The Retail department help Sainsbury’s achieve the objectives of:
- Profit
- Increasing Sales and Market Share
- Survival
- Developing Staff Skills
Retail help with ‘Profit’ as they have to persuade the customers to buy the products and if the customers decide to purchase an item then they are causing Sainsbury’s to make a profit. This department also help Sainsbury’s with the ‘Increasing Sales and Market Share’ as they once again try to entice the customer to purchase a good and if they are successful in doing so then they are helping Sainsbury’s to increase their sales. ‘Survival’ is another objective that this function of the business helps with as if they entice customers to purchase items they are helping Sainsbury’s to stay in business. Developing staff skills is the final objective being met by this department as they are developing their communications skills by talking to customers’ everyday.
The marketing department are assisting Sainsbury’s buy helping them meet the following objectives:
- Increasing Sales and Market Share
- Profit
The marketing department help Sainsbury’s to meet the objective of ‘Increasing Sales and Market Share’ by researching the market of competitors and ensuring that they are using the correct marketing mix. They can also help Sainsbury’s advertise itself better to acclaim better custom from customers. They could also come up with better pricing strategies to help products sell better which leads me on to the next objective the marketing department could help Sainsbury’s with which is ‘Profit’. By ensuring that Sainsbury’s are pricing their goods at appropriate prices a better profit may be gained at the end and this could also boost sales for Sainsbury’s. Sales and profit could also be met by the marketing department meeting the needs of Sainsbury’s customers.
The trading department of Saisnbury’s helps them meet their objectives of:
- Profit
- Increasing Sales and Market Share
The trading department help Sainsbury’s meet their objective of ‘Profit’ by ordering the goods in at the appropriate amount that then will be sold on to customers to help Sainsbury’s make a profit which also helps Sainsbury’s to meet their objective of ‘Increasing Sales’.
The finance department have the basic objective of helping Sainsbury’s to survive by making sure that all money coming in and flowing out of the business is correct. By supervising the money they can make sure that Sainsbury’s do not go into debt which will help them gain the objective of ‘Survival’. I suppose in a way they help Sainsbury’s with the objective of ‘Profit’ as they deal with all the money situations in the business. They have to draw up different accounts throughout the year to show how Sainsbury’s are doing ‘money wise’. If they made an error in any pf the account this could lead to Sainsbury’s thinking they have less money or more money then they should. The staff working in the finance department are there to make sure this doesn’t happen.
The Human Resources function helps Sainsbury’s to meet the objectives of:
Personnel help Sainsbury’s to achieve the objective of ‘Developing Staff Skills’ by recruiting new staff for Sainsbury’s and training them on different sections needed. This helps the workforce to develop possibly new or develop on skills needed in the working environment of Sainsbury’s. I feel that this is the only objective that this function of Sainsbury’s can help with. All in all the personnel department are there for the welfare of the workforce.
Organisational Structure
The first organisational structure I shall write about is that of flat structure. A Flat organisational structure only has a few levels within its structure but has a wider span of control. This type of chart is more flexible and as a result is more able to manage with change. Because of the small number of levels within the organisation there are few barriers to effective communication.
The second type of organisation chart I shall talk about is that of a Hierarchical organisational structure. The hierarchical structure has many levels within its structure which leads to it having a narrow span of control. Communication can become highly formalised because there is a long chain of command. Such as organisations are frequently highly in bureaucratic and machine like in their ability to respond to change. This type of organisational structure has many barriers of communication.
The final organisational structure I am going to talk about is that of Matrix structure. This underlines getting people with particular specialist skills together into project teams. Companies have progressed towards a matrix structure. This is where project teams will be selected across the range of functions within a business. The matrix structure ensures that there is no cross fertilisation of ideas and gives scope for people lower down the organisation to use their talents effectively.
Span of control is the number of people or departments which report to a particular manager. It can be as narrow as two or three employees or as wide as 50 employees. Sainsbury’s have a narrow span of control as their organisational chart is that of hierarchical.
The advantages of a narrow span of control are as follows:
- Sainsbury’s have a higher degree of control.
- Sainsbury’s have fewer subordinates which means the manager is more familiar with each individual.
- As Sainsbury’s have close supervision then this means faster feedback.
The disadvantages of a narrow span of control are as follows:
- As Sainsbury’s have more levels of management this can be more expensive.
- There would be slower decision making in Sainsbury’s as they have vertical layers.
- Isolation of top management discourages employee independence.
