4.0 impact of external environment on organisation:
Consists of a number of broader forces that affect not only the company but also the other actors in the microenvironment. (D. Jobber, 1998)
Main points reviewed from SWOT analysis external:
Threats (external):
Companies need to be in a position not only to respond to changing environmental factors but also to capitalise on them. At the very least, management should be able to identify the environmental trends, where they are leading and how to react successfully to them. This will ensure that the circumstances don’t dictate the business. To analyse and foresee these changes, the macro-environment is generally broken down into the following sub-environments. (G. Lancaster and L. Massingham, 1988).
Due to the change in politics is much easier to import from the overseas, creating a competitive advantage in the cheaper products, therefore other companies will be able to compete with us. This is another external factor.
The increasingly diversified supermarkets making them one-stop shops, this is by introducing higher range of products i.e. taking some market share away from us. This means more competition across the country, pushing use to return to our core business to concentrate on quality and price.
As for the future Environments pressure is by imposing fee to enter the city centre, due to ever increasing traffic. This will force retailers to change there future planning for outlets.
Opportunities (External):
In the future, our company will depend on the international market to compete with other companies. Due to the global economy moving closer together. I.e. they can produce in the third world countries trade it in the west. This area is highly profitable and this policy can be used to develop the company more and gain higher consumer perception of the companies’ image.
The future technological and social factors are also playing a major role in companies moving into Internet e tailing, E-commerce mail order. This is where our company should be heading at the moment.
The market development entails the promotion of new uses of existing products to new customers or the marketing of existing products to new market segments. Market development through entering new segments could involve the search for overseas opportunities
The Internet is a global web of over 50,000 computer networks, which permit instantaneous global communications. There are many advantages to the company: lower costs. Relationship building, audience measurement, and fast changes to catalogues. In Stores ‘r’ us case they should consider putting all their stock on a online database an relate this to all their members therefore the members will know what stock they have and where to procure it from. Wal-Mart one of our considered competitors uses this facility.
5.0 Evaluation of Management and Leadership approaches that are evident:
Johnson and Scholes (1999) believe the success of strategic change ultimately depends on the beliefs, assumptions and behaviour of people in their organisational lives. The wholesaler scenario has illustrated that our managers do not address these factors, resulting in having a direct negative impact on staff’s behaviour.
When considering the Ohio State study, below it shows the change in the management in the company, where it compares between the consideration and structure. It is clear that the company was in a high structure with low consideration, therefore in this leadership there is no staff consultation showing that the company adapted a role culture.
Adapted from Hersey et al, 1993.
There is no consultation behaviour with staff, making the company falls into a bureaucratic system, In a bureaucratic organisation tasks are allocated as official duties among various positions, there is division of labour and high specialisation, a hierarchical authority applies, impersonal orientation from staff is expected from in their dealings with customers and other staff. Employment by the organisation is based on technical qualifications and constitutes of a life long career for the staff. (Blau. P, & Scott. W, 1996. Mullins. L, 1999). Yet it is not suitable for the complex and more fast-changing modern world, especially where interpersonal relationships and possible conflicts of interests are involved. (Bennett. R, 1994). There should be more involvement from staff to get better results, where they would be more enthusiastic if they share the vision.
The term ‘bureaucracy’ has common connotations with criticisms of the red tape and rigidity, it’s also been criticised for ignoring the roles and influences of informal groups and has little to say about the influence of official leaders.
The non-consultative nature of the change has led to resistance and highlighted a very centralised management style along with a role culture. This is very familiar with family run organisations with their obvious paternal instincts being that of control and decision-making.
Deming, (1986) talks of the appropriateness of quality circles in bringing together managers and staff along with increases in motivation, acceptance and loyalty. Trust and confidence is described in Mullins (2002) as being the key to getting the most desired responses out of staff. Management have to initiate this trust and there are no signs of this being considered.
Regular top/down appraisals would enable us to monitor quality, morale, skill levels and supply of management. Armstrong (1986) differentiates the fundamentals of traditional staff and management appraisals. However, the adoption of a more flexible approach, such as 360° appraisal, would be more suited to our customer focused business as appraisals would consider customers, valuable point of view and the views of manager’s subordinates (Mullins, 2002). This more complex approach provides a broader picture of an individual’s relationship with an organisation, informing us of relationships, teamwork, leadership and quality of decision making, all very relevant to the issues this report has raised. The adoption of flexible working practices within Stores ‘r’ us, means appraisals could be extended to all staff as a tool to enhance staff/manager relationships and harmonise the working environment, thus reducing the boredom factor in the job.
6.0 Solutions for HR and Personnel
To maintain the focus of this report, this section will address three areas that will aid Stores ‘r’ us UK operation with their current situation and therefore reduce the main problems highlighted in the SWOT analysis.
6.1 Streamlining of range and reduction in need for specialist staff
To aid and assist our company to work on our core competencies we should consider out sourcing our bakery and butchers, optical and photographic, auto products and pharmacy functions i.e. have separate entity within our business entity and therefore reducing our overall costs.
