Business development

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Business development entails tasks and processes to develop and implement growth opportunities within and between organizations. [1] It is a subset of the fields of business, commerce and organizational theory. Business development is the creation of long-term value for an organization from customers, markets, and relationships. [2] Business development can be taken to mean any activity by either a small or large organization, non-profit or for-profit enterprise which serves the purpose of ‘developing’ the business in some way. In addition, business development activities can be done internally or externally by a business development consultant. External business development can be facilitated through Planning Systems, which are put in place by governments to help small businesses. In addition, reputation building has also proven to help facilitate business development.

Business Organization undertaking commercial, industrial, or professional activity

Business is the activity of making one's living or making money by producing or buying and selling products. Simply put, it is "any activity or enterprise entered into for profit. It does not mean it is a company, a corporation, partnership, or have any such formal organization, but it can range from a street peddler to General Motors."

Commerce is the exchange of goods and services, especially on a large scale. It includes legal, economic, political, social, cultural and technological systems that operate in a country or in international trade.

Organizational theory consists of many approaches to organizational analysis. Organizations are defined as social units of people that are structured and managed to meet a need, or to pursue collective goals. Theories of organizations include rational system perspective, division of labour, bureaucratic theory, and contingency theory.

Contents

Overview

In the limited scholarly work available on the subject, business development is conceptualized as or related to discrete projects, specific modes of growth, and organizational units, activities, and practices. Sorensen [3] integrates these different perspectives with insights from chairmen and managing directors, senior business developers, and venture capitalists from successful high-tech firms worldwide, which is adopted in the Palgrave Encyclopedia of Strategic Management:

Chief executive officer Highest-ranking corporate officer or administrator

The chief executive officer (CEO), or just chief executive (CE), is the most senior corporate, executive, or administrative officer in charge of managing an organization – especially an independent legal entity such as a company or nonprofit institution. CEOs lead a range of organizations, including public and private corporations, non-profit organizations and even some government organizations. The CEO of a corporation or company typically reports to the board of directors and is charged with maximizing the value of the entity, which may include maximizing the share price, market share, revenues or another element. In the non-profit and government sector, CEOs typically aim at achieving outcomes related to the organization's mission, such as reducing poverty, increasing literacy, etc.

Business development is defined as the tasks and processes concerning the analytical preparation of potential growth opportunities, and the support and monitoring of the implementation of growth opportunities, but does not include decisions on strategy and implementation of growth opportunities. [4]

Background

In practice, the term business development and its actor, the business developer, have evolved into many usages and applications. Today, the applications of business development and the business developer or marketer tasks across industries and countries, cover everything from IT-programmers, specialized engineers, advanced marketing or key account management activities, and sales and relations development for current and prospective customers. For this reason, it has been difficult to discern the unique features of the business development function and whether these activities are a source of profits.

Recent systematic research on the subject has outlined the contours of an emerging business development function with a unique role in the innovation management process. The business development function seems to be more matured in high-tech, and especially the pharma and biotech, industries. [5] [6] [7]

Innovation management is a combination of the management of innovation processes, and change management. It refers to product, business process, marketing and organizational innovation. Innovation management is the subject of ISO 56000 series standards being developed by ISO TC 279.

Professionals

The business developer is concerned with the analytical preparation of potential growth opportunities for the senior management or board of directors as well as the subsequent support and monitoring of its implementation. Both in the development phase and the implementation phase, the business developer collaborates and integrates the knowledge and feedback from the organization’s specialist functions, for example, research and development, production, marketing, and sales to assure that the organization is capable of implementing the growth opportunity successfully. [3] The business developers' tools to address the business development tasks are the business model answering "how do we make money" and its analytical backup and roadmap for implementation, the business plan.

Senior management, executive management, upper management, or a management team is generally a team of individuals at the highest level of management of an organization who have the day-to-day tasks of managing that organization—sometimes a company or a corporation.

Board of directors Type of governing body for an organisation

A board of directors is a group of people who jointly supervise the activities of an organization, which can be either a for-profit business, nonprofit organization, or a government agency. Such a board's powers, duties, and responsibilities are determined by government regulations and the organization's own constitution and bylaws. These authorities may specify the number of members of the board, how they are to be chosen, and how often they are to meet.

Implementation is the realization of an application, or execution of a plan, idea, model, design, specification, standard, algorithm, or policy.

