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Discrimination of Single Adults in the Adoption Process: An Interdisciplinary Approach

Introduction

Even though it is legal in all 50 states for a single adult to adopt a child, there is still a negative attitude on placing adoptee children with single adults in the adoption process. This problem exists due to the fact that millions of children remain in the adoption system waiting to be adopted, despite the fact that there are numerous suitable single adults wanting to adopt these children. Since the adoption process is made more difficult for single adults due to discrimination, many children remain without a home.

There are a large amount of willing single adults in the U.S. that are more than willing to adopt, love and care for the unwanted children in the adoption system. The adoption process is made more difficult for single adults because there is still the common belief that “two heads are better than one”, and that children need to be placed in two parent homes rather than with single adults. If more children in the adoption system can be placed with eligible and loving single adults, then they will have a better chance of having a more stable and successful life.

The discrimination that single parents experience when attempting to adopt an unwanted child requires multiple perspectives in order to be fully discussed. The reason that this is an interdisciplinary problem is because the discrimination of single adults in the adoption process is “too broad and complex to be dealt with adequately by a single discipline or profession (Repko, 2005).

The unwanted children in the adoption system are a huge societal problem that needs to be addressed. It is especially a problem when there a people out there that want to take care of these children. An interdisciplinary approach also needs to be taken because there is not one area or subject that can provide a sufficient solution to this social problem.

The first discipline that will give us a better understanding of this complex social problem would be the Sociology. According to the Journal of the American Planning Association, the structure of family has changed over the last 40 years due to several factors such as, the rising divorce rate, the increase in cohabitating couples and rising unemployment rates.

The nuclear family is no longer the norm and many families are headed by single parents. These factors alone should make the adoption process fair and more acceptable when it comes to single adult homes versus two-parent homes.

The next discipline that can give us a better perspective on the discrimination of single adults in the adoption process would be Economics. If single adults were considered as equal as two parent families in the adoption process then more children can be put into more homes and the financial burden on the state will be greatly reduced. According to the U.S. Department of Labor it is estimated that it cost $124,000- $170,000 to raise a child from birth to age 18 depending on the child.

According to the National Council for Adoption (NCFA), as of 1997 about 100,000 children were in need of a home. That is approximately 2 billion dollars that the government has to pay to care for these unwanted children. If more single adults were allowed to adopt, then that cost can be greatly reduced.

The third discipline that will help in addressing this problem will be Psychology. Children in need of adoption will have a better chance of psychologically wellbeing if they are out in a stable home, even if it is the home of a single adult, rather than them staying in the foster care system waiting on a two-parent home. There is this common belief that “two heads are better than one” when it comes to raising a child, but that may not necessarily be true. A child may have just as equal as a chance of psychological wellbeing in a single adult home as they would in a two-parent home.

Since the very beginning with the very first adoption laws, there have been laws in most states that allow single parents to adopt according to the American Adoption Project. With single parents being eligible to adopt legally there was a negative attitude geared towards single adults in the adoption process especially at the beginning of the twentieth century.

During this time period it was stigmatic to be a single parent whether the child was born out of wedlock or if a single adult was attempting to adopt. According to The Adoption History Project it wasn’t until 1965 that the Los Angeles Bureau of Adoptions made the first organized effort to enlist single parents to adopt children. (www.uoregon.edu/~adoption/topics/singleparentadoptions.htm).

Also according to The Adoption History Project, not only has adoption by single adults has been a growing trend since the 1970’s but approximately one-third of children adopted from the public foster care system and one-quarter of all children with special needs are adopted by single individuals today, but many fewer single adults adopt fewer singles adopt healthy infants domestically or internationally.

The purpose of this paper is to bring to light the ongoing bias that occurs against the numerous amounts of single adults pursuing adoption and hopefully bring an end to the bias against the single adults who want to nurture and provide a loving home for the unwanted children in the foster care system. With 89.6 million singles heading over half of America’s households, according to the 2006 US Census, there should be more have just as equal of an opportunity to adopt a child in need of a home as anyone else.

Background

Discrimination of single adults in the adoption process has a negative impact not only on the children that are in dire need of stable and loving homes, but discrimination of single adults in the adoption process also has a negative impact on the single, potential parents that are ready and willing to provide a home for children that are unwanted by the rest of society. The problem with discriminating against single adults in the adoption process not only alienates a major population in America, but the children in need have a decreased chance at a stable home and end up waiting in the system if no one else adopts them.

As of 2005 there were over 513,000 children in the U.S. that were in some form of foster care. Of those 513,000 children that were in foster care, 114,000, over half being male, were waiting to be adopted; meaning the parental rights of their biological parents had been terminated. Almost 700 of these children were runaways, and the rest were divided amongst government institutions, and foster homes. 23% of the children that were waiting to be adopted had been waiting in the foster care system since they were infants. (Adoption and Foster Care Analysis and Reporting System, 2005) With two-parent homes being the preference for an adoptee rather over single parents, many of these children age out of the adoption system without ever being placed in a permanent home.

Nearly 20,000 children each year “aged out” of the foster care system or become a legal adults when they turn 18 and are no longer in the care of the foster care system. With these children coming from abusive families, without knowing where they came from at all or without the stability that they need as a child, they can end up becoming unstable adults which can have a negative impact on society. They may not get the help that they need to overcome their unfortunate circumstance, and therefore more likely not to experience stable adulthood also. According to a study conducted on foster children aged out of the system, Aging Out of the Foster Care System: Challenges and Opportunities for the State of Michigan:

Young adults out of foster care are 51 percent more likely to be unemployed, 27 percent more likely to be incarcerated, and 42 percent more likely to be teenage parents, and 25 percent more likely to be homeless. Within four years, 60 percent of them will have had a child (Anderson, 2003)

With the rising numbers of children in the foster care system, the problem of youth ageing out of the system and not succeeding in life will only become worse if nothing is done about it (Anderson, 2003). With them being at a disadvantage during childhood and growing up to a disadvantage in adulthood, these factors can a huge negative impact on society. They may need to be placed on welfare due their higher chance of being unemployed, which will cost the government and taxpayers even more money in addition to the cost of raising them as children.

It also cost money to have them in prison, and support them if they become teenage parents. Making the adoption process fair for single adults increases the likelihood of giving more children in foster care a better childhood, a chance at a successful adulthood, and easing the financial burden on the U.S. Government and its taxpayers.

Giving qualified single adults the opportunity to give these children a better future and loving home and have a positive impact on all of society. With more stable adults coming from stable homes, this decreases the chances of unemployment, teenage pregnancy, and imprisonment.

Imagine growing up in an abusive household or being given up as a baby and not knowing where you came from and being placed in foster care or adoption facility. You may be placed in and out of different foster families throughout your life, but never the permanent and loving home that you need. Some of the foster families you have lived with may have been sufficient, other foster homes have had abusive foster parents, or other children in their care may have abused you also.

You eventually turn 18, a legal adult, and are told to gather all of your belongings so that you can leave. Imagine being forced out of the only home you knew, without knowing a stable home or being taught the basic skills of surviving in the everyday world. This process happens to over 20,000 adults coming out of the foster care system all over the U.S.

It is often wondered why these single adults would want to tie themselves down with children, let alone someone else’s child. It is also wondered why risk adopting a child that comes from an abusive home and has a risk of mental health problems, or why go through with the difficult process as a single adult by competing with two-parent families to adopt a child.

Single adults may be single by no fault of their own or they may choose to be single by choice. Either way, a single adult have the same needs and urges to nurture a child so they pursue parenthood just like any other adult. Single adults that pursue adoption want to love and provide a home for the unwanted children in foster care, even the ones with special needs. It is estimated that 25% of the adoption of children with special needs, are adopted by single adults (Prowler, 1990).

Not only do single adults have to endure negativity to adopt a child from adoption agencies, they may endure criticism from the people that are closest to them. Family and friends of these single adults that are attempting to adopt can be discouraging by telling them to get married first or by telling them that they cannot raise a child on their own.

For many singles, family and friends maybe the biggest obstacle that you have to overcome before even beginning adoption procedures (Prowler, 1990). She also states that single men may have it even tougher when it comes to overcoming obstacles. Their motives are highly questioned and they may get asked intimate questions about their sexuality and their reasoning behind wanting to adopt a child as a single man.

The disciplines that are used to explain this complex, real world problem are Sociology, Economics, and Psychology. Sociology is one of the most important disciplines that will be used to address the problem of discrimination of single adults in the adoption process because the family structure in America has drastically changed the this discipline helps to address this fact. Sociology not only deals with the individual, it deals with family structure also.

The next discipline that is used to address this complex issue would be Economics. Not allowing eligible single adults adopt fairly is hurting the American society financially, and the Economic discipline helps to address this issue. Sociology and Economics are discussed first because they are the more important of all three of the disciplines that are discussed and they have the biggest impact on the groups that are being discussed.

Although Sociology and Economics are the more important disciplines, the complex problem of the discrimination of single adults in the adoption process cannot be fully addressed without discussing the discipline of Psychology, which discusses the mental well-being of the children that are in the foster care system. In order to have a better understanding of the complex issue of discrimination of single adults in the adoption process, we must be able to make use of the interdisciplinary process in order to have a good understanding of this issue.

For this interdisciplinary problem , of the different models that can be used to address the problem, the comprehensive model will be used by giving the information, facts, and conclusion from each discipline in order to fully address the complex problem of discrimination against single adults in the adoption process (Repko, 2005).

References

U.S. Singles: The New Nuclear Family. (2007, May 30). Marketing Charts. Retrieved

February 9, 2008, from http://www.marketingcharts.com/television/us-singles-the-new-nuclear-family-490.

Ellewood, D. (1993). The Changing Structure of American Families. Journal of the

American Planning Association (27) 1, 45-47. Retrieved February 14, 2007, from

Academic Search Complete Database.

Economics

Anderson, G. (2003) Aging Out of the Foster Care System: Challenges and

Opportunities for the State of Michigan. http://www.ippsr.msu.edu/Publications/ARFosterCare.pdf.

Psychology

Additional Sources

Repko, A. (2005). Interdisciplinary Practice: A Student Guide to Research and Writing. Boston, MA: Pearson Custom Publishing.

Prowler, M (1990). Single Parent Adoption: What You Need to Know. National Adoption Center. Retrieved January 26, 2008, http://library.adoption.com/single-parent-

Adoption.

Adoption and Foster Care Analysis and Reporting System. (2005) The AFCARS Report.

www.acf.hhs.gov/programs/cb.

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In the 18th-19th centuries, industrialisation caused some serious changes in the lives of people (Knight, 2009). In the UK, for instance, industrialisation significantly decreased the schools’ provision of outdoor activities. However, such educators as Friedrich Froebel, Margaret McMillan and Maria Montessori contributed much to the revival of interest in outdoor play. Due to their efforts, the outdoor play provision occupies a crucial place in a contemporary early years setting. This essay analyses the issue of outdoor play in an early years setting. It will start with the definition of the concept of outdoor play and will proceed with the discussion of the first early-years practitioners who accentuated the need to integrate outdoor play into the curriculum. The analysis will then discuss in more detail the significance and use of outdoor play in an early years setting, juxtaposing theoretical and empirical evidence. Finally, the essay will identify the challenges to the successful provision of outdoor play in an early years setting.

In view of the fact that children perceive and interact with the world using different senses, it is essential for early years practitioners to use the methods which provide children with an opportunity to learn through these senses (Ouvry, 2000). Play is especially effective for learning because play evokes positive feelings in children and thus motivates them to learn (Ouvry, 2000). According to Johnston and Nahmad-Williams (2014), it is rather difficult to understand what constitutes play within an early years setting because educators and researchers cannot agree on whether to consider structured play (e.g. play activities developed by early years practitioners) as play. Johnston and Nahmad-Williams (2014, p.273) define outdoor play as “a carefully planned outdoor environment that covers the six areas of learning”. These six areas include: 1) physical development; 2) creative development; 3) social, personal, and emotional development; 4) understanding of the world; 5) literacy, language, and communication; 6) reasoning, problem solving, and numeracy (DCSF, 2008). In contemporary early years settings, two types of outdoor play are used: free play and structured play (Johnston and Nahmad-Williams, 2014). Free play is initiated by children: in free play, children choose the resources and materials to play with, although early years practitioners are responsible for preparing the materials. In free play, early years practitioners do not control play; however, they supervise children and provide necessary support. In this regard, free play reinforces children’s independence and their interactions with each other (Johnston and Nahmad-Williams, 2014). In structured play, it is an early years practitioner who chooses the resources and materials and who prepares specific tasks for children to complete (Johnston and Nahmad-Williams, 2014). Although structured play activities are created taking into account children’s interests and needs, structured play is controlled by an early years practitioner who ensures that specific learning outcomes are met.

