New venture creation torrent

These stages include the person entrepreneur analysis, environmental analysis and the strategic decision process on the best approach to enter the market.

The implicit assumption that is relevant to this study is that there are critical factors throughout all three stages that need to be considered when contemplating a new venture. The levels of analysis and the factors to be tested are depicted in the following way Figure 2. The figure above shows the entrepreneurial decision-making process and the primary areas of focus entrepreneur, environment and strategy to be considered when launching a new venture.

The entrepreneurial decision-making process occurs against a backdrop of uncertainty and risk, so although a potential idea may have been identified, there is a degree of risk associated with creating a solution, and uncertainty connected with the best strategic approach.

The bi-directional arrows represent the influence a change or failing will have on the rest of the model. That is, a misinterpreted need or problem will have an impact on the strategic approach selected and vice versa. Unique and creative ideas will influence the decision-making process, along with the uncertainty and risks involved. According to Nebhwani et al. Entrepreneurs meet the changing needs and demands of the industry and individuals through innovative, creative and new ideas.

Their ideas are generally influenced by three dimensions, which also have an impact on their decision-making and actions. These dimensions include individual characteristics, organisation and environmental constraints, as set out in Figure 3. The above model is not that dissimilar from the adapted model in Figure 2 ; however, it is more detailed in highlighting the factors influencing the decision to create a new venture.

According to Mokaya , the environmental dimension takes priority in creating a new venture, with the degree and nature of available resources in the environment taking precedence over factors in the other dimensions. There is also an element of competitive analysis suggesting that an exploration of other market players in the industry is an essential consideration for entrepreneurs prior to start-up. The model is more strategic in the organisational dimension through consideration of different generic strategies and a more focused consideration of organisational capabilities.

Cornelissen and Clarke state that the development of a new venture leads the entrepreneur to explore slightly broader factors which impact the overall decision to create a business. According to this model, the establishment of a new venture is based on two conditions.

The first condition includes the freedom degree of individual independence of the entrepreneur to create an economic venture, which is innovative and creative. The second condition includes favourable economic conditions, which results in growth of the new venture. According to Cornelissen and Clarke , the decision of an entrepreneur is based on understanding the prevailing economic conditions.

The entrepreneur needs to understand the fundamental economic conditions within the country where the business will be located and those positive economic signals that will foster success for the business.

The economic freedom provided to entrepreneurs helps them in developing the business efficiently. The dominant taxation policy, trade policies, regulations, government interventions and other monetary policies have a direct influence on the decision to establish new venture Oviatt and McDougall, When, for example, taxation policies and tariffs are favourably oriented towards small business, then it positively influences business performance, whereas if they are unfavourable, it negatively affects business.

Experienced entrepreneurs often consider further macro-environmental factors as part of the decision-making process to establish a new venture.

Typically, however, Individual, competitive and immediate market factors take precedence in the decision-making cycle over a more focused macro-strategic analysis of the environment.

Serial entrepreneurs also pay attention to a wider context of analysis, having been through the process of start-up before. They also, generally speaking, have a good understanding of the value of conducting prior research to the success of new venture. Some of these other essential factors are discussed below. Aspelund et al. Increasingly, the emphasis is on user convenience and how technology can significantly improve the lives of a tech-savvy population. Consideration of the rapidly changing technology environment also enables entrepreneurs to design products or services that are flexible and can be easily adapted to customer needs Robinson and McDougall, Furthermore, advances in technology can also assist the entrepreneur internally by redefining traditional business processes and streamlining services.

Technology is a significant consideration in the design and structure of the new venture, for example, moving traditional bricks and mortar retail into virtual and digital retail platforms for online shopping. Dollinger suggests that experienced entrepreneurs scan socio-demographic factors before establishing a new venture.

Socio-demographic factors comprise two key components; demographic shifts in population e. Baron and Tang specifically point out that market factors such as environmental heterogeneity, competition intensity, environmental dynamism, industry cost structures market scope, market growth rate, product innovation and market intensity are all components that need further investigation in deciding to create a new venture.