Business development professionals frequently have had earlier experience in sales, financial services, investment banking or management consulting, and delivery; although some find their route to this area by climbing the corporate ladder in functions such as operations management. Skill sets and experience for business-development specialists usually consist of a mixture of the following (depending on the business requirements):

Professional person who is paid to undertake a specialized set of tasks and to complete them for a fee

A professional is a member of a profession or any person who earns their living from a specified professional activity. The term also describes the standards of education and training that prepare members of the profession with the particular knowledge and skills necessary to perform their specific role within that profession. In addition, most professionals are subject to strict codes of conduct, enshrining rigorous ethical and moral obligations. Professional standards of practice and ethics for a particular field are typically agreed upon and maintained through widely recognized professional associations, such as the IEEE. Some definitions of "professional" limit this term to those professions that serve some important aspect of public interest and the general good of society.

Financial services economic service provided by the finance industry

Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, consumer-finance companies, stock brokerages, investment funds, individual managers and some government-sponsored enterprises. Financial services companies are present in all economically developed geographic locations and tend to cluster in local, national, regional and international financial centers such as London, New York City, and Tokyo.

An Investment bank is a financial services company or corporate division that engages in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated with corporate finance, such a bank might assist in raising financial capital by underwriting or acting as the client's agent in the issuance of securities. An investment bank may also assist companies involved in mergers and acquisitions (M&A) and provide ancillary services such as market making, trading of derivatives and equity securities, and FICC services. Most investment banks maintain prime brokerage and asset management departments in conjunction with their investment research businesses. As an industry, it is broken up into the Bulge Bracket, Middle Market, and boutique market.

The "pipeline" refers to the flow of potential clients which a company has started developing. Business development staff assign to each potential client in the pipeline a percent chance of success, with projected sales-volumes attached. Planners can use the weighted average of all the potential clients in the pipeline to project staffing to manage the new activity when finalized. Enterprises usually support pipelines with some kind of customer relationship management tool or database, either web-based solution or an in-house system. Sometimes business development specialists manage and analyze the data to produce sales management information. Such management of information could include:

For larger and well-established companies, especially in technology-related industries, the term "business development" often refers to setting up and managing strategic relationships and alliances with other, third-party companies. In these instances, the companies may leverage each other's expertise, technologies or other intellectual property to expand their capacities for identifying, researching, analyzing and bringing to market new businesses and new products. Business development focuses on the implementation of the strategic business plan through equity financing, acquisition/divestiture of technologies, products, and companies, plus the establishment of strategic partnerships where appropriate.

Business development is to be thought of as a marketing tactic. The objectives include branding, expansion in markets, new user acquisition, and awareness. However, the main function of business development is to utilize partners in selling to the right customers. Creating opportunities for value to be ongoing in the long-term is very important. To be successful in business development the partnership must be built on strong relationships. [8]

Business Development and Ethics

Facilitated development

Business Development is affected by external factors. "Planning Systems" are systems set in place in order to regulate businesses. In many cases, ruling agencies deem the necessary for business survival. [9] There is a section of Business that is dedicated to facilitating ethical business development in developing countries. In the early 2000s, Business Ethics was dedicated to helping the Businesses in need that are in these countries. However, owing to lots of backlash from critics, they have changed their focus into helping businesses that are going to help the most people develop. These policies have improved the quality of life of the people. However, this facilitation changes the norms and, in turn, harms some groups. In order to enforce the new policies in an ethical manner Business Ethicists have created a cost-benefit analysis, placing an emphasis on basic necessities. These concerns have become so great that Business Ethicists have created a new department called Development Ethics. Now, instead of simply helping developing businesses, international business developers have begun ensuring that the companies keep basic human rights in mind. This especially applies to countries where the laws are not so strict and allow for abuse to take place. These development policies now have to follow the criteria that Penz created, consisting of: security, empowerment, rights, equity, integrity, and cultural freedom. [10] The idea of providing people with human rights in order to facilitate business development can be seen through the rapid development of China in the last few decades. The policies that were implemented in the last couple decades coincide with these developments. In the 1980s, government policies facilitated the rise in literacy rate and education. The following decade, healthcare coverage increased significantly. This development was not originally seen as monetary capital, but instead, it was seen as human capital. With more workers able to bring skill and maximum effort to their workplace, companies were able to develop extremely rapidly. [11]

