Entrepreneurial audit

4.6. Assessment of the business cost structure

After analysis of the core business model form a financial point of view, it was observed that the management style reflects flexible type of cost structure, since it is both a fixed-cost-based and variable based. The system can be defined as a fixed-cost-based system, since for most employees there are basic and fixed salaries, and latter cost can be elaborated as business expenses that are not dependent on the activities of the business^, but which tend to be time-related, such as salaries or rents being paid per month. But the system is therefore variable-cost-based since for the employees who perform as consultants, apart from the basic salaries provided they are additionally rewarded on commission based remuneration.

4.7. Core competencies of the venture at the present time

OWHC as any other business needs to acquire core competencies for its business to develop, therefore in the OWHC's case core competencies can be defined as the instruments and tool that lead to the development of core products and to the offer of a given service. Core products are services delivered to clients; and thus are key elements used to build a larger number of networks in terms of reliable and satisfied clients. The business units of the corporation each tap into the relatively few core products to develop a larger number of end user products based on the core product delivery. It has been observed that OWHC's core competencies arise from the integration of multiple factors such as the qualified workforce and the coordination of diverse production skills. Those above developed competencies are considered critical due to their appropriateness as they provide access to a wide variety of markets, contribute significantly to the end-product benefits, and be difficult for competitors to imitate. Thus, as the business unit does manage to sustain its own core competencies over time, due to its autonomy it may not share them with other business units. As a solution to this problem, it is suggested that corporate key managers should have the ability to allocate not only cash but also core competencies among business units. Business units that lose key employees for the sake of a corporate core competency should be recognized for their contribution.

Equally, OWHC's key managers recognise recruitment as a key function/core competency that is perhaps on the edge of the debate around what constitutes a `core-competency' for the enterprise. If getting the best talent in is so important to a businesses success, then should this be something that you rely on a third party to do for you? Which explains the fact within OWHC the recruitment performed on their clients' behalf is assumed to be sufficiently effectuated as indicators in terms of unsatisfied clients have proven to be positively in their favour. To corroborate this latter fact, key managers interviewed for the purpose of the study stated that «they have never lost a client, since the company has started».

When the founders of the organisation started the venture in 2000, the core business was mainly grounded on HR consulting only. Then as the market was evolving and organisations depicted the growing need to outsource third party companies for employees recruitment, the management style in 2004 evolved to including recruitment as a core competency to the core business model, and hiring individuals such as Mark Holshausen and Kathy Black for the sake of rendering professional the recruitment department in the organisation. The type of recruitment in practice was centred on engineers merely, as a result companies outsourcing from OWHC would then be given the opportunity to hire qualified engineers, and to obtain programs for the upgrading existing engineers facing difficulties due to the newness of recent technologies.