Friedrich Froebel (1782-1852) was one of the first advocates of outdoor play in an early years setting (Riddall-Leech, 2002; Knight, 2009). According to Froebel, outdoor play contributes to the development of children’s imagination which is essential for successful learning and healthy growth. It was Froebel who opened a kindergarten in Germany to integrate the outdoor play provision. A significant focus in this provision was put on imaginative play and play with wooden blocks (Tassoni, 2007). In contrast to Froebel, Maria Montessori (1870-1952) did not consider imaginative play as crucial for children’s development. A doctor and educator who mainly worked with children with specific learning needs and who opened Children’s Houses for working class children, Montessori stimulated young children to actively participate in real life outdoor activities and thus acquire knowledge and develop diverse skills (Tassoni, 2007). She strongly believed that the best way for children to learn was through their interactions with the environment. Montessori put a particular emphasis on structured play, endowing children with constructive play materials and intentionally designed equipment to facilitate their learning (Tassoni, 2007).

However, according to Montessori philosophy, early years practitioners are not allowed to interfere into children’s play. In this regard, children learn to develop decision-making skills, independent thinking, and confidence through outdoor play activities. Many contemporary early years settings are organised, drawing on Montessori’s ideas of structured outdoor play environment (Tassoni, 2007). Margaret McMillan (1860-1931), a social reformer who worked with children from poor families, significantly highlighted the value of outdoor play (Knight, 2009; Ouvry, 2000). In the viewpoint of McMillan, outdoor play is essential for the healthy development of children. She especially emphasised such aspects of outdoor play as fresh air and movement. McMillan contributed much to the spread of a play-centred approach by opening several outdoor nurseries (Knight, 2009). Her first nursery school was opened in Deptford and was organised as a garden “with children flowing freely between inside and out” (Ouvry, 2000, p.5). For McMillan, a professionally structured outdoor setting satisfied all learning needs of children. One of McMillan’s major requirements towards a professionally structured outdoor setting was to create “a provocative challenging environment” (Tovey, 2010, p.79). It is in such a challenging environment that children acquire rich and diverse experience and thus uncover their true identities (Garrick, 2009). It is in such a challenging environment that children engage in adventurous and creative activities and acquire understanding of the natural world. This environment motivates children to learn.

Drawing on the ideas of early years practitioners on outdoor play, contemporary researchers and authors also widely discuss the significance of outdoor play in an early years setting. For instance, Garrick (2009) acknowledges that outdoor play significantly reinforces children’s physical development. Baldock (2001) accentuates the ability of outdoor play to shape children’s spatial skills and decision-making skills due to the acquired independence. In her action research, Nind (2003) drew the parallels between independent outdoor play and improved language competence. The findings of Nind’s (2003) study showed that children who had problems with English as a foreign language more actively engaged in communication in the outdoor play setting. Playing outdoors, they behaved in a more independent way and employed a variety of communication strategies to share their views with peers. However, Manning-Morton and Thorp (2003) and Siraj-Blatchford and Sylva (2004) point at the need to create a balance between outdoor activities planned by early years practitioners and children’s free activities. In the case of free activities, children acquire an opportunity to explore the outer world and express their selves through these activities. Planned outdoor activities are also crucial as they improve children’s cognitive skills, social skills, and creativity. In their study of early years settings, Siraj-Blatchford et al. (2002, p.8) have found that outdoor play activities are especially effective if they are based on the adult-child interaction because such interaction reinforces “sustained shared thinking, an episode in which two or more individuals ‘work together’ in an intellectual way to solve a problem, clarify a concept, evaluate activities, extend a narrative”.

Despite the discussed positive effects of outdoor play on children in an early years setting, there are some factors that prevent its successful provision. According to Garrick (2009, p.x), although UK statutory guidance recognises outdoor play as a crucial aspect of an early years curriculum, “currently there is no requirement in England to develop outdoor areas as a condition of registration”. According to UK statutory guidance, early years practitioners are recommended to use parks and similar facilities for outdoor play if early years settings lack outdoor areas (DCSF, 2008). Garrick (2009) goes further by claiming that early years settings with outdoor areas are often poorly equipped and thus do not provide many possibilities for learning. Ouvry (2000), Maynard and Waters (2007), and Johnston and Nahmad-Williams (2014) have found out that early years practitioners in English settings are often reluctant to integrate the outdoor play provision because they are too obsessed with health and safety issues. In more specific terms, they are afraid that cold and windy weather is detrimental to children’s health and thus rarely allow young children to play outdoors. The study of Ellis (2002) has brought into light the opinions of ATL (Association of Teachers and Lecturers) members on the outdoor play provision. In the viewpoints of more than 60 percent of teachers, it is difficult to integrate the outdoor play provision because of poor management and the lack of adequate support.

Unlike the UK, Scandinavian countries widely integrate the outdoor play provision which draws on Froebel philosophy (Knight, 2009). In particular, a range of Forest Schools have been opened in Denmark, Sweden, and other Scandinavian countries. In these schools, the emphasis is put on free outdoor activities, the development of social skills and creativity in children, and children’s emotional well-being (Knight, 2009). In these schools, children engage in outdoor activities in different weather conditions. In the 1990s, the early years practitioners from Bridgwater College visited the Danish Forest School and greatly admired the way children acquire their skills and knowledge (Knight, 2009). Upon their return, these early years practitioners decided to open a similar school in the UK. They found outdoor areas not far from Bridgwater College and created the outdoor play provision for early years children and children with special needs. The provision has improved children’s overall well-being and has increased children’s confidence, self-esteem, and independent thinking (Knight, 2009). Due to its great achievements in the development of young children, Bridgwater College has received the Queen’s Anniversary Prizes Award. The difference between Forest Schools in Scandinavian countries and Forest Schools in the UK is that UK early years practitioners allow children to play outdoors only in warm weather. Moreover, UK early years practitioners prefer structured play; thus, learning in these early years setting is more formal than learning in Scandinavian Forest Schools (Knight, 2009). According to Tovey (2010, p.79), children in the UK “are limited by a culture of risk aversion, risk anxiety, restrictions on children’s freedoms to play outdoors and increased regulation”. In Scandinavian countries, children possess more freedom in their outdoor play.

Some recent research provides conclusive evidence that young children prefer playing in dangerous and challenging outdoor settings. For instance, Stephenson (2003) and Sandseter (2007), who studied outdoor play in early years settings of Norway and New Zealand, revealed that children specifically chose dangerous, risky, and scary places for their outdoor play. Such places motivated children to engage in the exploration of the unknown and thus overcome their fears. More importantly, Stephenson (2003) and Sandseter (2007) found that each time children played, they intentionally increased risk. Tovey (2010, p.80) specifies that the findings of Stephenson (2003) and Sandseter (2007) suggest that “it is not just the feelings of joy that motivate children but the desire to experience the borderlines of fear and exhilaration”. Taking into account these crucial findings, it is obvious that instead of creating a safe outdoor environment for young children, it is more effective to create a significantly challenging environment in which children are able to uncover all their potential. While acknowledging the importance of safety issues, Sandseter (2007, p.104) nevertheless proves that early years practitioners should pay equal attention to “the benefits of risky play”. Drawing on the findings of Stephenson (2003) and Sandseter (2007), UK policy makers and early years practitioners should reconsider their views on the outdoor play provision and gradually shift towards the creation of the environment which benefits children rather than hinders their learning and overall development.

As the essay has clearly shown, both first early years practitioners and contemporary researchers have accentuated the significance of outdoor play in the development of children. Outdoor play is thought to positively affect children’s spatial skills, social skills, decision-making skills, language competence, and physical health. On the basis of the acquired evidence, it is obvious that the juxtaposition of structured and free outdoor activities is especially effective. Unfortunately, as the analysis has revealed, there are some serious obstacles to the successful integration of the outdoor play provision in the UK, including the lack of outdoor areas in early years settings, the educators’ obsession with safety and health issues, inadequate support and poor management. Scandinavian countries, however, have significant experience in the integration of the outdoor play provision. Recently, UK early years practitioners have borrowed this experience and have opened several Forest Schools in which children successfully learn through outdoor play.

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Maynard, T. & Waters, J. (2007). Learning in the outdoor environment: A missed opportunity. Early Years, 27 (3), 255-265.

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Siraj-Blatchford, I., Sylva, K., Muttock, S., Gilden, R., & Bell, D. (2002). Researching effective pedagogy in the early years. London: Institute of Education.

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Tovey, H. (2010). Playing on the edge: Perceptions of risk and danger in outdoor play. In: P. Broadhead, J. Howard, & E. Wood (Eds.), Play and learning in the early years: From research to practice (pp.79-94). London: Sage.

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What are the application differences of a Polyurethane dispersion coating compared to a solvent based polyurethane and what are the advantages upon each other?

A polyurethane coating is a versatile product with many advantages upon other coating systems. A major disadvantage of classical, solvent based polyurethane coatings, are the volatile organic compounds (VOCs) present in the wet state. New regulations force formulators to keep the VOC content below 350 g/l. Recent developments dealt with this problem. Developers have succeeded in making a polyurethane dispersion in water, eliminating most of the volatile organic solvents.

However, the costs of a so called water borne polyurethane are higher than that of a solvent based polyurethane. A question that may arise is whether or not the dispersed polyurethane performs the same way as the classical, solvent based, polyurethanes and whether or not it is worth the money.

Besides possible differences in performance, processing techniques may differ. The goal of this investigation is to give an overview of the differences between the performance, processing and cost between a polyurethane dispersion and solvent based polyurethanes. The major formulations of both types will be summarized and compared to find the best coating.

The chemistry of PU

A polyurethane (PU) is a polycondensation reaction product of an isocyanate with a monomer. The isocyanate must have at least two functional groups and the monomer at least two alcohol groups. The catalyst for the reaction can be a tertiary amine like dimethylcyclohexylamine or organic metallic materials like dibutyltin dilaturate. The condensation of a cyanate with a hydroxyl end-group results in a urethane linkage. Both the isocyanate and the hydroxyl alcohol (diol) need to be bi-functional to form polyurethane. The reaction mechanism of the formation of PU catalyzed by a tertiary amine is given by:

Figure 1: reaction mechanism of the catalyzed condensation reaction of PU by a tertiary amine

Many isocyanates can be used but MDI, aliphatics such as H12MDI, HDI, IPDI and TDI are the most widely used among others. MDI consumption exceed 45% of the total amount of isocyanates used, closely followed by aliphatics (35-40%) and TDI (15%). Whilst the reactivity of the isocyanate determents the rate of the reaction, the main properties of the PU is devised from the diol.

As with the choice of an isocyanate, a wide variety of diols can be used. EG, BDO, DEG, glycerin and TMP are all useable. For hard and weatherable coatings acrylic and polyester polyols tend to be preferred. Polyols with a low molecular weight as the main reactant produces polymer chains with more urethane groups hence a harder and stiff polymer is formed. High molecular weight polyols however produces a more flexible polymer. Also a low functionality long-chain polyol produces soft and flexible PU while short-chain polyols with high functionality makes more cross-linked products which are more rigid.

Different types of PU formulations

PU coatings can be divided into two main groups, namely into 1 and 2 pack systems (1k and 2k). The 1k system basically contains a dissolved, fully reacted PU whilst a 2k system can contain partially reacted PU and unreacted monomers. Both systems can be solvent-based or waterborne. Furthermore there are several curing (or drying) systems known, each resulting in different performing coatings.

Two-component or 2k

As mentioned briefly 2k systems are reactive and the primary reaction is of isocyanate with polyols. The main disadvantage of a 2k system is the pot-life. When the isocyanate is added the mixture begins to react and hardens. However, the main advantage of a reactive system is the outstanding mechanical performance. Because the PU particles react and crosslink, an endless polymer forms which is hard and chemical resistant. Two-component systems include solvent-based and waterborne formulations.

Solvent-based 2kcoatings are obtained by mixing aliphatic isocyanates with polyester polyols or blends of polyester with acrylic grades. Formulations like these cure by partially physical drying and cross-linking with the isocyanate. Solvent-based 2k formulations are mostly used in the automotive and aviation industry as a finish coating.

Waterborne 2k coatings are formulated with dispersible isocyanates and water-dispersible polyols such as polyacrylates or emulsifiable polyesters. The most commonly used isocyanate is a HDI trimer but IPDI trimers can also be used. Aromatic isocyanates cannot be used in waterborne formulations because they react dangerously with water. Dispersible isocyanates can be used as such or can, by partial reaction with a dispersible polyol, be emulsified, making it easier to mix.

However some waterborne systems still need up to 10% co-solvent to form a homogeneous finish. These formulations cure by partially physical drying and by cross-linking but can also be thermally cured at temperatures ranging from 20 EsC to 80 EsC. Waterborne 2k systems are frequently used as protective coatings in the transportation, machinery and furniture industry. Their high flexibility also makes it possible for use on polymeric and wooden surfaces.

One-component or 1k

A 1k PU coating consists of partially reacted polymers (prepolymers) which are liquid at room temperature. These prepolymers are synthesized by reacting MDI, HDI or TDI with a polyester or polyester polyols. The main advantage of a one-component system is that no mixing is required and pot life is no issue. 1k systems are storage stable with a shelf life of up to six months. However a disadvantage is that most 1k formulations are not cross-linked making them less hard and vulnerable to solvents.

