps the entity in attaining success in the long term. Another is high competition in the market. They have to manufacture the products and services by which they can attain success in the high competition. Along with this, these challenges have an impact on the strengths and weaknesses of entities, and for that, they have to improve their weaknesses (Wilson and Post, 2013). By these challenges, the entity can do the proper operations and functions along with this, they can provide the best services to their consumers By doing so, they can attain the leading position and by doing so, they can improve productivity and attain sustainability in the market. They have to provide the best solutions to the consumers if they are facing problems. Along with this, the managers of FRACINO have to provide motivation or encouragement to staff members so that they can do the best work and attain success in the competitive market.

Various global challenges are having a great impact on the SME sectors. Political stability is one of the key factors that can impact the SMEs. Because there are various political decisions like import and export duties on various machinery parts, it can affect the business operations and profitability of FRACINO. Apart from that, issues regarding the tax can also affect the business. For example, if the government can increase taxes on SMEs, it can affect their return on investment and revenues. Therefore, the government can try to provide tax benefits to SME sectors, which can help to provide more leverage.

Conclusion

From the above-carried-out analysis, it has been observed that FRACINO has to use new and innovative technology so that it can attain the leading position in the competitive market. Small-scale enterprises play an important role in the economy as they help in making the right decisions with the proper utilization of resources. Further, small and medium-sized industries help in enhancing growth, and in this sector entity, having a limited number of staff members helps maintain the relationship with the consumers, and by that, FRACINO attains success in the competitive market.

References

• Anderson, N., PotočNik, K., and Zhou, J., 2014. Innovation and creativity in organizations a state-of-the-science review, prospective commentary, and guiding framework. Journal of Management.
• Andries, P., and Czarnitzki, D., 2014. Small firm innovation performance and employee involvement. Small business economics.
• Bridge, S., and O'Neill, K., 2012. Understanding enterprise: entrepreneurship and small business. Palgrave Macmillan.
• Baden-Fuller, C., and Haefliger, S., 2013. Business models and technological innovation. Long-range planning.
• Carland, J. W., and Carland, J. C., 2015. A model of potential entrepreneurship: profiles and educational implications. Journal of Small Business Strategy.
• Chava, S. and et al., 2013. Banking deregulation and innovation. Journal of Financial Economics.
• Chesbrough, H., 2013. Open business models: How to thrive in the innovation landscape. Harvard Business Press.
• Davenport, T. H., 2013. Process innovation: reengineering work through information technology. Harvard Business Press.
• Hatten, T. S., 2015. Small business management: Entrepreneurship and beyond. Nelson Education.
• Johnston, R. E., and Bate, J. D., 2013. The power of strategy innovation: a new way of linking creativity and strategic planning to discover great business opportunities. AMACOM Div American Mgmt Assn.

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