Investigation into Cadbury's Plc.
To: MS Sweet
From: Michael Pidding
Reference: Unit 1
Date: December 2002
Title: Investigation into Cadbury's Plc
.0 Introduction:
This report will show the types of business ownership, by classifying the business according to the type of business. It will explain the benefits and the constraints of the type of ownership. This report will also show a clear description of Cadbury's, and will show their reasons for their choice of objectives. In addition to this report it will show the types of functional areas that exist in my chosen business.
This will include a description of production, finance, human resources, marketing, administration and research and development. Also included in this report will be a cover the types of management style the company has. This report will also explain the organisational structure and how it has affected its performance and how it helps to meet its objectives.
This report will also show a clear explanation of how the production process and quality control helps the business to add value to its product and it will describe the types of communication the business uses.
The person, who created the Cadbury business, is John Cadbury in 1824. The business started as a shop in a fashionable place in Birmingham.
It sold things such as tea and coffee, mustard and a new sideline - cocoa and drinking chocolate, which John Cadbury prepared himself using a mortar and pestle.
2.0 Information:
2.1a Introduction to types of business:
Private sector:
Private Sector are privately owned businesses, this can includes public limited companies and private limited companies. A private limited company is usually smaller than a public limited. A public limited company sells its shares on the stock exchange while a private limited company is restricted to selling shares to family and friends. A public limited usually has many more owners (shareholders) than a private limited company and has more rules, regulations and laws concerning the operation of a public company.
The advantages of being in the private sector is you have limited liability, which means if the business goes bankrupt, the owners are only liable for debts up to the amount they have invested in the firm. Personal possessions are not at risk. They can also sell shares; to friends and family in the case of private limited company and on the stock exchange in the case of a public limited company. The business also has legal personality which is an entity in its own right, the firm can now be sued, not its owners.
Public Sector
Public sector organisations are owned or directed by the government and have no shareholders. Examples included the BBC, the Bank of England, the armed services and local authority services such as schools, parks, museums and libraries. Revenue often coves from the taxpayer as well as customers. Public Sector is likely to have social objectives; not just to be profit oriented.
Voluntary:
Voluntary workers run a voluntary organisation. It is a non-profitable organisations and runs by donations made. Voluntary organisations tend to be charities such as Oxfam, sports club or societies.
2.1b sole trader:
Control is a key consideration in deciding on what type of business to form. The great thing about being a sole trader is that your business and you can make the decisions. In other words, you more or less have total control.
A sole trader is a single person who owns a business by himself. A sole trader has full responsibility of the company and the financial control of their business as well. Its easy for a sole trader to go bankrupt as they will be declared bankrupt when the owe the sum of £750. Sole traders have unlimited liability which means if the business goes bankrupt then the owner of the business could loose all his personal possessions to pay off the debt. A sole trader is easy to establish and can act quickly on all major decisions as he/she doesn't have to discuss it with anyone else. Also a sole trader has limited financial resources, as the bank will only give them a limited loan for the business.
The advantages of a sole trader are:
* Easy to set up as no special paperwork is required.
* Generally these are small businesses, so less capital required.
* Speedy decisions can be made as few people involved.
* Special services can be offered to customers.
* Profits do not have to be shared
* Business affairs can be kept private
The disadvantages are that:
* Having unlimited liability endangers personal belongings
* Finance can be difficult to raise
* Small scale limits discounts and other benefits of large scale businesses
* Prices are often higher than those of large businesses
Ill health/ holidays may affect the running of the business.
A sole trader would re-invest most of his profits back in to the business, this would be done to pay off his debts or outstanding bills or bank loans. Paying off wages and try to expand or improve the business would use up any other profits.
2.1c partnership:
A partnership consists of 2-20 people who each own a part of the company an example of this might be a nightclub owned by twelve people who each own a part of the business. To start a partnership they must first agree to a legal documentation called a 'deed of partnership' this is a contract between the partners outlines all the aspects of the business like the division of profits and the rights of each partner.
When you take a partner into your business, you have to share control. The relationships between partners are determined by a deed of partnership. Deeds normally cover areas such as capital, profit, shares, responsibilities, salaries and procedures for dissolution. One problem of a partnership is that partners can, and often do fall out. A major source of disagreement is over control, one partner wanting to do something other partners disagree with.
A partnership has advantages as they can share resources and ideas, can cover each other if one falls ill or one takes a holiday also they have a wider range of finance than a sole trader also a partner might specialise in one aspect of the business. The disadvantages are that they still have unlimited liability and the profits have to be shared between the partners. Other disadvantages would be that the decision-making would be a lot slower and they might not all agree on the same idea.
Control is decided on how much money or capital is put into the business by one person, sometimes it is decided by all members that one person should control the business this would be done by a voting system where each person gets one vote.
Profits are shared out equally between each person in the business; some profits might be re-invested to improve or expand the business or to expand their product range.
Private Limited company-
Private companies tend to be smaller than public one's and are often family businesses. There must be a minimum of at least two shareholders but there is no maximum amount. Shares in private companies cannot be traded on the stock exchange, and often shares can be brought only with the permission of the board of directors.
The danger of losing control really comes down to the fore when you become a public limited company. Now the shares can be traded on the stock exchange, and individuals or groups of individuals can take over the other companies by buying up to 51% of the shares. In the real world, companies are brought and sold all too frequently. Existing shareholders are often tempted to sell by an attractive offer to buy shares at an inflated price by another business or interest group.
In companies, shareholders may receive a benefit from owning their shares in to ways. First, they may be paid a dividend upon the shareholding, which is expressed as a return on the par or face value of the shares. Secondly, they may receive income by selling their shareholding at a value above that which they originally paid for it.
The board of directors is a committee set up to protect the shareholders' interests. The members of the board choose the managing director, who is responsible for the running pf the business. The rules of the business set out when shareholders' meetings will take place and the rights of shareholders.
Private companies may find it hard to raise more capital by selling shares than unlimited liability businesses. The shareholders can also have the protection of limited liability.
The main disadvantages compared with unlimited liability businesses are that they have to share out profits among shareholders, and they cannot make decisions quickly plus they cost more to set up.
When a business expands to become very large, it will feel limited liability is essential because it will be asking a great many shareholders to risk their capital in the business. Without limited liability status, large numbers of people will not be prepared to sink their capital into a business
As an organisation becomes larger and takes on more sophisticated forms of business ownership i.e. company status, it has access to wider range of sources of finance. Cadburys do this by selling shares to the public and by taking out large business loans from banks.
2.1d Public Limited company-
Cadbury is a public limited company. It has the opportunity to become larger than the other forms of private business organisation. It is allowed to raise capital through the medium of the Stock Exchange, which quotes their share prices, and this creates a fullness of financial possibilities. The initials "PLC" (or plc) appear after the name of the public limited company. Only two people are needed to form a public limited company and there is no stated maximum of shareholders. In Cadbury's case it is owned by many shareowners, some of whom are members of staff.
All to often we see successful private companies becoming public companies only to be brought up, with their original owners losing their jobs and their interest in the business. In the world of multinational enterprise and global business, even the most successful business make good targets for a take-over. The shareholders own the business but professional managers make the decisions.
Cadburys business advantage is:
* Shareholders have limited liability, so it means that the shareowners lose what they put in the business and they receive annual dividends.
* It is easier to raise finance from banks, because Cadbury has many assets, which means banks are insured their money back or Cadbury's assets instead of the money.
* Since it has many assets, it is possible to operate on large scale, which means more production and promotion for the product. This leads to Cadbury's objective to grow the business and also to operate in a wide range of markets. This leads Cadbury to have a high income, which is a success to Cadburys objective, which is to maximise profits.
* Suppliers feel more confident about trading with legally established bodies
* There are tax advantages associated with giving shares to employees
The disadvantages are:
* Since Cadbury is a plc, its affairs are public; e.g., accounts and annual returns must be audited. This gives opportunities to competitors to get information about Cadbury. For example if Cadbury makes a loss, investors (competitors) will know about it and use it to their advantage.