A key consideration for the entrepreneur at a start-up is the presence of a team of suitably qualified and experienced personnel to assist in the development and exploitation of innovative business ideas and problem solutions.

Entrepreneurs seldom create new ventures entirely on their own and often need a talented team of specialists to facilitate the development and distribution of innovative products and services. The research approach adopted in this initial pilot study is predominantly a qualitative, inductive research strategy built on a constructivist framework of entrepreneurial decision-making. The strategy is based primarily on the premise that humans are intrinsically motivated to acquire and assimilate information relevant to a particular decision-making process and to give it their own meaning.

It is also based on the further premise that the factors taken into consideration when starting a new venture are not only common amongst certain individuals, but are also relatively stable over long periods of time. Although this may be the case, the factors themselves will be subject to individual interpretation and weighted differently in terms of emphasis and impact. The objective set for this study was to explore in greater depth those factors that most influenced entrepreneurs to engage in new venture creation.

A secondary objective was to confirm the investigative direction, validity and reliability of the questions used here to a future exploratory study on the cognitive antecedents associated with entrepreneurial decision-making. A semi-structured interview method was used to solicit data from a sample of five entrepreneurs currently housed in a business incubation unit.

The exploratory nature of this initial pilot study presumed no prior knowledge of the specific factors used by entrepreneurs to make decisions about new venture creation, other than those focused primarily on the individual, the environment within which they operate and the goal of establishing the new venture itself.

It was therefore decided that the best way to solicit data for the study was to engage the sample in an open-ended conversation loosely guided by a broadly defined notion of how to build a start-up business. This approach allowed for a larger discussion on the topic and the opportunity to further refine the questions that will be used in the larger subsequent study mentioned above.

The sample of five entrepreneurs in the business incubation unit were representative of different industries in New Zealand, namely, food, cosmetics, apparel, hospitality and electronics.

The semi-structured interviews were based on four open-ended questions and acted as an aide memoire to focus the conversations held with the sample on the topic of entrepreneurial decision-making. Conversations were recorded and subsequently converted into typed transcripts.

These were reviewed and signed off by participants to verify the information that had been discussed. Each conversation took approximately 1 h to complete. The data solicited from these conversations were subjected to narrative inquiry, a process which leads to the formation of categories of description and which outlines the critical components and interpretations of the construct under study. The same categories of description are used to explore the relationships between categories, which together form an outcome space.

Validity is achieved in relation to the data available and the transparency provided in the path through data analysis. Excerpts from interviews were used in three ways: to illustrate a critical feature of a theme;. Categories of analysis were also further subjected to thematic analysis to determine common topics and to further determine the validity of the questions posed to the sample. This was considered an appropriate stage at which to conduct semi-structured interviews, as the decision whether to establish a new venture was still being investigated and tested for feasibility.

The sample was representative of a number of different industries as well, which eliminates any specific bias towards a particular industry or profession. The business incubation unit where these entrepreneurs are housed is situated on a university campus close to a large business district that accommodates approximately 12, independent businesses.

The business incubator provides all of the basic resources needed for start-ups e. Individual semi-structured interviews were used to solicit data in this pilot study, the results of which are reported in the following narrative and thematic analysis.

Entrepreneurs were asked individually to discuss their background expertise in relation to creating a new venture.

Three main categories of expertise that were deemed important to business start-up were expressed: Wide market awareness : The sample expressed the need to be able to demonstrate a sound understanding of their respective markets and industries, including the identification of key industry drivers and knowledge of the competitive landscape. Personal capabilities : Individuals were confident that they possessed the requisite business knowledge and skills applicable to their specific industries to be able to create and establish a new venture.

Strategic capability : Individuals were able to demonstrate a future goal orientation that focused on wealth maximisation and value delivery. The identification of a market related need or unresolved problem is a necessary ingredient to new venture creation. Furthermore, it is incumbent on the entrepreneur to ensure they have the necessary knowledge and skills to be able to conduct detailed market research in their respective industries.

