Financial Reports
The last method of measuring success that Kenwood uses is financial reports. Kenwood takes reports monthly and yearly. The monthly reports are taken to monitor the success within the company. The yearly reports are for the Kenwood Corporation. The report is an official examination of Kenwood's accounts. These reports will reflect the annual budgets, forecast and the annual forward plans.
3.4 Functional Areas
Most large businesses have functional areas. The main functions of any business are shown below
Each Functional area operates to support the business aims and objectives and a range of activities that goes on each one. The way in which the functional areas correspond with each other is important. There have to be close linked between different functional areas
Finance
The chief accountant is responsible for supervising the accounts and finance department. They must keep a detailed record of all money paid in and out of the company.
The financial accounting function is responsible for keeping records of financial events as they occur.
The management accounting function has the responsibility for nudging the company in certain directions. They provide their managers with budgets, forecasts, profit/loss and financial reports.
Production
The production director of a company is responsible for making sure raw materials are processed into finished goods effectively. They have to make sure work is carried out properly and must supervise procedures for enabling work to be carried out smoothly
Human Resources
The Human Resource department or Personnel function covers a variety of activities in an organisation. There are six different types of work the Human resources may include
-
A policy-making-role-these are policies that cover the place and importance of people
-
A welfare role-looks after people at work and their needs
-
A bargaining and negotiating role-concerned with acting as a intermediary between different groups and interests
-
An administrative role-concerned with wages and the supervision and implementation of health and safety laws
-
An education and development role-helps with the education and development of the workforce, recruit, selection, training/developing appraisals etc
Marketing
This function is in charge of identifying, satisfying and anticipating what the customers of the company wants profitably. The marketing department is mainly concerned with the consumer needs and wants. This involves market research to find out what makes up a particular market "what people want". In any business there should always be close co-operation between marketing and production departments as this would tie into with the product development.
Examples of Marketing activities are market research, advertising, packaging, promotion, distribution and pricing.
In order for Kenwood to meet their overall objective there are a few things the marketing department must do. One of the things for example is the marketing department has to do research for customer stats. The marketing department has close communication with the finance department this is to set budgets for products etc.
Administration
All large businesses depend on an administrative spine. Dealing with enquires; communicating messages and producing documents for the workforce are all examples of administrative tasks.
Research and Development
In an organisation this department has strictly commercial functions- to further the company's business aims by creating new and better products etc. And providing expert advice to the company and customers.
It is important for different functional areas to work well together and to understand the main objectives the business wants to achieve. With a clear set of objectives, it is likely that everyone in the functional areas will work in a co-ordinated way so they are met.
The marketing, research and administration all help to meet objectives as they speed up the processing.
Kenwood also have support functions, these exist to ensure that the trading cycle for purchasing the products, its receipt and distribution, repairs and servicing and the funding of the company- present a total support package to dealers that they feel comfortable with, while producing a profit which is acceptable to them and there shareholders. In KEUKs case this is Kenwood Corporation. This cycle repeats itself daily-weekly-monthly-annually- the company cannot die unless its shareholders withdraw financial support or they run out of money.
3.5 Management Style and culture
All companies have management styles, which are different. Within an organisation a person's management style is the typical patterns of behaviour they show in carrying out a management role over a period of time. Below are the three most common management styles:
Autocratic management style is where the manager is used to giving out instructions rather than asking people of their opinions. The manger is the only person contributing to the decision making.
Consultative management style is where the manager consults other people before making all the decisions. The manager wants to draw on more sources of opinion than just themselves.
Democratic management style is where teams and individuals are given the responsibility to make the decisions. The team is then held responsible for the decisions they have made.
I would say Kenwood has a consultative management style, this is because they work well in teams, has meetings etc. This also means that the manager will consult people before making decisions and the manager would like to get other opinions rather than just themselves.
There are four types of an organisation culture.
Cultures of an organisation are found and produced over the years by significant groups within an organisation. Below are brief notes on each culture.
Power Culture
The centralisation of power is the key feature of a power culture. It is found usually in a small organisation where a single individual is in control. There is a central power source. The rays of influence spread out from the central figure. This type of organisation enables it to move quickly in making decisions and reacting to threat and danger.
Role Culture
This role is typical to bureaucracies. These are large businesses in which all members have a defined job or role to carry out. Businesses would be divided up into different functions (Accounts, marketing, production etc) These functions would have a hierarchy ordering of offices e.g. production managers, production director.