* It's a complicated business. Cadbury is a large business it has many different departments for different jobs, all these departments have to work together. Information passes between departments can be confusing.
* Cadbury has many assets, which contain many capitals, which are very costly to use.
* Since Cadbury is a large business, formatting and running, its costs can be expensive
* Since Cadbury is a plc, Heavy penalties are imposed if "rules" are broken.
When a business expands to become very large, it will feel limited liability is essential because it will be asking a great many shareholders to risk their capital in the business. Without limited liability status, large numbers of people will not be prepared to sink their capital into a business
As an organisation becomes larger and takes on more sophisticated forms of business ownership i.e. company status, it has access to wider range of sources of finance. Cadburys do this by selling shares to the public and by taking out large business loans from banks.
When an organisation moves on to corporate status it is able to draw on a much wider range of sources of finance all of the following apply to Cadbury. Not only does the company have more access to sources of finance but it will also find it easier to raise finance because it is seen as being more financially secure. When Cadbury became a company many people were willing to buy shares. The shareholders knew they were not risking their personal asset. Initially, Cadbury were a private company with shareholders being mainly made up with family and friends. Later on, they went for a full stock exchange listing, as they became a public limited company. Plcs are able to raise capital though shares, bank loans, overdrafts, mortgages and many other sources of finance. Large companies will be able to borrow money at lower rates of interest than smaller companies.
In 1847 the Cadbury business became a partnership. This is because John Cadbury took his brother, which also made it a family business. The business was now known as The Cadbury Brothers. A factory in Birmingham was rented, to produce their products. In 1854 the company received its first Royal Warrant as 'manufacturers of cocoa and chocolate to Queen Victoria'. In 1856 John Cadbury's son Richard joined the company, followed in 1861 Richard and George became the second Cadbury brothers to run the business when their father retired due to failing health.
The first Cadbury factory was built in the country; it was built in the green fields of Kings Norton, outside the city of Birmingham, between 1899.
This place was named "Bournville", which was named by George Cadbury where he built the factory. This took place because George Cadbury had an image, with a saying,
"If the country is a good place to live in, why not work in it?"
So he took his workers to live and work in (the country) Bournville. Further on the years Cadbury invited new recipes, so new chocolate were been created, for instance in 1915 Cadbury's Milk Tray, in 1920, Cadbury's Flake, in 1938 Roses were created.
In 1969 Cadbury and Schweppes that is a beverage business merged together as a business. This business grew worldwide over centuries, it manufactured, marketed and distributed products in over 200 countries and new chocolates and drinks were been created. While confectionery and soft drinks remained the core of the business, the group also expanded into related food categories such as hot beverages and biscuits and also into health and hygiene
The main advantage of selling shares though the stock exchange is that large amounts of capital can be raised very quickly. One disadvantage is that the original shareholders can lose control of a business if large quantities of shares are purchased as part of a "take-over bid". It is also costly to have shares quoted on the stock exchange.
To create a public company, the directors must apply to the stock exchange council, which will carefully check the accounts. A business waiting to go on public will then arrange for one of the merchant banks to handle the paperwork. Selling new shares is a risky business. The stock exchange has "good day's" and "bad day's". If the issue of new shares coincides with a bad day then it can find itself in difficulties
Size:
The size of the business can be measured in a number of ways such as employees, turnover and assets. A firm may be large using one indicator but small using another for example the National Health Service has a large number of employees but a low turnover.
The main activities of Cadbury after it merged with Schweppes are to produces confectionery such as crunchie, twirl, roses, mini egg, whole nut, Cadbury's Milk Tray and beverages such as Dr Pepper and Seven up. Cadbury and Schweppes have 180 brands.
Now these days Cadbury and Schweppes the business is functional it is owned by many shareholders (some of whom are members of staff). The company employs around 38,000 people worldwide but in Britain 12,000 employees. The company owns 7,500 vehicles that are used for the business (delivery) in Britain. In Britain there are 17 Cadbury and Schweppes sites.
Small- This type of size makes under 2.8 million turnovers per year, has a balance sheet for under 1.4 million and has under 50 employees working for them.
Medium- This type of size makes between 2.8 to 11 million a year in turnover, has a balance sheet for between 1.4 to 5.6 million and has between 50 to 250 employees working for them
Large- This type of size makes 11.2 million plus turnover a year, has a balance sheet of 5.6 million plus and has more than 250 employees working for the company.
Cadburys is in the Private sector, and is a large business. There are Cadburys factories all over the world. It also has a large turn over each year and a high balance sheet total. Cadbury Schweppes is a major global company, which manufactures, markets and distributes branded beverages and confectionery products, two closely related consumer markets, in almost 200 countries. The Group employs over 40,000 people worldwide and has many companies worldwide; their main factory is in borville and has regional and worldwide headquarters.
Co-operative
A democratic organisation where all members have one vote. It's possible to have shareholders in a co-operative, but the shareholders have one vote rather than one vote per share. This means no one member can easily dominate. There are several types of co-operative:
Worker co-operative: organisation owned by employees. Employees should be motivated but can have problems managing themselves.
co-operatives have the legal protection of limited liability this applies to Cadbury.
When Co-operatives raise finance from the co-operators by selling shares and from the usual means of loans and borrowed money
Retail co-operatives: set up to benefit consumers. Surpluses distributed via lower prices.
Producer co-operatives: these have central organisations such as the Milk Marketing Board, which buys and sells products for its members.
Franchise
A franchiser sells the right to use or sell a product or service to a franchisee in return for a fixed fee and or percentage of the turnover ...
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co-operatives have the legal protection of limited liability this applies to Cadbury.
When Co-operatives raise finance from the co-operators by selling shares and from the usual means of loans and borrowed money
Retail co-operatives: set up to benefit consumers. Surpluses distributed via lower prices.
Producer co-operatives: these have central organisations such as the Milk Marketing Board, which buys and sells products for its members.
Franchise
A franchiser sells the right to use or sell a product or service to a franchisee in return for a fixed fee and or percentage of the turnover for example Mc Donald's, Hertz.
The reason why they might sell a franchise is because its quicker growth as can cover a geographic area more quickly, it provides funds and managers are more motivated as they own the franchise.
The reason some one might buy a franchise is because the product or service is established therefore a cheaper market research and promotional cost, they may receive help and training from franchiser, can share marketing costs, research findings, new product development costs and has lower start up costs
An individual taking out a franchise will usually need to provide the start-up capital of setting up the franchise- normally more than £10000. An individual who is already in a particular line of business can benefit from converting from a sole trader to a franchise, as a result of the image and reputation the franchising company provides.
2.2 Objectives:
Businesses exist to provide goods and services. All businesses, whether they aim to make a profit or not, have to make products or provide services that satisfy customer wants and needs. To do this, businesses set themselves objectives that govern the way they operate.
Mission Statement
A mission statement is an attempt to identify the purpose of the business in a few sentences. It is the vision and direction the firm intends to take and outlines the following:
o What business the organisation is in
o Who the business serves
o What benefits do they provide
o How are consumers satisfied
This is Cadbury's mission statement:
"We are passionate about working together to create brands that people love. Brands that bring the world moments of delight and a splash of colour on a grey day."
This lets the customers know if they are getting value for money. Also, that the business has reliability, quality and speed of services.
This lets the shareholders know that Cadburys are going to create a good quality chocolate, which mean that Cadburys should be able to sell a large amount and make a profit. It also shows that they are trying to reach their objectives.
It tells the employees that Cadburys want to work together, to achieve a high quality chocolate.
Cadbury's objectives would be as follows:
Every company or business has its set of objectives, below are a small list of Cadbury's objectives and aims
Public limited companies like Cadbury will have objectives such as:
* Maximise profit, this is done by cutting down on faulty goods and products also by producing products efficiently
* To be the number one product in a given market, this is done by the promotion of the product
* To maximise sales, make sure that your product is widely known to the customer and is better than their rivals
* To grow, expand their product range merge with or take over other companies
* To operate in a wide range of markets
* To give satisfaction to customers, good reputation and good customer services
* Have a good reputation
* To provide the freedom for workers to express them selves and suggest ideas to help the business
* Achieve best possible financial return on capital
* Boost or maintain share market values
These objectives will ensure Cadburys success as a business. The following statistics shows that Cadbury is a very successful business.