Inherent to this were the developments and enhancements in prevailing technology that made significant improvements possible.

Advances in technology : Apart from the technology developments described in existing products above, totally new technologies enabled the introduction of new products and services for two of the five new ventures. The perceived potential opportunity was therefore to open up entirely new markets within an industry and to introduce innovative solutions that would supersede traditional modes of production. Unique value delivery : Closely associated with the above were the unique value propositions made possible by advances in technology.

Furthermore, there were other identified market gaps that could be pursued across industry boundaries. The literature suggests that there are several factors that are taken into consideration when planning a new venture, including the idea itself, potential customer demand, the market gap, scalability, start-up costs and market attractiveness. The findings from this pilot suggest that entrepreneurial decision-making is influenced primarily by four main factors: Novelty of the idea : This finding supports the notion found in widespread literature on entrepreneurial behaviour that creativity and innovation are integral to start-up success.

It is a key differentiating feature between an entrepreneurial versus small business start-up. The idea itself, however, needs to be substantially different from what is currently available and, in some cases, needs to be significantly disruptive. Individuals in the sample reported that mere improvements to an existing product or service would not be sufficiently sustainable over the long term and would not necessarily support new venture creation.

Market demand : This was probably more important than the first point above. Entrepreneurs suggested that just because an idea might be novel, it did not mean there was ready market demand for exploitation. The absence of sufficient market demand was therefore deemed to be crucial to deciding whether one would consider starting a business. For some, past experience of the process of building a start-up was clearly important. All of the entrepreneurs agreed, however, that being housed in a business incubator, with ready access to resources and expertise as required, was a significant contributor to their decision to build a start-up.

Apart from the novelty of the solution or idea, it was first critical for the sample to completely understand as much as possible about the need expressed by the market or the problem being experienced.

Table I summarises the findings from this pilot study and will be used to primarily to design the research strategy for a wider examination of cognitive antecedents. The act of building a new business is a complex task which essentially involves intensive research modelling and planning. Although the literature generally points to a lack of resources and capability as a key reason for start-up failure, the same cannot be said here.

This sample of entrepreneurs are housed in a business incubator facility where there are sufficient resources and available capability to assist in the success of the start-up. The sample reported that the crowded nature of the market place inhibited their ability to gain access to accurate and verifiable information about market needs and problems.

This has the effect of extending the amount of, and time taken in conducting, much needed market research. Compliance : Industry regulations, statutory provisions, legislation and tax policies can often be a landmine for the unwary, not only for compliance purposes but also for access to decision-making information.

Some of these entrepreneurs operate in highly regulated markets e. Market conditions : Apart from the abovementioned points, wider economic market conditions can delay or prevent the establishment of a new venture. In a downturn economy, it is unlikely that entrepreneurs will pursue new venture creation, preferring instead to wait until conditions improve before proceeding.

Despite favourable economic conditions, timing market entry is often challenging, particularly when the new idea on which the start-up is built is novel, unique and unknown. It was notable from the conversations that none of the sample referred to their own lack of skill or knowledge concerning new venture creation as an issue in either their research or their decision-making. It was concluded that this was a function of their current location in a business incubation unit, and that where there was a lack of knowledge, skill or expertise, this was readily available to them whenever they needed it.

Furthermore, entrepreneurial decision-making takes place against a backdrop of uncertainty and risk, so although a potential idea may have been identified, there is a degree of risk associated with creating a solution and uncertainty connected with the best strategic approach to resolve it. If the solution does not provide meaningful differentiation from other available alternatives and offers little compelling value to potential customers, then the basis for new venture creation may be fundamentally flawed.

This makes sense when considering that new ventures are often launched in highly volatile and rapidly changing competitive markets. Mere improvements to an existing product or service are not sufficiently differentiated and therefore do not provide a compelling value proposition that would attract a suitably sized market on which to build a sustainable business. The absence of a suitably novel solution and compelling value proposition necessarily excludes any consideration of new venture creation.

