Ethical Concerns And Risk Of New Start-Up Business In Australia

Question: Discuss about the Ethical Concerns And Risk Of New Start-Up Business In Australia. Answer: Introduction The advent of globalization and the recent advancements in the technological fields have drastically changed the way the various companies transact their business (Franks et al. 2014). In addition to this, it is seen that the on a yearly basis various new business organizations are coming into business every year. The establishment of these new start-up companies poses a serious threat to the already established ones on account of the innovative strategies which they use for the conduct of their business (Cannone and Ughetto 2014). However, it is seen that the majority of these companies fail to sustain themselves in the business world and therefore had to close down their business operations within a very short period (Cannone and Ughetto 2014). There are various considerations which these new start-up business organizations need to take into consideration like the formulation and the implementation of various innovative strategies in order to sustain themselves in the competitive m arket, the identification of the business risks which might have an impact on the business and the development of effective strategies for the mitigation of those risks (Franks et al. 2014). This particular report will try to analyze the risks as well as the ethical issues faced by the new start-up companies of Australia like PurePonics, Afterpay, Uptick and others. Risk Assessment Risk is defined as the situation in which a business organization stands to gain or lose a considerable thing. It is commonly seen that with the concept of risk various negative connotations are attached. However, the business organizations stand to gain something or the other by means of the risks which they face. Therefore, in the opinion of many scholars as well as critics risks are the potential situations from which a business organization can gain significantly (Sigala 2017). In other words, the various risks and their effective mitigation can be seen as potential future opportunities. It is significant to note that the various new start-up companies face more risks in comparison to the already well-established ones (Franks et al. 2014). For example, the risks which a start-up company faces in a particular sector might not be the same as the risks faced by the other start-up companies in other sectors of the business. The start-up company PurePonics operational in the nation of Australia was founded by Steve Gleeson and Paul Hopper in the year 2016 and provides services to the customers in the food sector (Kuivalainen, Saarenketo and Puumalainen 2012). The main tagline of the company is More taste, less waste and grown close to where you live and eat. The company currently is looking for more investment to accelerate their expansion across Australia and beyond (Kuivalainen, Saarenketo and Puumalainen 2012). However, there are some risks also associated with the process which the investors need to take into consideration. The top three risks involved in the process are- The primary risk which the investors need to take into consideration is the risks from the various competitors of this particular new start-up company in the same food sector. Another risk factor which the investors need to take into consideration is terms of the sustainability of this particular company as it is seen that the majority of the start-up companies do not sustain long in the business. Another factor which the investors need to take into consideration is the fact that this particular company depends on the innovative technologies for the production of food items, an idea which is not much welcomed by the majority of the people (Otim et al. 2012). Therefore, the company will have a very limited customer base which is likely to hurt the prospects of the company in the longer run. The company Uptick, on the other hand, offers a suite of cloud-based solutions for organizations that manage, maintain and audit buildings(Uptick.com. 2018). The company in the recent has done good business in the nation of Australia. However, the risk which this particular company faces is significant and some of the risks which the company faces at the moment are listed below- The primary risk which the company is from the threat from the well established companies in the same industry. Another risk which the company faces is that the nature of the services provided this particular company is very narrow and thus the company is likely to get outrival by the other companies which offer more diverse options to the business organizations (Rubin, Aas and Stead 2015). The economic recession which the world is facing at the moment also poses as a threat to the prospects of the company in the longer run. The new start-up company Afterpay, on the other hand, founded in the year 2014 by Nick Molnar offers help to the customers in the way they make online transactions (Afterpay.com. 2018). This particular company believes in evolving the retail status quo to provide customers a better way to shop (Afterpay.com. 2018). However, the company faces a significant amount of risk and the most important ones are listed below- The economic recession which the world is facing at the moment is likely to hurt the prospects of the company in the longer run since it operates in the financial sector itself. The risk which the company faces from the various competitors in the same sector is also very significant. Another risk which the investors need to take into consideration is the fact that the company enables the customers to pay the money for the products which they buy in 4 easy installments. However, it is often seen that the customers does not pay the remaining installments after they have got their products delivered. Therefore, this poses a significant amount of risk to the company. Therefore, the various investors as well as the entrepreneur need to take these risks faced by the various new start-up companies into consideration for the formulation and the implementation of strategies which is likely to bring about the overall growth and the development of their business operations (cs, Szerb and Autio 2015). In addition to this, the investors