Task culture
This is where many people work in teams, combining to complete projects together. In a task culture teams will often have a considerable input in determining how a certain job will be done. Their views and opinions will be listened to.
Person culture
Person cultures are likely to be found in not-for-profit organisations such as charities. The organisation exists only to serve the interests of those within it. In this culture the individual has complete freedom to adopt any direction and to do, as they like. The organisation does not have the power to evict an individual.
Kenwood's organisation culture is Task Culture. As again they work well in teams and co-operate well so every one gets on. This is also because the employees in Kenwood work in teams to complete projects. Their views are always listened to.
3.6 The use of ICT for internal and external communications of the business.
Businesses have to communicate with many individuals and organisations including their customers, competitors and suppliers as well as their employees. For a business to run smoothly good communication is essential. Any organisation have to have good paths of communication so that:
- Every one is clear of objectives
- There is accurate communication within the business and between the organisation and other individuals
- Every one is informed of changes and developments
- Ideals and views are clearly heard and everyone is heard
- The organisation and its members can respond quickly to new developments
In an organisation there is internal and external communication. Internal communication takes place within the organisation. External communication takes place between the organisation and the outside world.
The diagram shows examples of internal and external communication:
Common Forms of Internal Communication
There are three main ways of communicating information within an organisation. They are shown below:
-
Verbal Information is communicated in face-to-face interactions such as telephone messages, voice mail and answering machines. Verbal information is usually obtained quickly so it needs written backup.
-
Written Information will cover a range of paper documents such as memos, letters within an organisation. Written information often takes time and requires extensive filling and distribution systems.
-
Electronic Information for example emails. Many organisations use an internal networking system. This is used to send documents in electronic form around a company.
External Communication
All organisations need to communicate with their stakeholders, including shareholders, customers, government officials, suppliers and the community.
The diagram below shows Kenwood's ICT Links. This is their external communication. The diagram shows that Kenwood UK has links with Kenwood, which is in Japan as they are their suppliers. They also have links with European locations. Kenwood keeps close links with their customers, as they like to give a good quality service to them.
There are many different types of external communication (some methods are internal as well)
- The telephone - This allows the most frequent use of external communication as it allows people who would find it hard to meet to be able to talk over the phone also it is fast.
- Business Letters - A letter may be used to make arrangements, to provides a permanent record to both parties and confirm verbal arrangements
- Faxes - A fax is capable of sending visual and written information over telephone lines.
- E-mails - electronic letters that can be sent with in seconds to different computers around the world
- Websites - Electronic Media. Most companies have a web-site, which are used for public relations activities and communication purposes.
3.7 Production Process
There is an importance for any business to have good production, their importance of adding value to their products and their quality control and assurance. I have shown this below.
Kenwood Corporation - Manufactures
Kenwood Electronics - Suppliers
Retailers - sellers
Production Process
These are the processes that are followed out at Kenwood electronics to make sure their customers get good production. The cycle is a 12-month on going cycle.
The 12-month cycle is shown below:
- Sales planning seek to identify consumer trends
- Discussion within the UK involving marketing/technical
- Requests passed to Kenwood corporation
- Product development teams access requirements
- Product development estimate cost per unit
- Sales planning seek to achieve a standard GM
- Consumer price testing
- Firm production quantities
- Launch of new models
- Repeat!!! Faster-Cheaper-MORE BENEFITS
Kenwood put a great deal of time and effort into pleasing their customers. The sales planning team conducts market research. Discussions are held in the UK, This shows thorough planning and discussions can prop up new ideals. Requests are then passed onto Kenwood. It is the job of the product development teams to access requirements. A new product is tested on customers and if it is successful then it is launched. The ongoing cycle is able to identify customer needs and is able to produce products that are sure to sell well. Together the products will make Kenwood a profit. This cycle is attractive to customers and Kenwood developing teams as the cycle is cheap fast and creates more benefits.
Quality control
Kenwood do many things to make sure all their products are the best they can be. This is known as quality control. Quality control inspectors carry this out after a product has been produced. This process detects any faults the products may have and removes them. This is how businesses produce products of high standards.
Quality assurance
Kenwood does many things to check their quality assurance. Their products contain a seal of approval. They also have TQM, which is a total quality manager. Kenwood tests their products, this is known as self-checking. They also have many inspections to check there products are prefect. They use methods such as benchmarking. They have many methods to do this such as benchmarking. This helps organisations find the best methods of carrying out processes available. Which they would then use for there own organisation.
Adding value
To add value to their products Kenwood do all of the above and the things I have listed below.
