We live in rapidly changing times where everything is dynamic and change is the only constant. New technologies becomes obsolete in days, new business trends emerge every day, new issues and rules regarding labour laws, new managerial and HR policies, the uncertainty regarding the future, the management of resources and power etc keep taking place. The business environment is challenging and the business needs to take governance and risk issues seriously to adapt and prepare itself for these challenges.
Some of the various challenges that businesses have to face are as follows:
- The challenge of Globalization
- The challenge of Diversity
- The challenge of Ethics and Governance
The challenge of Globalisation
Globalisation is the interaction of companies and businesses on a world wide global scale. Understanding the basic overview of the global economy as it changes is extremely helpful for managerial and business level applications. The main challenge faced by businesses is that businesses are faced with the challenge of localizing products and services effectively and efficiently in a way that minimizes the adverse cultural and environmental effects caused by this rapid global expansion to maintain an ethical operation.
On the flipside, globalisation presents enormous opportunities for businesses to grow. Intercultural marketplaces allow for differing demographics, larger market potential, a more diverse customer base, more diverse product offering and a highly valuable human resource potential.
The challenge of Diversity
With globalisation comes and enormous percentage of cross-cultural relationships and domestic diversity. Globalization has created higher potential value in approaching diverse markets and demographics. Because of this, understanding how to manage a diverse community internally has now become a priority for management.
Businesses and managers must be not only be aware of diversity in the workplace but also be open-minded and empathetic to perspectives other than their own. The goal for management is to ensure everyone is working to assimilate to everyone else in a balanced and effective manner that harvests differences rather than smoothing them over.
The challenge of Ethics and Governance
Ethics is at the core of corporate governance, and management must reflect accountability for their actions on a global community scale. Business itself cannot be ethical: only the managers and corporate strategists can implement ethics within the framework of the business strategy. Corporate ethics and shareholder desires for profitability are not always aligned, and it is the responsibility of executive management to ensure ethics supersede profitability.
In its simplest form, corporate ethics is a legal matter. Corporate governance and ethics become more difficult with the indirect implications of particular practices, making it important to assess the way in which certain operations may adversely affect the community at large. Managers are the primary decision makers, and therefore must hold themselves accountable for the way in which a business operates and affects stakeholders, shareholders, employees, and the community at large.
Functioning in the business world is full of challenges. Businesses should adapt to it and adopt a proactive approach towards dealing with it. Apart from the challenges mentioned above, businesses also have to deal with the challenges and penalties of non-compliance, risks and governance. For these challenges, you can try VComply, an effective GRC SaaS tool.
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