needs to make a thorough inspection of the company and also the nature of their business and the risks faced by them before making into investment in these business organizations (cs, Szerb and Autio 2015). It is significant to note that the risks posed by the competitors and economic can easily be overcome by the development of effective strategies and thus the primary focus of the investors and the entrepreneur should be on the nature of the business of the company and the prospects of their future growth. Ethical Issues The various ethical issues arise when the business organizations have to make a decision as regards to whether they should do the thing which is likely to enhance the prospects of their business or the thing which is ethically correct (Slade and Prinsloo 2013). The ethical issues faced by the company PurePonics are listed below- Focus more on the quantity rather than the quality of the products manufactured by it. Use of unhealthy chemicals to increase it amount of products manufactured by it. The supply of chemically prepared food products to the customers. The ethical issues faced by the company Uptick are listed below- The use of the data and financial records of the company to which it provides services The unethical use of the latest innovations as well as technology The use of unethical means to bring about the overall growth as well as development of their business The ethical issues faced by the company Afterpay are listed below- The use of the financial details of the customers in an unethical manner The charging of unjustified interest rates from the customers The use of the identity of the customers to do unethical things These ethical issues play a vital role in the decision making process of the business organizations concerned. It is often seen that there is a tendency among the business organizations to bring about an overall growth as well as development of their business organization and to achieve this particular goal the business organizations often resort to activities which can improve their prospects but are very unethical (Ford and Richardson 2013). Therefore, the various investors as well as the entrepreneurs need to take these factors into consideration as their association with a business organization which uses unfair means to increase its business can harm their reputation as well in the longer run by their association with those business organizations (Slade and Prinsloo 2013). Top Three Risks / Ethical Issues It is significant to note that on the basis of the above given analysis there are three major risk factors and ethical issues which the three new start-up companies face at the moment. The primary risk which the all the new start-up companies face is the risk from the factor of economic recession (Franks et al. 2014). It is to be noted that the economic factor plays an important role in the overall growth as well as the development of the business organizations. Therefore, if there is a recession then it is likely to affect the business of the various new start-up companies in a significant manner. The new start-up companies require an economic stable environment more than the already established companies as they need to take care of the cost of the establishment of the company, promotional costs and various others and in addition to these the new start-up companies generally do not reliable investors until and unless they have well established themselves in the market. Therefore, t he risk factor related to the economic recession is likely to play a significant role in the process of the overall growth as well as the development of the business organizations concerned (Franks et al. 2014). The second risk factor which the various new business organizations need to take into consideration is the threat from the competitors who have already established themselves in the business. It is significant to note that the risk from the competitors is a significant one for all the business organizations however for the new start-up companies it is a bit more as in the initial phase of their business they need to consider not only the variousmanagement and promotional issues but also the threat from the competitors who have already established themselves in the business long ago and use various innovative and new strategies to outrival their competitors in the business market. The primary ethical issue which the various new start-up business organizations face is whether they should focus on quality or quantity (Ford and Richardson 2013). It is significant to note that the major interest of the start-up companies is to capture the market with their products and thus many of the business organizations end up using unethical means for the production of the products and services offered by them to the customers. Therefore, the business organizations are often in a dilemma whether they do the thing which will lead to the overall growth as well as the development of the business organization concerned or they should do the thing which is ethically correct even if it might hurt the prospects of the business organization in the longer run (Floyd et al. 2013). Conclusion To conclude, the new start-up business organizations face a considerable amount of risk and also ethical issues. In this particular context it is interesting to note that almost all the business organizations face a considerable amount of business risks and ethical issues however the risks as well as ethical issues faced by the new start-up business organizations in more in comparison to the ones faced by the already established ones. Therefore, the new start-up business organizations need to device various effective strategies by means of which they can outrival the already established ones in the business market. It is significant to note that these strategies need to innovative as well as in synchronization with the requirements of the present times for them to be effective. In addition to that, the new start-up business organizations can also take the help of various risk mitigation strategies in a bid to bring about their overall growth and development. References cs, Z.J., Szerb, L. and Autio, E., 2015. The global entrepreneurship and development index. 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