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A Leadership Proposal about How to Increase Profit

Updated on June 26, 2014

The company has a problem. It sells its glasses at cheaper price in order to increase sales. As a result, profit remains stagnant. It is hard for me as the owner to make more profits. I may take many possible types of actions while I am making decision to deal with this situation. “For example, in a situation where the leader is the most knowledgeable and experienced member of a group, an authoritarian style might be most appropriate. In other instances where group members are skilled experts, a democratic style would be more effective, “according to Kendra Cherry. To resolve this conflict, I, the boss and owner of the company, am more knowledgeable about business, so I may be in charge to make decision depending on the circumstance. However, I have to listen to other members of the group before making a decision on my own. I have to work corporately with my teammates depending on the circumstances.

Roldens Inc., my institution, is a corporation that sells eyeglasses. This company exists in order to provide good services to its employees and its customers, helping customers finding glasses at a cheaper price. This mission statement can positively impact my organization because a lot of customers are more likely to buy glasses from my organization, and employees are more likely to feel that it is enjoyable to work with their bosses because the bosses will provide good services to them.

The goal that I want to achieve is that I want the company to make good or more profits while selling the glasses at lower price. In this case, I may use the situational theories to achieve this goal. “Situational theories propose that leaders choose the best course of action based upon situational variables. Different styles of leadership may be more appropriate for certain types of decision-making, “according to Kendra Cherry.

In order to achieve that goal, I, as a leader, have to communicate with the employers and the customers. I have to try to cut down in advertisement fees. The employers have to talk to their customers, asking them if they can tell others about the products or how our glasses are at cheaper price. That can improve advertisement while cutting some unnecessary advertisement fees. As a result, there is going to have a plus in the company profit. As a matter of fact, Richard Coughlin and Peter Sirman, PA human resources experts talk about that in the article titled How Can Companies Improve Their Profits And Increase Their Competitiveness by Reducing Costs by stating that “driving ruthless internal efficiency is important to increase profit. By stopping any activity that does not add value, companies should uncover inefficient end to end delivery processes right across the supply chain, drive out waste and the cost of failure, maximize the use of the capacity of all resources, and seek new value by exploring sourcing options for services and components.”

In situations that that doesn’t work out, I can take other decisions depending on the circumstances. I can refocus on what the customers really value. “By re-examining the goods services and propositions that are offered and through checking how existing goods and services meet changing customer requirements, there is the opportunity to re-designing those offerings so that they cost less to produce and deliver,” according to Richard Coughlin and Peter Sirman, PA human resources experts. Relatedly, I can focus on what type of glass that the customers buy the most; as a result, he produces more of them in the company. That can increase sell; consequently, it can lead to a higher profit.

Additionally, changing the operating model can be a good decision to increase profit. “By looking at new, lower cost operating and delivery models. This can be achieved by considering channels to market, new distribution and production partners, and new internal operating model, which focus on the goods and services you know your customers want”( Coughlin & Sirman, 2014).

As the demand of glasses goes up in the company, if the strategies above do not work out, the company can increase the price of its products a little bit, but the price of their glasses should remain cheaper compared to other companies. As stated in the article titled Strategies to improve profit, “Increase your prices is a good way to improve profits - check if you have priced your goods and services correctly and if you could increase prices without reducing sales.”

I will evaluate the success of my plan when I see that profit is increasing.

"Profitability is probably the first thing people think about when measuring success. Is the business making money? This is fairly common sense — if there is money left after you have paid your monthly operating expenses and debt, then things are looking pretty good. However, if you find your bottom line is continually red, your chances of success begin to dwindle" ( Alter, 2014).

If customers remains in the market or the number of customers increase even when after I increase the price of my products, that tells me that my plan consequently produce a good success.

"A growing customer base is a sure sign that you are effectively reaching your target market, and reaching your target market is what your business is all about. Without a vibrant customer base, your success will be limited, at best. The long-term growth of your company is tied directly to your ability to not only reach your customer base, but to expand it to accommodate your long-term goals. All of those long hours spent on the research and development of a marketing strategy prove themselves here" (President Michael Alter, 2014).

Customer satisfaction can also help me evaluate the success of my plan. If he customers like the new products design or most likely to continue to buy the type of glasses that I concentrate more in or produce more, that also tells me that my plan is successful.

"Customer satisfaction is an indication that your company understands the needs of your customers. Understanding your customers and being able to satisfy their needs is crucial to the strength of your business. Just remember, one unsatisfied customer can negate the promotional impact of several satisfied customers. Having strong customer service polices will add to the success of your company" (President Michael Alter states,2014).

I have to also determine how the employers or employees feel about the results of the plan. Do they feel that they are not appreciated after they find out that they have to talk to their customers about the products or to tell them to talk to other people about the products that they buy? If they feel satisfied about it, it is conceivable that that is going to help me perceive that my plan produces good results. “Customer satisfaction is an indication that your company understands the needs of your customers. Understanding your customers and being able to satisfy their needs is crucial to the strength of your business. Just remember, one unsatisfied customer can negate the promotional impact of several satisfied customers. Having strong customer service polices will add to the success of your company,” according to SurePayroll and President Michael Alter.

