Competitiveness of Organizations the Business

Competitiveness of Organizations

The business environment in which companies develop their activity has become more competitive. There are several reasons that determine this increased competitiveness in different business sectors. The developing markets in different countries have strongly appealed established companies to expand their business on international level, and to new companies to be developed in order to address the opportunities that these markets provide.

This situation can e attributed to the process of globalization. The process has developed different markets in different countries. This refers to selling products, manufacturing them, but also to the labor market. Because of this process, large numbers of individuals move from country to country in the search of higher paid jobs.

This is an important issue for the countries of these individuals, because they send more money home, the budget of these countries increases the spending power of these people increases, which significantly influences the economic development in these countries. But this also determines higher unemployment levels in the countries where these individuals go to work. This increases social spending in these countries, while reducing economic development. Therefore, the process of globalization influences the competitiveness between these countries.

In addition to this, the developing needs of customers determine increased competitiveness. Customers modify their purchasing behavior, their needs and preferences, determining companies to increase competitiveness. Customers know that they can influence the quality of the products these companies provide.

Competitiveness Analysis

When addressing the issue of competitiveness it is important to understand that there is internal and external competitiveness. External competitiveness refers to competition between countries, between organizations, between companies. In other words, companies compete because they address customers with limited resources. They want to benefit from these resources of customers. But they can benefit from these resources by providing the most cost-efficient product that satisfies their needs and preferences.

In most cases, the competition between companies is based price competition. The reduced financial resources of customers determine them to provide products that are in the range that customers can afford. But this means that the production of these products must allow the price that is needed by customers, while being profitable for the company. In order to reach this objective, companies must reduce their production costs.

The outsourcing process is frequently used by companies that want to reduce their production costs. This means that they outsource some of their processes and activities to cheaper destinations. But the human resources provided by countries with cheaper workforce are limited. Therefore, companies must also compete for these resources. In addition to this, countries that provide cheaper workforce compete with other countries in order to attract investors, and develop their economic situation.

It is important to understand the multilevel competitiveness that takes place between organizations on international level. There is also the internal competitiveness within these organizations that must be addressed. This internal competitiveness refers to competitiveness between the employees of these companies. The competitive business environment in which these companies develop their activity determines them to establish higher standards of performance that their employees must reach.

This is because the success of these companies on the market can be attributed to the performance of their employees. This means that employees must be motivated in order to reach these objectives (Silva, 1997). In other words, companies must develop complex strategies that allow them to motivate their employees into improving their performance. However, there are several types of strategies that can be applied in order to motivate employees. It seems that internal competitiveness between companies' employees is such a successful strategy.

This is because the psychological motivation of employees is difficult to control by employees. Although employees can be motivated by certain strategies, this does not mean that they remain motivated. Their needs are changing, and they require other incentives in order to satisfy these needs (Yussof & Ismail, 2002). But there are situations where companies cannot provide the incentives their employees require.

In such cases, these companies prefer to increase competitiveness between employees. Therefore, employees feel threatened in such situations, and improve their performance in order to show what benefits they can provide to the company in comparison with other employees. In these cases, employees can be considered small profit centers, like companies that are larger profit centers (Afza & Nazir, 2007). In other words, these employees are considered units that provide certain levels of profits, at certain quality standards, while requiring certain levels of resources.

In other words, it is important that employees focus on providing high levels of profits, while not reducing the quality standards, and reducing the level of resources that are required in order to provide these profits. In such cases, companies establish the level of profits that is considered satisfactory, and the level of resources that the company can invest in reaching these objectives.

However, there are situations where these activities require higher levels of resources in comparison with those established by the company. Therefore, the employees that are affected by such situations, can reduce the quality of their activity in order to stay within the resources levels established by the company, or use larger resources in order to reach the established quality standards (Frost, 2010). It is difficult to determine which alternative should be addressed. This differs in each situation.

The increased competitiveness between companies' employees usually determines improved performance of these employees (Cummings, 1994). But this is not a successful solution on longer periods of time. This is because employees should collaborate with each other, and not compete. By competing within the company, employees become adversaries, they stand on opposite positions, instead of being on the same side. They do not focus on improving their situation, but on creating problems that reveal other employees' flaws. This is not a productive situation for these companies.

In addition to this, communication within competitive workplace environments is defective. This is because employees that work in such competitive companies consider that they should not communicate useful information that can help their colleagues do their job. They prefer to not communicate certain information, because it would create problems for their colleagues, while making them look good. This is not a useful situation for these companies.

But workplace environments with reduced competitiveness between employees do not determine them to improve their performance. In such companies, employees are not interested in developing their career, their skills, and their performance, because there is no threat, and they do not feel the need of getting out of their comfort zone and increasing their work efforts.

Conclusions

It is difficult to determine the correct level of competitiveness that companies should focus on. This is because competitiveness between employees can improve their performance, but it can also determine problems within these companies. Therefore, it is important that these companies develop motivational strategies for their human resources that are intended to increase competitiveness between employees regarding smaller projects, not regarding the entire activity. This should be alternated with periods where the company should focus on improving communication between its employees.