Creativity and innovation are therefore necessary prerequisites at a cognitive level in the decision to build a start-up. Despite being significantly creative and innovative, the individual is still faced with difficulties in start-up if they do not also possess sufficient knowledge or skills in respect of building a start-up. The samples in this study were well qualified in terms of their individual industry experiences and knowledge of prevailing market conditions.

Their individual portfolios of skills were increased by the fact they operated out of an established business incubator that provided them with needed additional capability. However, what was less well developed was their individual ability to extrapolate what they knew and experienced to create future scenario where problems or needs become so critical that they could visualise the compelling nature of their solutions.

Those who do not improve their cognitive ability in this sense develop a reliance on the incubator and are eventually forced out on their own. Survivability of a new venture without this safety net under real market conditions is often brutally short.

Clarity and rigor around the actual market need or unresolved problem was significant in the decision-making process. Apart from the novelty of the solution or idea, it was first critical for entrepreneurs to completely understand as much as possible about the need expressed by the market or the problem being experienced.

This finding suggests the individual needs to possess a fairly high level of analytical thinking and an ability to critically deconstruct needs and problems. Despite voicing this as absolutely crucial to the solution development process, four out of five of the samples were tempted to claim they were already familiar with the problems or needs experienced in their industry without substantiating this claim with evidence from the prospective customers.

The antecedent requirements for new venture creation therefore suggest that individual entrepreneurs need to have a fairly comprehensive and detailed knowledge of industry conditions and the competitive environment they are entering. This study confirms previous research and literature emphasizing that thorough and detailed market research is crucial to start-up success and sustainability Li, ; Gerschewski and Xiao, The findings also suggest that the entrepreneur necessarily conducts considerable market research with a view to fully understanding the dynamic conditions that exist in the market.

Based on the resulting information, entrepreneurs engage in a process of creating a new venture by way of securing resources, modelling the business value delivery system and implementing an appropriate entry strategy into the market Kanchana et al.

Furthermore, other major resources and capabilities, including human resources, operating capital, financial investment and technology, are all integral to start-up success and need to be factored into the planning of the new venture Kanchana et al.

Not only does it provide a benefit in terms of reducing the time taken to engage with the market but also enables, through process reconfiguration, the simplification of value delivery to the consumer. It is therefore important for entrepreneurs to be technologically perceptive and adept at introducing cutting edge solutions that are novel and innovative, if they are to succeed in launching a new venture.

The decision to build a new venture by an entrepreneur has been revealed as somewhat complex, requiring a considerable degree of knowledge and skill. The process of identifying, defining and assessing a market-related need or problem through new venture creation is, in itself, a time-consuming and often frustrating exercise. Despite the rapid and significant advances in technology enabling the simplification of complex processes and quick deployment of innovative solutions, considerable reliance is still focused on the cognitive capacity of entrepreneurs to build sustainable new ventures that will cater for dynamic market needs and problems.

The study has a marked leaning towards new and developing entrepreneurs rather than seasoned and experienced serial entrepreneurs. Many small and medium ventures are started by individual or families. In such a scenario, the problems found in family owned ventures and the ways in which they can be solved have also been covered.

The mindsets and methods model of entrepreneurship is an example of such a model. The concept of franchising and its backbone, the service delivery system is also a part of this paper. The layout of this paper has been done on the same model as the topics were learnt, week by week.

This is only a brief description and review of the whole module, since what has been learnt in the past several weeks is very large for a full depiction. This module is ideal for businessmen, prospective and current managers and those who are planning to start new ventures. The past seven weeks of the module on entrepreneurship and starting new ventures has been an extremely useful session. It has been doubly advantageous because I am a reasonably successful entrepreneur myself as the owner and managing director of Thai Lay Fashion Company.

The information and education gained from this module will help to improve my business and help me in fine-tuning many aspects and processes in the business. This paper is an attempt to present all that has been learnt in the module in a concise and coherent form. All the main topics that have been covered will be briefly mentioned in the introduction before moving on to the main body of the work.