Reputation building

With companies becoming more and more conscious of ethical practices, closely watching themselves to avoid scrutiny, a company's reputation has become a great concern. Ethical business practices are closely tied with reputation which makes it essential to follow ethical guidelines if a company is looking to build their reputation. In fact, Businesses that develop quickly and successfully have tendencies to show honesty, impartiality, and service to all of their stakeholders. In order for a company to be considered "ethical", it must cater to the needs of the customer, keeping their best interest in mind. This will influence customers to make repeated purchases and lead to more profit. In order for a company to build a strong reputation with their suppliers, it is crucial for them to focus on impartial business interactions and developing long relationships. These relationships can lead to mutually-beneficial business deals for both the company and its supplier. With the employees, they must take their interests into consideration and facilitate teamwork as opposed to rigorous competition. This ensures that the company will keep their most loyal and dedicated employees for as long as possible. Funding for further development can rise when a company is able to develop strong relationship with each stakeholder individually, and ethically. This is based on the concept of reciprocation, which states how in order for social change to take place between groups of people, trust must be built between them through mutually beneficial actions. This can be supported through the results of a questionnaire study that was conducted on technology industries in GTSM and TSE [ disambiguation needed ]. [12] In addition, in order for a company to practice business ethics, and ensure strong business development, it is essential to maintain a positive relationship with the environment. With concerns about the recent decline of the environment increasing, stakeholders have become more involved in efforts to preserve resources and a negative impact on the environment brings about risks of damaging stakeholder relationships. [13]

See also

Notes and references

  1. Compare: Houterman, Joyce; Blok, Vincent; Omta, Onno (2014). "Venture capital financing of techno-entrepreneurial start-ups: drivers and barriers for investments in research-based spin-offs in the Dutch medical life sciences industry". In Therin, Francois (ed.). Handbook of Research on Techno-Entrepreneurship: How Technology and Entrepreneurship are Shaping the Development of Industries and Companies. Elgar reference collection (2 ed.). Edward Elgar Publishing. p. 169. ISBN   9781781951828 . Retrieved 2015-07-23. <--Business development (BD) involves all activities t ??? * developing products and technologies so that they can be commercialized, building relationships with potential partners [...]-->
  2. What, Exactly, Is Business Development? [ need quotation to verify ]
  3. 1 2 Sørensen, Hans Eibe (2012). Business Development: A Market-Oriented Perspective. John Wiley & Sons.
  4. The Palgrave Encyclopedia of Strategic Management (2014)
  5. Davis, C. H., & Sun, E. (2006). Business development capabilities in information technology SMEs in a regional economy: An exploratory study. The Journal of Technology Transfer, 31(1), 145-161.
  6. Kind, S., & Knyphausen-Aufseß, Z. (2007). What is 'business development'? The case of biotechnology. The Case of Biotechnology. Schmalenbach Business Review, 59(2), 176–199.
  7. Lorenzi, V., & Sørensen, H. E. (2014). Business Development Capability: Insights from the Biotechnology Industry. Symphony. Emerging Issues in Management, (2), 1-16.
  8. "What, Exactly, Is Business Development?". Forbes. Retrieved 2015-11-09.
  9. Ploegmakers, Huub; Beckers, Pascal; Van der Krabben, Erwin (2017-11-15). "The impact of planning intervention on business development: Evidence from the Netherlands". Urban Studies. 55 (14): 3252–3273. doi:10.1177/0042098017735011. ISSN   0042-0980. PMC   6187060 . PMID   30369645.
  10. Poruthiyil, Prabhir Vishnu (2013-09-01). "Weaning Business Ethics from Strategic Economism: The Development Ethics Perspective". Journal of Business Ethics. 116 (4): 735–749. doi:10.1007/s10551-013-1818-8. ISSN   1573-0697.
  11. Enderle, Georges (2010). "Wealth Creation in China and Some Lessons for Development Ethics". Journal of Business Ethics. 96 (1): 1–15. doi:10.1007/s10551-010-0453-x. ISSN   0167-4544. JSTOR   40836185.
  12. Su, Hwan-Yann (2014-01-01). "Business Ethics and the Development of Intellectual Capital". Journal of Business Ethics. 119 (1): 87–98. doi:10.1007/s10551-013-1623-4. ISSN   1573-0697.
  13. "Journal of Business Ethics - Springer". link.springer.com. Retrieved 2019-04-18.

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