However none of the departments would work without each other, as on e area can control the other. E.g. Finance and production departments
In terms of helping them achieve there objectives the HRM department is essential when working to a schedule as it has the ability to report on staff morale. If it is high it is more likely they are going to produce more quality products. The sales and marketing department can help in achieving the aftermarket service objective as it is able to contact customers or notify them if they are having problems with there products.
E4
Looking at Rolls Royce it has a Democratic Paternalistic style of management. Although it has department it has one group of people within the company that make all the decisions. This is why the control can be said to be more centralised which means control is at the top and not spread out between the subordinates. This means that the subordinates get less freedom. The extreme right of management styles is an authoritarian style; this style is most noticeable in the military. Rolls Royce all though not extreme right it is definitely further right than left as it has a chairman and a Chief Executive who overlook the decisions. The other extreme in management styles is a lasses-faire style that almost gives a 100% control of the company to the workers. It is the opposite of authoritarian and has a more decentralised system where power is delegated to the employer. The styles of management are summed up in McGregor’s Theory Y and X. Theory X focuses on the autocratic style where motivation is created through fear and money there is a negative perception of workers, which can create staff motivation problems. On the other hand McGregor’s Theory Y describes best a laissez-faire style of leadership. It is the total opposite of his Theory X. It has a positive perception of the worker. This environment creates enjoyment and satisfaction. This means they have to accept responsibility for there work as there is no one else to blame. But it can cause a lack of motivation if the workers are not told what to do and more often than not they abuse the freedom of this style of leadership. Rolls Royce is neither one of these two theories but it considers itself to be more towards the McGregor X theory of management. Another form of measuring management styles is through the Tannenbaum and Schmidt Continuum.
Manager Manager
Tells Delegates
This shows that as the role of the manger decreases the role of the worker increases and vice versa. As shown on the diagram Rolls Royce Plc is further to the right. It is known as the manger sells technique where the people at the top make the decision but invite questions form the workers.
It is also hard to pinpoint an exact culture to Rolls Royce Plc; I think after researching the company it is a cross between all four different types of culture Power, Person, Task and Role.
It is a Power culture because of its mangers at the top of the business. This type of culture is normally linked with an autocratic or authoritarian style of management. As the onlookers not the workers make all the decisions. However it is not solely a power culture as it has many leaders at the top therefore becoming more of a role culture where the emphasis is on the position of the individuals in the hierarchy. Also found within this culture, which describes Rolls Royce is that it has many departments run by leaders that all work under one name for the same goal. This is true because of the many different branches found in under the Rolls Royce name such as aerospace, marine and energy. This leads onto looking at a task culture where a team environment is used to create products. A person culture can be found inside the factory based part of the company as people who are skilled in certain areas make their own decisions however it does not change much to the overall culture
Overall I think that Rolls Royce is mainly a role culture as most manufacturing companies are seen to and proven to be, this type of culture. Within this company in the production department in the factories each worker does his own job, which overall are headed by a senior management team who overlook the final product been produced. This links to the hierarchy found within Rolls Royce, a tall structure
E5
Communication is the sending and receiving information. For communication to work it must have feedback
Sender Message Channel Medium Receiver
Feedback
Communication is essential in any business whether it is internal or external to the business. A large company like Rolls Royce relies on communication to get things done. Internal communication can include memos, e-mail, telephone and face-to-face interaction.
Advantages of a memo are it is informative, instructive and is easy to understand by any employee. Memos are normally sent to departments to let more than one person know. However it can disadvantages such as not been read, it is hard to know whether everyone who read it understood it. Memos are used to pass on forthcoming events.
E-mail is a far more personal form of communication. E-mails are quick to use and can carry complex data such as images or files. But as e-mail is restricted to people who can access computers it is not always good to send important information unless you know it is going to be received.
Telephone is a far more traditional form of communication, which is used everyday not just in the workplace. Phoning someone is also far more efficient and instant way to contact a person. You are also guaranteed a reply when talking to the receiver. But if no one answers the phone it is going to stop you passing on the message.