Statistics from 1994 to 1998.
The statistics from the financial overview show the finance has just been increasing positively.
They have satisfied shareholders because their share increased by 6%.
There has been a boost in the share market value, earning 37.2 pence from 1994 and 39.4 pence in 1998, which was a 6 % increase with in four years.
Cadbury has been having an increase in profit from 1994 to 1998. From 1994 to 1998 the profit has increased from £575 million to £609 million, an increase of 6 %.
These are recent statistics (1999-2000) for Cadbury and Schweppes, which still show that Cadbury and Schweppes is an ongoing successful business.
999
2000
% Charge
£ Million
£ Million
Sales
4,301
4,575
+6
Underlying * operating profits
747
841
+13
Underlying * profits before tax
686
792
+15
Underlying * ESP
22.5p
25.8p
+15
Free cash flow
292
401
+37
Dividends per share
0p
0.5
+5
These figures show:
* Cash flow of 401 million pounds
* Dividends going up 0.05 an increase by 5% in one year
* Relating back to the objectives Cadbury increased sales by 6%. Which gave them a profit increase of 15%
Cadbury is successful because it has promoted itself with the underground. I say this because over 10 million people use the underground and when they do they would find the Cadbury catering machine. This is an example.
Strategy
Cadbury pursue this objective by:
• Focussing on our core businesses of beverages and confectionery
• Developing robust and sustainable positions in regional markets
• Growing organically and by acquisition
Objectives and Targets
Cadbury have the aim of producing superior and sustainable returns for its shareowners. Since 1997, we they set their selves three medium term targets against which our progress can be measured. Primarily, these targets are growth in underlying earnings per share, free cash flow generation and superior growth in total shareowner return. The targets have been set over four year periods, the first from 1997 to 2000 and currently 2001 to 2004.
5th year of delivery against targets
997-2000
2001-2004
Target
Actual
Target
2001
Underlying* EPS (CAGR)
0%
+ 11%
+ 10%
+ 14%
Free Cash flow (average)
£150m
+ £252m
+ £300m
+ £397m
The table above shows that Cadbury met its objectives of growth in underlying earnings per share and free cash flow generation.
Profit Maximisation
This is the result of reducing costs and increasing sales, economy of scale is a good use here as when you make something in large quantities it reduces the cost. This is also a competitive advantage as it reduces the cost but still increase the sale and financial providers are willing to invest such as banks because they are making profit.
Shareholders want better dividends from it and if you sell shares profit will increase. Cadburys try and maximise their profit by cutting down on faulty goods, by increasing their market share and cutting down on production costs.
Survival
This is important to small business and new products as this could mean they avoid bankruptcy and insolvency. Also if there were recession unemployment could mean they would decrease their prices of products as customers and consumers would not be able to afford them. Survival is also important, as this would stop being merged or taken over by another company for example Smith Glaxo Klien. Cadbury survives in a hostile market, as there are big rival companies who are always trying to take over the company or merge with them. Cadburys survive by making sure they sell as many products as possible, making a profit each year and by making sure they're doing better than their rivals.
Increase market share:
There are many ways in which Cadbury increase their market share, Chocolate maker Cadbury have now began its contract with London Underground to dispense a range of products through state of the art vending machines at Tube stations in the capital.
A Cadbury spokesman said: "We are absolutely delighted to have won what is the biggest vending contract in the UK."
London Underground's business development manager, Simon Williams, added: "By entering into partnership with Cadbury we can be sure that the excellent opportunities to develop the vending business will be fully exploited and that the Underground will benefit from increased revenue at no investment cost."
The greater the market share, the more power the firm will have to set prices or control production. The market leader will have control, and have the power to set the prices. Maximum market share would also be part of this. This can involve entering many different markets, or producing as many different products for the same market as possible.
Providing a service to the community:
Producing high quality goods:
The term "high quality" is often mistakenly confused with most expensive, yet frequently the most expensive items are not the best quality. Cadbury produce high quality goods by having high quality control standards by checking the product at each stage of the making process. Also Cadbury ensure that if the product isn't of the highest standard then they compensate the customer.
Today we use the term "quality" to mean producing a good or service to customer requirements. A high-quality product is therefore one that gives the customers what they expect. Leading businesses often talk about "delighting" the customer. It is not surprising, therefore, that the provision of high quality products and services has become a leading objective of modern business organisations.
Of course, this notion of high quality is just as relevant for services as it is for products. For example, in recent years we have seen a rapid rise in the buying of insurance and banking services directly over the phone. In the first decade of the twenty-first century we are also seeing an explosion in e-commerce, particularly in the field of retailing were consumers are increasingly able to buy goods over the Internet.
Developing a skilled workforce:
Today most organisations include objectives related to developing people at work in their list of objectives.
The importance of people in organisations is widely recognised. In the last decade of the twentieth century, many business writers realised that "intelligence" laid at the heart of modern business success. Intelligent employees are able to add millions of pounds to the value of corporation.
The intelligent worker requires a range of skills and aptitudes that enables him or her independently to make decisions on behalf of the organisation. The sorts of decisions the employer makes require good communication skills, good interpersonal skills, the ability to work with numbers and ICT.
Cadbury support a full suite of learning and development activities, ranging from self-managed study, coaching and courses to language skills and progression towards professional qualifications. Much of it takes place in the workplace, where learning is encouraged through coaching, supervision and your own experience. Cadbury also have global learning initiatives such as an International Development Programme and our Sales and Marketing Academy. In the UK Cadbury have achieved Investors In People status.
Charitable and non-profit making:
There are many organisations in this country that can be seen as comprising the charitable or non-profit sector of the economy. Here the organisation's objectives are widely different from those of the for profit organisations.
Not-for-profit co-operatives will find it difficult to raise finance from the commercial financial sector, which generally looks for a higher return on investment. However, in recent years they have been benefited from the increasing number of investors who are looking for ethical, sources of saving and investment, rather than a pure financial return.
The non-profit organisations will measure its success in terms of meeting its other objectives. For example:
War child might measure their success in providing aid and assistance to children in war-torn regions of the world
Shelter would measure their success in terms of helping to find accommodation for homeless people.
Oxfam would measure their success in providing famine relief.
Of course, these organisations will also need to operate in a business like way. They will seek, for example, to cut out any wasteful use of resources to drive down costs. They will seek to optimise the success of their trading activities to maximise revenues. However, the key difference between them and other organisations is that their primary objectives will always focus on charitable, socially committed, not-for-profit ends.
One of the most important areas of non-profit work is in caring for the environment. Organisations such as greenpeace set out directly to protect the world's environmental resources. Greenpeace take direct action in setting out to save whales using voluntary contributions. Other environmental charities include the national trust, which seeks out to protect our natural heritage and woodland trust.
Cadbury Schweppes first adopted its corporate
Environmental Policy in 1993. One of the commitments we made at that time was to review and update the policy on a regular basis. That is why our policy has been revised and expanded during 1999-2000 to reflect the progress we have made since 1993 and to take into account new areas of focus. At Cadbury Schweppes, we see sound and responsible environmental management as an integral part of achieving our goal to grow the value of our confectionery and beverages businesses for our shareowners. Proactive management of the environmental issues associated with the supply of our raw materials, our manufacturing processes and facilities, and the distribution, sale and consumption of our products is key in our approach to protecting the environment. Cadbury will:
. Conduct our business in compliance with environmental laws and with our guidelines, which set global standards for our operations.
2. Maintain systems to manage our environmental responsibilities.
3. Set clear targets for continuous improvement and monitor these targets to ensure that they are met.
4. Establish and enable employee accountability for our environmental performance.
5. Strive to prevent pollution and to minimize the environmental costs and impacts of our global operations.
6. Assess the impact of new operations and products and seek ways to contribute positively to their environmental performance.
7. Train and motivate our employees to understand their environmental responsibilities and to actively support our environmental programmers.