1k formulations are broadly used as maintenance and repair coatings for their ease in application and mechanical behavior. They are used for painting steel constructions such as bridges and other large steel structures where corrosion protection is needed.

Solvent-based 1k coatingsare obtained through reacting aromatic or aliphatic isocyanates (MDI and IPDI) with polyesters or polyether polyols. This reaction forms high molecular weight linear PUs. Commonly used additives are chain extenders. Curing occurs by evaporation of the solvent but 1k systems can be formulated so they cure by oxidation, with moisture and even by UV-radiation.

Waterborne 1k or better known as PUDs are fully reacted polyurethane systems. The PU particles have hydrophilic groups in their backbone and are maximum one tenth of a micrometer in length, dispersed in water. This makes a both chemically and colloidal stable mixture (Figure 2). A PUD can also be formed by incorporating a surfactant.

PUDs are currently very popular because they are environmentally friendly, but still being able to perform reasonably. Because PUDs are relatively expensive they are mixed with acrylic grades to lower the material costs. However more acrylic means less hardness. 1k waterborne formulations can cure physical, by oxidation and by UV-radiation.

There are formulations at the market containing no solvent. These coatings find their application in the building sector. To obtain solvent-free formulations MDI is reacted with polyether or oil-modified polyester polyols. To obtain higher hardness chain extenders and catalysts are added to the formulation.

Drying systems

As mentioned above the way a coating cures strongly effects the final performance of the coating. The way a coating dries is dependant of its formulation. A 2k system can cure on air, by heat and under influence of UV. One-component systems can cure physically, with moisture, by oxidation, under influence of UV-radiation and by heat.

Physical drying basically means that the solvent containing the PU evaporates, leaving the PU to form a film. A major disadvantage of this way of drying is that there is no cross-linking between the PU particles. This drying mechanism affects some one component systems.

UV curing coatings can be formulated as solvent-based or waterborne and both 1k and 2k. In a UV-curing formulation the catalyst is inactive in absence of UV-radiation; this behavior is seen with a photo-initiator. When UV-radiation hits the catalyst it unblocks and becomes active and initiates the curing. A schematic representation of this process is shown in Figure 3. UV-curing coatings are predominantly used as automobile finishes as it has unmatchable hardness and gloss.

Oxidative drying is a process which is used with a special type of 1k PU coatings. So called oil-modified PUs (OMU) are synthesized through an addition reaction of isocyanate with a hydroxyl bearing, fatty acid modified ester (TDI). To obtain higher densities more isocyanate can be added but this means that more solvent is needed, as much as 550 g/l (not VOC-compliant).

Natural oils like linseed oil can be used as the diol and a mineral spirit can be used as the solvent. An OMU can be solvent- or water-based and cures by reacting with air surrounding the coating. The fatty acid groups of the oil (attached to the PU) form cross-links with each other by mean of oxidation. OMUs have better mechanical and weathering properties than unmodified, non-reactive alkyds, but reactive PU coatings are superior. OMUs are predominantly used as wood finishes for their distinctive yellowing/aging which some formulators prefer.

Moisture curing PU (MCPU) coatings are formulated with NCO-terminated PU prepolymers. The NCO groups react with atmospheric moisture which produces a amine-group. This further reacts with remaining isocyanate to form highly cross-linked urea-networks. MCPU coatings have superior hardness, strength and stiffness. Even though the coating is cross-linked a MCPU has a relatively high flexibility. Because a MCPU cures with moisture this strongly affects the storage stability.

Thermal curing formulations are based on deactivated isocyanate mixed with a polyol. This semi-one-component formulation is stable at room temperature but when heated (100-200 EsC) the deactivated isocyanate unblocks and reacts with the polyol, the same way as a reactive 2k coating. The isocyanates (aromatic or aliphatic) all have one active hydrogen. For blocking the isocyanate caprolactam is mostly used. A different way of blocking the isocyanate is creating uretidinedione or dimer links. Thermally cured coatings find their main usage on surfaces which need to withstand excessive heating and cooling cycles.

An overview of all the PU coatings with their distinctive curing system is shown in Figure 5.

Testing the coatings

To make a comparison of different types of PU coatings the performance of a coating need to be tested. Because of the broad application possibilities of PU coatings and because of the need of a wide variety of different characteristics, the comparison will be narrowed down to floor coatings. Floor coatings are tested on mar and scuff resistance, taber abrasion, chemical resistance, color and Konig hardness. Because thermal cured coatings are not applicable as flour coatings these formulations will not be used in the comparison. Moisture cured…

Mar and scuff resistance

Mar and scuff resistance or simply put resistance to marking can be measured by several methods. One of them is the pendulum method which consists of a pendulum arm with a hard-wood block attached to the end. The weighted block hits the coated panel four times and the average 20Es gloss of the coating is measured before and after the test. The results are expressed as percentage 20Es gloss retained and visual assessment of the panel (scratching and scuffing).

Taber abrasion

To test taber abrasion can be described as wear resistance. To measure abrasion resistance an arm is weighted with 1000 gram weights and attached to abrasive wheels (mostly consist of minerals). The arm makes 1000 cycles over the substrate. The initial weight of the coated substrate is compared with the weight after the test. The results are expressed in milligrams removed.

Chemical resistance

Chemical resistance is determined of dry films using eight household stains and chemicals. Test chemicals include MEK, olive oil, several cleaning chemicals, ethanol, white vinegar, water and 7% of ammonia solution. The chemicals are applied on a two-ply square towel on the test film, completely saturating the towel. The towel with the liquid is immediately covered with a watch glass. After a period of two hours the stains are removed and the panel is rinsed and dried. The impact of the chemicals on the coating is investigated immediately after the rinsing. The surface is investigated on discoloration, blistering and softening. Each chemical is rated on a scale of 1 to 10 with 10 being “no effect”.

Color

An important property to investigate of coatings is color, especially when evaluating PU coatings, because PUs tend to yellow, especially OMUs. The initial yellowness index of a coating is measured and after a period of lighting. The difference between initial and final yellowness index is also measured as the Delta E. When this value is below 1.0 the color difference is insignificant. The higher the value the more yellow the coating has become in a period of time.

Konig hardness

Konig hardness is a method used for measuring the hardness of a coating. With this method a pendulum rocks back and forth over the coated substrate. The coating will dampen the rocking motion, slowing the pendulum down. The results with the Konig hardness are expressed in seconds; the longer the pendulum rocks, the harder the coating.

Solvent-based vs. waterborne

For this comparison different formulations of each type are reviewed. Solvent-based 2k, solvent-based OMU and 2k UV are compared with waterborne OMU, 2k and a PUD/acrylic mixture. Data from sb OMU, PUD/acrylic, wb OMU and wb 2k is obtained from the article “Oil-modified urethanes for clear wood finishes: Distinction or extinction” by Richard A. Caldwell from Reichhold. Data from sb 2k, 2k UV and 100% PUD formulations are obtained from several commercially available coatings […]. Some values may differ because of the objective opinion of the investigator and the formulation.

Some values are projected as expected where data was missing. These projections include chemical resistance of sb 2k, 2k UV and 100% PUD formulations. The taber abrasion resistance – at 500 cycles – of the wb OMU coating is multiplied by a statistically calculated value, using know data from other formulations, to obtain a value with 1000 cycles.

As shown in Graph 1 a 2k UV coating has superior mechanical properties (Konig hardness and taber abrasion). This is because a 2k UV coating has a high amount of cross-linking. This can be related to the 20Es gloss of the dried film. High gloss usually means high cross-linkage. The solvent-based 2k formulations perform comparable with 2k UV coatings but are slightly less cross-linked as shown in the gloss and the hardness.

The waterborne formulations are all significantly softer but tend to be slightly more mar and scuff resistant. However the initial gloss values of these waterborne coatings are somewhat lower. It can also be found that the 1k OMU formulations perform better than most non-reactive coatings. However they tend to yellow and perform worse than reactive (2k) coatings. This shows that the oxidative cross-linking cannot be compared with the reactive cross-linking of 2k formulations. It is somewhat surprising that 100% PUD performs comparable with a wb 2k formulation. However the chemical resistance and the scuff resistance are lower showing the benefits of cross-linking.

Conclusion

If a hard coating with high gloss is wishful UV cured 2k coatings are the best choice. The best mar and scuff resistance is obtained with waterborne formulations but these show less hardness and chemical resistance. Solvent-based systems have an overall better performance than waterborne systems but VOC regulations restrict the amount of solvents used, causing a lower amount of solids possible.

This results in less cross-linking hence less hardness and chemical resistance. Even though high VOC content solvent-based coatings perform better, VOC regulations cause a shift to waterborne formulations which are increasingly performing better. During the investigation it became clear that a good comparison between different PU formulations is a nearly impossible task because of the large amount of different possible formulations of each class.

Waterborne PU coatings, when properly formulated, can meet the performance of solvent-based coatings, especially when compared with VOC-compatible solvent-based coatings but with a higher price. Eventually VOC regulations are further sharpened causing a market shift towards waterborne formulations, making them worth the money.

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The types of chemical reaction considered here are: oxidation, reduction, phosphorylation, hydrolysis, condensation, isomerization,deamination and carboxylation.

Oxidation

Oxidation involves an increase in the oxidation number ofa species. This involves the addition of oxygen or the loss of hydrogen orelectrons. Ultimately the first two can always be viewed as equivalent toloss of electrons. Oxidation always occurs together with reduction as part ofa redox reaction. The substance producing the oxidation is termed the oxidant(electron acceptor) and is concomitantly reduced. Likewise the oxidisedspecies (electron donor) can be termed the reductant. (Atkins, 1990)

There are many examples of oxidation reactions in thecatabolism of glucose. For example in the first stage of the glycolyticpathway leading from glucose to pyruvate, after the six carbon intermediatesare cleaved to generate glyceraldehyde 3-phosphate the enzyme glyceraldehydephosphate dehydrogenase catalyses the conversion of glyceraldehyde3-phosphate to 3-phosphoglycerol phosphate (utilizing the cofactor NAD andinorganic phosphate) This oxidation is the first time that reducing potentialin the form of NADH is generated in the breakdown of glucose (note the NAD iscorrespondingly reduced in the process).

Reduction

Reduction is a decrease in the oxidation number of asubstance resulting from the gain of electrons as part of a redox reaction.This is often but not necessarily associated with the loss of oxygen orhydrogen. (See oxidation above).

An example of a reduction reaction occurs in the finalstage of glycolysis under anaerobic conditions where pyruvate is reduced tolactate catalysed by the enzyme lactate dehydrogenase. The reducing potentialfor this reaction is provided by NADH and H⁺ and prevents thecells finite supply of NAD being tied up in the reduced form from reactionssuch as the oxidation example above. Again the reductant NADH is oxidised inthe process.

Phosphorylation

Phosphorylation involves the addition of a phosphate (PO4^2-)or phospho (PO3^2-) from a donor to receptor moleculeusually by a nucleophilic displacement of the phosphorus atom by a lone pairon an electronegative heteroatom (e.g. O or N). (Cox, 2004)

In the first reaction of the catabolism of glucose, theglucose molecule is phosphorylated by the high-energy phosphate compoundadenosine triphosphate (ATP) catalysed by the enzyme hexokinase. The hydroxylgroup on carbon atom 6 of the glucose nucleophilically attacks the terminalphosphate of ATP displacing a PO3^2- group, which isadded to the glucose releasing ADP. In addition to priming the molecule withenergy it keeps the glucose in the cytoplasm, as the glucose transporters arespecific for free glucose. (Cox, 2004)

Hydrolysis

Hydrolysis is the reaction of a chemical species (moleculeor ion) with water. In biological systems this usually involves addition ofthe elements of water across a chemical bond to break the bond, resulting inan OH group attached to one atom of the hydrolysed bond and an H atom addedto the other atom. This can split the molecule into two separate molecules(see example) or can break a cyclical compound into a linear structure.

The neurochemical transmitter acetylcholine is responsiblefor conduction of the motor neurone impulse across the synaptic gap. Toprevent continuation of the signal and tetanic paralysis of the muscle theacetylcholine is hydrolysed to acetate and choline by the enzymeacetylcholine esterase. This is an uncomplicated ester hydrolysis in whichwater nucleophilically attacks the carbonyl group of the acetate component ofthe ester. (Vander, 2001)

Condensation

A condensation reaction occurs when two or more reactingspecies react to form a single product and eliminate a simple molecule in theprocess. Where the simple molecule is water the condensation reaction can bethought of as the opposite of the hydrolysis reaction. Likewise the tworeacting species can be separated but on the same molecule resulting in acyclization reaction. (McNaught, 1997)

Peptide synthesis occurring on the ribosome and catalysedby its peptide synthetase activity is an example of a condensation reaction.Condensation takes place between the amino group of the added amino acid andthe carboxyl group of the growing peptide chain (activated by anaminoacyl-tRNA linkage) eliminating the elements of water. (Alberts, 1989).