As in a narrow span of control there are quite a few managers then each one could supervise a different department to make sure work is being done and that employees are working at the right level. Employees may become more motivated as their specialist manger may be ‘pushing’ them and encouraging them to get the work done. Although employees may not be happy with the constant supervision of work their work and may become less motivated. Better communication in Sainsbury’s as the manager will be familiar with most employees. Faster feedback in Sainsbury’s could lead to better decisions being made to improve and meet their objectives. With a narrow span of control there are usually more people working in a company which will mean different employees will specialise in different departments to get work done faster.
The chain of command is the way in which orders, communications or instructions are passed down through the organisation chart from the top person to the bottom person. The order will pass through a number of levels. Sainsbury’s have a long chain of command as they have may levels to pass through.
The advantages of long chain of command are as follows:
- Once again as in a narrow span of control this means that Sainsbury’s have a higher degree of control.
- As there are more layers in Sainsbury’s organisation chart the person at the top will receive more feedback from employees once they have passed an order down through the chain of command.
The disadvantages of a long chain of command are:
- The instructions being sent down the chain of command will take longer to get to the employees within Sainsbury’s.
- As the chain of command is long in Sainsbury’s then this could lead to messages being misinterpreted as it follows the chain of command.
- As there are many employees within Sainsbury’s someone may not receive the message being sent through the chain of command.
- Once again as mentioned in the narrow span of control there would be slower decision making in Sainsbury’s as they have vertical layers.
- As in the narrow span of control disadvantages isolation of top management discourages employee independence.
As Sainsbury’s have a long chain of command this means that there are a lot of managers or persons in charge within the chain of command and each one could specialise in their own department an have control of a number of employees so messages can be sent down the chain of command faster. This will result in more work being done leading onto Sainsbury’s meeting objectives such as a boost in sales or profit maximisation. Employees may become more motivated as they have their own departmental manger encouraging them to work. Better communication skills would be achieved as there are quite a few mangers operating different departments. Faster feedback will be achievable which will lead to Sainsbury’s meeting more of their objectives. Also employees as well as managers specialise in different departments which will help get work done faster leading to Sainsbury’s, once again being able to meet their objectives. However messages flowing down the chain of command could take longer and could even be misinterpreted leading to employees following the wrong instructions.
The advantages of Sainsbury’s having a hierarchical structure are as follows:
- Within Sainsbury’s there is easier definition of roles and responsibilities.
- There is greater scope for developing knowledge.
- Sainsbury’s will have more frequent opportunities for promotion.
The disadvantages of Sainsbury’s having a hierarchical structure are as follows:
- Sainsbury’s may slow down the assembly of special purpose.
- This is likely to encourage set ways of behaviour.
- May impede decision making.
This will affect employees in Sainsbury’s in different ways. In Sainsbury’s employees will know their roles as they are part of a hierarchical structure knowing where they stand in the business. This leads on to employees specialising in one department which may motivate them to work harder. As every employee specialises in different departments work will be done faster which will lead to bigger sales and profit maximisation. If employees work hard and develop skills as they go along this may enlarge the chance of promotion making the employees more motivated in their work to show that they are worthy of promotion. As decisions are slower to be made this could affect how will Sainsbury’s can meet their objectives. For example if Sainsbury’s managers had to make a decision on how to sell their products faster and in bigger quantities sales may drop due to how long the decision may take to make.
The matrix structure emphasises getting people with particular specialist skills together into project teams. Individuals within the teams have their own responsibility. The matrix structure was developed to overcome some of the problems with the entrepreneurial and bureaucratic structures. The following are the benefits of matrix structure:
- Creative solutions to problems
- Enhanced risk taking
- Greater utilization of resources
- Faster response to market
- Faster rollout of new products
- Better planning
- Enhanced communications and information transfer
- Enhanced managerial growth
Within Sainsbury’s hierarchical structure I could not find a matrix structure.
Centralisation and decentralisation refer to the degree which authority is assigned in a business. I f there was to be complete centralisation then subordinates would have no authority at all. Complete decentralisation would mean subordinates have all the authority to take decisions.
The advantages of centralisation are as follows:
- Senior management have more control of business.
- Ordering and purchasing can be standardised throughout the organisation, leading to economies of scale.
- Senior managers should be more experienced and skilful in making decisions. In theory, centralised decisions by senior people should be of better quality than decentralised decisions made by others less experienced.
- In times of crisis the firm may need a central group of senior managers.