The usual housekeeping details as mentioned in the assignment will be given at the end of the paper just before the conclusion. The initial chapters were concerned with the concept of economic and personal freedom which is one of the main reasons why people become entrepreneurs. A case study of a person called Kurt Bauer was also reviewed.

A marketing plan for an organization with regard to the issues of starting a venture was also done. The difference between an idea and an opportunity, and how entrepreneurs use the business plan process to identify the best team members, director, and value-added investors was also studied.

The importance of factors other than finance was also discussed. Another interesting section was the difference between and entrepreneur and an administrator.

The concept of employee motivation, and rewards was also very informative and useful. Next section was about the role of the top management and mangers with regard to employee recruitment and retention. Proper care and effort should be taken by a new entrepreneur while in the act of a new venture creation. The topic related to that was the due diligence and evaluation process required by potential investors.

The different sources of finance that is available to an entrepreneur in the process of venture creation came next. Financing was studied in depth in the next chapter with regard to debt and equity financing. Franchising is an import and popular way of doing business.

The most important part of the franchise process is the creation of a service delivery system. This was what was studied next. The concept of harvest goad was studied as the second last chapter in the module. The last module was in fact in the form of an interview. The whole module will be given in a concise form in the coming sections. Real life examples with references to the topics covered will be given wherever possible.

It is to be noted that the examples will focus mostly on small and medium businesses since the topic is related to that concept. The following definition though long clearly states what entrepreneurship is all about. The product or service may or may not be new or unique, but value must somehow be infused by the entrepreneur by receiving and locating the necessary skills and resources.

This will replace the need for a long winded explanation about the concept. A person who engages in the above activities is an entrepreneur. Steps to lessen failure and increase chance of success: Even though failure rates of new businesses are quite high, the following steps can be followed so that chances of success will be increased.

Adequate capital: One of the most important things that a start-up should ensure is to have adequate capital including working capital. Capital can be obtained though financial institutions like banks, angel investors or though the concept of venture capital VC.

Each financial institution will have their own policies on providing loans depending on the type of business, the reputation of the businessman, the security he can provide etc. Most have their own criteria for providing finance and will usually insist on a board position and the right to provide consultancy to the start-up venture.

Venture capital is the least risky way to start a business. Match between Capital and the Opportunity : Every idea and opportunity needs a certain amount of capital to be successful.

So, plan according to your capital available. The opportunity itself should be studied thoroughly for its feasibility. Other factors: Other factors that contribute towards the success of a new venture include understanding the competition, competent employees, and the ability to conduct the day to day running of the business.

Decision making is an important and often crucial function of an entrepreneur. He or she will be faced with situations that may seem difficult to understand and come to conclusion. One of the methods to overcome this is to use what is known as the normative method of analysing given situations. A graphical representation of the analysis process is given below. This section will be the analysis of a given case study using the normative analysis method. Kurt Bauer is a young business graduate who has two options, one becoming a businessman partnering with his brother and a few other associates and the other to work under a businessman called Ludwig salary, commission and a possible future partnership.

The mindset of the man presented in the picture is that he has dreams of becoming a big businessman. The problem for Kurt is which option to choose here. He can go and work under Ludwig in the future hope of getting a full partnership and he can start a venture on his own. The problem defined is that both cannot be done simultaneously without negatively affecting the outcome of the two options.

This is not a major issue and Kurt will most probably opt for the second option. The main problem is that nearly half of new business ventures fail to succeed and Kurt is about to start one on his own. The solution is that Kurt should go into business on his own with financial help from his venture capitalist uncle and his brother.

Alternative solutions include availing the services of a professional venture capitalist, taking a loan, or getting capital from angel investors. As for the decision on the issue, Kurt should get collateral from his uncle instead of a loan and use it to get capital from a bank or similar institution. He can release the collateral once the loan has been repaid or he has enough assets on his own.

