Business leaders are faced various problems since their very inception. Various challenges remain continuously from the start of a lifecycle of a business to the end of its life cycle. The year 2023 and 2024 are very crucial for businesses that are struggling after the covid 19. There are lots of challenges they are facing with business.
Today, business plans and decision-making are depending on market situations and government policies also. There are many problems existing for a business to fight.
What are the Biggest Business Challenges in the Years 2023-2024?
Following are the biggest challenges business leaders face today:
1. Problems Related to Objectives
A business operates in an economic, social, political, and cultural environment.
Each entrepreneur has to decide the objectives of his business by looking at the variant environment.
The problem of objectives arises on account of different objectives of an enterprise and they are contradictory to each other.
The maximization of profit with the improvement in the quality of a product keeping the price low and expansion of the market as the sum of mutually contradictory objectives.
A business has the objectives of meeting social responsibilities, protecting the national interest, and political stability.
Keeping in view the contradiction of these objectives coordination among these objectives is a must.
2. Location and Size of the Plant
An entrepreneur has to select the place of his plant.
The determination of place is affected by several factors such as the availability of raw material, the supply of labor, nearness of sources of power, measures of the market, availability of means of transport, and the location of Banking, Financial, and Institutions.
While selecting the place of a plant an entrepreneur keeps all these factors in his mind.
Therefore, the size of the firm or plant is an important problem.
Whether the size of a plant or firm is small or large he has to study the various aspects relating to technology, managerial, marketing, and finances.
He should be realistic while making all these decisions.
3. Government Policies
Government policies such as the industrial policy, the fiscal policy, the tariff policy, etc. May have a profound impact on business.
Some policy developments create opportunities as well as threats.
In other words, a development that brightens the prospects of some enterprises may pose a threat to others.
For example, the policy of globalization in India. Particularly around the Mid-eighties have opened up new opportunities and threats.
They have provided a lot of opportunities to a large number of enterprises to diversify and make their product mix better.
But they have also given rise to a serious threat to many existing products by way of increased competition.
4. Finance Problems
In a business not only physical planning is adopted but financial planning is also adopted.
Financial planning consists of the following elements:
- Determination of demand for a product and the cost of the product.
- Determination of Necessary funds for physical planning.
- Forecasting of profit and its calculation on the basis of capital structure.
- Determination of period.
5. Organization Structure
Business is faced with problems relating to their organizational structure.
A business leader has to divide its total function into two different departments on the basis of specialization and each activity is sub-divided into sub-process and each sub-process is completed by a group of workers.
Division of work of each department, accountability, the delegation of authority and coordination are concerned with it.
In the absence of a clear-out division of work, duties, and relationships no enterprise can work efficiently.
6. Marketing
The success and development of a business depend on the proper marketing of products.
Markets are searched out and customers for different products are also found.
Where the customers are residing and what are there necessities.
After finding out all these things an entrepreneur has to take the following decisions:
- Share, characteristics, and utility of the product.
- To take decisions relating to social contact, individual sales, advertisement, and publicity in order to encourage marketing.
- Price, concessions, discounts, etc.
- Selection of place of stores, distribution of products, and place.
7. Legal Formalities
Whenever a business is set up, operated, and closed down a large number of formalities are accomplished.
These formalities are relating to different types of taxes to be paid namely corporate tax, excise duties, sales tax, customs duties, keeping accounts, supply of various types of information, compliance of various laws and rules namely the selection of place, environment protection, pollution control, size, wages, bonus, working and living conditions.
8. Industrial Relations
The modern production system is very large and complicated.
Under such a system, the entrepreneur has to take several steps so that the corporation of workers employed in a large-scale business is sought.
The interest of capital and Labour are contradictory.
A slight doubt between the two parties leads to industrial unrest resulting in go-slow tactics, lockouts, strikes, etc. in an enterprise.
There is an urgent need to maintain a cordial relationship between Labour and capital through the coordination of trade unions, prevention, and settlement of industrial disputes, and democratic participation in management.
9. Impatience of Stakeholders
By virtue of being “strategic“, strategic plans tend to have a long-term focus, and results arising from them will come slowly while stakeholders as ever are impatient to see results right from the next day.
This causes a lot of stress on strategic programs and many times distorts them simply to satisfy the stakeholders.
10. Business Skills
Business skills are also a big factor. This is a personal opinion, but I know that at least at my work, nothing is systematic.
Meaning that there are no express written guidelines, training manuals, quality tests, etc, which makes it difficult for us employees because there is a lack of communication.
This is definitely a problem because it can lead to unhappy customers if different employees do things in different ways.
11. Growing Competition
Growing competition is a huge challenge for business owners today.
There are more people in business today and huge companies that have been in a particular line of business longer than newcomers at any time in history.
12. Physical Facilities
After selecting the location and size of an enterprise, an entrepreneur has to select various physical facilities.
He has to take a decision regarding the process of production and basic infrastructure.
Production involves the division of labor and specialization which involve complicated machinery and process.
Its selection depends on comparative cost and efficiency. He has to allocate the shape of the plant, building, and each activity.
13. Globalization
Business leaders are today facing three major challenges and opportunities that are globalization, advances in technology, and deregulation.
The key to surviving in today’s world is to determine the needs and wants of target customers and deliver the desired satisfaction more efficiently and effectively than competitors.
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