Isomerization

In an isomerization reaction the product of the reactionis an isomer of the reactant. In such a reaction there is no net change inthe stoichiometry of the molecular formula between reactants and products(though intermediate steps may involve extra atoms). The isomerization can bethe result of molecular or conformational rearrangements (McNaught, 1997)

The second reaction of the glycolytic breakdown of glucoseis an example of an isomerization reaction. Glucose-6-phosphate is convertedto fructose-6-phosphate by the enzyme glucose phosphate isomerase. Thisproduces a more symmetrical molecule with a second available primary alcoholgroup for phosphorylation.

Deamination

Deamination is the removal of an amine (NH2)group from a molecule. The nitrogen is usually removed as ammonia, the extrahydrogen coming from water leaving a ketone group in place of the amine. Thisreaction also increases the resulting oxidation number of the reactingspecies and is often termed oxidative deamination. (Cox, 2004)

Oxidative deamination is an important reaction in thedegradation of amino acids especially in the liver. Glutamate, produced fromother amino acids by transamination, is converted into a-ketoglutarate and ammonia by the enzymeglutamate dehydrogenase in association with the cofactors NAD or NADP. Theammonia is ultimately excreted via the urea cycle. (Cox, 2004)

Carboxylation

Carboxylation is the addition of a carboxylate group to amolecule. This is an important method for increasing the number of carbonatoms in a synthesis. The source of the carbon is typically carbon dioxidefor example in the reaction of a carbonated grignard reagent (or thebicarbonate ion in aqueous biological systems).

The fixation of carbon dioxide by green plants is animportant example of a carboxylation reaction. In plants that use theCalvin cycle, CO2 is incorporated into 3-phosphoglycerate by theenzyme ribulose-diphosphate carboxylase. This carboxylates the five-carbonribulose sugar to produce a six-carbon intermediate, which is then hydrolysedto produce two 3 carbon molecules of 3-phosphoglycerate.

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What are the implications for a firm that does not conduct CSR?

Corporate Social Responsibility (CSR) is often mistaken for a 21st century buzz phrase when in fact it has been part of the business lexicon for decades. While some argue that the concept dates back to the Industrial Revolution, the first substantive work was written by Peter Drucker in his 1954 book The Practice of Management. Despite the passage of time, there is still no universal definition of CSR. Corporate Social Responsibility, what it is and how it is implemented, is different depending upon the country a business operates within, the regulatory system they are answerable to and even the industry within which they work. These complications aside, it is necessary to fix on the well-rounded definition of CSR in order to critically discuss the concept in this paper. The definition offered by the International Organization for Standardization will be used, as it is general in nature and applicable to most businesses, regardless their country of operation:

“Social responsibility is the responsibility of an organisation for the impacts of its decisions and activities on society and the environment, through transparent and ethical behaviour that:

contributes to sustainable development, including the health and the welfare of society

takes into account the expectations of stakeholders

is in compliance with applicable law and consistent with international norms of behaviour; and

Is integrated throughout the organization and practised in its relationships.” (International Organization for Standardization, 2010)

The one weakness in this definition is the proposition that CSR is about compliance with applicable law. In Dahlsrud’s (2008) analysis of 37 CSR definitions, he identified five critical dimensions. The first dimension is the environment and its consideration in business operations and the second is the social dimension which covers businesses taking into account their impact on society. Both of these dimensions are central to our working definition. The third dimension identified is the economic dimension which looks for a commitment to integrating CSR into business operations is also present as is the fourth dimension which related to how businesses should manage all stakeholder groups in a socially responsible manner (Dahlsrud, 2008). The final dimension, voluntariness, is what is missing from the ISO definition. Dahlsrud (2008) defines voluntariness as businesses making decisions and undertaking activities that are above what is legally required whereas the ISO definition (International Organization for Standardization, 2010) states that mere compliance is acceptable. It is argued that merely complying with the law is better described as good corporate governance and not of itself an act of corporate social responsibility (Ashley and Crowther, 2012; Benabou and Tirole, 2010).

Central to the CSR debate is the notion of how society defines the role of business, and the resulting responsibilities. The classic roles and responsibilities assigned to business are to harness capital and other resources in production, to provide employment and meaningful jobs, to conduct research, development and innovation, to provide goods and services for sale, to create wealth for shareholders, employees, customers and society at large. (Fitzgerald and Cormack, 2011) These core, growth and profit motivated responsibilities do touch on some dimensions of CSR, but comparing these to the responsibilities endowed by CSR shows the amount of change necessary to move towards a socially responsible business model.

One extreme of the CSR debate, often referred to as the neo-classical or traditional conflict approach (Redman, 2005), argues that the only social responsibility of business is to increase profits (Friedman, 1970). The other end of the spectrum is what Redman terms the “true believers” (2005, 78) approach to CSR. This is where a firm has environmental and social commitments in place that are not profit motivated. However, true corporate altruism is rare with evidence suggesting that organisations are more likely to adopt an ‘enlightened self-interest’ approach to CSR (Porter and Kramer, 2006). This is an approach that ties socially responsible activities to profit making activities (Redman, 2005).

Enlightened self-interest has been one of the driving forces behind corporate responsibility in relation to the environment and utilization of scare resources. Inputs to production, from raw products to fossil fuels, are becoming scare and businesses have needed to adapt to these changes or risk extinction (Ashley and Crowther, 2012). So while environmental impacts are now of greater concern to business, it could be argued that this is more the survival of the business than a deliberately socially responsible endeavor (Ashley and Crowther, 2012).

At the same time, society now holds greater expectations of the business community (Scherer and Palazzo, 2011). With higher levels of education (for the most part) and thus knowledge, there is less of a tendency to believe the rhetoric of business. Ashley and Crowther argue that customers are not looking for perfection of business practices, but “the do expect honesty and transparency” (2012, pg.3).

The rise and rise of social media has also created a fast and ubiquitous means for people to call businesses to account for (perceived) socially irresponsible acts (Fitzgerald and Cormack, 2011). The media also has the ability to provide focus and extensive coverage on businesses who have engaged in dubious practices (Fitzgerald and Cormack, 2011). Companies who use third world (often slave) labour are being named and shamed, and forced to reassess their supply chain practices (Ashley and Crowther, 2012).

Despite these inroads, the last decade has seen examples where self-regulation and responsible corporate behaviour have failed spectacularly (Lynch-Wood et al, 2009), causing such events as the Global Financial Crisis. Few, if any, parts of society remain unaffected by these events. The response by policy makers and legislators has been swift and punitive. The net result being greater compliance and reporting requirements across most organisations and industries. Now there exists little distinction between what would have been considered a CSR organisation and one that practices good corporate governance (Money and Scheper, 2007; Mason and Simmonds, 2014).

It would be disingenuous to deny that the CSR movement has not had a positive impact on the business community. However, the overwhelming amount of progress in socially responsible action has been sparked by the depletion of natural resources and the need for businesses to diversify operations, changes in society and societal expectations of business and government legislative response to corporate failings. Being socially responsible is now just good business, an essential component of operational and strategic decision making (Porter and Kramer, 2006). Whichever way it is has been achieved, there are consequences that still exist for organisation that do not conduct CSR.

Both the perception and reality of company performance can be enhanced by adopting CSR. Some pundits argue the payoff is long term, others argue that there is no payoff at all (McWilliams et al, 2006). Above profitability, there are a number of risks organisations face if they do not engage in CSR behaviour. It should be noted that the following is not an exhaustive list, merely the ones with the greatest potential impact.

Reputational damage has always been a key outcome of socially irresponsible business activities (Walker and Dyck, 2014). Reputation can be defined as the aggregate perception of an organisations internal and external stakeholders (Walker and Dyck, 2014) and represents a firm’s single greatest intangible asset. Once reputation is lost, or at least impacted significantly, it is difficult to get back. Changes to the speed with which reputation damaging information can spread is also of concern to socially irresponsible organisations as it is much more difficult to hide or deny wrong doing (Ashley and Crowther, 2012).Further to this, Walker and Dyck’s (2014) research showed a positive correlation between a firm’s reputation and those with corporate social responsibility.

Employee engagement and attracting talent appears to go hand in hand with socially responsible corporate practices (Bhattacharya et al., 2008). The global economy has been described as a ‘knowledge economy’ (Fitzgerald and Cormack, 2011), with the greatest corporate assets residing in the intellectual endeavor of staff. Bhattacharya et al. (2008) also argue that CSR is a way for a firm to show their values in practice and thereby emotionally engaging employees to achieve all of the organisation’s goals.

Engaged staff, at all levels of the business, are crucial to complete in a market place that is increasingly saturated by products and services. Differentiating the offering of one business from another (Servaes and Tamayo 2013) is becoming more difficult to achieve, but CSR related activities provide a point of product differentiation. Environmentally sounds goods (such as recyclable plastics) and Fairtrade food stuffs (such as coffee) are two examples of familiar products that have been differentiated by organisations acting in a more socially responsible manner. Firms who fail to innovate in this way will become followers instead of leaders, and potentially impact their profitability (Blowfield and Murray, 2008).

Smarter product and service development needs to start with managers and leaders thinking outside their traditional product and service offerings (Blowfield and Murray, 2008). The move to a more socially responsible business imperative has opened up new markets and opportunities within which an organisation can expand and prosper (Porter and Kramer, 2006). Those organisations closed to CSR will miss these opportunities and run the risk of being left behind. Even if opportunities are identified, access to capital may become increasingly difficult for non-CSR firms.

With the rise of Socially Responsible Investment, organisations that do not engage in CSR can limit their access to capital and hence, their growth potential (Porter and Kramer, 2006). Furthermore, organisations run the risk of greater regulatory intervention if they do not change to more socially responsible ways.

The recent trend towards regulation of business activities has highlighted the fact that if governments and policy makers identify failures in self-regulation, they are more than willing to step in and regulate business behaviour (Lynch-Wood et al, 2009). Legislation changes and compliance requirements are both restrictive and costly to organisations. If organisations fail to go above and beyond the current compliance requirements, they risk more being imposed on their activities (Benabou and Tirole, 2010).

These risks all have the potential to significantly impact an organisations profitability and in extreme cases, long-term survival. These considerations also should be cause enough for businesses to reconsider their default position on CSR initiatives. Whatever the short-comings of the CSR movement, and the ideologically motivated debates about definition, society and the global economy are radically changed. Being socially responsible is now the only way to do business.

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Introduction

It is not unusual for employees to approach organisational change with the mentality they inherited from their social-cultural environment. The impetus for instant change is not obvious at all. Behavioural change does not happen because it is suggested, recommended, or enforced by a manager (or anyone else). Change happens because one sees value and personal benefit in making the change. As a result, it is imperative that change agents understand the power they exert in attempting to implement organisational change initiatives. Change agents are catalysts for workplace behavior modification. They devise motivational plans that trigger the inspiration for employees to follow agent directives. Hence, it is not enough for management teams to think of change in terms of organizational requirements. Managers who seek the expertise of change agents are wise in so doing. Expert change agents are knowledgeable in understanding potential road blocks that inhibit employees from making the necessary adaptations to new initiatives. Social and cultural environments contribute towards the complexity of behavior modification. This paper presents a transformation initiative whereby the change agents utilise effective communication as a tool to create a vision and the credibility necessary to inspire voluntary participation in behavioural change.

Creating Vision and Credibility Through Effective Communication

Effective communication is instrumental to the success of organisation change initiatives. When done intentionally well the emotional rewards are satisfactory. But, when it fails to impart the messages necessary to complete projects the results can be catastrophic (Hunt, 2014). Misunderstandings, antipathy, and a host of other negative emotions could seriously damage business relationships. Good communication contributes towards operational and process efficiencies (Hunt, 2014). Therefore, it follows that the value of using effective communication as a tool can never be over-emphasised or underrated for the impact it makes on successful outcomes.

This paper presents the communication process undertaken by a primary change agent with a twenty manager team. The goal is to develop a change management plan that transitions the organisation from a traditional work-group to a team-based culture. Discussions include the channels of communication, traditional work-groups versus team based organisations, the role of the primary change agent, the communication team, assumptions made, the transition process, change initiative communication, team credibility, faith creation, and answering tough questions. The paper concludes with a recapitulation of the content.

Traditional Working Groups Versus Team Based Organisations

This section distinguishes working groups from team-based organisations. They do not function in the same capacity, hence, the necessity to differentiate them here. Traditional working groups (WG) within organisations function independently. Examples of traditional WGs are accounting and human resource departments or new product divisions. These departments work independent of each other. Work is individualised (Zaharia, Dogaru, & Boaja, 2014).

In contrast, team-based organisations focus on different skills and competencies that come together to meet a common goal. Teams are not limited to functional requirements. Teams use a cross-functional composition to work in a common goal scenario. Individuals do not function independent of the group goals. Everyone working together achieve the goal (Zaharia, Dogaru, & Boaja, 2014).

Primary Change Agent Leadership Role

Buono and Subbiah (2014) suggest that primary change agents (PCA) are effective to the extent that they understand the cultural environment, are able to identify influential key players, and possess the ability to provide mentorship, as well as, positive role modeling. Buono and Subbiah (2014) suggest further that PCAS are influencers. They motivate and inspire change in others. Additionally, PCAS have internal systems knowledge and can troubleshoot problems as they arise.