Hong Kong has a vibrant international trade and business history and its venture capital industry is very strong. It was formed in with the primary objective of having an organized body to provide such capital and also for protecting the interests of venture capitalists and private equity financing companies in the country. An opportunity is differentiated from an idea in terms of its marketing possibilities.

All opportunities are exploitable for business growth and customer acceptance. Opportunity is profitable for business. But all business ideas are not marketable or profitable for the business firm. Before undertaking an opportunity as a business, the needs and demands of targeted customer group has to be identified properly.

For modifying the opportunity as a business way, the personal skills of entrepreneurs have to be applied on it. An opportunity , on the other hand, is an idea that can be executed, at a profit, within an undetermined period of time a window of opportunity. For converting an idea in to an opportunity, judgment of the created ideas have to be done quickly by using the Venture opportunity screening Exercises VOSE.

The concept is explained below. An idea occupying money making characteristics are considered as opportunity. Only few of the ideas are advantages for business through customer attraction and profitability. After undertaking an idea as an opportunity for the business, entrepreneurs has to take steps to shape the opportunity.

For this the needs and objectives of the business concern have to be analyzed. The cost effectiveness of particular idea comparing with its alternatives also has to be considered. The selection criteria for an opportunity must be in terms of major benefits, market possibility and potential business strengths supplied by each opportunity.

Chapter 5: The Opportunity , p. For shaping an idea into an opportunity, a thorough research on the market characteristics has o be carried out by the entrepreneurs.

Analysis of competitors will provide an overview about the potential strength and competency of the firm with regard to its competitors. A business plan is the written description of the future of a business. It is a tool for entrepreneurs to realise their business goals. Entrepreneurs can use the business plan for coordinating the human resource personnel towards the business goals.

Managers can be directed properly through well prepared business plans. Investment seeking entrepreneurs can use the business plan for transmission of their vision to potential investors. Potential investors can be attracted to the business with proper business plan. A business plan is an essential tool for companies raising capital. A Business plan is the guideline for managing the business in profitable ways.

The business plan should explore business goals and strategies to all persons engaged in the business operations and the ways for achieving them. This will provide competitive strength for the firm.

An Introduction To Business Plans. At the time of selection process of staff personnel, business plan will act as a basis for setting up of selection criteria. Thus best team members suitable to the business objectives can be selected. It explains the purpose of the organization.

By establishing vision in the business plan it can persuade others to contribute for achieving the vision. Business plan can be used as yardstick for measuring the operational performance of employees and managers. There are many examples of success storied that started from and idea which became an opportunity and eventually a business success. Such corporations have now become multinational companies. But the example given here is not very well known outside of Hong Kong.

It also shows that any person can succeed in the region and need not be born here. He had an idea to start a western style restaurant in a relatively small street called Lan Kwai Fong the name adopted by his company as well. The ideas became a success and eventually he bought the whole street which became a cultural hotspot for tourists and locals alike.

His idea developed into real estate and is now known in Hong Kong as Mr. Lan Kwai Fong. Even though finance is an important part of the business process and new venture creation, there are other factors, that are equally or more important. The potential value of a business unit can be analysed using the Timmons model. It helps determine the viability of new business model and emphasizes rigor in opportunity assessment.

Entrepreneur requires various resources such as human resources including top professionals, finance, physical assets, and a business plan. Financial factor comes only as the least important factor for the entrepreneur.

It is believed that entrepreneurs take greater degree of risk especially in areas where they have control or competencies in realizing the profit. Utilization of professionals is a crucial decision process. Entrepreneur needs to look into whether the services of professionals and other important factors such as technical know-how, expertise in the field etc.

Alternative solution can be used without appointing professionals which will help to reduce much cost and effort. Even though it may sound similar, the manager and entrepreneur are two different characters and needs different skills and capabilities in each case. Differences: The primary difference between an entrepreneur and administrator is with regard to risk bearing and conflict management, both inside and outside the organisation.