The advantages of decentralisation are as follows:
- It reduces the stress and burdens of senior management
- It provides subordinates with greater job satisfaction by giving them more say in decision making.
- By allowing assigned authority, management at middle and junior levels are groomed to take over higher positions. They are given the experience of decision making when carrying out delegated tasks. Delegation is therefore important for management development.
A decision that may be made centrally as opposed to a decentralised would be the budget allocation. This could not b made by a single employ but must be made by someone senior as this is a decision that could affect the whole company. Another centrally made decision would be that of closing down Sainsbury’s. This decision could not be made by employees as they do not own the business of Sainsbury’s. This decision would have to be made by the chief executive who of course is Justin King. Decision making could affect employee performance greatly. They could become less motivated if they do not have a say in the decision making of the business. Sometimes decentralisation is necessary to motivate employees more.
This structure will help Sainsbury’s to meet their objectives as there are a lot of layers within the hierarchical structure. Many functions exist within this structure each with their own specific role to play in order for Sainsbury’s to meet their objectives. In the pages above I have discussed how some of the departments within Sainsbury’s could help them achieve different objectives in their own way. Work will be completed faster due to the amount of levels on the organisational chart. A larger profit will be made than a flat structure because there are more people working in Sainsbury’s as they have a hierarchical structure. An increase in sales may also occur due to the amount of layers in the structure. With more people working in Sainsbury’s then more products will be sold. With such a large structure staff will also develop many skills throughout the organisation as there are many departments to work for.
Management Styles (see appendix 1)
The structure of a business is closely linked to its management. There are several, quite apparent styles of management, each with its own advantages and disadvantages. The ones I shall be talking about are:
- Autocratic
- Democratic
- Consultative
- Persuasive
Autocratic
This is where a dominant leader who decides by him/herself, without consultation of others. Decisions are therefore taken based on the experience and wisdom of one individual and tend to be less popular than if there were some form of group consensus. This results in little consistency, the need for high levels of supervision and poor levels of motivation amongst employees.
Democratic
This where a leader actively encourages the sharing of ideas amongst the group and asks the group for their opinions. Whilst not everyone’s opinion will be fulfilled, at least there will have been a chance to air views which makes employees feel they are involved in the decision making process. This shall also make employees feel more motivated. This leadership style needs good communication skills. The leaders must be able to explain ideas clearly to the employees and understand feedback they receive. This could mean that decisions could take longer.
Consultative
This is where leaders consult with others before decisions are made. There will be group influence in the final decision, even though it is made by the leader.
Persuasive
The leader makes decisions alone. Others are persuaded by the leader the decision is the right one.
Sainsbury’s follow two different management styles. They follow both the autocratic and democratic management style. I found this information in a questionnaire I designed for this assignment and by asking Sainsbury’s which management style they used. I also gained this information as I am an employee of Sainsbury’s and I am sometimes given instructions from the manger (autocratic) but other times the manger involves me and we come to a decision (democratic).
Analysis of Management Styles (see appendix 1)
The advantages of the autocratic management style are as follows:
- In Sainsbury’s decisions can be made quickly without a series of meetings and discussions associated with democratic leadership. For example a manager in Sainsbury’s will maker a decision without the interference of employees which makes the decision making much faster.
- There is more emphasis on decision taking rather than on decision making. For example if a manager in Sainsbury’s were to tell an employee to carry out some sort of work then the employee has to follow these instructions without having their own opinion.
The disadvantages of the autocratic management style are as follows:
- The leader is detached. This meaning that the manager in Sainsbury’s will not always be there but will have a set of instructions for the employee to follow.
- Decisions are made on the opinions of one person. Once again the manager in Sainsbury’s will be the only one making the decisions for the employees to follow.
- Uses only one way communication with consequently no opportunity for feedback. Employees of Sainsbury’s, sometimes, will not have the opportunity to speak back to the manager.
This style of management can affect the performance of the employee as they don’t have a say in what work to be carried out. Employees of Sainsbury’s may become less motivated as they can not put across their own opinion on what decisions to make and take. However the theory X by Douglas McGregor states that the employees are lazy must be controlled. This could be the case for some employees in Sainsbury’s and this could be why Sainsbury’s use this management style with some of their employees. This could lead to Sainsbury’s doing well in their objectives as by the manager controlling the employee and telling them what to do, work will be done much quicker than without the manager there. This is how this management style could help Sainsbury’s achieve their objectives.