Buono and Subbiah (2014) propose an example of PCA as someone who is able to identify subtle disturbances that could potentially interfere with change processes. A manager who is perceptive, tactful, and diplomatic is considered an effective PCA. Another example is a manager who understands the business and how it acquires revenue from beginning to end. Still another example is a manager who can create partnerships and alliances throughout the organisation (Tan & Kaufman, 2015).

The Communication Team

Lira, Ripoll, Peiro, and Zornoza (2013) suggest that team popularity has increased within the past decade. They assert further that teams are effective only to the extent that they can complete project related tasks on time using various modern day technologies, such as, social networks, and computerised mediums. Teams must become efficient in developing effective interpersonal relationships. Lira et al. (2013) recommend that Human Resources facilitate ongoing leadership development training to increase group efficacy and competency.

The communication team serves to facilitate the interactions between management and the workforce. Their plans will include educatory processes that will help the workforce make sense of the transition process. Bolman and Deal (2008) advise on the complexity of organisation change and the ambiguities that are ever present in the communicative process. They recommend that the managers reflect upon their images to become aware of potential erroneous perspectives. They encourage managers to be intuitive and consider that failure is one component of success.

Context Assumptions

Presented here are the assumptions made concerning the PCA. The PCA is experienced in matters of effective organisational change. The PCA understands the communication process. The PCA is competent in leadership roles. Finally, the PCA is very well versed in team dynamics and organisation political processes.

The following assumptions are made within the context of the subject matter contained herein: the Organisation Change Team (OCT; twenty managers) assigned to this project is positive and enthusiastic about this change initiative. They exude a spirit of participation with proactive attitudes. They view this project from a servant leadership perspective. They expect challenges and understand that every project has unforeseen circumstances that must be addressed ad-hoc (Kotter & Cohen, 2002).

Transitioning To A Team-Based Environment

Transitioning the cultural environment from that of a working group to a team-based one requires the acknowledgement and acceptance that the external environment has forever changed the way organisations learn new skills (Katzenbach & Smith, 2003). Empirical research on team transition from traditional work groups to teams is lacking. The general consensus is that change is necessary, but implementing a change initiative is challenging. Gardner (2009) suggests that employee resistance and lack of management support top the list of reasons for project failures.

Bolman and Deal (2008) discuss the importance of providing opportunities to learn about emotional intelligence. Emotional intelligence as it has been presented by Goleman (1995) indicates the importance of empathy and acknowledging the emotions of others. Goleman posits that emotional intelligence has greater significance than does intellectual abilities. Showing compassion and empathy is instrumental in employee engagement processes (Goleman, 1995).

Idris, Dollard, and Tuckey (2015) propose that organisations can do much in terms of contributing towards employee well-being. They suggest that employers create environments conducive to learning opportunities. Idris et al. (2015) found a strong correlation between safe psychosocial environments and job satisfaction. Idris et al. (2015) suggest that employees who feel intellectually stimulated are more likely to exude stronger intrinsic motivation stimulus. Such stimulus becomes the driving force that creates inspiration to participate in the change initiative.

Change Initiative Communication Plan
Presentation Style

Nawar (2012) recommends the use of symbols as a form of “visual education” (p. 61) with the goal to communicate a message in the absence of language. However, the visual elements (photos, videos, and symbols) cannot replace (and should not be used to replace) the verbal component of the communication process. Visuals used in conjunction with language enhance the comprehension process.

Nawar (2012) proposes that audio-visual presentations increase understanding of the subject content. As a result, the leadership team will add video content to their presentations. The suggested theme for the videos will be called “Excite Your Senses – Go Ahead and Make the Change!” using the Monarch Butterfly as a symbol of transformation. According to the USDA Forest Services, Monarch butterflies are the only butterflies to survive the challenges of migration twice per year (Migration, nd). The objective of this approach is to help set the stage for understanding the challenges that come with change (Kotter & Cohen, 2002).

Channels Of Communication

Berger and Iyengar (2013) suggest that communication in modern day society is multidimensional because of the multiple modalities used to transmit messages. There are social network mediums (Facebook, Twitter, Instagram and others). There are many email exchanges (Hotmail, Gmail, Yahoo, and others). There are interactive networks, such as, Tango and Skype. Finally, there is face-to-face interactions.

Berger and Iyengar (2013) studied the various ways in which one message can be constructed using different platforms. They found that written messages provided greater opportunity to improve the communication process because more time is required to write than it is to talk. The studies also showed that conversations contributed to the acceptance of referrals and recommendations. Given the results of the aforementioned research, it follows that the potential of employees voluntarily engaging in behavioural changes increase when managers engage them in conversations as opposed to sending out memos via emails.

Medlin and Green (2014) support the concept that effective management increases the prospect that employees will voluntarily commit their time and intellectual resources for the benefit of the organisation. They conducted a study to propose that positive management interaction with employees resulted in improved performance. They found that employees who felt valued and appreciated were both effective and efficient. One principle that Medlin and Green (2014) found that contributed to increased production was “unity of clarity” (p.27). This principle aligns with the channels of communication to ensure that effective communication between the management team and employees produce results.

Team Credibility

Vigliotti and Gregory (2013) propose that managers establish credibility by aspiring to become active, show competence, and demonstrate respect towards others. Managers must create safe environments by maintaining open communication processes. They should be approachable, honest, and of high integrity. They must demonstrate superior active listening skills.

Clarity and simplicity are synonymous (Kotter & Cohen, 2002). Additionally, creativity, authenticity, and credibility precede message crafting (Hatfield, 2012). Hatfield (2012) suggests further that messages must arouse emotional energy if they are to have any effect on the intended audience. Hence, it is imperative that managers dedicate significant time towards drafting their vision statement. The articulated vision must inspire intrinsic motivation in the employees or the risk of failure to engage the workforce becomes imminent (Kotter & Cohen, 2002; Hatfield, 2012).

Creating Faith in The Change Effort

LaFasto and Larson (2001) assert that faith in the change effort is created when management practices demonstrate clarity, confidence, and commitment. Empowering teams to make decisions that implement changes faster also creates faith. Management shows faith when they believe that the teams are equipped to handle challenges that arise. Finally, establishing a culture of constant accountability and excellence conation sends a strong message of trust and belief throughout the organisation (LaFasto & Larson, 2001; Kotter & Cohen, 2002; Hatfield, 2012).

Answering Tough Questions

Kotter and Cohen (2003) suggest that all change efforts engender questions intended to alleviate anxiety. Management can and should prepare answers for the tough questions. However, the best practice in answering questions comes from being sincere and honest.

Fusco, O’Riordan and Palmer (2015) encourage leaders to remain authentic. Managers can do this by expressing a strong sense of self-awareness and confidence by way of their actions. Open communication, information sharing, and honesty in one’s interpersonal relations increase the possibility that the tough questions will be perceived as inquisitive and welcomed.. Jones (2013) advises managers to refrain from distorting or manipulating the facts of impending changes if they intend to gain the trust and respect of their employees.

Conclusion

This paper introduced an organisation change initiative that involved the transitioning from a traditional work-group to a modern day team-based culture. Discussions involved the transition process, the role of the primary change agent, the communication team, change initiative communication plan, team credibility, creating faith in the change effort, and answering tough questions. Context assumptions were made to provide the understanding that major change initiatives cannot be undertaken by inexperienced managers.

References

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Critically discuss the various modes of entry for which an organisation can internationalise their operations. Is there one mode that is preferred above others?

Introduction to Foreign Market Entry Modes

An organisation has a number of different entry modes to choose from when it internationalizes its operations. This essay will focus on the different types of foreign entry modes organisations have to choose from. As well as what organisational circumstances, goals, and objectives are best suited to the types of different entry modes. Examples will also be given of organisations which have used these different entry modes when going international. There is no one entry mode that is superior to another, instead the organisations circumstances, goals, and objectives will be best suited to a certain entry mode. An organisation’s internal resources and capabilities, and the environment of the country of entry are other important considerations when choosing the foreign entry mode.

Changes Leading to Internationalization

Changes in the internal and external environment have meant that more and more firms are expanding their operations across country borders. External factors such as: the removal of trade barriers, free trade agreements between countries, and an emerging middle class has made the idea of going global more attractive to organisations across the world. Internal factors such as: increasing profits, increasing market share and becoming a global brand are more drivers for organisations to globalise. Whilst there are a lot of drivers of internationalisation, and hence potential advantages to internationalise, there is no one best entry mode.

All organisations will have different reasons for going global, which will have an influence on which entry mode is best suited to them. An organisation will need to determine their desired level of commitment, flexibility, control, presence and risk when going global, in order to choose the entry mode which best suits their situation. A number of foreign entry modes exist, including: exporting, licensing, franchising, joint venture and wholly owned subsidiary. The following section will analyse these foreign entry modes in greater detail.

Types of Foreign Entry Modes
Exporting

Exporting is a cross border sale of domestically grown or produced goods Cavusgil, 2004). There are three types of exporting: indirect exporting, direct exporting and cooperative exporting. Indirect exporting is the most low risk entry mode as there is effectively no exposure to the foreign market and its associated risks (Kotler & Armstrong, 2012). The organisation is merely selling their product to an agent in the foreign market who then sells the product on to an intermediary. Exporting is a common method used by organisations when they first enter a new market. Organisations choose this options as it’s low risk, it requires less commitment, and gets their brand exposure to the new market. A number of organisations choose indirect export as an entry mode to see if the foreign market is receptive of their brand. In situations where the foreign market is receptive, an organisation may choose to further ingrain their presence in the foreign market with higher commitment, higher presence, and higher risk foreign entry mode strategies (Cavusgil, 2004). Exporting has become more prevalent across the globe due to the removal of trade barriers, and transport becoming cheaper and more efficient (Shaver, 2011).

A direct export is the same as an indirect export except that it doesn’t involve an agent who sells the good to the intermediary. Direct exporting is a very common entry mode used by organisations who want exposure to a foreign market, but want to limit the risks associated with other types of entry modes. The Austrian energy drink Red Bull entered Australia using direct export as its entry mode. Red Bull is the leading energy drink brand in the Australian market, holding a 36% market share (Speedy, 2011). This case of Red Bull supports that exporting can be a very successful foreign entry mode strategy.

Cooperative exporting is another exporting option that organisations can use as a foreign market entry strategy. Organisations use this entry mode by entering an agreement with another foreign or local organisation to use its distribution network (Kotler & Armstrong 2012). This entry mode allows organisations reach to the foreign market without the associated risks that come with other entry modes. Cooperative exporting is generally mutually beneficial, provided the goods being exported don’t impede the sale of other products being sold (Kotler & Armstrong, 2012). For cooperative exporting to be successful the exported product should complement, as oppose to compete against other products being sold. US chewing gum company Wrigley successfully entered the Indian market using cooperative export as their foreign entry mode. Wrigley entered a cooperative export agreement with Parrys, a local confectionery company, by doing so Wrigley gained access to 250,000 retail outlets (Kotler & Armstrong, 2012).

Licensing

International licensing is a cross border agreement that permits organisations in the target country the rights to use the property of the licensor (Kotler & Armstrong, 2012). This property is generally intangible and includes: trademarks, patents, and production techniques. The licensee is required to pay a fee in exchange for the rights specified in the contract between the parties. Licensing is commonly chosen because it’s low risk, has low exposure to economic and political conditions, has high return on investment and is preferred by local governments (Agrawal & Ramaswami, 1992). Microsoft Corp and Walt Disney Co are two examples of large multinationals that have had success in foreign markets using licensing as their entry mode. Whilst licensing in these examples have been very successful and undoubtedly the right foreign market entry mode, licensing does have its limitations. Licensing can reduce the potential profit of outright ownership, affect the image of the brand due to lack of control over licensee, and nurture a potential future competitor (Brouthers, 2013).

Franchising

Franchising is a foreign market entry strategy where a semi-independent business owner (the franchisee) pays fees and royalties to the franchiser to use a company’s trademark and sell its products and/or services (Kotler & Armstrong, 2012). The terms and conditions of a franchise package vary depending on the contract, however it generally includes: equipment, operations and management manual, staff training, and location approval (Alon, 2014). Franchising is commonly used and a largely successful method of cross border market entry, however organisations pursuing this entry mode need to consider both the positive and negative aspects of franchising.

The most common advantages of franchising are that it capitalises on an already successful strategy, the franchisee generally has local knowledge, it’s less risky than equity based foreign entry modes, and the franchisor isn’t exposed to risks associated with the foreign market (Alon, 2014). Subway, 7-Eleven, Pizza Hut, and McDonalds are just a few examples of organisations that have been successful using franchising as their foreign market entry mode. Subway was founded in 1965 in the United States; using franchising as a foreign market entry strategy it has grown to have over 42,000 stores in 107 countries. Subway is now the world’s largest franchise and highlights how successful franchising can be (Subway, 2014). Just like in the case of Subway, franchising allows for rapid expansion that would be unlikely using other foreign entry modes.

