Historically, businesses had a more rigid framework and it can be said that business management was comparatively easier. The business scenario has evolved to be very flexible and has thus, lead to a large number of complex and chaotic issues that are faced by people sitting at the helm, managing business affairs.
Sources of Chaos
The new business scenario is more dynamic, flexible, continuously evolving and requiring adaptability. Managers need to develop adaptation and leadership skills to cope with these requirements. There are four key sources which interact to produce the current business environment – diversity, interdependence, ambiguity, and flux.
Diversity refers to the diverse profiles of employees with blurring global and geographical boundaries. This diversity is seen across other strategy and business drivers apart from the the human resource, i.e. management systems, diverse financial goals, different business models for separate business units. Externally, these may be seen as varied consumer needs, differing cultural values and varied stakeholder claims. Business managers have to undertake this arduous task of managing diversity internally and externally on a regular basis and this may often make them non-responsive.
In the current scenario, most businesses are becoming interdependent. Often, not just are the businesses interrelated within industry, they are also interrelated across industries. Value chains are consistently being replaced by value webs. More interrelation and blurring of boundaries means increased scope for error and chaos.
Similarly, the amount of information is increasing but there is increasingly lower clarity on the analysis, interpretation and use of this information. This leads to ambiguity and chaos. Accounting standards vary across different countries causing confusion and chaos related to financial accounting. Similarly, the value drivers are continuously changing and are thus, ambiguous for business managers.
To top all of this, the business environment is in a state of continuous flux or change. This renders any temporary solutions useless at a fast pace. Solutions found this week may be obsolete the next. This is a mind-boggling situation for business managers to handle.
Ways to Manage
One of the ways businesses deal with this constant chaos is by creating a varied business structure. Different business units to deal with unique business issues. These business units are centrally managed by a core management but are given sufficient freedom to tackle their individual problems. However, structures and policies are not a permanent fix for the continuous chaos businesses face in the current times. In fact these become more difficult to manage over time as the complexity increases.
The companies looking to sort these problems more effectively look to include Thoreau’s advice to their strategy – simplification. They use the existing relationships and human resources and work to simplify procedures instead of complicating them further. The best way to do so is to first have the key purpose of the company in tow. The purpose and the company values must be simplified. After this, a couple more core issues like processes and decentralisation, awareness systems in the company and the leadership must be simplified. Thus, simplification is the key to manage businesses in this chaotic and complex business environment. Certain online business management courses deal with managing such specific situations.