8. Work with our supply chain and business partners to improve our collective environmental performance, to protect the ecosystems that provide our raw materials and to minimize the impacts from
Transportation.
9. Communicate openly with our shareowners, employees, customers and other interested parties by regularly reporting on our commitments and our progress towards meeting them.
0. Review and update this policy regularly.
Organisational culture:
Cadbury is a mixture of Cultures such as:
Role culture is doing a job that is very important to the organisation; it is having power over a group (refer to the organisational structure which indicates that Cadbury has role culture because it has many management directors that have power over many groups). This job is an internal job of the organisation it is controlled by having procedures and rules that member of staff should not break or they will lose their position in the organisation. Relating this to Cadbury, marketing directors, who are in charge of market research for new product such as a chocolate, this information (research) has to be confidential.
Power culture is a business being dominated by an individual. The Management director dominates Cadbury,
Task culture focus on getting the job done. Groups or teams within this cultural are not fixed but are made up of individuals brought together to achieve a specific task. Cadburys production department has a task culture. It works as a team to package the chocolate. Packaging the chocolates is done as a team. A member of the production team packages the chocolate in foiled rapping, and then the chocolate is passed by machinery to another member of the production team who packages the foil chocolate in boxes. These boxes are then stacked in many counties on a machine. These stacks are the rapped with cellophane, so boxes don't fall off. Finally another member of the production team using machinery to the storage takes these stacks.
Person culture places the emphasis on the individual rather than the organisation and its objectives. For example if any member of staff has any suggestions for improvement, their suggestions are taken to account and if successful they will be used
Cadbury's Culture arises from the traditions, beliefs and values of the Quaker family. This is how Cadbury adopted the paternalistic management. It includes religious beliefs, attitudes towards alcohol, the food we eat and the importance we attach to family life. The Quaker's cultural values are very strong and can impose important constraints on the business activity. For example, Cadbury finds, it would be unwise to try to sell products that are seen to insult religions or people, and it would be foolish to try to make people adopt working practices that are disapproved of by the cultural grouping (Quaker). The reason why Cadbury is successful is because it makes best use of its opportunities, which therefore allows decision making understood.
Economic:
The economic environment is influenced by domestic economic policies; it is also dependent upon world economic trends. Rates of economic growth, inflation, consumption patterns, income distribution and many other economic trends determine the nature of products and services required by consumers, as well as how difficult it becomes to supply them. This applies to Cadbury as they depend on the publics demand for their products. So if the economy is in recession then the demand for their product will decrease. If the economy is in a boom then the economy will increase.
Social:
Cadbury recognise their responsibilities as a stakeholders in the communities in which we operate. Cadbury commit resources to assist and support the development of community and social investment through national or local targeted programmes in partnership with others. Cadbury also encourage and support the efforts of our employees to give leadership and service to the educational and social fabric of communities in which they live as part of our commitment to engage with relevant stakeholders.
Cadbury has grown into a business with a wonderful mix of the old and the new and as they continue to grow and develop, Cadbury know that they must work even harder to maintain and protect the high standards set. Community activities are a vital part of our 'leadership' position, the protection and development of our reputation and the value we place on our people.
Healthy high streets are founded on healthy back streets: It is in the interests of business to have prosperous communities, educated employees and healthy, happy consumers.
Building and protecting our reputation: Our good reputation has always been important to us - because it is important to our people, our brands, our customers, our regulators and, increasingly, our investors.
Valuing and developing our people: Using community activities to generate Management and competence development (skills, expertise, contacts, understanding of the marketplace) and support a productive business culture (morale, energy levels, positively, proactively, reduced absenteeism, team building, creativity).
But also to ensure our people value and develop us: Acting as an aid to better staff relations, improving staff commitment levels, and our ability to retain and keep - as well as recruit - the best people
Environmental:
As a major multi-national manufacturing company we recognise that our responsibilities in these areas are considerable. We need to ensure that in the course of our business activities we:
Minimise our impact on the environment around the world, working towards the objective of long-term sustainability.
Look after the health and safety interest of our employees
Find opportunities to improve the local environment in the communities in which we operate
Ethical:
Since the first reported incidents of enforced child labour on cocoa farms in Cote d'Ivoire, West Africa, Cadbury Schweppes has been active within a global alliance to create a long-term, universal solution to address abusive child labour and forced labour practices in the growing of cocoa. This unique global alliance comprises industry, governments, NGOs and third-party groups. Its efforts are focused on achieving the goals of an industry protocol (agreed September 2001) to bring about permanent change by ensuring all cocoa is grown without abusive child labour or forced labour practices by July 2005.
Cadbury, in common with other industry members of this unique global alliance, committed resources to fund a number of surveys into labour conditions on cocoa farms in West Africa. This unprecedented study comprised a series of carefully designed and independent surveys conducted by international expert bodies including the International Labour Organisation (ILO). Its findings confirm the need to address the safety of children on cocoa farms and the economic well being of cocoa farming families. The results of these surveys have led to the development of pilot programmes designed to strengthen cocoa farming communities and address labour issues. Launched in November 2002, this action programme will reach tens of thousands of farming families.
There are more than a million cocoa farms in West Africa alone (Cadbury Schweppes buys most of its cocoa from Ghana and the Far East) and many of these farms are small with children who live and work on them in appropriate roles as members of the family. A long-term, universal solution to address abusive working practices must not harm those families who are committing no wrong and depend on cocoa for their livelihood.
2.3 functional areas:
Every public limited company has organisational functions these are the main activities of the following areas at Cadbury, which allow it to exist and become a successful business. This diagram shows the system of the business.
Finance:
The chief accountant is responsible for supervising the accounts and finance department. The accounts section must keep a detailed record of all money paid in and out and present the final balance sheet, sources and use of funds, profit and loss account, and other financial records at regular intervals. Modern accounts are held on computer files, and accounting procedures are greatly simplified by the use of specialised software.
As well as keeping day-to-day records, the financial accounting function will also e responsible for producing periodic records such as the annual accounts and figures for discussion at meetings of directors.
Within finance and accounts department, other sub functions might include a cashier's department and a wages department. The cahier's department will be concerned with handling all cash transactions, as well as cheque and other payments though bank accounts. These records will be kept in a cashbook or computerised system.
The finance department is in charge of and deals with money. The Finance department keeps records of all financial documents this involves reporting and recording expenses spent and profit made, asset value and cash flow (money that goes in and out of the business). Since Cadbury is a limited company the finance department must, each year, file with Register of Companies a set of audited accounts. These will include a director's report, auditor's report, profit and loss account, balance sheet, source and application of funds and an explanation of these accounts.
It is also necessary to file an annual return giving details of the directors, shareholders and other information required by law. All this information will be kept on file at Companies House and is opened to inspection by member's public. This is a diagram of how
Financial information can be fed to those who require it, such as information for record keeping and decision-making purposes.
This department is in charge of giving budgets to other departments (by doing this it makes sure that the business reaches break even and no less in really bad circumstances). This is also, so that the other departments keep to their main objective and responsibilities and do not waste money. Managers see these targets and compare them with other past targets to find how successful the business is. The targets help the finance department to make plans for the future that will help the business to achieve its objectives. For an example the finance department gives research and development, a budget of £50,000.
The research and development department will use this money within one financial year and not over drawing (not taking more money). But under circumstances if research and development department required more money to develop a new chocolate, the finance department will analyse research and development's plans for producing a new chocolate and if they think it will be successful finance will give the money needed. Through this the departments would have achieved their objectives (e.g. making a profit, good reputation, achieve best possible financial return on capital). They way that Cadbury deals with exchanging of money is by SAP, which is an electronic payment system. For example if Tesco purchases a quantity of chocolate from Cadbury. Cadbury can bill Tesco straight away. This process is time efficient and is a straightforward process.
