The Business Dilemma

A world of questions:

Tanveer started a small grocery store in the year 2004 after his father passed away. The store initially supported his family. In 2008, Tanveer got admitted into MBA through a distance education program and started to expand the store. He introduced many competitive features such as selling branded items, home deliveries, phone orders, etc., and made his store one of the prominent stores in the region. Now, he sees his customers are visiting malls like Total, Big Bazaar, Star Bazaar, etc., and they seem to like shopping there inspite of all the products and services offered by him. These outlets are not only big, but also offer lower prices and decent quality. Tanveer now wants to do something by which he can retain his customers. He has a few questions in mind.

1. Why do customers run behind malls? What is it that his shop lacks that the malls offer? Can he really compete with the malls?
2. Will reducing the prices of groceries sold in his shop help? Or should he focus on a limited group of customers who accept his prices and pay for his services?
3. Should he expand and open new stores in newer locations or should he invest his money in getting more varieties of items in his existing shop?

While Tanveer was wrestling with these questions, his store manager, Charan, a 25 year old young man, who joined Tanveer in 2006, was trying to find answers to different questions. Of late, Tanveer had advertised in the local newspaper about free home deliveries to all parts of the city. Now, there were enquiries and orders from distant parts of the city. But, the orders were few and scattered. Also, existing customers were constantly enquiring if certain items can be got for lower prices as the several malls had announced weekend sales on those items. Charan was asking these questions to himself

1. What is the best way deliver groceries to far off places? How much will the deliveries cost them additionally? Should he accept the orders or reject it? What would be the implications of rejection?
2. How much discount on existing prices can he offer customers? Which customers should be given the discount and which of them need not be given discounts?
3. How can he arrange the items in the shop in such a way that casual visitors buy the most fast moving item?
4. How can he inform to regular customers and visitors about the new items that are available to them at lower prices?

While he was breaking his head over these questions, Charan got a call from one of his delivery team members, which had gone to deliver groceries in a nearby area. The delivery person asked him these questions:

1. A customer approached the delivery van and was enquiring whehter he can buy some of the items. Usually the answer would be to call the shop and place a direct order. But, there were some items which were left out undelivered as a couple of customers were not available for delivery. Should he return the order or can he sell a few items that are on extra stock?
2. There is an order from an area adjacent to where the delivery van was. This is a new customer and he was not picking up the phone? Should he return or proceed with the delivery?

As we can see, people in various levels of running a business face different questions which require concrete answers. We can also see that answering each question in an objective manner is important as each decision impacts the profitability of the organization. Tanveer, Charan and the delivery guy are all a part of the store and their decisions will determine the final fate of the store. All the above questions are examples of what are known as Business Dilemmas

Business Dilemma – Its nature and consequences

Generally defined, a Dilemma is “A state of Uncertainty or Perplexity as requiring a choice between two equally unfavorable options.” But for the purpose of our discussion we shall modify the above definition slightly.

A Business Dilemma is “A state of Uncertainty or Perplexity, which arises in the context of a business, as requiring a choice between two or more equally favorable/unfavorable options.”

A preliminary look at the above definition brings forth two points that describe the nature of a dilemma.

• A dilemma comes into existence because there are two or more options available. That is, there are two or more possible answers for the same question. Let us call this the necessary condition for a dilemma to exist.
• A dilemma comes into existence also because these options appear to weigh equally when it comes to make a choice. Let us call this the sufficient condition for a dilemma to exist.

Let us formally state the nature of the dilemma now. A Business Dilemma exists if and only if there are two or more alternative options available to resolve the dilemma and each of these options appear to be equally favorable or unfavorable.

The result of dilemma is a state of indecision. When those who face a dilemma cannot make a choice there would be no progress. This is a highly undesirable state for organizations as it might create a drag on utilization of resources. The consequences of such a drag are multifarious, and the final impact of such a drag will be on the customers satisfaction with products and services. Thus a state of indecision is highly undesirable and those who face the dilemma would be under pressure to resolve it as quickly as possible.

Resolving Business Dilemmas

To resolve a dilemma, it is important to evaluate the choices available more closely. This also means that more information would be needed which would tilt the balance that appears to exist in favor of one or the other alternative. Then choice would be possible. The dilemma can be resolved. Therefore, the people facing dilemmas' would be in search for information that would help them to make a choice. However, a misguided choice could prove disastrous for a business. So, the information that is collected for making a choice, has to be objective and unbiased.

For this reason, Business Research relies on the usage of Scientific Method. Using processes that are advocated by the Scientific Method, Business Research makes sure that information collected for the purpose of decision making is objective and unbiased.

The Concept Map

To help understand the discussion better and to explore the concepts discussed here a little more on your own, I have created a concept map. This map can be useful for answering several questions. I am herewith discussing an example:

Q: Why is Business Research important for a firm?

A: Business research employs the scientific method that objectivizes decision making. Such decision making removes the dilemmas faced by Entrepreneurs, Managers and Executives in creation, deployment and utilization of resources that are used to create products and services that are finally delivered to customers. Thus, we can say that we can created products and services that address the needs of the consumers and result in satisfaction of consumers through appropriate utilization of business research. Thus, any customer centric organization intent upon making its money through satisfying customers can derive great value out of using business research.

Exercise:

Now look at the “Business Diamond” highlighted with a purple colored dotted lines. What are some of the inferences that you can draw by looking at this diamond? Feel free to post your comments below.

Coming up next “The Scientific Method”