Many organisations add value to their products. Kenwood add on to their product services such as after sale services, guarantee, insurance. This also adds a good service to their consumers as it shows trust and if their consumers have any problems with their products the after sale service will take care of things.
3.8 How successful the business is in meeting its objectives
Kenwood have many objectives that they have to meet. I am going to talk about these below, I will also talk about objectives that have not been met if there are any.
The table above shows Kenwood's profit for 2002 and 2001. As you can see there profit has fallen in 2002 than the amount of profit they made in 2001. Their profit has decreased by about £543,582. This means they have not met their objective this year. There could be many reasons why Kenwood have not met there objective. One reason could be that Kenwood did not reach customer satisfaction when making their products. This is shown by the cost of sales, this has decreased which could off been because the products Kenwood was making are not what customers want.
However the Administrative expenses have increased. The administrative expenses are the money paid out for the care of the building. A reason in which there has been a profit made here could be because the building has had no problems so no money has been paid out on extras.
- Increasing sales or market shares
As the table above shows Kenwood's shares have not changed much, however there was a tiny change of 2%, which means there is a difference between the two years 2002 and 2001. This means this objective has been met
Even though Kenwood have not made a massive increase in profit this year they are still surviving. This is another objective they have met. Their profit has not fallen by a large amount and it will be very easy to make up in the following years as they can learn from their mistakes
-
Developing staff skills
- Kenwood have a training scheme for their employees. This is where their employees can develop and learn new skills. Also they have many benefits for their staff. There is the pension scheme; also their employees can enjoy bonuses and discounts. The Kenwood staffs are happy, which means this objective has been met.
3.9 Explain how the organisational structure, culture and management style affects the performance of a business and helps it meets its objectives.
There are three main structures that an organisation could have:
-
Flat Structure - Organisations that have a low level of authority has a flat structure. E.g. A private shop owner
-
Tall Structure - An organisation that operates with more layers of authority has a tall structure. E.g. A large corporate organisation
-
Matrix Structure - Companies that sell and make products usually employ project managers. These organisations employ matrix structures as they have an emphasis on project management
Kenwood have a tall/matrix structure. This is because they have many layers, which means they have a tall structure. Kenwood almost have a Matrix structure because they are split into divisions. Kenwood have nine different divisions. This is effective as it means they can communicate better.
There are many advantages and disadvantages for Kenwood having these structures.
Advantages of tall and matrix structure
- As an individuals position is marked clearly on the chart
- People like work with others
- Employees can see who their own manager is for their section
- Members mix with each other functionally
- Communication is quick and easy to understand
Disadvantages of a tall and matrix structure
- They may not like the people they work with
- The products that are being produced may not be off high quality
-
Below is Kenwood's organisational chart.
Throughout my report I have mentioned that Kenwood have a Tall/Matrix structure, Task culture and a Consultative management style. I am going to explain how these have an effect on the performance of Kenwood and how it helps Kenwood to meet its objectives. First of all the management style, culture and structure of the organisational all interrelate with one another. The Matrix structure helps this by having a project manager who brings people together through the different functional areas. This helps because the different functional areas all co-operate well with each other to get their overall project completed.
A Consultative management style works well with this structure because the manager will consult other members of the organisation that are in the different functional areas with the decision making which would make it a group decision rather than a one person decision. Therefore the whole team are co-operating with each other.
Lastly the task culture relates with the structure and management style. A task culture is where people work in teams together to complete projects. This is the same as the matrix structure. All three things include co-operation between the people in the organisation so all three interrelate and work well together. As all three works well together it means the overall performance of the business is the best it can be. Everyone is working together, co-operating which means everyone is happy in their job which would make the products being produce would have a higher quality which would mean Kenwood would meet their objectives.
3.10 Impact of ICT on internal and external communications of the business
Computers have been around since the 1960's. There has been a great impact on ICT on industry recently. We have seen many industries use computer-aided design (CAD), computer-aided manufacture (CAM) and computer aided engineering (CAE)
CAM assists the designer with the use of computer graphics and computer based structural analysis. It helps designs be responsive to changing specification. CAM converts the CAD design into instructions for manufacturing equipment. As CAM follows CAD it is often called CAMCAD.
CAE involves using sophisticated computer equipment to aid engineers. Though for many organisations this is still experimental. The aim of CAE is to provide solutions and responses quickly.
There are many benefits of businesses using ICT these are listed below.