"Perhaps the most important measure of business success is whether you — the owner — is satisfied with the results of business ownership. Dissatisfaction is contagious. If you're not happy with your business, it won't be long before your dissatisfaction begins to affect the employees and even the customers. Every once in a while, carve out time for a reality check. Identify the sources of your dissatisfaction and make the necessary changes before it's too late," according to President Michael Alter.

If I, the owner of the institution, satisfy with the plan of the business, it is clear that I positively evaluate the success of my plan.

Critical think process is an important tool that can help me to evaluate my plan as I have been making some good evaluations above regarding customers’, owner’s, and employers’ satisfaction and profitability and customer base.

Additionally, a good accounting process can be used to evaluate the success of the plan. The accountant of the company has the responsibility to calculate profit and determine if sales increase or if more customers buy products in the company.

In addition to the accounting process, I may conduct a survey, asking the employers, employees, or customers about how they feel about the plan. Do they think that it leads to a good success? Depending on how they respond, I will be able to come up with an appropriate evaluation.

The feasibility of the study is normal. I experience a lot while doing the study. My knowledge increases about leadership because of the research that I do for the study. As I develop my plan, new ideas, ideas that I did not even expect that I would have, come to my mind. The paramount idea was how to increase profits in the institution. That makes me ponder a lot.

As I did during in the process, "to be successful, a businessman must objectively perceive reality and rationally process and evaluate information. He must detect information gaps between consumer wants and needs and the potential of a new but as yet undeveloped product or service to meet those wants and needs. The businessman must anticipate new markets and consumers' future wants and needs, learn from competitors' successes and failures, accumulate capital for his projects, acquire the needed resources, coordinate numerous activities and employee skills, and take risks by trading present and known values for resources that only promise a potential future value for him. Profit is payment for the businessman's thought, vision, initiative, determination, and efficiency" (Edward W.Younkins, 2001).

This experience is very beneficial to me. I have learned a lot from it. The plan is also very significant. Any business owner may learn something from it.

"Businessmen aim to produce a profit by selling at the highest price the market will permit while buying at the lowest prices the market will yield. They profit by doing the best they can in creating goods and services that the consumers desire. The role of business is to produce the best possible goods, services, and ideas at the lowest possible cost so as to maximize the firm's profits. The businessman earns profits by using as little as possible to provide customers with as much as possible. Profit is made by creating wealth and trading with others" (Edward W.Younkins, 2001).

I choose to focus on customers’ need during the process because I know the value of it. As Edward goes on to indicate, “A firm's economic power is derived from its ability to produce material values and offer them for sale. Unlike political power, which depends on physical force, economic power relies on voluntary choices. A company is powerless when it fails to provide things that people want to purchase. The only leverage the businessman has is the quality of his products and his ability to persuade.” As I have been stated above, focusing in customers’ need lead to a good result. It is more likely to be possible that sales is going to increase in the corporation, the cost of hazardous wastes is going to decrease, and profits is more likely to increase. As leaders, it is extremely important to try to reduce or eliminates unnecessary expenses in the company because they are unbeneficial. “The core of business is wealth creation. Its essential nature involves the production of value for trade. In a firm, managers are employed to add to the net worth of the company. They are not typically hired to carry on programs of social reform. The businessman provides business competence for a price. People normally invest to increase their wealth and the businessman furnishes the skills to meet this goal” (Edward W.Younkins, 2001).

Works Cited

Leadership Theories: The 8 Major Leadership Theories. The Eight Major Theories of Leadership by Kendra Cherry. 6/15/2014.

How can companies improve their profits and increase their competitiveness by reducing costs? Richard Coughlin and Peter Sirman, PA human resources experts, 2014. June 15, 2014.

Five Ways to Measure Success in Your Business By SurePayroll President Michael Alter, 6/15/2014. June 15, 2014.

THE BUSINESSMANAS A MORAL RISK-TAKER, CAPITALISM & COMMERCE by Edward W.Younkins. Montréal, 3 mars 2001 / No 78. June 15, 2014.


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    • Debraw50 profile image

      Debraw50 3 years ago

      Hello Pauley, Hope you are doing well. I Like your Hub. It is very well written and you put a lot of thought into it. It will help many others who read it. Keep writing.

    • teaches12345 profile image

      Dianna Mendez 3 years ago

      This is quite an interesting view of this topic.

    • rebelogilbert profile image

      Gilbert Arevalo 3 years ago from Hacienda Heights, California

      Excellent pointers, paulynice!

    • vkwok profile image

      Victor W. Kwok 3 years ago from Hawaii

      I can see you put a lot of thought into this hub.

    • mylindaelliott profile image

      mylindaelliott 3 years ago from Louisiana

      That sounds like a thorough analysis.

    • MizBejabbers profile image

      MizBejabbers 3 years ago

      I liked the quote by Edward W. Younkins, but WalMart has put many a small merchant out of business by making that impossible, especially in small towns. Today we are reaping the benefit of Chinese-made goods and cheap quality, but we still keep on buying there. I’ve noticed that in this “bigger is better” atmosphere of today, the one who spends the most on TV and then manages his business well seems to grow. When I worked in broadcasting, I heard a saying to the effect that when times were hard, the first thing a business cut down on or from its budget was advertising, and that was the last thing that needed to be cut.