Free Essay On Legal Requirements And Business Venture’s Exit Strategy

There are significant number of legal requirements that one has to fulfill in order to commence his or her business. The mention of hectic process of registration is an obvious choice. However, the most important document in the life of a business has a term of Memorandum of Association associated with it that officially declares the existence of the company, and divides the roles and responsibilities amongst the multiple partners of the business as well. The partners who invest the most in terms of monetary language usually occupy the seats of directorship. However, some of the progressive organizational controllers assign jobs according to the needed skills in order to establish an adequate level of job personality fit. The management sciences find some room of application at the middle managerial levels of the organizations, and top managers are decided on the basis of respective investment levels. Additionally, human development is considered the backbone of attached organizational concept, but the due process of selection is not followed in allocating top managers in small business enterprises.
The businesses have to develop exit strategies in order to plan closure of their organizational setups because they do not have the capacity to continue because of financial, strategic, and competitive causes. However, the companies who cannot fulfill their fixed costs have to shut down because they have compromised their cost structure to a level of no return. The exit strategy that an economist understands is quite different from the one that makes sense for a businessman who is engaged in commercial activities in a direct sense.
Exit strategy is having a negative and unconstructive image attached to itself because people think that this framework is developed to kill the businesses. However, it is not the case in real terms. The exit strategy calls the entrepreneur to revisit his or her key value preposition so that he or she can develop a new product or service in order to recapture the market once more for example Apple believed in bringing and sponsoring new product developmental projects in order to reclaim its competitiveness. Secondly, the organizations have to evaluate the financial side of the business. That will aid them in the process of finding ways to drive down costs by getting rid of unnecessary product and organizational features. The company’s owners have to find novel methods of raising money so that future organizational adventures can be supported.
The only thing that is going to save a dying organization is called successful and efficient innovative entrepreneurship. Business dies out when managers and employees start to lose faith in its vision and mission so the company has to refrain from making rudderless effort in this regard. The companies that have management positions with a positive and constructive mindset prevail in the long run perspective. The spirit of innovation should never be absent from the walls of the company, and there are various types of organizational innovative regimes present in the jungle of corporatism. One can bring strategic changes along with operational ones while keeping its workforce satisfied through offering of monetary and nonmonetary benefits. If an organization is innovating and inventing at a regular interval then, there is no apparent need to have an exit strategy, and once the companies lose the ability to cover fixed costs then, they have to exit.

References

Cefis, E., & Marsili, O. (2005). A matter of life and death: innovation and firm survival. Industrial and Corporate Change Vol 16 (4), 1167-1192.
van de ven, A. (1992). Suggestions for studying strategy process: A research note. Strategic Management Journal Vol 13 (1), 169–188.