Whilst in general, franchising is a popular and successful mode for foreign market entry, there are a few potential shortcomings. These shortcomings include: decreased brand quality due to not having full control over franchises, not maximising profit as franchisor only receives a royalty fee and not the full profit made, and the possibility of nurturing a future competitor. Whilst these potential shortcomings could be detrimental to an organisation, franchising is continually chosen as a foreign market entry mode as franchisors believe that the rewards outweigh the risks.

Joint Venture

An organisation may choose a joint venture as their foreign market entry mode for a number of different reasons, for example: to divide the risk with other parties, to leverage of each other’s strengths etc. However if a joint venture is to be successful the two or more organisations that form the joint venture must/should have common objectives in regards to: the market of entry, acceptable levels of risk/reward of the market entered, the sharing of technology, joint product development and the following of local government laws (Kotler & Armstrong, 2012). Joint ventures often thrive if the following conditions are present between the partners: converging goals, small market share compared to the market leader, and are able to learn from one another without surrendering their competitive advantage or intellectual property (Chang, Chung & Moon, 2012).

Under the right circumstances, a joint venture can allow an organisation to gain access to a new market which it previously wouldn’t have been able to do so by itself. The main restriction in this situation is generally the local government. A local government may choose to impose restrictions on wholly owned foreign investment for a number of reasons, such as: threat to local players, threat to the environment, threat to the long term prosperity of the industry etc. A real life example of this is Singapore Airlines entering the Indian market. The Indian government imposes restrictions on foreign airlines entering the local airline industry as a wholly owned subsidiary (The Indian Express, 2014). However Singapore Airlines entered a joint venture with the Tata group, and owns a 49% stake in the SIA/Tata alliance (The Indian Express, 2014). Whilst SIA wanted to enter the Indian domestic airline market with maximum presence, entering as a wholly owned subsidiary was not possible. Entering as a joint venture in this situation was the best entry mode for SIA as it allowed maximum exposure, maximum commitment, maximum flexibility and maximum potential rewards.

Wholly Owned Subsidiary

A wholly owned subsidiaries is the process where by an organisation enters a foreign market with 100% ownership of the foreign entity (Yiu & Makino, 2002). The two ways that wholly owned subsidiaries come about is through either acquisition or greenfield operations. Acquisition is the purchase of a foreign organisation as a way to enter a new market. A greenfield operation is the creation of a new organisation and legal entity in the foreign market. A number of organisations that want to limit their risk, while maximising their exposure to the foreign market will choose acquisition as their entry mode. This is because an acquisition uses an already established brand name and customer base. However neither acquisition or greenfield are seen as superior to one another, the entry mode which is more beneficial is dependent upon the organisations circumstances, goals and objectives.

Wholly owned subsidiaries incur more risks than all the entry modes previously mentioned, however if implemented correctly and in the right circumstances, it generally results in high rewards (profits). An organisation that enters a market as a wholly owned subsidiary has: high control, high commitment, high presence and high risk/reward. A wholly owned subsidiary allows an organisation to reach diverse geographic regions, markets and different industries. Through entering the correct markets and with good management a wholly owned subsidiary is a good hedge against market changes, such as political changes, legal changes and declines in different sectors (Yiu & Makino, 2002).

Conclusion

No one entry mode is considered to be superior to one another. When an organisation is choosing to internationalise their operations, they will first need to decide what its optimal levels of: commitment, flexibility, control, presence and risk are in order to select the most appropriate entry mode. An organisation’s internal resources and capabilities are another important consideration when choosing the foreign entry mode. The market of entry is also another important consideration for the organisation planning to internationalize their operations. A PESTLE analysis of the foreign market will help the firm to gain a better understanding of the market environment. The process for an organisation to internationalize their operations is often quite difficult, and so is the process of choosing the foreign market entry mode. It’s for this reason that there is no superior foreign market entry mode. From the examples given it’s clear that each entry mode can be successful if implemented in the right circumstances.

References

Agrawal, S., Ramaswami, S. (1992). Choice of Foreign Market Entry Mode: Impact of Ownership, Location and Internalization Factors. Journal of International Business Studies. Volume 23, No. 1. pp. 1- 27.

Alon, I. (2014). Global Franchising Operations Management: Cases in Franchise, International, and Emerging Markets Operations. Australia. Angus & Robertson.

Brouthers, K. (2013). Institutional, cultural, and transaction cost influences on entry mode choice and performance. International Business Studies. Volume 44. pp 203-221

Cavusgil, S. (2004). Differences among exporting firms based on their degree of internationalization. Journal of Business Research. Volume 12, Issue 2. pp. 195-208

Chang, S., Chung, J., Moon, J. (2012). When do wholly owned subsidiaries perform better than joint ventures? . Strategic Management Journal. Volume 34, Issue 3. pp. 317- 337.

Kotler, P., Armstrong, G. (2012). Principles of Marketing. Australia: Pearson.

Shaver, J. (2011). The benefits of geographic sales diversification: How exporting facilitates capital investment. Strategic Management Journal. Volume 32, Issue 10. pp. 1046- 1060.

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Yiu, D., Makino, S. (2002). The Choice Between Joint Venture and Wholly Owned Subsidiary: An Institutional Perspective. Organization Science. Volume 13, Issue 6. pp. 667-683

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1) “It is said that life without chocolate is like a beach without water” (Christou, 2009). The UK Chocolate market is the largest within the European Union (30 percent of the EU market) with British citizens consuming more chocolate than any other EU nation (Barnett, 2006). Within the UK adults are the primary consumers eating ?3.5 billion a year compared to children who consume ?390 million a year, with the over 55’s the highest consumers of all adults (Scott-Thomas, 2009) Twenty-one per cent of the total chocolate and confectionery sold in Britain is consumed by people above the age of 55, who spend on average ?700 yearly (Datamonitor, 2005).

Within the UK the main manufacturers are as follows:

Chocolate manufacturers by sales and share (Mintel, 2009)

2009

2007

2005

% change

?m

%

?m

%

?m

%

2005-07

1

Cadbury Trebor Basset

1189

35.3

1101

34.9

1146

34

3.8

2

Masterfoods (Mars)

1010

30

953

30.2

914

27

10.5

3

Nestle

494

14.7

470

14.9

672

20

-26.6

4

Ferrero

134

4

126

4

118

4

13.2

5

Kraft Foods

61

1.8

63

2

141

4

-56.7

Own-label

217

6.5

189

6

124

4

75.3

Others

260

7.7

252

8

245

7

6.2

Total

3365

100

3154

100

3360

100

0.1

The current market can be broken down into the following segments:
Boxed; chocolate assortment composing of a selection of high-added-value individual units
(Booth, 1990)
Countlines; chocolate-covered bars with an individual centre which can be eaten with one hand, so called named because these items are sold by number rather than weight.
Moulded Bars ; regular bars of chocolate with or without inclusions i.e. nuts or filled centres i.e. soft caramels
Seasonal Chocolate : chocolate confectionary produced for Easter through ‘eggs’ and Christmas in ‘gift boxes’ and ‘miniatures’
Straightlines ; small items which are identical and eaten as casual snacks on the move i.e. Cadbury’s chocolate buttons
Other Chocolate Confectionary/ Assortments; other
The below table suggests that the most revenue generating segment using recent data is ‘countlines’ @ 2244.44 ˆmillions.

UK Chocolate Market Value (Euro m), 2004- 2008

Segment20042005200620072008

Boxed

1332.6

1350.2

1367.6

1385

1400

Countlines

2152.3

2176.4

2200.6

2224.6

2244.4

Moulded Bars

982.3

996.3

1010.3

1024.2

1036.3

Other Choc Confectionary

18.1

18.1

18

17.9

17.7

Seasonal chocolate

885.2

899.5

913.8

928.1

940.8

Straightlines

732.9

743

753.1

763.4

772.1

Total

6103.46183.56263.46343.26411.3

(Source: Business Insights; Chocolate Confectionery Industry Insights, 2008)

Additionally within these segments the following brands are present:

Chocolate confectionery brands by sales and share (Mintel, 2009)

2009

2007

2005

% change

?m

%

?m

%

?m

%

2005-07

Cadbury Dairy Milk

345

10.3

318

10.1

275

8.2

25.4

Galaxy

146

4.3

138

4.4

129

3.8

13.3

Mars

99

2.9

97

3.1

104

3.1

-4.7

Kit Kat

80

2.4

70

2.2

83

2.5

-3.3

Flake

77

2.3

70

2.2

49

1.5

57.2

Aero

67

2

64

2

56

1.7

18.4

Snickers

52

1.6

51

1.6

57

1.7

-8.1

Milky Bar

52

1.6

50

1.6

60

1.8

-13.2

Others

2040

60.6

1921

61.1

2222

66.1

-8.2

Own-label

224

6.7

193

6.1

162

4.8

38.2

Total

3365

100

3154

100

3360

100

0.1

Market Trends:

Seasonality:
The chocolate industry is highly seasonal where peak seasons of Easter and Christmas observe a sharp increase in sales. Therefore if externalities affect these periods it can be assumed that performance will be severely curtailed. The recent recession over the Christmas period impaired consumer spending therefore to mitigate the loss of sales it is essential to maximise them over the Easter period 2010.

Failure of new products
Numerous new product launches have failed over the past few years where many companies have adapted the strategy of re-launching old favourites to leverage on their brand equity and consumer recognition.

Barriers to Entry
The chocolate industry is synonymous with a number of large firms (Mars, Nestle and Cadbury) dominating the market, enjoying a well established history and therefore high brand loyalty. Consequently barriers to entry are high for existing incumbents and new entrants.

Increasing Cost of Raw Products
As cost of raw products rise such as cocoa, chocolate manufacturers are shifting their attention away from marketing strategies and instead focusing on the input processes of chocolate making as opposed to the output.

Potential Partnerships
Given a saturated market and a continuous increase of raw material prices, to remain competitive and keep costs down, creation of partnerships are potential business propositions for manufacturers.

Growth of luxury segment of market
Luxury dark chocolate brands have entered the market in (Booth, 2000) due to the advocates of healthy eating and the anti-oxidant benefits of dark chocolate. Targeting the ‘grey pound’ with a larger disposable income the luxury segment is increasing in market share presently.

2. The highly competitive UK chocolate confectionary market has suffered a hit during the 2008/9 recession where volume sales have decreased by 2.6 percent (Nielsen, 2009) throughout all leading brands. However this fall in sales contradicts the trend which has emerged throughout the recession of an observed increase in comfort eating such as chocolate within the ‘affordable’ segment of the market. Currently the chocolate industry is saturated with increasing pressure from unfavourable economic conditions squeezing profit margins and manufacturers consequently looking for new growth areas.

Segmentation targeting and positioning
Segment of Chocolate Industry –’Countlines’
Analysis of the industry suggests that the most revenue generating segment belongs to the ‘countlines’ segment at 2244.44 ˆ million yearly, making this a potential area for diversification for JFL. Consumption of these modern snacks such as Snickers represent a growing sector of the confectionary market as they subscribe well into ‘on-the-go’ lifestyles which compliment modern society. Easily fitted into handbags, suit pockets and sportswear countlines are convenient snacks in a variety of choices which make them ideal for busy people everywhere. As per the above table and market research competitors brands within this segment are:
‘Mars’ 49 g @ 40p
‘Twix’ 58 g @ 45p
‘Mars Snickers’ 58 g @ 45p
‘Cadbury Dairy Milk’ 49 g @ 58p
‘Green and Blacks Organic’ 50g @ ?1.25

Positioning – ‘Pocket Money Segment to luxurious treats’
There is a decline in the ”pocket money’ segment of the confectionery market due to increasing health concerns over children’s increasing sugar intake. Market research evidences that it’s the 11-14 year old segment of children who spend the most on weekly pocket money with expenditures of ?10 – 15 (Youth TGI, 2009). Linking this to the entry strategy for JFL within the chocolate industry and the consumer’s propensity towards familiar brands and pricing structures; it is recommended that entry into the ‘countlines’ segment should be positioned within the ‘pocket- money’ segment. This should be at the lower end for ‘tweens‘ and the higher end for the ‘over 55’s’. Another suggestion is that JFL ‘partner’ with another manufacturer such as Nestle to leverage on brand credibility and reduce start-up costs into the market, especially with increasing raw material prices. The risk of cannibalisation will be mitigated due to product launch into different segments.

Consumer Segmentation – ‘Over 55’s’
Given that the over 55’s are the biggest consumers of chocolate with a larger disposable income it is recommended therefore that JFL position themselves at the premium end of the ‘pocket money’ ‘countlines’ segment. Building on the notion that the ‘health food’ chocolate market is growing due to its anti-oxidant benefits it is recommended that JFL target the ‘grey pound’ with a product which offers health benefits (increased anti- oxidants, reduced saturated fats) which is perceived to be of superior quality.

Consumer Segmentation – ‘Tweens 11-14’
Building upon the increasing disposable income of this segment and the reputable brand image that JFL has built within sugar confectionary it is recommended that JFL target this segment for entry into the market. Offering a product which is half the size of an average chocolate bar: at 25g within the ‘countlines’ segment this will enable JFL to remain competitive on cost whilst leveraging the Nestle brand.

