Introduction
Every organisation contains different business activities. Strategies regarding traditional and modern business are moderately different. Business has evolved with time. Comparatively, contemporary business activities are needed of modern industries. It seems compulsory to understand the difference between traditional and modern businesses. Interestingly, it can help to derive some basic business insights as well. However, it appears imperative to understand traditional and modern business to illustrate some differences in an effective manner. The business evolvement may contain some phases, and this journey can help the management depict modern business initiatives (Blackford, 2012).
Traditional Business
Traditional business is a process of selling different goods and services to the local audience. Customers have to visit the business store or outlet to buy these products or services. The management of the company only targets the local audience to generate revenues. In traditional business, the target audience is not specific. It looks like the limited business process. The product, customers, profitability, and revenues are limited. For starting the traditional business, there is a need for a big startup cost. Traditional business is hierarchical, as people are usually departmentalised. People follow the chain of command in the traditional business (Balotsky & Christensen, 2004).
Modern Business
The modern business does not demonstrate boundaries. An organisation intends to use modern technology for the business process to gain a competitive advantage. In the modern organisation, the management of the company intends to leverage the power of technology. The modern business helps to maximise the productivity everywhere. The modern business contains new age business ideas that can alter the landscape of the business regarding operations. Online stores or E-Commerce firms are examples of modern businesses. The management of modern business usually streamlines different business ideas, and due to effective improvisation, it executes efficiently (Downey, 2015).
Difference between Traditional and Modern Business
The big difference between traditional business and modern business is the business channel. For Instance, the traditional business uses business outlets or stores to sell products to customers. The channel for modern business is the website, apps or any other social media platforms. Comparatively, modern business seems fast. However, in this modern era, reliability is triggered by the brand image. Apart from this major difference, many other differences can be illustrated along with several insights.
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Work Planning
Work planning is quite different in both businesses. For Instance, in the traditional business, the management of the company usually develops the plans to make some predictable outputs. Different managers in different departments monitor the process of business. Work is to be organised effectively. Without delegating, it looks like a tough task for the management. In the traditional business, top management cannot identify issues that emerge at the bottom line of the company. Interestingly, managers like to monitor the work through work reports. Accordingly, it identifies some issues and makes different decisions (Hamilton, 2015).
Conversely, in modern business, the management organises the work in short cycles. The company distributes work in different teams. Self-organizing and self-management teams are visible in modern business. Based on different skills, abilities, and credibility, the management allocates work responsibilities. Due to this consideration, the work efficiency, productivity, and profitability are high as compared to the traditional business (Dholakia & Fırat, 2006).
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Reporting
The traditional business depicts traditional reporting. Workers report to managers and wait for the approval of the decision or further instructions. Dependability on different managers in the traditional business is high. On the other hand, modern business empowers different teams to report to customers regarding work and services. In today’s business, workers are motivated to engage customers effectively (Prince, 2008).
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Goals
Traditional business portrays goals as outputs. For Instance, the company streamlines the goals of the business to achieve expected outcomes. The most important thing is making outputs predictable, which also leads towards internal stakeholder satisfaction. Conversely, the goal of modern business is to produce some outputs, as it is meant for customers. It is a fact that the emphasis of the modern business in on the customer satisfaction and loyalty instead of profitability (Dholakia & Fırat, 2006).
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Performance Measurement
Measuring the performance of people in the company has become the top priority of the management. The purpose is to improve the quality of work and maximise productivity. In the conventional business, managers like to measure the performance of workers through key performance indicators. The role of business management is to identify the strengths and weaknesses of workers, and accordingly, make decisions. Comparatively, the management of modern business likes to create teams to measure their performance. For Instance, 360 feedback platforms have been seen in modern organisations or businesses, as people collaborate with each other and identify several aspects that are to be improved. Work performance can be improved quickly in the modern business process (Teodorescu, 2013).
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Time Management
The time management process is also the main focus in both, traditional and modern businesses. However, some differences are to be portrayed. The traditional business management estimates the time needed for the specific work or task. Workers have to ask managers for the required time to complete the task. However, in contemporary business, workers are delegated effectively, as they estimate the required time to complete the work and report to the management. At the bottom line, workers in modern business have a better understanding of work and time, and it seems the main reason for this delegation (Blackford, 2012).
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Work Evaluation
It has been revealed that traditional business emphasises work evaluation. Interestingly, it is different from modern business. The firm management evaluates the work in terms of the conformance of the plan. The goals are to be met effectively to justify the effective work. The modern business management evaluates the work through the feedback of customers. Many modern organisations have created many platforms for customers to provide their valuable suggestions and feedback regarding products and services. The prominent example is Amazon. Through its website, customers usually submit their feedback. By using this feedback, the new business streamlines the rational decision-making process. Relative to the work evaluation, feedback helps the company contain thoughtful considerations for both internal and external business processes. Thus, it is to be said that the work evaluation can be managed effectively in the modern business (Balotsky & Christensen, 2004).
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Visibility of Impediments
Visibility of impediments in the business is important, as immediate decisions are to be made to sustain the business process. When the traditional business intends to accomplish its goals and objectives, it struggles with identifying these impediments. It has a negative impact on the company. Due to these hidden impediments, the traditional business may struggle due to different crises. Some big structural changes are often needed in the business which may also hurt sustainability. In modern business, these obstacles are visible. The management system identifies these impediments and eliminates them immediately (Blackford, 2012).
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Decision Making Process
The biggest difference can be seen in the decision-making process. Contemporary business needs data to enclose thoughtful considerations in the decision-making process. Many organisations integrate with customer trends to obtain numerous insights and make customer-oriented decisions. Decisions or strategies in traditional business are based on different opinions. It keeps it backward as compared to modern business. Company oriented decisions lead towards limited access to different markets, and obviously, the management expects low profitability. Thus, the big reason for the success of modern businesses is customer oriented and data-driven decisions (Teodorescu, 2013).