Retailers employ an ever increasing proportion of part time staff, traditionally this has been for financial reasons but more recently because they fit in with irregular opening hours and the changing employment market (Browell and Ivers, 1998). We as a company have implemented this well however we need to consider that part time workers require different satisfaction levels from their core worker colleagues. One way for us to incorporate them, is to consider them as part of the core workforce and ensure free flow of information and goal achievement. Staff turnover has been highlighted as a problem for Stores ‘r’ us, we need to increase their morale and their commitment has to be task/friend focussed as opposed to company/career focussed.
Staff we recruit in the future for positions will not require specialist knowledge but our recruitment methods will still need to attract people with other skills that are more in line with our new vision of customer focus.
Looking forward, we cannot afford to sustain current levels of absenteeism and staff turnover. Mullins (2002) talks about staff turnover being one of the most adverse affects of a poor recruitment strategy. Therefore we need to ensure that our recruitment plan targets the ideal calibre of staff.
6.2 Launch of graduate recruitment and training program
The need for a systematic approach to recruitment is vital when considering the launch of graduate recruitment campaign. Our previous recruitment targets have been young, specialised staff with knowledge of the outdoors, now we have to target suitable professionals with the aim of training and retaining them. Mullins (2002) talks about a minimum five-stage plan that covers the consideration of the post to be filled through to induction of suitable candidates, this would provide a foundation plan for our new recruitment campaign. As de-layering reduces promotion prospects for remaining and prospective employees, graduates need to be re-assured, in any advertising literature, that possibilities for progression still exist.
We have lost some valuable information through not collating exit interview data, this can often be the most useful information when considering staff retention strategies and behavioural issues within an organisation (Kransdorff, 1995). Perhaps a survey of current staff feelings may help recoup some of this lost data. This data can be used to aid the induction of future recruits and prevent similar issues causing resignations. Many UK organisations employ consultants who conduct staff research to aid them.
Historically, we have addressed recruitment diligently, but our HR plan has not extended to staff retention, many of our staff returned to work for our competitors. Examples of retention strategies we may use are listed below.
- Offering of professional qualifications
- Provision of goals to captivate employees and promote initiative
- Reward and bonus schemes (simplify)
Consideration of these will help prevent staff turnover problems such as those we are encountering now and hindering our UK operation.
We have to ensure that our remaining and future human resource is best organised to achieve our corporate goals efficiently and effectively. Atkinson’s (in Mullins, 2002) model of a flexible workforce would correlate with our new objectives and elements that this report considers, fit neatly into his idea i.e. part time staff, outsourcing and delayed recruitment.
6.3 Refocus of business on quality service
A vision is a statement to illustrate the desired future position of an organisation (Johnson and Scholes, 1999). In retail, service is often the only distinguishing feature between competitors and so it is vital that Stores ‘r’ us vision for the millennium includes an element of customer satisfaction and even, as Gilbert (1999) talks about, customer delight. A mission statement needs to be adopted by all strategic levels of our organisation and bred into the whole cultural web; involvement needs to be at all levels.
Gilbert (1999) believes that it is only the human resource of an organisation that can deliver this. This places satisfaction of our customer firmly in the hands of the HR department and the adaptation of our recruitment and training plan.
Expanding on the idea of a flexible organisation, Peters (1998) talks about “hiring for attitude, train for skill. Hiring for intelligence, train for whatever. Hiring for talent, train for whatever.” It is this that best illustrates where we have been and where we need to go to recruit staff that we can train and develop to meet our standards of unrivalled customer satisfaction. Peters (1998) presents his contemporary approach of “hire, reward, and promote convivial, customer obsessed folks!” A good example of this would be Games Workshop, due to all the staff are obsessed with the products they sell, so when the consumer asks about a product they will get more of a passionate view of the product and all details of the product due to the employee wants to give this information.
Further consideration of Atkinson, and expanding his ideas to reflect the modern business environment, could enable movement of multi-skilled staff between the two main functions of Stores ‘r’ us, posing a more efficient solution to short term job allocation.
Taking this further, job rotation could help solve boredom, this anti-demarcation would also lead to better information sharing and increase the shelf life of a part time member of staff. In some respects, Stores ‘r’ us operation also resonates with Handy’s Shamrock Organisation model (in Mullins, 2002). Our web activities hand over the information searching stage to the customer and this could be expanded further by enabling the customers to read information in store without the need to interact with members of staff at all e.g. information leaflets at point of sale. The biggest benefit here for Stores ‘r’ us would be accurate allocation of resources to best concentrate on customers and their needs.
The HR plan needs to address the fact that we are fighting with competitors to attract staff and management that are capable of delivering the levels of customer satisfaction we will be demanding.
6.4 European Aspects
Including this European element in our three step plan would serve a number of benefits: (Mercado et al, 2001)
- Enhancement of supply chain relationships with neighbouring countries e.g. future suppliers.
- Encourage cultural diversity within our operations.
- Take advantage of EU regulations enabling recruitment of EU member state employees, widening our target recruitment range.
- Utilisation of different methods and approaches to job design that differ greatly in other countries and offer us subsequent competitive advantage.