3. Product description;
‘Over 55’s’ – An average sized premium chocolate bar (50g) specifically formulated to contain increased levels of anti-oxidant properties in the form of flavonoids, found in cocoa processed with minimal extraction and reduced milk content. Lines can be either solid chocolate classified as ‘premium milk with added cocoa’ or individual centres of nut or coconut covered with ‘premium milk with added cocoa’.
‘Tweens 11-14’ – A mini-bar of 25g formulated with milk chocolate where lines can be either solid milk chocolate or individual centres of toffee, caramel and nuts.

Brand image;
‘Over 55’s’ – The branding of ‘premium healthy chocolate’ to this segment should demonstrate one which will communicate the health benefits of eating chocolate rich in anti-oxidants. The differentiating factor with this brand is the fact that it is milk chocolate with added cocoa, for ‘a premium creamy milk chocolaty taste with all the anti-oxidants of dark chocolate’. The reason for this is the baby boomer generation (over 55s) has been evidenced as possessing an extremely ‘sweet tooth’, which create preferences towards sweeter milk chocolate rather than bitter dark chocolate. Therefore a bar which can be sold as milk with added benefits of dark will appeal to the psychology of this segment.
‘Tweens 11-14’ – The branding of the mini-bars, it is recommended will leverage Nestles brand and associated products such as breakfast cereal (Shredded Wheat, Cheerio’s, Golden Nuggets, Clusters) beverages (coffee, hot chocolate and Nesquik) and ice-cream. These are items which this segment of the market consume regularly, even on a daily basis, therefore creating this relationship between the new product of ‘mini-bar’ and household names will re-enforce brand identity.

Pricing objectives strategy;
‘Over 55’s’ – The price of this product should reflect its position within the ‘higher end’ of the ‘pocket money’ segment of ‘countlines’. The average weekly expenditure on chocolate confectionary for the ‘grey pound’ is ?13.50 per week (?700 per person annually) with buying behaviour of chocolate in the luxury end of the market a few times a week i.e. ‘Green and Blacks Organic’ 50g @ ?1.25. It is recommended that the price per bar of this product (50g) should be positioned just below the premium price but substantially above the lowest price of counterline competitors bars at 40p. Therefore the price for this product should be pitched at 80p per 50g bar.

‘Tweens 11-14? – The average weekly expenditure within the pocket money segment is at the lowest range ?10 min – ?15 maximum (?520 – 780 per person annually) with buying behaviour at the lowest end of the market with daily purchases of chocolate. It is recommended that the price per mini- bar of this product (50g) should be positioned just below the lowest price of counterline competitors bars at 40p. Therefore the price for this product should be pitched at 30p per 25g bar.

Retailing and distribution objectives and strategies;
‘Over 55’s’ – Distribution channels for chocolate are wide, with chocolate availability the highest it have ever been, from small retailers to mass-market outlets. To maximise product launch it is recommended leveraging on current trends such as increasing internet usage to distribute the product. The advantages of this distribution channel are that it is cost effective, can penetrate a wide market quickly and once set-up is easy to maintain. For this segment who are becoming more technology ‘savvy’ and have availability to the net this distribution channel will be successful.

‘Tweens 11-14? – Distribution for this segment follows the above, and builds on existing channels of all sizes of retailers to mass-market outlets. Given the proposed partnership with Nestle and their grocery products such as breakfast cereal and beverages, it is recommended that using coffee shops, supermarkets and ice-cream outlets will increase sales of the ‘mini-bar’. Additionally the internet for this segment is a must given the trend towards online purchases.

Integrated marketing communications’ objectives strategies;
‘Over 55’s’ – For this segment the IMC strategy will encompass promotional strategies which will use venues such as golf clubs, day centres, community leisure centres, gymnasiums and supermarkets to launch the product. The promotional aspect should encompass ‘EMarketing’ linked to offers, which when advertised at the above mentioned outlets customers will receive a specified discount if they print out a voucher online which is redeemable.

‘Tweens 11-14?- It is recommended using an IMC strategy which can be integrated into Nestles existing marketing plan so as to 1) drive down promotional costs 2) leverage existing expertise within Nestle and 3) build on existing marketing strategies. Extra consideration will be taken to ensure that cannibalisation does not occur through alignment of segmentation against current Nestle chocolate. ‘EMarketing’ will be used as above for promotion using the same redeemable voucher offer.

Evaluation and control;
To see whether your product launch has been successful it is recommended that JFL implement a metric which enables accurate measurement of sales within both lines. As the predominant form of distribution and promotion is online, converted sales can be measured through CTR (click through rates). Additionally measurement can be through response rates and online users to the JFL website. For control it is recommended allocating one employee per line who has expertise within EMarketing.

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Introduction

Modern day organisations are impacted by many factors which may include the external business environment, government regulations, and internal interpersonal interactions. However, none has the more significant cultural impact of the internal operations of the organization than organizational culture its self. Culture poses the greater challenge in organisation operations because it encompasses behavioral expectation which are more difficult to monitor. Overall organisational culture is best viewed as a collection of values, organisational principles, products presented, markets served, strategies applied, global cultures, languages, public assumptions, leadership styles, behavioral norms, symbolisms, habits, and belief systems that bring groups together for a common cause. It also includes a range of emotional interactions which result as a consequence of connection to the organisation. Every organisation is a culture with subcultures unto itself. They have ways of operating that differ in their approaches that bring products or services to market. Their social and psychological environments contribute to the emotional well being of society and the national groups that interact within the confines of the organisation existence. This paper presents a discussion on organisation culture.

The Impact of Organisation Culture on Teams

Before one can consider the impact of organisation culture (OC) on teams, it is best to provide a definition to aid in its understanding. Organisation culture is a set of shared behavioral norms and values that influence interpersonal interactions, decision-making, and resource allocations (Kotter, 2012; Silber & Kearny, 2012). Kotter (2012) suggests that few individuals understand the dynamics of OC, or how to put in motion a plan to change it. As a result, many fail at the attempt to initiate OC change (Kotter, 2012).

Bolman and Deal (2008) discuss organisation culture as the adhesive substance that connects the organisation structure to the unification of people for the mutual accomplishment of goals. They assert that cultural values are linked to symbols, rituals, playful humor, and other specialised symbols that contribute to its existence. These researchers argue further that management practices are undeniably culture initiated. Additionally, emotional healing and conflict resolution is conducted within the confines of cultural norms.

Bolman and Deal (2008) present examples of organisations such as AT&T, Coca Cola, Delta Airlines, and others as demonstration of the cultural transactions which take place within them. They discuss the emotional consequences explained by one executive as one moment euphoric and at other times depressed. Coca Cola’s discussion is on the introduction of a new product concoction that impacted its revenues and how they were forced to revert to the original formulation. Delta experienced success as a privately held organisation only to experience failure as it was transformed into a public one.

Bolman and Deal (2008) speak of the emotional experiences that remained after Enron collapsed. The impact was felt throughout the organisation and trickled over into the public area. Where Enron succeeded as an independent entity, it failed in its acquisition prospects because its significant growth impaired its abilities to sustain an ethical culture. Enron ignored the cultural values that drove its success. The aforementioned examples serve to present the impact that culture imposes upon organisations as a social group form.

Differentiating Workgroups from Teams

Workgroups. Katzenbach and Smith (2003) believe it was important to distinguish workgroups from teams because they differ in operation and outcomes. Work-groups exist to follow the task-driven instructions of a single leader. All within the group operate as individuals who fulfill the requirements of assigned tasks. The individuals within the workgroup perform according to skills relevant to the task assigned. For example, an administrative assistant (individual) works in a department (workgroup), but is assigned to limited tasks, such as, typing documents or serving coffee or greeting corporate guests (Katzenbach & Smith, 2003).

Teams. In contrast, teams work together towards a common goal (Katzenbach & Smith, 2003). Teams do not operate from task relevant assignments. They use their skills and competencies to complete all tasks that complete the mission of their coming together. They can be dissolved after initiatives are completed and be reassigned to work on other projects relevant to individual competencies and skills. For example, an application systems designer has computer programming skills and knowledge of designing business applications; work assignments are not limited to computer programming alone (Katzenbach & Smith, 2003).

Additional Notes on Workgroups. Katzenbach and Smith (2003) make it clear that workgroups are prevalent within the organisation and function independent of common goals. Workgroups function best in top-down organisation structures. Focus remains on individual performance. Members in workgroups compete with other members in pursuit of personal accomplishments.

Leadership Affect on Organisation Culture

Leadership Behavior. Scholl (2003) posits that leaders model the behaviors and attitudes duplicated throughout the organisation. According to Morill (2008), OC is a modern day concept with roots in social movement theory and the sociology of culture. Kitts and Trowbridge (2007) posit that research concerning the logistics of OC emergence and maintenance is lacking. They assert further that Human Resource transactions, such as, recruitment and turnover, make any attempt at OC maintenance, a significant challenge.

Fear as Motivator. Grenny, Patterson, Maxfield, McMillan, and Switzler (2013) affirm from their research that fear becomes the norm when cultural behaviors are challenged. Open confrontation of unhealthy behaviors warrants retribution. One example in which challenges can and do arise is a hospital setting, which requires the washing of hands for sanitary reasons. Consider that a nurse aide is in a patient room when a surgeon enters the room and fails to follow the hand-washing norms. Given the surgeon’s esteemed status, the aide witnessing such becomes intimidated and fails to mention the hand-washing rules (Grenny, Patterson, Maxfield, McMillan, & Switzler, 2013).

OC Characteristics. According to Silber and Kearny (2010), OC comprises three characteristics which easily identify them, namely, artifacts, espoused values, and accepted norms. Artifacts are considered to be the more obvious culture differences, such as, nationality or dress codes. Espoused values are what management consider to be important, such as, a motto that says “the customer is always right”. Accepted norms are values and belief systems that are taken for granted, such as, the concept of innovation requiring creativity (Silber & Kearny, 2010).

Affect of Organisational Culture

Impact of OC on Teams. According to Rosenblatt (2011), work values come from the globalized concept of desired behaviors and relevant group beliefs. Rosenblatt (2011) believes that the values of the organisation are derived from the broader interfaces and environmental characteristics within a social system, such as, individual cultural values and collectivism (codified behavioral patters). Rosenblatt (2011) discusses the concept of codified behavioral patterns as a function of belief systems that are transferred from group to group in a globalized manner. As a result, they become embedded with the organisation rules and regulations.

Impact of Teams on OC. Lucas (2010) asserts that individual cognition influences team interactions. Every person processes information according to that which has been assimilated from the global environmental group. Additionally, individual learning styles influence how information is adopted. As a result, the belief patterns of individual members is transferred via the interpersonal relationships to the team as a group.

According to Lucas (2010), cognition affects the recollection of information and transmits it to thought processes. This transmission in turn affects the perceptions of individual members. How the members view the processed information is the direct result of past interpersonal interactions. As a result, the individual members respond to one another based upon the levels of confidence the information has provided.

Culture Alignment Issues

Behaviors. Silber and Kearny (2010) discuss behaviors within the context of cultural alignment as it relates to task completion. These researchers assert that how behaviors are manifested within the OC group identifies where the challenges lay. They use an example of how answering of the phone impacts the customer service provided. Silber and Kearny (2010) suggest that vocal intonation and attitude impacts how the customer perceives the organisation. As a result, the organisation leadership must determine if the resulting outcomes align with the intended goals and objectives.

Katzenbach and Smith (2003) assert that teams impact the organisational culture by engaging in the behaviors that drive performance to the next level. Teams can resist change by not adopting the same value or belief system that management embraces. The wrong attitudes affect performance which in turn affects the organisations goals and objectives (Katzenbach & Smith, 2003).

O’Donnell and Boyle (2008) assert that behaviors and attitudes are complex and not always clearly interpreted. Some issues associated with the difficult of aligning the culture for success include but are not limited to: presenting a compelling vision for change; understanding the leadership mission; influencing the beliefs and values of culturally diverse individuals; communication of conflicts and how to address them; incorporating a compensation and reward system; ensuring adequate training and development opportunities; technological tools for communication transmission; removal of non-compliant team players (O’Donnell & Boyle, 2008).

Role Considerations

Leadership Role. Bolman and Deal (2008) suggest that the role of a leader is to ignite the passion (intrinsic motivation) of the individual team members to participate in the organisation mission. Grenny, Patterson, Maxfield, McMillan, and Switzler (2013) posit that leadership calls for influencing team member behavioral changes to meet organisation goals and objectives. Mitchell and Boyle (2009) assert that leaders help connect the emotional attachment of team members to the vision, hence, inspiring the desire for aligning behaviors to the mission. Joshi, Lazarova and Liao (2009) draw upon the principles of social identity theory to explain the relationship between leaders and followers. These researchers assert that leaders are effective in direct proportion to their ability to influence and connect the perception of follower identity to their cause.

