The organizational culture and employee behavior is largely contingent on the ownership model. The level of growth of a company determines how much freedom the manager gives to the employees. Freedom is gauged in terms of how much employees can do without seeking approval of the leader, and the effectiveness of the results demonstrates the balance between freedom and maturity. The ability of employees to make the right choices and remain organized even in the absence of their leader depicts maturity. A mature team earns its freedom without the leader fearing loss of ownership. However, immature employees have to get approval before they make a decision, which technically means the leader makes the decision ( Rodin, 2015) . Freedom and maturity must be balanced to create an employee-owned company and a team that supports each other.
Potential Changes in the Ownership Model
The 21 st century has revolutionized ownership, shifting it from the manager to a group of individuals. Traditionally, most companies and assets were owned by individuals who employed professionals to run the business in various departments. In some cases, the owner had little knowledge of how the business operates. For instance, it was not uncommon to find an engineer who owned a pharmacy and relied on pharmacists to keep the business running. In one case, the engineer accords the pharmacists freedom to decide without his approval, while some may desire to approve resolutions to ensure the company is being run as they wish.
Delegate your assignment to our experts and they will do the rest.
The conventional ownership model is, changing, with teams owning more businesses. The traditional business model was based on assumption, with uncertainty whether the product would generate income or not. Enterprises are therefore opting to research on value proposition first since it is one of the fastest-changing in business models. The value proposition is a measure of the collective benefits that customers will earn by purchasing a product or using a service. The value that a potential customer perceives they will gain from utilizing the service or good determines their willingness to spend on them ( Türe, 2015) . The value proposition has the highest probability of changing, as customer preferences change with changing trends. Taking an example of the transport industry, where a high value was initially attached to owning a car. The convenience, pride, and privacy of owning a car was desired. However, in the recent past, more people prefer to use transportation apps as they provide the same privacy and convenience but lower costs ( Hietanen, 2016). Owners of cars are therefore shifting from using their vehicles for private transportation into using them in business. Business ownership models have to change to serve customer prepositions since the customer is the focus of any business.
Marketing strategies are formulated based on the company’s target market. As teams mature and gain more ownership of the business, they are likely to discover unexploited methods of reaching the target market. A team that has carefully sampled the market, combined with knowledge of the company’s strengths and weaknesses, gives the company agility in the market. They may also discover that there is an unexploited target group, which may make it necessary to re-adjust the business model to accommodate a broader market. The discovery also gives them a competitive advantage over similar firms. For a mature organization, such decisions will not take long to be approved since employees work as a team to evaluate and decide on the best approaches without waiting for the leader to make the decision.
Effect on the Distribution Channel
A change in value proposition will force the business to re-strategize its priorities in marketing. The distribution channel will have to refocus on customer satisfaction, which necessitates the adaptation of new distribution methods. Changing the distribution channel may be expensive, but the business could consider increasing the cost of goods or services to meet the operating cost. Discovery of a new target market will also interfere with the distribution channel, and make the distribution channel longer, demanding for more employees. The distribution channel will prolong the time taken to reach the customer, such that the delivery is not timely.
Effect on Insurance
Exploring new ideas and areas pose higher risks for the organization, which raises insurance costs. Some of the new ideas may not be covered in the existing insurance programs, which translates into extra costs by the business. When taking risks into account, the potential benefits must surpass the insurance costs for profitability ( Cummins & Weiss, 2015) . Some insurance firms may also be reluctant to cover some risks, and the business could be in a dilemma on whether to venture into a new business or not. Insuring all risks is, however, advisable to ensure the company remains in operation despite continually changing business models.
Conclusion
Businesses are shifting the models of ownership, with firms becoming owned by teams other than individuals. Employees work as teams to make decisions on behalf of the business without relying on their manager. Working in an organization ensures they make informed decisions. Companies no longer make marketing decisions without assessing their target market. Changes in value proposition, customer preferences, and the target market means the business model has to be adjusted in accordance. A mature organization will promptly adjust to such changes without waiting for the approval of an individual, which gives them a competitive advantage over immature organizations. However, striking a balance between employee freedom and maturing requires progressive training and practice for them to be effective on their own. Once a business strikes a balance, the leader will only need to oversee and make crucial decisions, as teams manage and run the business.
References
Cummins, J. D., & Weiss, M. A. (2015). Measuring cost efficiency in the property-liability insurance industry. Journal of Banking & Finance , 17 (2-3), 463-481.
Hietanen, S. (2016). Mobility as a Service. the new transport model , 2-4.
Rodin, D. (2015). The ownership model of business ethics. Metaphilosophy , 36 (1 ‐ 2), 163-181.
Türe, M. (2015). Value-in-disposition: Exploring how consumers derive value from disposition of possessions. Marketing Theory , 14 (1), 53-72.