Easiest and more often than not is to speak to the receiver face to face. At least you know the information is going to be passed on. Again it is also instant when waiting for a reply. A face-to-face conversation can be both private, in a room and public, in a meeting. Talking to a person face to face can be based, as it may be scary or time consuming if the conversation digresses. It can also be hard to tell a person bad news face to face as emotions can play an apart in conversation.
All the above forms of communication can be found within Rolls Royce as forms of internal communication.
However such forms as e-mail or by Telephone can also be used externally in a business.
For example if a company works globally then they are going to encounter language barriers if using a phone is the only way to contact the client. This is why e-mail is used more often nowadays to share information over long distances. As aforementioned e-mails can have attachments which makes sending images or documents far quicker and easier than by post. Another form of external communication is the Internet using the company web page. WebPages can be accessed by anyone in the world with an Internet connection at any time. It is an essential part of a Plc company such as Rolls Royce as it is the easiest way to publish figure to show the investors they are informative and easy to run. However if a person does not have a connection or a computer, it is very hard to view the web page. Also if the main computer system breaks down it is hard to save the web page from crashing causing loss of business. When choosing a medium of communication it is important you chose the write one otherwise a barrier in communication can appear. The type of communication is dependent on the skills of the sender of receiver e.g. whether they can read e-mails. I have also mentioned that when using technology such as a computer it does not breakdown or cause a power failure. If a company does have poor communication skills both internally and externally it can lead to low morale, an increased level of errors, hostile relations and lack of control in the business.
E6
Within the factories of Rolls Royce they use a mainly capital intensive form of production this allows products such as engines to be made fast and all of the same quality. However when looking at the motor industry side of Rolls Royce it is clear that it is far more labour intensive which means the cars are made by hand causing it to be a far slower process and more expensive as you employ skilled workers. This is why the cars produced Rolls Royce is made when ordered by a customer. There is no guarantee that every car is going to be the same. This is a unique selling point for cars such as Rolls Royce at the upper end of the price market. When producing a product such as a jet engine Rolls Royce employs a batch production method. This involves a stage-by-stage method, which sees each operation performed on a number of products at the same time.
Advantages of batch production are it provides more interesting jobs than in flow production, which will increase staff morale, and there is better utilisation of capital than in job production. Although slower than a flow production method, which is mainly automated, it is far quicker than a job production method, which suits hand made products.
When producing a product it is certain you test the quality of the product. Quality however is subjective it is also qualitative as it is very difficult to measure. Quality can either tangible or intangible. Quality of a piece of furniture can be decided upon looking at it, Quality is intangible because people can associate brands or reputation with the product. The quality of Rolls Royce cars can be intangible because of its world-renowned reputation. To ensure a high quality product is produced you need to know what purpose the customer would want the product for. Quality can be tested by whether it conforms to the original specification. Rolls Royce employs three methods of quality testing. Quality Control involves checking of the project at the end of production. The product is made, inspected then passed or rejected. But there is a drawback to this form of checking. If errors are found it is impossible to correct and results in waste been produced which is costly. It is also hard to establish who owns the quality and whose responsibility it is. The only reason this method is used in a company is to increase the cost of the product when sold; there is no real attention to the actual quality of the product.
This form of quality control was originally introduced after the war because of global market competition and therefore there was a need for an increase in quality.
The most standard system also used by Rolls Royce is Quality Assurance. This looks at the quality of product before it is produced. You ‘Say what you do - do what I say – prove it’. The end goal of this quality testing system is to produce a quality product. The whole production method is broken down into a processes performed by groups of people. This system requires you to conform to the system of which the end goal is quality. Benefits of Quality Assurance should be to reduce poor quality and therefore reduce costs. Also producing quality products would boost a company’s reputation. Also it can have an effect on staff morale if a company is doing well and producing quality products. However because there is more time taken on producing the product the cost of originally implementing the product although short term could be big. As quality needs to be assured it means regular inspections need to be undertaken to ensure quality is achieved. However these inspections do not come for free so paying for these inspections is another short-term cost. Overall this is a better form of quality testing than quality control as changes can be made to product as it goes through production to increase quality.
