Phones Galore Ltd Business Case Study
The Culture of Phones Galore Ltd
Phones Galore Ltd has adopted a very autocratic style of leadership and has not been accustomed to the modern ways of running a private limited company.
The current Managing Director of Phones Galore believes that the company is "one happy family".
Contrary to this statement, the staff turnover is very high and the employees believe that the business is run very autocratically.
There are five main branches within the company:
* Production
* Engineering
* Accounts and Purchasing
* Quality
* Administration
Arthur Dawley is the Managing Director and Head of Sales. However, currently Arthur has asked his nephew to take the role as Head of Sales. This is the first sign that the company's environment is in disorder.
The Production and Quality managers have put forward ideas for improvements but have been ignored. Arthur from what the Production and Quality managers have said, only listens and consults to Walter the Accounts and purchasing manager. Arthur is believed to be autocratic but fair simultaneously. Walter was appointed Production manager when Phones Galore became and Private Limited Company.
The involvement of staff is very limited as only Walter has an active part. The Managing Director does not involve staff when asking for improvements his methods are of a recluse. Currently he wants to improve the quality of the products but the Quality manager has not been consulted!
The employees have a limited understanding of what is taking place in their environment. Whether it being an advance or a step back. Mel, an employee of Phones galore has a view that the MD requires the workers to collect their pay and go to home. This statement can be justified as staff turnover is very high and Mel herself is looking for another occupation.
Due to the staff not taking active roles in their jobs, satisfaction of working there cannot be achieved, as the staff turnover justifies.
Training and appraisal schemes are not offered and the factory floor has not been visited, this suggests another reason why staff turnover is high. If the managing director does not pay close attention to his production floor, then how can he improve situations relating to quality improvements?
Culture of a Business
Achieving business objectives
The management of business sets objectives such as customer care, quality and environment responsibility to satisfy any stakeholder. However, it will be pointless if the workforce is not dedicated to the achievement of these objectives.
Let us say for example, you arrive at a shop with poor conditions and a poor working environment, the business is failing to achieve its objectives because of the wrong type attitude. The business lacks a motivational culture. Known as corporate culture.
Corporate Culture
This can be defined as:
"The attitudes, values and beliefs that are shared by the people in a business"
If a business is to do well in its objectives, it is vital that all internal stakeholders share a belief in those objectives.
It is up to the firm to promote a common 'initiative' involving:
* The business objectives
* A common code of behaviour for the employees
Types of Cultures
There are many factors, which influence how the culture of a firm might develop.
Some businesses will ...
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Corporate Culture
This can be defined as:
"The attitudes, values and beliefs that are shared by the people in a business"
If a business is to do well in its objectives, it is vital that all internal stakeholders share a belief in those objectives.
It is up to the firm to promote a common 'initiative' involving:
* The business objectives
* A common code of behaviour for the employees
Types of Cultures
There are many factors, which influence how the culture of a firm might develop.
Some businesses will see an increase in the market segment as an objective, others might see quality as a priority and others may see environmental and ethical considerations as an objective. Whatever the objectives, the influence of culture is summarised as:
* Economic - The need to make a profit and become efficient in the market segment.
* Social - the need to serve local communities and society as a unit.
* Environmental - the need to take into account energy and natural resources in sustaining.
* Ethical - the need to help and not take advantage of developing economy e.g. third world oil.
Organisational Culture
There are four main styles of culture:
Role culture - this is best suited for an organisation that sets a role for each individual 'a role', is set and complied according to the rules and regulations.
Task culture - a team working on a specific project(s)
Power culture - a firm that is based around the main power stature. This type of culture reminds me verily of Phones Galore Ltd.
Person Culture - administrative back up for an individual.
Each of the above stated culture may vary in whom it may suit below is a diagram giving a brief guideline of how a culture can apply to a firm.
Type of culture
What it entails
Suitability
ROLE
* Stringent following of rules and regulations
* Tasks are clearly refined
* Chain of command rigid
Hierarchical structures
TASK
* Based on a specific task for specific sections
* Hierarchy not a main concern
Matrix or team based structures
POWER
* Strong central figure
* Decisions made by board or the power head.
Company with a dominant chairperson or director.
PERSON
* No formal hierarchy
* Backup for an individual
Professionals e.g. architects,
Show business individuals.
The culture of Phones Galore and any other culture is dependant on how the individuals of the firm carry out their tasks.
Having studied Phones Galore I believe they have a power culture. I feel this is true to the fact, as there is a central figure of power, the Managing Director, Arthur Dawley.
Due to him being a power head of the company, he wants to stamp his authority and have his power renowned in the company. He is very dominant and wants to be traditional in his style; I can justify this, as Arthur was reluctant to accept new styles such as JIT management. I also can relate that from a 50:50 partnership to a private limited company Arthur has a right to feel more powerful as he owns most of Phones Galore.
Arthur likes the to show his authority in his business, this shows that he is autocratic; he rarely discusses decisions with the lower order.
Arthur believes that his orders should be implemented upon giving his orders, but this rarely works in today's society, as what can happen is that plans and decisions can backfire and Arthur will only have himself to blame.
This type of style is suited in events of emergency or when safety rules have to be followed, situations where quick decisions are needed.
Regardless of Phones Galore' manager having his weak points, he has been mentioned as a fair person.