Cadbury Schweppes plc reports on financial performance for the 24 weeks ended 16 June 2002:
2002
2001
Change
£M
£M
%
Sales†
2,354
2,200
+ 7
Underlying Operating Profit*
429
400
+ 7
Underlying Profit Before Tax*
386
351
+10
Underlying EPS* - pence
2.9
1.5
+12
Dividends per share - pence
3.5
3.35
+ 4.5
Production:
The production director of a company is responsible for making sure raw materials are processed into goods effectively. He or she must make sure the work is carried out to an appropriate standard, and must supervise procedures for enabling work to be carried out smoothly.
In a manufacturing company, the production function may be split into five main sub functions:
) The production and planning department will set standards and targets for each section of the production process. The quantity and quality of products coming off a production line will be closely monitored.
2) The purchasing department will be responsible for providing the materials, components and equipment required to keep the production process running smoothly.
3) The stores department will be responsible for stocking all the necessary tools, spares, raw materials and equipment required to service the manufacturing process.
4) The design and technical support department will be responsible for researching new products or modifications on existing ones. It will be responsible for estimating costs of producing in different quantities and by using different methods.
5) The works department will be concerned with the actual manufacture of a product. This will also involve the maintenance of a production line and other necessary repairs. The works department may also be involved with quality control and inspection.
The factors of production
Land: buildings (site where the business is located)
Labour: Mangers, workers (any jobs roles that need to be filled)
Capital: equipment, machinery needed
Enterprise: the willingness to take risks to earn a profit
The factors of production at Cadbury are (as shown below in table):
Land
Labour
Capital
Enterprise
* Cadbury world
* Cadbury factory
(200 around the country)
* Managing director
* Directorate
* Executive manger
* Senior manger
* Line manger
* Clerical support assistance
* Machinery for production
* Till
* Calculators
* Computers
* Furniture
* Fixtures and fittings
* Work hard
* Energy- physical
* Enthusiasm,
* Motivation, commitment
The production department produces the products; any activities associated with production are wealth creation. A simple example of wealth creation would be the production of a chocolate bar. The difference between all of the costs of the production and the price of the finished chocolate represents the wealth that has been created. The contribution of all those involved in its development have added value to this process and helped to create that wealth.
In production there has to be an input, which is transformed to an output. Processes take through the transformation, these add value to the output such as materials and Labour so that the finished product can meet customer needs. The output could either be a service or a product (in Cadbury's case). The business will need to have a system to ensure that the production process and the product itself are of constant high quality production. For example Cadbury reduces the amount of food wasted:
The example of Curly Wurly
An example of this is, while Cadbury was producing Curly Wurly (the chocolate bar). A great amount of waste was created. When the chocolate Curly Wurly was cut to size there were little pieces of chocolate that were cut off and thrown away (waste). A member of staff (floor manager) that was cleaning the waste of the product (the little left over of Curly Wurly that were cut off), went to the production department and told them that these little pieces of chocolate that are wasted could be used as another brand of chocolate. This chocolate (waste of Curly Wurly) was then further known as Squiggles.
This is diagram shows a flow of production:
Stage 1 stage 2 stage 3
Machine A's machine B's Machine C's/people
Before production takes place, a brief is done, to find out what to produce? Then it is backed up by primary and secondary research. Then Marketing department basically takes place, "what product should be produced, for what price, where to locate it, "place" and how to promote it", (Read Marketing). This will help Cadbury to achieve their objective to give satisfaction to customers through selling them a certain product for certain price, will also help them operate in a wide range of markets and Help Cadbury to be noticed through Promotion.
The system that Cadbury produces its products is
This is a diagram to illustrate main process in Cadbury s chain of production. The diagram illustrates pictures of the production with an explanation describing it.
The raw materials are transported to the mixers. By means of a computerised weighing installation the different recipes are composed. The main raw materials are sugar, cocoa powder and cocoa butter, cream. After a specified mixing time the dough is transported to the extruding department.
Extruding the chocolate
When the dough leaves the mixers, it is transported to the extruding department. A whole battery of extruders alters the dough to long strings of chocolate. The chocolate has to be cooled down
Into the cooling tunnel
After the extrusion of the chocolate dough, there are two things that need to be, cooling the strings of chocolate and breaking them into little pieces.
In the cooling tunnel the product is cooled down. During the transportation of the cooled strings, the strings are broken into smaller pieces. The chocolate is still rather dim. It needs to become shiny and attractive, which is done during the glazing of the.
The chocolate is then packaged
Expedition
When the product is packed, it is time to distribute the products to the place where at the time our clients want them to be. Transportation and warehousing of a natural product like chocolate are done under specified conditions. These conditions can be found on the level of this site concerning the different ranges of products.
These are requirements that Cadbury use:
1. Temperature
The most ideal temperature to store and transport is between 18ºC and 22ºC.
2. Handling
Although the packaging is designed for regular transport, careful handling must be used to prevent the occurrence of damage.
3. Humidity
The ideal humidity to store and transport is less than 65%. Do not store in areas with a high humidity. In any case try to prevent direct contact of water with the cardboard packaging and our products. Do not expose to wet environments.
4. Sunlight
Over-exposure of chocolate products to sunlight is fatal for the quality. Do not expose cartons to direct sunlight.
5. Storage conditions
Dust
Though the cartons are sealed, exposure to dust and other contaminates is possible. This is why Cadbury try to avoid storage of any cartons in dusty conditions.
Primary, secondary and tertiary production,
. Help to add a bit more value to something the customers benefits from
2. Improves the welfare of our society
3. Provides us with the standard of living to which we have become accustomed.
For example:
. Primary production, is the earliest stage in the production and is concerned with extracting raw materials e.g. Cocoa
2. Secondary production is the second part of production process. It involves process that transforms raw materials from the primary stage into finished product.
3. Tertiary production is the productivity activity of the service sector of the economy.
The production department in Cadbury is concerned with the following issues:
* Costs of production
* The condition of the means of production (machinery, etc.)
* Keeping production going
* Health and safety
* Keeping employees motivated
* Keeping up to date with technology
* Satisfying the requirements of customers
* Maximising the use of plant
* Minimising the waste of materials
When Cadbury produces a chocolate it produces it in a Flow Production, which is a continuous process of parts passing on from one stage to another until completion. Units of production are worked on in each operation and then passed straight on to the next work stage. In order to make the production line work smoothly, Cadbury insures each operation must be of equal length and there should no movements or leakages from the line. E.g. hold ups to work in process. Because there is a continual demand for chocolate this process (flow production) is successful
Human resources:
The human resource management or personnel function of an organisation covers a variety of activities. The term "human resource management" has largely replaced the old-fashioned word "personnel", which was used in the past. The type of work covered in the human resource function might include policy making role, welfare role, supporting role, bargaining and negotiating role, administrative role and educational and development role.
Human resource is concerned with the whole range of activities to do with looking after the people that work within an organisation and those with whom the organisation comes into contact. In Cadbury, staff members are one of a business's most expensive and valuable assets. Human resource department plans the manpower needs of the business, recruits not just the people who work but for their qualifications, talent and well motivated; it is also responsible for Health and safety, training of staff and making staff record. Cadbury would use human resources because it is a very big organisation.
Human resources would help them meet their objective of developing staff skills. By giving staff subsidised training, staff for Cadbury will be able to improve their skill like gain a degree (mature student) Cadbury does this all and employees the right people for a smooth running of the organisation.
Marketing:
The marketing function is responsible for identifying, anticipating and satisfying customer requirements profitably. Marketing and sales are sometimes combined in a single department, but there is an important distinction between the two. The marketing department, then, is primarily concerned with investigating consumers' needs and wants. This will involve carrying out market research to find out who makes up a particular market, what they want, where they want it, how they like it and at what price.
The charted institute of marketing defines marketing as:
"The management process responsible for identifying anticipating and satisfying customer requirements profitably."
The marketing department is responsible for,
> Carrying out MARKET RESEARCH
> Developing the right MARKET MIX
Businesses (Cadbury) carrying out market research to identify customer's needs. This can be done by,
> Primary research: asking customers (new research)
> Secondary research: using existing information
The marketing department is also responsible for developing the businesses,
Marketing Mix. This means that they must get the right:
* PRODUCTS-what features does the product have that make it suitable for the target market? Cadbury adds its logo to the package, and adds a certain quality to the chocolate that the other competitors don't (recipe) sometimes, this brings satisfaction to the customers.