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Systems & Technology
In business industries, modern organisations gain success due to sophisticated systems and advanced technology. Modern organisations like to make big shifts regarding technology. The whole work process seems sophisticated. With the passage of time, due to adequate financial resources and capabilities, businesses evolve in terms of technology development. Due to this difference, these firms can come up with some differentiated products or services. Interestingly, it looks tough for traditional businesses to imitate outputs, as they usually contain the manual work process. Thus, regarding the technology development, work process, differentiation, and rapidness, the traditional business is far behind (Dholakia & Fırat, 2006).
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Change Management
The change management process is different in modern and traditional business. For Instance, the modern business depicts some small changes that provide short-term benefits to the organisation. The management identifies the need for change with the passage of time, and instead of making some major changes, initiates the small changes. The traditional business depends on major structural changes after a long time. It seems costly and keeps the business process backward in the competitive industry. Sudden drastic changes may hurt the financial capability of the business, and traditional business usually experiences it. For example, in the Chinese market, customers integrate with the technology, and companies, from retail to manufacturing, like to come up with some new things to attract customers. The customer loyalty and satisfaction in China is also based on small changes, which satisfy internal and external stakeholders. Therefore, in Chinese industries, modern organisations can be observed (Blackford, 2012).
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Corporate Social Responsibility
It has been observed that traditional businesses tolerate waste. The firm management does not have waste management strategies to depict corporate social responsibility. The emphasis of the traditional business is to maximise its profitability. Therefore, the management usually avoids these kinds of investments. Comparatively, modern businesses demonstrate some ethical consecrations. They like to rationalise some green initiates to create a positive impact on society and the environment. Instead of focusing on profitability, these companies identify several areas to invest in and play the role. An example of Starbucks, a prominent coffee chain, is the limelight. This modern organisation has initiated ethical sourcing. Furthermore, it also strengthened communities. A prominent leader in the green retail industry is a glimpse of the corporate social responsibility of this company. Conversely, traditional business does not contain these practices to create the goodwill in the society (Singh & Singla, 2012).
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Leadership
The role of leadership in the company is important, and it has been perceived in organisations differently. The leadership approach in the traditional business is autocratic or transactional. In this business process, the management does not want to delegate the decision-making process. Leadership depicts the power in the company, and all decisions are made at the top level. The modern business is integrated with the democratic leadership style or approach. Leadership usually delegates the decision-making process. Employees participate in the decision-making process. Mutual ideas, thoughts, opinions, and reservations are key elements in making effective decisions in the end. Transformational leadership is also a good approach in modern business. Based on it, the management can make small changes to gain short-term benefits. Both employees and management identify the need for change and implement the strategy. Thus, in both businesses, the leadership is a big difference, and it is also impactful (Dholakia & Fırat, 2006).
The Journey towards Modern Business
The modern business is a need of this contemporary era. It is the best time for traditional businesses to make big shifts regarding technology developments, sales channels, leadership, decision making and all mentioned change elements. To make this journey easier, the management has to avoid structural or drastic change at the initial stage. Starting with some minor change is a good approach, which is less costly. Of course, the company has to gain the return through these small initiatives and invest back in the change process. It seems a steady process that can make the traditional business modern. In this E-Commerce era, the online platform for selling products and services can be the first initiative of traditional business. Integration with technology may help to evolve with time and give a tough time to rivals in the competitive market. However, it is to mention that the quality is not to be compromised in this journey, as it is an ultimate element to increase customer satisfaction. Many organisations have emerged in the modern business era due to these considerations. From retail to manufacturing, organisations have entered the modern era, and the customer assertiveness has been increased in the buying process (Downey, 2015).
Conclusion
In the end, it is to conclude that there is a big difference between traditional and modern business. Regarding strategies, decisions, leadership, sales, and change management, actions are different. The modern business is more successful as compared to the traditional business. The most important thing for traditional business is to derive some insights into these differences and take some immediate steps to integrate with some modern needs of the business. Profitability, productivity, customer range, and customer satisfaction can be attained at the end.
References
Balotsky, E.R. & Christensen, E.W., 2004. Educating a Modern Business Workforce: An Integrated Educational Information Technology Process. Group & Organization Management, 29(2), pp.148-70.
Blackford, M.G., 2012. The Rise of Modern Business: Great Britain, the United States, Germany, Japan, and China. 3rd ed. UNC Press Books.
Dholakia, N. & Fırat, A.F., 2006. Global business beyond modernity. Critical Perspectives on International Business, 2(2), pp.147-62.
Downey, A., 2015. Traditional To Modern Values: China’s Opening And The Impact On Prestige Goods. The International Business & Economics Research Journal, 14(4), pp.603-16.
Hamilton, C., 2015. Traditional vs. Modern Business. [Online] Available at: http://benelds.com.au/blog/2015/03/15/traditional-vs-modern-business/ [Accessed 2 July 2018].
Prince, E.T., 2008. Business acumen: a critical concern of modern leadership development: Global trends accelerate the move away from traditional approaches. Human Resource Management International Digest, 16(9), pp.6-9.
Singh, S. & Singla, N., 2012. Fresh Food Retail Chains and Traditional Fruit and Vegetable Retailers in India. Productivity, 53(2), pp.123-43.
Teodorescu, A., 2013. Traditional Vs. Modern Approaches In Business English Teaching In The Economic Field. Knowledge Horizons. Economics, 5(2), pp.153-56.
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