The final form of quality testing is Total Quality Management or TQM. This is the most advanced form of quality testing. It involves ‘Building Quality In’. Most of TQM is based on the theories of Edward Deming and his fourteen points. Some of his management points revolve around the workforce essential if any business is to run properly:
- Drive out fear, so that everyone may work effectively for the company.
- Put everybody in the company to work to accomplish the transformation.
Then whole aim of TQM is to transfer ownership of quality to everyone. Production is done in groups where a group of people work on the same product. It is known as the internal customer system the next group of people are the previous group’s customer so before the product is passed on quality of the product must be checked. As ownership is transferred to everyone each person it means more responsibility for the workers. Also unlike the other two systems errors are worked out when found. TQM uses a ‘Right First Time’ method, which works on a theory of prevention not detection.
All three of these methods of testing quality contribute to the overall quality produced by Rolls Royce each day. If quality is not met it could mean lack of sales due to reasons such as loss of reputation. It is not just Rolls Royce that has to deal with quality. All businesses have to ensure they are producing quality goods otherwise people won’t buy their products.
C1
After looking at a press release produced by Rolls Royce it is clear they have met their objectives. A good indication of whether sales have increased is the share price and how much dividend is been paid out. As Rolls Royce is a Plc it is easy to look up financial records. After looking at sales figures compared to previous years there is clear increase in sales. Another objective they aim to achieve is to increase after sales revenue. A statement produced by the company on the website clear sated how well after sale revenue had increased so this is a clear indication that the company was pleased. Therefore showing they had reached there objective with regards to after sales revenue.
A presentation produced by Rolls Royce at the end of each year contains a short statement from each area of Rolls Royce referring to how well they have done in the previous year:
- Civil Aerospace = Growing services/improving business mix
- Defence = Well positioned on new programme
- Marine = Continuing strong order intake
- Energy = Introduced new products
These four sentences sum up how the business has done in relation to there objectives mentioned previously. But as regards to SMART it is hard to consider whether these objectives were met. Although there is clearly a positive feel to these four statements it is hard to measure objectives that are far more long term objectives. One objective that is mentioned that there is no reference to in their yearly overview is whether harmful waste has been disposed protecting the environment. However in conclusion I have a quote from the annual press release from the Managing Director of Rolls Royce “2002 is developing, overall, in line with our expectations”
In terms of sales figures however compared to the previous are slightly down due to the September 11th attacks which halted the need for aeroplane parts.
(Shown below is the profit and loss account showing the first half of the year for 2001 and 2002)
C2
Without structure Rolls Royce would not be the business it is today it relies heavily on its structure, management style and culture. As mentioned before this company is controlled by overseers however if freedom as not given to the workers. This sort of management style contributes to the overall success of the business because staff morale is high. If workers are pleased the production and quality process is good. This style of management has a chain effect. It is hard to determine a certain type of culture within Rolls Royce; because of this it may cause confusion in the business. If there is confusion within the business it could affect sales. Also lack of control or structure in a business could cause failure of meeting objectives. In this case there is clear answer to whether Rolls Royce was aiming to reduce harmful wastes in their factories. If a lack of communication caused by poor structure, this objective may not be met. I believe Rolls Royce contains mainly a role culture atmosphere. In this type of culture a man is set to do his own job with a senior management team overlooking production. Due to there been a senior management team there is a level of control within the company, this could aid the company in terms of communication and quality of products been produced.