The advantages of the Democratic culture are as follows:
- Group actively involved in all aspects of the business and encouraged to take responsibility for decisions made. In Sainsbury’s employees have the chance to make the decision for them and use their initiative with only slight interference from the manager.
- Two way communication is normal. Manager and employee can talk together in Sainsbury’s and make decisions between themselves.
This management style can affect the performance of the employee greatly. By managers of Sainsbury’s encouraging their employees in their work, employees can be more motivated and will gain job satisfaction. This is linked with the theory by Elton Mayo which is all about human relations and teamwork. Managers in Sainsbury’s tend to do this by giving the employee the chance to make their own decisions and use their initiative in their work which for me personally as a employee of Sainsbury’s is a great motivator and helps to get work done much faster. Sainsbury’s have recently started an employee to chief executive decision making scheme where employees of Sainsbury’s can send their ideas to Justin King (Chief Executive of Sainsbury’s) to help him in his decision making to make Sainsbury’s a better place. In doing this again employees of Sainsbury’s will be more motivated in their work and will lead to Sainsbury’s reaching their objectives. For example, if an employee of Sainsbury’s has a part to play in decision making they may improve stock availability and sell more products to gain more sales and a large profit. This is how this management style could affect Sainsbury’s objectives.
Culture of Business (see appendix 1)
We use the term ‘culture’ to describe the typical approach within an organisation. Culture refers to the personality of an organisation, the shared beliefs and the written and unwritten policies and procedures that determine the ways in which the organisation and its people behave and solve business problems. There are four main types of culture which are:
Power Culture
The centralisation of power is the key feature of power culture. It’s mostly found in small businesses where an individual or small group of individuals are in control. In this type of organisation the emphasis is on individuals rather then group decision making, enabling it to move quickly to make decisions and to react well to threat or danger. Nevertheless the danger of this sort of culture is that as it is autocratic there can be a feeling of containment and lack of challenge in the workforce. Power cultures tend to suffer from low morale and high staff turnover in the middle management layers. Power culture can also exist in large companies. Within power culture few decisions are taken collectively. There are usually few layers of management and a relatively wide span of control. Convinces delegation or empowerment, through the control put forth by the leader means the decision making power remains paternalistic.
Role Culture
In role culture the role is often more important than the individual who fills it. Within role culture tasks are clearly defined as are accountability and responsibility. There is a clear chain of command to be seen in role culture. The main source of power in this culture is position power. Roles can be precisely defined using job descriptions and definitions of authority. There are set ways of communicating such as standard memos with defined circulation lists in this culture. There are also likely to be many layers of hierarchy in a bureaucratic structure in which there is a narrow span of control.
Task Culture
The emphasis is on "the task", which may be:
- improve productivity
- improve quality
- reduce absenteeism
- increase sales
In order for the task to be achieved, the team must be supplied with the right amount of resources in terms of people, finance and equipment. The team is given decision-making power and authority for the task to be completed. The aim is achieving the task. Team members are chosen on the grounds of potential rather than position. Task culture does not depend on a central figure and is not working solely by logic and rationality as it is flexible. It exists for the task and not for the people concerned. This works best in a business with a wide span of control and relatively few levels of management on the hierarchy.
Person Culture
In person culture individuals are central. The organisation exists only to serve the interest of those within it. Person cultures are more likely to be found in co-operatives and not for-profit organisations. In person culture hierarchies do not exist unless appointed by mutual consent. An individual can leave the company by cannot be told to leave. The individual can do whatever they want as they have complete freedom to adopt in any direction.
Within Sainsbury’s Role culture exists. I found this out using a questionnaire designed for this assignment. I asked the question ‘which type of culture exists within the business’. Even as an employee of Sainsbury’s I could not see what type of culture exited but now I have found out.
Analysis of Culture (see appendix 1)
The advantages for this type of culture are as follows:
- Each person can specialise in a different department in Sainsbury’s as they have a specific role.
- Job satisfaction
The disadvantages of this type of culture are as follows:
- Employees may get bored with the same job all the time and maybe less motivated.
This type of culture could help Sainsbury’s achieve their objectives as everyone knows exactly what their role is within the business environment and working within a team structure brings with it motivation and job satisfaction, pride and commitment. By employees having all this then this will surely help Sainsbury’s to achieve their objectives boosting sales as each employee specialises in different areas of work which speeds up the availability of goods. This will also lead to Sainsbury’s meeting the objective of profit maximisation as sales are being increased then more money is coming into the business. The objective of prestige could also be met as more stock is readily available as employees specialise in their own areas of work.