* PRICE- should the products be priced higher or lower than those of competitors? In local areas, most corner shops sell Cadbury chocolate at the same price as competitor e.g. Cadbury whole nut costs 35 pence, while a Mars bar and Galaxy bar cost 35 pence as well.
* PLACE- where will customers want to buy the products? Cadbury sells its products to shops (business) that deal with beverages and confectionery e.g. corners shops, super stores (Iceland, Sainsbury, Kwick Save, Tesco, Asda, Safeway), petrol station etc. these business are usually visited by customers on a daily bases.
* PROMOTION- where should the products be advertised, to suit the needs of the business's target market? Cadbury advertises its products on television, Internet, billposter, in beverages and confectionery business by hanging posters.
This would help Cadbury to achieve ones of its objectives, which is "to be the Number one product in a given market". By achieving this objective it would lead them to achieve the other objective, such as "maximising profit etc.
Administration:
All large organisations depend on an administrative spine. Dealing with enquiries, communicating messages and producing documents for the workforce are all examples of administrative tasks.
Administrators are very important because they service the work of the organisation. Problems arise when the administrators clog up the arteries of an organisation with administrative work that moves the organisation away from its central objectives. The term used to describe such a situation is bureaucracy.
Many large firms have a central office that is responsible for controlling key aspects of the firm's paper work.
Cadbury does not really have a main administration department. Each department has its own administration. Each department is responsible for its inputs of information, processing information and out put of information; does its own filing, photocopying, correspondence, mail and telephone calls.
Research and development:
In any company, research and development or (R&D) has strictly commercial functions- to further the company's business aims by creating new and better products, improving operational process and developing new ones, and providing expert advice to the rest of the company and to customers. This is true of Cadbury's. Without a flow of new improved products and process, no company can hope to remain successful.
The research and development department is the department that researches new products and develops the old products. To remain successful, business must constantly work to create new and better products and processes.
Research-this involves carrying out investigation to come up with new idea, e.g. by carrying out brainstorming, examining competitors products or carrying out research in laboratory.
Development- this involves turning the findings of the research into useful products or processes.
If Cadbury had a mishap with a chocolate, the research and development department would try to correct the mishap. The research and development department must work closely with the marketing and production departments in particular this is because marketing and production are the beginning and end of producing a product.
As you can see from the table above this is the life cycle of the product while being produced.
> The input would be from the Marketing department.
> The process would be from the production department
> The output would be the product or waste
Therefore because there is a mishap from the output, this has to be due to a fault in the input (The marketing department) or the process (the production department)
How do the functions help achieve objectives?
The functional areas affect the success of Cadburys. Since Cadburys are successful at carrying out their objectives the functions do communicate well and effectively. The production team is extremely well at putting maximum effort into achieving customer satisfaction. This is why the company get so much repeat trade.
If there wasn't a research and development Cadburys would not have such a wide variety of products satisfying a wide range of customers all with different tastes. Another main factor for being successful is having committed employees which is why the human resources team recruit staff that is suitable for the job.
The finance department is also very well meeting objectives as one simple mistake mad by this department in the accounts the whole of Cadburys could go bust. This is why they have to be careful in adding up the expenses. The marketing team research into exactly what the customers want which is why the company is so successful as they know exactly what customers want.
Overall all the functional areas are interlinked together and as a result of this each area must do an effective job individually to meet the objectives by making continual profit. Cadburys will only be able to survive if they invest into research and development and marketing, as these are the main functions that differentiate themselves from the competition. The chocolate itself does not really make a difference; profit is more likely to from a successful advertising campaign. The objective to increase market share is also linked to research and development and marketing functions as the more research that is done the wider the audience that can be reached. The objective of developing a skilled workforce relates to human resources as human resources is responsible for recruitment and training in order to develop Cadburys staff.
2.4 Management:
Cadbury has more than one management style. This is so it has the best management. This is in terms of efficiency, training, and knowledge and to focus more on the loyalty of the workers in Cadbury. Cadbury has three management styles, which are:
Cadbury who initiate a quality improvement process must incorporate several basic principles into their management style:
> A firm commitment to and support for quality
> A concern for the satisfaction of staff and users of health services
> A focus on problem solving to improve quality
> Respect for staff and their abilities
> A willingness to collect and use data to determine the nature and size of problems and to improve processes
This is a diagram of the downward flow of communication in line organisation.
Organisational charts:
Organisational charts are charts that show the structure of an enterprise and the relationships between the various members of the organisation and what their key responsibilities are. A clear chart will show:
* How the organisation is structured
* The level of responsibility of each organisational member and to whom each reports
* Lines of communication
* Possible lines of promotion
Flat and Tall structures:
Cadburys type of organisational structure is in a tall hierarchical
Flat structure does not have many layers, which means information is sent quickly; with less complication or misunderstanding; therefore it produces the correct result. Due to having a Flat structure communication is easier {clear information, understanding} between each layer, therefore when decisions are made, they will be specific to advice/order instructions. Tall structure has many layers, which information can take a long time to reach other departments, which can lead to misinformation being sent to other departments. Having a tall structure can make communication harder between each layer.
Hierarchical structure is based on distinct chain of commands from Managing director to Clerical Support assistants (according to Cadbury). Decisions are made at the top and pass down. Such organisational are usually based on clearly defined procedures and roles.
Cadbury organisation is based on more democratic. Decisions are made as a result of a consultation process involving various members of the organisation (Cadbury). Ideas would be discussed and thought through collectively.
Within Cadbury organisation we can find a Democratic structure, Because Cadbury tends to be found in situation were it is felt to be important for all members of the organisation to understand what they are doing, were decisions require individual initiative, and where member of staff need to work as a team
How management style, Culture and Organisational structure interrelate
Management style, culture and organisational structure interrelate together in Cadbury because they all work together to help the business to achieve its objectives; in order to lead a successful business.
Cadbury has strategies for the organisation, continually to motivate members of staff to support this process, and market change within the organisation.
Management style, culture and organisational structure interrelate together in Cadbury because they all work together to:
Develop Strategies: Cadbury's good management involves long-term or sometimes strategic planning. Without members of staff (employees) at Cadbury having a clear idea of Cadburys goals, employees don't know where the Cadbury is going, or the best means to achieve the goals. An institution needs to define where it's going (the vision), why it's going there (the mission), and how to get there (the strategies). It will then be easier to use this process to work cohesively towards organisational goals. Tools in this section for helping you develop a coherent strategy for your organisation include the affinity technique, force field analysis, SWOT analysis, and strategic analysis. Due to this employees at Cadbury would feel they are part of the organisation.
Marketing Change: Quality improvement is about continued readiness to make changes towards improvement. However, every change of attitude or practice implies advantages and disadvantages. For people to accept a change, the advantages always have to be greater than the disadvantages. To promote the idea of change, you need to market its advantages. Tools in this section that will help you market change include developing a marketing plan, stakeholder analysis, and negotiation techniques. An example of making changes towards improvement, is when Cadbury creates a new chocolate bar; for instance the chocolate bar, Fuse. It was the highest selling chocolate in the year 1996. People accepted the chocolate because it was different, which means that Cadbury filled a gap in the market. It also reached the consumer via promotion strategies. Every promotion had a meaning, for example the billboard promotion for fuse used a motto that was confusing. That's what Cadbury were trying to do confuse the consumers, so that they repeatingly, think of the motto to try understand it and what this is doing is reminding the consumers of the chocolate Fuse.
Motivating People: Motivating people to perform to the best of their capabilities and in the best interests of the organisation are a huge task. Important elements that Cadbury uses in motivating there include leadership, clear organisational and individual goals, rewards based on performance of staff, and participatory supervision. Cadbury helps to motivate their staff also by including developing a supervision visit plan, effective meeting management, and techniques for solving conflicts.
Matrix structures:
Nowadays, many organisations employ matrix structures, particularly where there is an emphasis on project management. A project team is responsible for managing a particular project. For example, companies that make and sell goods employ project managers who pilot particular products from the initial development stage though to final production and sales. The project manager is there to plan, co-ordinate, imitate, persuade and hurry things up.