C3
Within Rolls Royce ICT is a major part of the company. The company believes the role of ICT is important in such a large company. Therefore I think the use of ICT in the company is very good. Internally the company uses ICT for e-mails. Other electronic devices such as telephones are used to record voicemail and a factory wide public address system to notify staff. However this form of communication is open, as it is not used for restricted information such as redundancies. If a company is going to survive in a changing environment it is going to need to communicate quickly, the use of computers or ICT is the best way. This is why it is best for any company to eventually use computers to aid them in their business not just communicating but for recording purposes. Externally business can use e –mail to place orders or inquire about business. However it isn’t entirely fool proof if a company urgently needs to contact supplier e-mail, although make take a few days before it is read and replied too. Apart from contacting suppliers or customers Rolls Royce uses the use of ICT to produce a website. This has to be the most successful way of using ICT in a business. It provides an alternative way of selling products. In the case of Rolls Royce it allows them to produce their financial records for potential buyers and shareholders to view, a requirement for a Plc. Apart from selling products and producing financial information it also provides a form of marketing products. Some communication can be used internally and externally, I have mentioned e-mail there are some others such as a fax machine and video messaging. However most technology is very expensive, only large businesses such as Rolls Royce can afford it. Therefore I believe that Rolls Royce use of ICT is exceptional. They use every available technique to aid their business. Although buying the latest technology can only be done because of success in the first place.
A1
It is hard to say what Rolls Royce could do to meet is objectives. However on e objective that could be met better is the environmental issue. The pollution produced by the factories could be monitored and checked regularly. It is also inevitable that turnover will increase within the next year as it is on its way up after September 11th attacks. A more short term solution would be to cut costs. You can do this in several ways. Although slightly unfairly is to cut staff by making people redundant but this case is only really necessary if there is major financial worries which is not the case within Rolls Royce. Therefore I suggest they pay more attention to quality and reduce waste products. In the long run it would be better but forward booking would increase. This could only be done if the board of directors accepted it. It would also pay to have staff working longer hours but staff morale would decrease. One objective states ‘to address four global growth markets’ to ensure they did, they could get the marketing department to advertise there business or offer cheaper but cost effective prices. As Rolls Royce does not offer products that can be sold over a till but more order based products over long periods of time in bulk it is difficult to keep track of money within business transactions. It is therefore important for Rolls Royce Plc to offer a good stock price to encourage investors. Once you have investors you must keep them happy. A good way to keep them happy is to send or post regular updates on the web of recent news within the business. Another objective is the hopeful increase in aftermarket sales revenue. This objective was clearly met with a 40% of sales coming from aftermarket sales. However it must not be a one off and must be kept at this level in the future. To ensure this happens the research department within Rolls Royce could undertake in a survey of all its customers regarding customer satisfaction. This may be time consuming but in the long run would benefit the business and keep the aftermarket sales revenue the same or possibly better.
A2
Putting the above effects in to action would mean some changes to the business. First of all certain departments would take more of a role in the business such as the research department if the survey is to be undertaken. The sales and marketing department would have to closely monitor the sales turnover figures and work out how much of that is aftermarket sale revenue. However I believe that the structure of the business would stay the same apart from the mangers taking more responsibility over the production method. The production method itself will rely on quality of the product. Rolls Royce at the current level has a high level of quality which needs to be maintained or bettered. The orders themselves been so big forms a forward order process which could see customers pulling out of buying large amounts of goods as they have to weight. If in the short term Rolls Royce could invest in faster machinery or more workers it could cut down the forward orders. In the long run however it would mean larger wage bills and higher risk of depreciation on the automated machinery.
One objective that would change is to establish themselves a leading competitor in four growth markets. Once it has established itself which no doubt will be in the near future it must maintain that standard which will mean more orders. Because the company has based itself in four markets it means more areas to get money. If one market slows down like the civil aerospace department after the September 11th attacks, it can fall back on the other three markets maintaining business. A disadvantage of this means the need for experienced workers and management staff in these areas. The company must also make sure enough money is been produced to fund these four markets. It is there they must make a new objective to keep the shareholder happy and informed on the running of the business. This alternative would make the investor happier to input more money into the business if he or she believes there stake will hold its value or possibly increase. One other objective that needs to be met is the issue with been environmentally friendly; this could mean the creation of a new department within the business known as the environment protection department. However the drawback with creating a new department like this it would increase the wage bill as more workers are been employed. There is one other alternative to hiring new staff, you can train current staff already on the payroll from different departments as the need to make an entirely new department would not be cost effective.