7.0 Timings, Costs for Solutions
Breakdown of 5 year plan for different stages of improvement each year will be broken down into two bullet points with relevant tasks and costs explained.
Streamlining of range and reduction in need for specialist staff
1. > Research to see what companies would be interested in taking over
some of our operations, looking at history and past performances. This
process should be free however may just be wages of staff we use for
the research. (admin costs)
> Approach companies and highlight the fact that we will be supplying
them with their current goods all they really have to do is run that part of
the business applying their logo if necessary. By end of approaches
hopefully have company to move in for trial year. (Company financed)
2. > Review and update board on company progress and evaluate whether to
extend or cancel agreement
3. > Review and update board on company progress (admin costs)
4. > Review and update board on company progress (admin costs)
5. > Review and update board on company progress (admin costs)
Launch of graduate recruitment and training program
1. > Firstly assess current staff training and development different aspects of
the business that they will be interested for the next year. (admin costs)
> Access current graduate recruitment schemes and configure marketing
our company in them ensuring to make the job role an promotion with the
company alluring for the second year (£10,000)
2. >Implement training (graduates and staff) for first half of a year allows
flexibility for training may need to hire extra part timers to cover.
(£50,000 PA)
> Review training and see whether any further training is needed
3. >Implement training (graduates and staff) for first half of a year allows
flexibility for training may need to hire extra part timers to cover.
(£50,000 PA)
> Review training and see whether any further training is needed
4. >Implement training (graduates and staff) for first half of a year allows
flexibility for training may need to hire extra part timers to cover.
(£50,000 PA)
> Review training and see whether any further training is needed
5. >Implement training (graduates and staff) for first half of a year allows
flexibility for training may need to hire extra part timers to cover.
(£50,000 PA)
> Review training and see whether any further training is needed
Refocus of business on quality service
1. > This should be starting after first few sessions of training allow employees
to have some empowerment and allow to bond and work in teams and
research BPR within Stores ‘r’ us
>Initiate BPR
2. >Move employees on to specific consumers i.e., targeting and sales to
particular important consumers.
>Review BPR and Targets for staff
3. > Entail more support to empowerment and then on just review targets with
regular meetings
4. > Review
> Review
5. > Review
> Review
7.1 Gantt Chart for Solutions
8.0 Conclusion
-
Recruitment in the future cannot be a one off action if we are trying to resolve some of the problems we have encountered. We need to adapt our overall human plan to ensure that people are selected for their potential to develop and to contribute to new ideas. (Mullins, 2002)
- Training could be introduced to continue the development of existing staff and provide a valuable retention strategy that offers us a point of difference to our competitors.
- This report also suggests that the Bonus scheme needs to be simplified and based on satisfaction of our consumers. I.e. based on customer complaints measured by mystery shoppers or by customer research by an outside agency.
- Appraisals should be introduced at all levels to ensure cultural integration of employees and to ensure that Stores ‘r’ us has management succession plans.
- A framework for strategic change needs to be implemented to ensure the smooth transition of change and consideration of employee’s views.
- To consider the feasibility of recruiting older staff and consumer obsessed folks in our stores as an alternative source of staff.
- A planned and timed change towards a new leadership style that will address the needs of all affected by change that leaders may implement.
- The report suggests a move away from the classical approaches to leadership evident within Stores ‘r’ us. We need to develop our management to become more front line in their approach as opposed to traditional bureaucratic foremanship.
9.0 References
Armstrong, M. (1986) A Handbook of Management Techniques. Kogan Page. London, UK.
Bennett R., (1994) ‘Organisational Behaviour’, Second Edition, M&E Handbook series.
Blau P., &Scott. W, (1996)- Mullins L., (1999) ‘Management and Organisational Behaviour’, Fifth Edition, Pitman publications.
Browell, S. & Ivers, R. (1998) Part-time employees in food retailing. Managing Service, Quality 8:4, 281-93.
Jobber, D. (1998) Principles and Practice of Marketing, 2nd Edition, , McGraw Hill.
Deming, W. E. (1986) Out of the Crisis. MIT Press. Massachusetts, USA.
Lancaster, G. & Massingham, L. (1988) Essentials of Marketing, First Edition, McGraw Hill.
Gilbert, D. (1999) Retail Marketing Management. FT, Prentice Hall. Harlow.
Hersey, P., Blanchard, K. H. & Johnson, D. E. (1993) Management of Organisational, Behaviour. 6th Edtn. Prentice Hall International. New Jersey.
Johnson, G. & Scholes, K. (1999) Exploring Corporate Strategy. 5th Edtn. FT Prentice Hall. London.
Kransdorff, A. (1995) Exit interviews as an induction tool. Management Development , Review. 8:2, 37-40.
Mercado, S., Welford, R. & Prescott, K. (2001) European Business. 4th Edtn. FT Prentice Hall. Harlow.
Mullins, L. J. (2002) Management and Organisational Behaviour. 6th Edtn. Prentice Hall. Harlow. 264-265.
Peters, T. (1997) The Circle of Innovation. Hodder and Stoughton. London.