Project management seeks to synchronise and maximise efforts across the various departments and groups involved with putting the plan into action. An organisation that operates purely on functional lines can soon run into bottlenecks and confusion between the various departments, but a project manager can ensure the is co-ordinated planning to bring resources and people together correctly. The project manager is there solely to co-ordinate the activities.
Management style, culture and organisational structure interrelate together in Cadbury because they all work together to help the business to achieve its objectives; in order to lead a successful business.
Cadbury has strategies for the organisation, continually to motivate members of staff to support this process, and market change within the organisation.
Management style, culture and organisational structure interrelate together in Cadbury because they all work together to:
Production finance marketing administration
Develop Strategies: Cadbury's good management involves long-term or sometimes strategic planning. Without members of staff (employees) at Cadbury having a clear idea of Cadburys goals, employees don't know where the Cadbury is going, or the best means to achieve the goals. An institution needs to define where it's going (the vision), why it's going there (the mission), and how to get there (the strategies). It will then be easier to use this process to work cohesively towards organisational goals. Tools in this section for helping you develop a coherent strategy for your organisation include the affinity technique, force field analysis, SWOT analysis, and strategic analysis. Due to this employees at Cadbury would feel they are part of the organisation.
Motivating People: Motivating people to perform to the best of their capabilities and in the best interests of the organisation are a huge task. Important elements that Cadbury uses in motivating there include leadership, clear organisational and individual goals, rewards based on performance of staff, and participatory supervision. Cadbury helps to motivate their staff also by including developing a supervision visit plan, effective meeting management, and techniques for solving conflicts.
Cadbury who initiate a quality improvement process must incorporate several basic principles into their management style:
> A firm commitment to and support for quality
> A concern for the satisfaction of staff and users of health services
> A focus on problem solving to improve quality
> Respect for staff and their abilities
> A willingness to collect and use data to determine the nature and size of problems and to improve processes
Centralised and decentralised:
Centralisation means keeping major responsibilities within sections or units of the central headquarters or at the heart of the organisation. "Decentralisation" describes a situation in which many specific responsibilities have been delegated to branches or away from the centre.
Delegation is the process of handling down the responsibilities, and decentralisation is the end result.
Organisations may choose to centralise certain key functions, such as accounts and purchasing in a large retailing organisation. Other functions may decentralise.
Leadership:
Cadbury organisation is based on more democratic. Decisions are made as a result of a consultation process involving various members of the organisation (Cadbury). Ideas would be discussed and thought through collectively.
Leadership is the art of organising the work to be done and motivating people to achieve objectives. Tannanbuam and schimt carried out studies on types of leaders and identified the following styles:
Consultative management: This is when all the ideas are received and then analysed. If ideas are found to be achievable and successful by the senior group, then it is taken forward. Since Cadbury is a flat structure, mangers working find that they can consult the level or layers of the organisation before making the decision. However power is still centralised by senior groups, who are at the top of the tall hierarchy (structure). (Refer to Curly Wurly example; a floor manager gave Decision to senior group, the idea was analysed, they found it efficient and successful so the idea was taken forward).
Autocratic leaders:
The leader is an authoritarian and expects unquestioning obedience to orders with no opportunity to be involved in decision-making process.
Democratic leaders:
This is when all members of staff work together as a team. They listen to each other's inputs of ideas and suggestions. Then as a team they reach a decision. This management style is good for Cadbury because it motivates workers; with having power and decision-making and through this it allows them to be involved in the business
Paternalistic:
It treats all its employees as a family. It makes them feel that they belong to a big family. It provides it employees; with there needs e.g. free health care, sport activities, and social club
Consultative management: This is when all the ideas are received and then analysed. If ideas are found to be achievable and successful by the senior group, then it is taken forward. Since Cadbury is a flat structure, mangers working find that they can consult the level or layers of the organisation before making the decision. However power is still centralised by senior groups, who are at the top of the tall hierarchy (structure). Decision was given by a floor manager to senior group, the idea was analysed, and they found it efficient and successful so the idea was taken forward).
Laissez faire leaders:
Clear objectives for subordinates who are allowed to achieve their objectives. This motivates enthusiastic workers, but dependent on competence of the employee.
It treats all its employees as a family. It makes them feel that they belong to a big family. It provides it employees; with there needs e.g. free health care, sport activities, and social club. In order for Cadbury to make its employees as part of the business (family) it advises them to have a share of the company.
Cadbury uses all these management style in order to achieve the best of its business (workers, Equipment). Autocratic is used in Cadbury by the managing director (refer to the organisational structure). It uses democratic to motivate the workers to perform good quality work. Through motivating the staff members (workers), this makes them feel valued and part of the organisation. Members of staff work willingly.
Cadburys Management by objectives
Management by objectives is a process of management that emphasises the role of leadership and communications in the organisation and control of the business. It is a method of managing managers rather than the workforce at large. This is how Cadbury is managed.
There are three basic elements in Management that Cadbury uses by objectives:
> The identification of agreed goals by a manager an a subordinate
> The definition of the subordinate's responsibilities in terms of agreed results
> The use of agreed goals and responsibilities to control the progress of the business
Advantages of Cadburys Management by objectives
. People work better when they have a clear understanding of what they are expected to achieve and how their activities will contribute to the overall objectives of the business.
2. The process of deciding on objectives and responsibilities improves communication between manager and subordinate. By improving feedback it helps with future decision-making.
3. It improves training by making managers aware of their own needs and the training needs of subordinates.
4. It provides opportunities for growth and development.
5. By setting identifiable, short-term targets it increase an individual's sense of achievement and provides opportunities for recognition
Disadvantages of Cadburys Management by objectives
. The assessment of objectives can appear judgmental and threatening if senior management lack the necessary interpersonal communication skills.
2. When unrealistic objectives are set the resulting failures can be de-motivating
3. Management of all levels must be convinced of the value of the exercise otherwise it will become a meaningless routine
In Cadburys case, members of staff are the building blocks of organisations (Cadbury). They can be organised into working groups and given structures to operate within, but unless they have the motivation to work within those structures they will, either consciously or unconsciously, adapt to their own needs. It has been pointed out that business exists for, by and because of people (staff members). A person is more complex than the most sophisticated techniques and technology employed in the business world. Therefore Cadbury has to insure that its members of staff are motivated to work to their maximum ability, have a clear understanding of what they are expected to achieve and how their activities will contribute to the overall objectives of the business (refer to advantages of Cadbury management by objectives). Cadburys management style helps it to achieve its basic principles into their management style
Disadvantages of Cadburys Management by objectives
The assessment of objectives can appear judgmental and threatening if senior management lack the necessary interpersonal communication skill
6.0 Communication:
Ict and Communication
Communication- involves sending a message between a "sender" and a "receiver".
The communication channel is the route by which a message is sent between the sender and the receiver. The communication channel can involve a range of communication media. A communication medium is the written, oral or technological method used to communicate a message. For example a manager wishes to notify an employees of a pay rise:
Types of communication:
Communication can be
* Internal or external
* Formal or informal
* Downward, upwards or horizontal
* Ristricted or open
The type of communication that Cadbury uses are e-mail,fax,telephone, mobile communication(text messges),laser,vidoe confrencing (allows the business to have virtual meetings), confrence calls,file trasfer,
Website internet
Intranet (internal communication
The advantages of Ict upon communication internal and external communication at Cadbury are:
* Fast (compared to other methods such as writing a letter)
* Can be more accurate (easier to correct errors)
* Allows people to use the information quickly and efficient
* Can get access to a wide range of information easily
* Easy and cheap to store information
* Can access information where ever you are in the world (and can communicate with people where ever they are)
* Often cheap to access
* Quality of information can be better
Disadvantages:
* Messages can be misunderstood
* Can take time to clarify misunderstanding
* Chance that messages can be sent to the wrong people
* People can be unfamiliar with the system
* Employees may need training (costly)
* Employees may feel de-motivated/ stressed by new technology
* Messages can be held up due to technical problems
* Lack of visual communication can hinder the quality of communication
* Employees can suffer from information over load
Ways to avoid some of these disadvantages are by
* Training staff
* Use face to face communication (maybe through the performance management system)
* Make sure employees feel they can get to see their manager
* Have technical support
* Help employees, by satisfying their social needs e.g. through social club
* Make sure employees are only given training that will be useful.