Team Role. Lucas (2010) asserts that individuals bring to the team their cognitive processing abilities and past influences. Additionally, team members are required to exert various levels of risk in direct proportion to the group obligations. Katzenbach and Smith (2003) declare that team members challenge and encourage each other. Team members share a common respect of the goals to be achieved as a group.

Need and Appropriate Role of Teams

Katzenbach and Smith (2003) declare that business opportunities and or threatening competition can create a need for teams at all levels of the organisation. External environmental changes, such as, government regulations, international and or local business competition, and or new technology contribute to organisation needs. Teams provide an element of social engagement that contributes to the commercial and managerial aspects of the work. Teams can engage in social functions that enhance and sustain organisation performance (Katzenbach & Smith, 2003).

Need and Appropriate Role of Leadership Teams

Keller and Aiken (nd) found in their research that seventy percent of change management teams failed and remain so by modern day standards. Their research also shows that teams everywhere are still struggling to become high performance teams. Only a very small group of teams have been able to succeed. Schyve (2009) declares that executive level oversight groups could be formed to strengthen weak work ethics or to help teams acquire the necessary skills to move them forward.

Culture Support of Teams

Executive Level Teams. Carillo (2015) declares that executive level teams are responsible for driving the logic of the organisation vision. They empower, encourage risk, allocate resources, and ensure that stakeholder assets are protected, and used appropriately. Grenny, Patterson, Maxfield, McMillan, and Switzler (2013) insists that these teams have a crystal clear vision of what is to be accomplished. Additionally, they are well versed in emotional intelligence and competent enough to help others feel their cause.

Change Management Oversight Teams. Naranjo-Gil (2015) posits that change management oversight teams execute and implement strategic organisation change initiatives. They mediate the negative and positive aspects of change on the psychological well being of the organisation. They measure the change results to those intended by the strategy. They politically navigate formal structures and informal to ensure that friction is minimized, hence, avoiding derailing of change initiatives (Naranjo-Gil, 2015; Katzebach & Smith, 2003; Silber & Kearny, 2008).

Executive Working Groups. McGuire, Palus, Pasmore, and Rhodes (2009) and Hambrick (1997), insist that the culture must be matched to the organisational purpose. Development of new belief systems must be cultivated; leaders must change themselves in the process; beyond the technology, cognitive abilities must be well developed; collaborative effects must be fostered and perfected; joint decision-making must be a public event.

Conclusion

The goal of this paper was to discuss the impact of organisation culture on teams. Hence, the intended goal has been achieved via the presentation of various topics that impact organisation culture in teams. The following topics were discussed a) the impact of organisation culture on teams; b) differentiating workgroups from teams; c) leadership affect on organisation culture; d) affect of organisational culture; e) culture alignment issues; f) role considerations; need and appropriate role of teams; g) need and appropriate role of leadership teams; h) culture support of teams. Additionally, a few examples of organisations which experienced success and failure was presented as a way to demonstrate the emotional power and affect of culture on the results achieved.

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The objective of this essay is to examine the current marketing strategy and marketing activities of one of the ‘big 4’ supermarkets in the United Kingdom with particular reference to the adverse effect produced by low cost competitors entering the market. For this purpose, Tesco has been selected. Tesco represents one of Britain’s largest and most profitable supermarket, which overtook ASDA in 1995 and continued to increase its market share through the years (Corporate Watch, 2004; Ruddick, 2015). In addition, Tesco was the first supermarket to (1) introduce ‘value’ lines and cost effective price range of its own-label products and (2) present the first company loyalty card on the market (Corporate Watch, 2004). Therefore, it becomes plausible to suggest that the company is an excellent choice for a marketing strategy analysis in the current declining grocery retail environment of British brands. The structure of this essay is as follows: (1) a brief overview of Tesco’s generic marketing strategy, (2) an in-depth evaluation of the supermarket’s existent marketing actions and tactics with the aid of the its marketing mix, (3) the impact of low cost competitors, (4) recommendations and suggestions for improvement, and (5) a summary of the main findings.

The supermarket’s broad market strategy can be categorised as market penetration and cost leadership. Firstly, market penetration has been defined by Ansoff (1957) to explain one of four business growth strategies. The strategy refers to involves attracting new customers, often achieved by gaining competitors’ customer base(s), in order to increase sales. Furthermore, Farris et al. (2010) identify two important metrics of market penetration – penetration rate and penetration share. On the one hand, the penetration rate refers to the proportion of the relevant study population that has purchased the examined product category. On the other hand, the comparison between the brand’s customer shares with the market’s overall customer population relates to penetration share. In relation to this, a key aspect in Tesco’s market strategy is attracting competitors’ customers (e.g. ASDA, Sainsbury, Morrison’s), which is evidenced by its increased market penetration rate and share from 7.2% in 1971 to its peak in 2007 when Tesco accounted for 31.1% of the total UK grocery market share (Economics Help, 2014). In addition, according to data from March the current market share of Tesco is 28.7%, which positions the company as a market share leader in the British groceries industry, however, this figure has decreased from the previous financial years (Kantar, 2015). Secondly, before the introduction of discount supermarkets, the company focused on cost leadership, which represents one of the three generic strategies devised by Porter (1980). Cost leadership relates to increasing one’s market share through attracting price sensitive customers and implementing an effective price strategy that enables the company to offer the lowest cost product offerings. Tesco successfully managed to maintain cost leadership through three actions before supermarkets like Aldi and Lidl entered the British grocery retail market. These actions were as follow: (1) high utilisation of assets, meaning that large outputs are produced and the fixed costs are spread over high quantities allowing the company to manufacture single units at lower costs; (2) minimal direct and indirect costs in the production and distribution stages; and (3) strict control over the supply chain to ensure low costs (Gamble et al., 2010). Thus, the cost leadership strategy was an appropriate approach for Tesco, because it represents a large company that is able to take advantage of the economies of scale in the market. Nevertheless, presently the company is unsuccessful in maintaining its cost leadership due to the strong presence of ‘budget’ supermarkets.

The following part of the essay will specifically focus on the Marketing mix of Tesco – product, place, price, promotion, which provides a better understanding of the company’s present marketing strategy.

Firstly, Tesco offers its target segments a wide range of high quality products at affordable prices. The balance between affordability and quality as well as Tesco’s Clubcard helped the company attain a relatively high level of competitive advantage (Winterman, 2013). Some of its various product categories consist of food, consumer electronics, financial services and clothing. This is in consistency with the findings from a study on customer perceived value, where four separate dimensions emerged explaining customer attitudes and behaviours – emotional, social, quality and value for money (Sweeney and Soutar, 2001). Similarly, FernA?ndez and Iniesta-Bonillo (2007) found that customers evaluate relevant benefits and costs involved in a purchase based on economic and cognitive reasoning.

Secondly, the ‘place’ element of the marketing mix refers to the distribution of products in locations where customers purchase products and services. In relation to this, Tesco emphasises product and service distribution in two main ‘locations’ – online and offline. On the one hand, the online sales channel is directly linked to Tesco’s website – Tesco Direct, which suits the specific needs of the online shoppers presenting them with various delivery options (Tesco Direct, 2015). On the other hand, the offline channel of distribution involves four different store formats – Tesco Express, Tesco Metro, Tesco Compact and Tesco Superstore (Tesco Official website, 2015).

Furthermore, Tesco’s initial pricing strategy can be characterised as price leadership, which represented an oligopolistic business behaviour, where there are a few companies that dominate the market and determine the price range (Kotler and Armstrong, 2010). The reason behind this price strategy adoption was the intense competition and other economic and behavioural factors in the British households i.e. cost conscious buyers (Business CafA©, 2009). Nonetheless, the company is no longer a price leader, but its pricing approach is still based on the marketing message ‘Every Little Helps’. In addition, Tesco is able to implement this strategy and remain to influence the retail market to a certain extent, because it evaluates and utilises the lowest cost materials for supply to achieve higher efficiency rates in the production processes.

Fourthly, Tesco’s promotion comprises of a wide range of media advertisements, regular announcements of promotions and discounts, point-of-sale marketing tactics, and sponsorships. These marketing activities are aligned with the company’s generic strategy of cost leadership and support Tesco’s price advantage through profit maximisation in the long run as well as enhance the value of the brand. Hence, Tesco’s marketing communications are integrated to enable the company to better coordinate its mission, vision, objectives and interactivity with customers. With the aid of information technology advances (Zabkar et al., 2015). Integrated Marketing Communications were also found to generate a synergy effect through the integration of marketing activities, which also tremendously influences customers through different channels of communications reinforcing the same message (Ewing et al. 2015) Tesco has successfully managed to build loyalty in its customer segments through its most effective customer loyalty mechanism – the Tesco Clubcard (Tesco Clubcard, 2015). In relation to this, Hallowell (1996) found a direct correlation between customer satisfaction, loyalty and company profitability. Likewise, Lee-Kelley et al. (2003) suggest that customer retention tools not only aim to increase the company’s profitability, but also establish long term relationships between sellers and buyers, which are fundamental to customer loyalty and also result in decreased levels of price sensitivity.

Tesco’s marketing strategy, which comprises of cost leadership and market penetration, has been increasingly impacted by the presence of the foreign grocery store chains Aldi and Lidl as well as food commodity prices and the outcome of this has been continuous price cuts by Tesco to meet the customer demand for low cost product offerings (Butler and Wood, 2014). Furthermore, the authors suggest that further intensification of the market dynamics is caused by the growth of high street convenience stores and the rise of discounters (e.g. Poundland and B&M), which is directly correlated to the altered consumer behaviour habits during the recession. In addition, business analysis of the current grocery retail market conditions suggest that Aldi and Lidl’s combined market share will increase to 12%-15% by 2020 (Allison, 2015). Nevertheless, according to a press release by KPMG (2014), it will be difficult for discount brands to fully challenge and erode the market of the big four, because grocery retail chains like Tesco command the store network market penetration and their market shares have existed for nearly 10 years.

In relation to Tesco’s marketing mix and the intense price competition and dynamics in the market, two main recommendations can be made for Tesco to regain its lost market ground – increased customer retention and an optimisation of its supply chain management to successfully recover its price leadership status. Due to the current intense competitiveness in the retail and food industry and the emergence of competitively low cost foreign supermarket chains, Tesco should firstly focus on increased levels of customer retention through the incorporation of effective customer relationship management systems. Numerous studies have demonstrated the importance of customer satisfaction in relationship marketing and customer retention. Specifically, Hennig-Thurau and Klee (1998) conceptualise relationship quality which refers to the extent of appropriateness of a relationship to fulfil the needs and requirements of a customer with regards to the relationship. One way to do this is further integrate the Tesco Clubcard to present loyal customers with various financial product offerings besides current accounts, mortgages and home insurance (Tesco Clubcard Perks, 2015). This will form relationships based on two factors – quality and value-for-money, which will translate into loyalty and protect the company from switching customers. In order to adequately target and foster loyalty in the right customer base(s), Tesco should understand which customer satisfaction elements have the greatest impact, and the amount of investments required to improve particular customer satisfaction elements (Rust and Zahorik, 1993).

The second recommendation for marketing strategy enhancement is directly related to Tesco’s supply chain management, which will enable the company to regain its lost market share through becoming a cost leader. Fearne (2009) suggests that in the current business context, companies must pursue a value chain as opposed to a supply chain, which represents a chain of activities performed, in order to deliver valuable products and services to customers. There are two elements that are emphasised in value chains: (1) focus on demand pull, which places customers first and everything else subordinate to their needs and (2) concentration on the formation of collaborative relationships with suppliers. According to the author, these two actions enable corporations and large organisations to achieve competitive edge and sustain it over time. For Tesco this would mean careful selection of suppliers and establishment of collaboration opportunities with these suppliers and stakeholders to increase the value added to the processes and/or production. For example, in Wales the company can form relationships with local farms to purchase the highest quality meat and, once supplier loyalty takes place, discount prices can be demanded from the meat producers in exchange for continuous bulk buying. This will allow Tesco to present its customers with quality local meat at low prices, which will positively influence its lost cost leadership presence in the market.

To conclude, the present work established that Tesco’s generic marketing strategy is dual – regular market penetration to attract competition’s customers and cost leadership to retain price sensitive and cost conscious customers. In terms of its extended marketing mix, notable actions are: (1) offering a wide range of product categories, from which groceries remain the most popular category, tremendously contributing to the Tesco’s market leadership position, (2) alignment of marketing messages, communication and relative pricing, (3) various marketing and advertising activities, but the integral one remaining the loyalty card, and (4) simplicity and convenience with regards to shopping alternatives and store design. Following the discussion of Tesco’s extended marketing mix, two areas for improvement were recommended – an increased emphasis on customer retention and loyalty through novel customer relationship management mechanisms and the development of a supply chain that adds value to the manufacturing processes through collaborative relationships. It is important that Tesco understands its customers’ needs and suppliers’ requirements, because the competition in the grocery retail industry has never been more severe due to business environments being dictated by the customers and the suppliers. In other words, market orientation is no longer dominated by supply push exchanges and transactions, but by devising marketing strategies and promotions based on customer research and feedback.

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