My recommendations would be to have, a more role culture this would suit Arthur more and his subordinates as, there is more democratic values, but with the stringent rules. Putting this into plan will help the company in succeed as that is ultimately the main goal for the company.
Phones Galore Ltd: Legal Status
Phones Galore has the legal status of a private limited company. The forms, which they should, possess, are the Articles and Memorandum of Association and also the Certificate of Incorporation.
The Memorandum of Association is, a documentation alongside the Articles of Association that is vital when setting up a limited company.
The Memorandum of Association sets out what types of activities the business can do and what can't they do set out by Companies House. (Where all applications for limited companies have to go through).
The Articles of Association is the internal legislation made upon the company this sets out the guidelines of what the directors can and cannot do.
The third legal documentation required in forming a private limited company, is the Certificate of Incorporation. This document is in its basic form the 'birth certificate' of the limited company. It states the date of incorporation and who has legally made the form valid and from which location it was materialised.
The Advantages of being a private limited company:
* Limited liability for the shareholders i.e. directors
* Continuity of existence
An advantage over the partnership form, if a death should occur to one of the directors then the company can still continue trading.
* Minimum number of shareholders is two i.e. the directors
* Greater capital potential
* Can operate on a wider span with the added flexibilty of employing specialist staff.
The Disadvantages of being a private limited company
* Growth may be limited, as extra income can't be raised through the general public (as shares can only be sold internally).
* An independent body or the Company of Registrar must audit accounts.
Phones Galore has gone through many changes in its development raised from a Partnership to a Private Limited Company. Reason being that the added assurance of limited liability is more suited to the directors of Phones Galore. As there was a time where an order was submitted to Phones Galore for a number of telecommunication products. But due to the lack of workforce the order could not be upheld so the requesting company decided to sue and almost succeeded in doing so. So in order to cancel out any chances of a similar mishap happening again the company became and L.T.D to evade further lawsuits and have added flexibility e.g. expansion prospects.
Why Phones Galore Ltd requires a Human Resources/Personnel Department?
A Human Resources or a Personnel Department is vital to a business in order for it to keep track of its employees and help employees resolve any problems that may occur while working, including Phones Galore.
There are four main reasons for having a HR department:
It encourages employers to develop clear links between their business plans and their HR plans so that they can integrate the two more effectively
Organisations can control staff costs and the number of employees more effectively, a standard needed by Phones Galore.
Employers can build up a skill profile for each of their employees. This makes it easier for employers to give work where its can be most valued for its organisation. In addition, plans for training and updating skills can be applied.
It creates a profile of staff (relating gender, race, disability), which is necessary for the operation of Equal Opportunities.
Having a HR department has shown the following changes to businesses nationwide in the UK, today:
* A decline in the proportion of employees that have trade union ship.
* A decline in the proportion of employees whose pay is set by unionised collective bargaining
* A rise in the range of employment issues that are lacking in originality, from a managerial outline
* A corresponding rise in the amount of part time, short term, contracted out employment
* Staff employed are fully-utilised to benefit from its organisation
* Staff can do challenging work, which motivates and stimulates them to work.
* Staff are properly qualified to do the job allotted to them
Phones Galore Ltd requires a Human Resources Department to resolve their staff turnover problem. High staff turnover is disruptive and an expense to the business it is the Personnel departments' job to keep turnover low as possible.
Human Resources can be responsible for the following five main areas that can be included in a structure of a HR department.
* Recruitment and Selection
* Employee relations
* Administration, Payroll, Records
* Health and Safety
* Training and Development
Recruiting and selecting employees, is a huge responsibility when trying to maintain a company.
Without the correct attitude and this department Phones Galore, will not be able to function properly. Having wrong types of employees in the wrong departments can show defectiveness. Or for a single employee that is taking on two jobs and is not able to multi skill efficiently like Phones Galore' MD, can also show a need for a Recruitment and Selection department or implying that employee relations need a shuffle.
There are a lot of sub sections that come under employee relations being specific to Phones Galore I will mention a few, termination of contract or employment.
Terminating contracts is what I feel, required at Phones Galore there is too much complacency within the hierarchy, many could blame the MD, but not all the blame is evident on the Managing Directors behalf. As I have discussed on previous occasions many employees are unmotivated, and are willing to leave on any given chance available.
Appraisals, also integrated within this department. Appraisals are interactive discussions between managers and employees to review the company and employee status. Giving appraisals lets employees know what position they are in within the company and what improvements if any can help there performance and status within Phones Galore. Appraisals should be given on a six monthly basis, when concerning Phones Galore I recommend or a three monthly basis, as there are signs of disarray among the workforce. Knowing what motivates the workforce, can give an insight on how to improve communications and relations. This hopefully will keep employs longer within Phones Galore, as an incentive maybe given to work towards, in the appraisal interview and discussed at the next. As I discussed, the business objectives and the employee's objective are reviewed, keeping this in mind the employee can give their ideas on the running of the business. Giving the employees, ideas, to the line manager, will give an opportunity to present what is found in the interviews, to the higher ranked managers and then applying what the employees think is appropriate, to the workforce.
Keeping records is another function of which Phones Galore should or could adhere to. Keeping records concerning employees and employers will give insight on who is most suited in which department, and where applicable sharing jobs if the skills are not available. Records should also be kept of when holiday leave and when pay is given.