ICT affected Cadbury's workplace international as a company because it has made communication much simpler and easier; Jobs that took a lot of time, effort and money are a lot simpler now with technology, like the Internet.
Cadbury uses ict as a mean of external communication, when it wants to cummunicate between the organistion and the outside world. Cadbury has a public image and this conveys a message which affects everyone who has dealings with it e.g. cutomers, shareholders, suppliers, compitetors, government, communities, international agencies, enviromental groups. Cadbury being able to provide a positive image through external communication creates a better external environment. Successful manipulation of public relations convinces others that Cadbury is worth dealing with ,buying its products (and might provide it with a considerable strategic and competitive advantage). Cadbury has open information for example it has a website that gives members of the public formal (none sensetivte ) information about the business.
On Cadbury's website you are able to find information on cadbury. The information are set out in topics then isues for example one topic is Cadbury today it has market information,information it has for schools and third party links which give you more information that you might need. It also has topics such as cadbury's learning Zone , this is where you learn about cadbury and now more aboout its history, your able to contact them asking them any questions relating with cadbury.
Cadbury uses ict as a mean of internal communication, when it wants to communicate between members of the organistaion. The reason why cadbury uses internal communication is to transfer information or intiate some action. Cadbury uses a software package called Lotus smart suite internally, this software package is like a personal organiser that allows the majority of staff to book in all important dates and information. Using this lotus program makes arrangement of meeting simpler and easier, to see if other members of staff are free. Cadbury as an internal business can uses this program to find out any information worldwide, for example if a member of staff that works for Cadbury in Britain wants to find information about another member of staff that works for Cadbury somewhere else in the world, they can.
In cadbury internal communication may flow:
Downward- from higher to lower levels. Say for example the managing director wanted to speak to Clerical support assistance to change the style of work.
Upwards- from lower to higher levels. E.g. Clerical support assistance gives suggestions to senior manger. (Refer to the incident of the Curly Wurly and squiggles).
Horizontal-between people and department ate the same level
Multi directionally- in all directions (quality circle).
They also use internal communication so that they can communicate restricted information that is sensitive to Cadbury (the business) for example regarding a new chocolate bar that Cadbury is creating. This is so that member of the public and competitors are restricted to the informal information.
Quality
Businesses change inputs into outputs in order to produce goods and services that meet the needs of their customers. The company need to be able track the production process in order to understand the physical transformations and activities that lead to the finished product or delivery of a service.
Quality refers to features of a product that allow it to meet customer's expectations. A product is often refereed to as a good quality if it is "fit for purpose".
To ensure good quality, Cadbury requires:
Quality raw materials
Quality production process
Quality design
Cadbury uses many processes to achieve quality. It uses quality assurance, control and total quality management to make sure that its quality standards are met. All of these quality processes tie in together.
Quality assurance places great emphasis upon the seller to deliver goods of appropriate quality, so that the receiving organisation is saved the time and trouble resulting from defects.
Quality control is inspecting or testing the quality of the product at various points in the manufacture of a product or delivery of service.
Total quality management is a method of establishing production faults through a philosophy of continuous improvements in every process of planning, production and service.
The advantages of TQM are as follows:
Every manager and employee is made responsible for the quality of the goods and services that are produced and for the quality of the systems that are used to deliver them to the customer.
The empowerment of the workforce improves the motivation of the employees and creates a better team spirit.
The advantages of TQA are as follows:
TQA looks beyond the production process and encompasses all aspects of the process (i.e. purchasing, administration etc) that is required to deliver the goods to the customer.
The category of this answer is; as/a2 business studies, marketing and production, quality
In order for Cadbury to achieve quality assurance, it must achieve:
Product perfection, It does this by taking samples from various batches of chocolate and analyses them, to find out if they meet quality standards. If they do not, the whole batch is brought back and not sold, it is further on analysed, in order to find the fault.
Process quality, it does these by regularly checking that all the production processes (machines) are working efficiently.
In this stage Cadbury uses quality control by inspecting or testing the quality of the product at various points in the manufacture of a product or delivery of service.
Human resource quality, Cadbury insures that it trains its entire staff to be aware of quality issues and to work towards quality improvements, (to give any suggestions for improvement, e.g. Curly Wurly example)
Consumer satisfaction, Cadbury does this by get results from primary and secondary research. Before releasing a new chocolate to the market, Cadbury further on analyses its chocolate by getting numerical members of the public to set a process called testing, which is putting these members of the public in a room to eat the new chocolate. Then specialists analyse the members of the public's reaction to the chocolate and also the members of the public fill in a form, analysing the chocolate. Then these information's gathered are apart to sum a result, if the new chocolate will satisfy the consumers.
Cadbury using quality assurance and control covers the total management quality. Total, as involving everyone (members of staff) and all activities in Cadbury. Quality, as in meeting customer's requirements. Management, as in quality is always managed continuously.
Every step that Cadbury takes for quality adds value top the product. If Cadbury never used any of these quality processes faults in the product will occur and will give the company
All people work in processes.
People
Get processes "in control"
Work with other employees and managers to identify process problems and eliminate them
Managers and/or Supervisors Work on Processes
> Provide training and tool resources
> Measure and review process performance (metrics)
> Improve process performance with the help of those who use the process
The effects that that's these strategies will have on processes must be managed and improved! This involves:
> Defining the process
> Measuring process performance (metrics)
> Reviewing process performance
> Identifying process shortcomings
> Analysing process problems
> Making a process change
> Measuring the effects of the process change
Communicating both ways between supervisor and user
Benchmarking involves Cadbury to carry out research to discover the best methods of production and adopting them.
There are five main steps involved in the benchmarking process:
. Identify the aspect of the production that are most important
2. Choose a business that is really good at it
3. Carry out research in to their practices
4. Work out how their practices can be used in Cadbury
5. Implement them
Cadbury manages to improve quality by benchmarking. Cadburys benchmarked walkers for the packaging. Cadbury used to package there chocolate in two layers, foil then paper. Now they package it in airtight foil packing. This is an advantage because it keeps the chocolate fresh, protects it dust and it keeps the flavour for a longer period of time. Plus using only one layer it is more money efficient and it means they are environmentally friendly because they don't use paper for packaging only cardboard boxes which the use to transport the products to customers (stores).
Quality circle is a group of employees who met together regularly to identify quality problems and come up with solutions.
Quality circle is workers who are involved in carrying day-to-day jobs. In Cadburys case, in chocolate manufacturing, employees working on the production line could be members of a quality circle
TQM Compared to ISO 9001
ISO 9000 is a Quality System Management Standard. TQM is a philosophy of perpetual improvement. The ISO Quality Standard sets in place a system to deploy policy and verifiable objectives. An ISO implementation is a basis for a Total Quality Management implementation. Where there is an ISO system, about 75 percent of the steps are in place for TQM. The requirements for TQM can be considered ISO plus. Another aspect relating to the ISO Standard is that the proposed changes for the next revision (1999) will contain customer satisfaction and measurement requirements. In short, implementing TQM is being proactive concerning quality rather than reactive.
What I would suggest the key to improving quality in Cadbury is to improve processes that define, produce and support products.
All people work in processes.
People
> Get processes "in control"
> Work with other employees and managers to identify process problems and eliminate them
Managers and/or Supervisors Work on Processes
> Provide training and tool resources
> Measure and review process performance (metrics)
> Improve process performance with the help of those who use the process
The effects that that's these strategies will have on processes must be managed and improved! This involves:
> Defining the process
> Measuring process performance (metrics)
> Reviewing process performance
> Identifying process shortcomings
> Analysing process problems
> Making a process change
> Measuring the effects of the process change
> Communicating both ways between supervisor and user