- It makes it possible for functional areas to share the same information
- It is quicker to communicate overseas e.g. Japan
Kenwood's network is AS 400. It is a wide area network for internal and external communication. It allows them to communicate with Japan for direct orders, as this external communication as it is outside the organisation. The network is externally linked to banks, customers and their suppliers. It is internally linked with their employees within the company. The link diagram is shown is 3.6.
There however are some disadvantages of using ICT
- The systems can crash and all of the work done on ICT could be lost
- -Although many businesses do have back ups
ICT has had a big impact on businesses. The main impact it has had is it speeds everything up. With the use of ICT businesses are able to communicate with their suppliers banks etc much quicker. The Kenwood network AS400 does just that. They have direct links to their suppliers and to their banks as well as links overseas to Japan.
Here are some ways in which ICT speeds up communication. Businesses are able to send emails, which takes the place of sending a letter or faxes or phone calls. The ICT can be used to replace the organisations traditional systems of filing and storing information so that everyone has use to the databases. The Internet can be used to find out about current developments that are taking place in the field in which the organisation is operating. The business website can create a communication link between the organisation and its global market.
3.11 Explain how the organisational structure, culture and management style interrelate in the business
Kenwood's structure is Matrix their culture is task and their management style is consultative. These three all interrelate together which means Kenwood works well.
About three years ago the leadership for Kenwood was a manager sent from Japan. This had a bad affect on the running of Kenwood because the Japanese manager tried to change the culture of the company to a Japanese style using autocratic styles. This style did not help with the running of the business as the management style, structure and culture did not relate, The reason they did not relate is because the manager tried to control a Japanese business culture on a British run company. The British culture is more laid back than Japanese cultures so there were many differences, which caused problems. The Japanese manager had left after a year.
Kenwood was going through a bad patch because managers who were not forward looking, and had older ideals, which was not suitable for advances in technology ran them, at that time. Now Kenwood are run by a younger generation, which have more up to date ideals which helps the business overall. However this can sometimes cause conflict as the older managers feel as if they are being pushed backed.
Now with Kenwood having a consultative management style, a task culture and a matrix structure the running off the business is much better overall. What I have written above shows that the business culture, structure and style are very important. What the Japanese manager tried to do did not work well as the different areas didn’t communicate and a lot of conflict was caused. Now the business is working much better and achieving more of their objectives. Kenwood's management style, cultures and structure all interrelate together well. This means there is good communication between different areas, which means the overall products are going to be much better.
3.12 Evaluate the impact of the organisationsal structure, culture and management style on the performance of the business.
As I have mentioned before Kenwood have a matrix structure, a consultative management style and a task culture. These three all interrelate as I have mentioned above well as it means Kenwood are working well and moving forward to achieving all of their objectives fully.
As the three all work well together it means the performance of the business is good,
If there is good communication between the different areas, it would equal better teamwork as the staff would be much happier, which would lead to better products which would make the customers happy which would make profit leading to development which would gain more market staff.
COMMUNICATION If the communication is
Good between the different areas
TEAMWORK this means the staff is
Much happier
BETTER PRODUCTS happier customers = PROFIT
As you can see the performance will be very good as the management style, culture and structure all interrelate. The atmosphere is much happier in the business.
3.13 Find an alternative approach to quality control or assurance and the effects it could have on functions of a business.
An alternative approach to quality control that Kenwood could use is using TQM (total quality management). It would create a quality culture so every employee will please customers.
I feel if Kenwood uses TQM (total quality management) it would improve their quality control. Below are some points in how it would improve the quality control.
- Improve Production
- Improve quality of the product
The quality of the products would be checked from the start of them being produced which would mean the quality of the product is the best it can be. Kenwood would manufacture more goods as they are all of a better quality it would improve there production.
As the products are of a better quality there consumers would find less faults with them so there would be less returns
- Sales may increase
- Increase profit
As the products are of a better quality more of them would sell so the sales would increase so it would increase the amount of profit Kenwood would make.
IV CONCLUSION
To conclude my report I have come to find that Kenwood is a good corporation. Their functional areas work and co-operate well with each other, which means meeting their objectives is not a hard task to meet. Their one objective they have not met this year is making a profit but I'm sure that if they carry on the way they are going it will be met in the future. It has been proved throughout this report that if the management style, culture and structure were changed the business would fall apart. This is because their organisation structure, management style and culture all interrelate well together, which means the staff are happy which would make the products of a higher quality.
V RECOMMENDATIONS
My recommendations to Kenwood are to carry on the way they are going and not to change their management style, organisation structure or culture in any way.
REFERENCES & APPENDICES
- AVCE Business text book
- Kenwood hand outs and visit