While an entrepreneur manager has material stakes and investments in the business, an administrator is staff personnel who delegates work to employees and supervises their performance. A manager is concerned with day—to-day activities of the business enterprise, and is accountable for persons working under him. Thus, the main difference between entrepreneurial managers is that there is need to assess what needs to be done for the corporate, and the manager determines how this could be performed, or achieved.

Thus the main area would be policy making and procedural for entrepreneurial, while for administrators, it would be practically executing them. The main areas in which there are perceived differences between entrepreneurial managers and administrators could be seen in terms of the following. An entrepreneur has to be competitively oriented while an administrator had to be an expert in day to day administration.

The former should always look for opportunities, whereas as for an administrator, this will be considered to be a quality rather than a necessity. An entrepreneur is an investor and employer while an administrator is an employee.

An administrator is only responsible for the area in which he controls whereas an entrepreneur has to have full control and responsibility of the entire organization. It is seen that ethical values also play an important role in entrepreneurship and sometimes short term gains have to be foregone for long term profits and objectives.

However, administrators are not under such kind of pressures or stresses, and only needs to perform assigned tasks determined by the management. A job opening in Hong Kong for an administrator describes the responsibilities or duties for that post.

They include general accounting duties and charge of general office administration. Japanese Speaking Accountant and Admin.

The person also has to have three years experience in the above mentioned duties. This is in agreement with what has been said above. Entrepreneurial characteristics are common everywhere whether it is in Hong Kong or any other part of the world. The case of Mr Thomas Tso, is an ideal example of a businessman who had ideas, saw an opportunity, and was willing to take the risk.

When he arrived in Canada from Hong Kong in June of he had a business plan. There were challenges ahead, but Mr. Tso was determined to succeed.

As a result, he runs a successful automobile sales and service dealership with plans for significant expansion. In order to maintain and increase the above factors, the employee will have to be motivated and rewarded.

The first reaction about what motivates an employee would be that it is the monetary compensation received in exchange of work performed. Many theories and studies have proved that monetary compensation is only one of the factors that motivate employees.

They include satisfaction of individual employee needs, specific and challenging goals to work for, and the individual expectations of reward by the employee. Other important factors are fairness, equity, and consistency. The different theories and studies on motivation is testimony to this fact. Motivation is a challenging task. Setting a reward system is equally challenging and efforts to make it perfect by providing proper job descriptions, setting up performance standards and benchmarks, proper monitoring and periodic reviews and changes to the reward system when needed is required.

It is often said that employees are the most important assets of an organization. It is the quality and ability of the employee, along with the capability and leadership shown by the top management of the company that ultimately results in its growth and success. The employee factor is especially true in the case of a new or start-up business. The employees, in close association with the management have to play a crucial role to attracting, retaining and growing its customer base.

The top management of the company has to play an extremely crucial role at this juncture of entry. They have the huge responsibility of recruiting the senior, middle, lower level managers, supervisors and entry level employees of the firm. They can resort to many established and accepted ways of doing this.

The most common ways are advertising in the print and visual media, taking employees from other companies, using networking or availing the services of a professional staffing agency. In the case of senior level management it would be ideal to use networking contacts established from sources like friends, business associates, auditors, venture capitalists, and other associates. An advantage is that the costs involved in paying fees of a staffing agency or paying for advertising space can be saved.

Advertising for jobs is useful for attracting a large number of applicants and it can benefit the company by having a large pool of talent to select from. Recruitment Methods. Advertising can be done in classifieds and trade journals which will less costly and more effective. But this form of attracting talent can be quite expensive and wasteful. Cost of advertising will depend on the media and the publication in which the advertisement is given.

It can be wasteful because the ad might not be visible or it might attract the wrong types of potential employees. Another effective but costly option would be to use the services of a professional staffing agency. The recruitment process involves sending interview dates, preliminary interview, short-listing, second and final interview and sending letter of acceptance.

A contract along with a job description will have to be prepared for signing. Intel is a very well known, respected and probably the largest processor manufacturer in the world. The Hong Kong division has implemented a lot of employee benefits to motivate and retain their employees.