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This section will consider an analysis of the global LCD industry and the factors within the strategic environment which will have an impact upon the industry. In order to analyse the environment, this section will make use of a PESTLE analysis which considers the relevant political, economic, social, technological, legal and environmental factors. Having conducted the analysis, the paper will then present an action plan as to how Phillips may maintain its market share in the industry.

Political

Political factors may be seen as having a large impact upon the global LCD sector and have had an impact upon both the market and manufacturing aspects of the industry. On the whole, recent decades have seen political moves to essentially open up world markets allowing producers such as Phillips to both retail and manufacture its products in a wider range of countries than previously (Griffin and Pustay, 2010, Krugman et al, 2012). Such political changes often relate to emerging markets such as China, Russia, India and Brazil all of which have taken significant political steps in recent years to attract investment from producers such as Phillips. Despite such reforms, manufacture such as Phillips also need to be aware that reversals of policy are still a possibility, this may be seen as all the more of a risk in these economically turbulent times when there may be sudden appetite on the behalf of political leaders for protectionist measures which favour domestic producers and protection of the jobs of voters.

Economic

Since 2007 it may be seen that the world economy has overall suffered from slow levels of economic growth referred to as the global economic downturn. In addition, the future outlook, especially within Western Europe and the UK would seem to remain bleak with the prospect of a double dip recession forecast by many (BBC News, 2012). For the global LCD sector this may mean that producers have had to focus upon a strategy of cost leadership and providing customers with a value for money based proposition rather than looking to develop value added differentiation based strategies. However, despite the global economic downturn which has affected many countries badly, the results have not all been negative. One consideration is that while countries such as the UK and US have been heavily hit, others such as China and the emerging economies have still seen rising levels of wealth and growing middle class (Ravillion, 2010). As such, this would seem to suggest that strategic planners must focus on investing in markets which have been least effected by recent economic events.

Social

One key issue which many countries have come to see is an ageing population, a trend seen in both the UK and Western Europe (Parliament UK 2012) but also in the emerging economy of China as a result of the long term effects of the one child policy (Hutchings, 2001). However, one interpretation of such social trends is that this could benefit the global LCD business as aging populations come to look for higher quality home entertainments and other sources of diversion which do not require mobility. Other social changes however have seen changing consumer attitudes towards issues of CSR and the environmental impact of products and consumerism in general (Parsons and Maclaran, 2009). In this case, the consumer electronics sector may be seen as facing both challenges relating to current manufacturing practises in Far East locations (Duhigg and Baboza, 2012) but also an opportunity to create additional products and services linked to developments in green technologies and manufacturing practises.

Technological

The global LCD market itself may be seen as the product of an innovation in technology and replacing earlier technologies based around the cathode ray tube. However, investment in the technology on the behalf of television and consumer electronics producers represents a risk for companies such as Phillips. On the one hand, while direct investment may reduce supply risks, equally there is a consideration that there is a wide level of uncertainty as to how long LCD technology will be the dominant force in the market (Di Serio et al, 2011). Other issues relate to technological developments of complimentary products, or products which make use of LCD technology besides the core television product such as computer monitors and other consumer electronics. One consideration is that LCD producers and users may choose to invest in the development of technologies not associated with LCD production directly but in order to develop a new generation of complimentary products which make use of existing LCD technologies.

Legal

In order to develop and improve LCD technologies, there is a requirement for significant investment on the behalf of producers such as Samsung, Phillips, Sony and others in the market. However, one issue in the innovation process is that if such investments are to continue then investors must have their intellectual property protected (Tidd and Bessant, 2009). However, at present, it would appear that such legal protection is applied in an inconsistent way on a global basis. While producers enjoy rather comprehensive protection in developed economies such as the UK, Western Europe and the United States, protection in key emerging markets such as China and the Far East can often be somewhat lacking in substance, this is despite efforts on the behalf of the WTO and other bodies to improve legislation (Griffin and Pustay, 2010, Panitchpakdi and Clifford, 2002).

Other legal issues relate to those of the HR perspective, in this case global manufacturing can often see that legal regulations a much lower in emerging economies such as the Far East and Latin America. However, a key question remains so to whether producers should necessarily take advantage of the lower legal regulations of these emerging economies. In some cases, doing so has in the past resulted in negative publicity for those in the consumer electronics sector, with Ravillion’s (2010) analysis of Apple proving the point.

Environmental

Recent years would seem to suggest that the supply chains of those operating in the global LCD sector have become more international in nature with greater outsourcing of operations and the marketing of products in a wider range of international markets (Di Serio et al, 2011). While this may benefit the sector allowing firms to reduce costs through taking advantage of the comparative advantage of nations (Porter, 1998), a spate of recent incidents have shown that environmental factors have recently had a negative impact upon the international supply chains of many companies both within and out with the sector. Such examples include the devastation caused by Hurricane Katrina in the Southern USA, earthquakes and tsunamis in Japan which had shock waves in the supply chain of Toyota as far afield as the UK and flooding in Thailand and Pakistan (Kollewe, 2011). All in all, recent decades would seem to suggest that environmental factors present significant challenges for industries such as the LCD sector which have become increasingly internationalised in recent years.

Action Plan

Based upon the above analysis it would appear that the global LCD industry faces an uncertain environment with both significant opportunities and threats. As such, the report recommends the following action plan for a producer such as Phillips in order to maintain market share.

Cost Strategy: Given the current economic climate and the general attitude of consumers it is recommended that Phillips should focus upon a low cost based strategy. In order to achieve thus the company will need to ensure that costs are reduced at every opportunity so as to see that not only is the company able to offer consumers the lowest priced product, but also so that such a strategy may be maintained in the long term (Johnson et al, 2008).

Market Selection: A key to maintaining market share for Phillips may be to consider the amount of effort put into individual markets. In this case, the company may choose to target geographic markets which have shown a greater level of resilience in the context of the current global financial downturn (World Bank, 2012). For example, Phillips may choose to develop an emerging markets strategy targeting key high growth markets such as China, India, Russia and Brazil in order to compensate for poor performance in the US and Western Europe.

The classical approach or approaches of strategic development may be best summarised by Whittington (2001) who brings together a number theories and theorists who take a ‘top down’ rational approach towards strategic development. In other words, business level strategies are devised by those at the strategic apex of an organisation and are then implemented throughout the organisation. As Whittington (2001) points out, such approaches towards strategy are often suited to larger companies in mature and stable markets as opposed to emerging industries with a dynamic set of competitors. Having considered the classical perspective, the paper will now make the following business level strategic recommendations on behalf of Phillips in relation to the future direction of the company.

In selection an overall business level strategy, firms such as Phillips are presented with a plethora of prescriptive options, many of which are based upon a price v quality based assessment of strategy. Porter (2004) for instance offers three generic strategies based around cost leadership, differentiation and market focus. On the other hand, Bowman (1995) offers eight possible strategies based around differing levels of price and product quality based propositions. In this case, given the nature of the external strategic environment and the current position of Phillips and its strategic resources, the report recommends that Phillips should make uses of an overall cost leadership strategy attempting to offer consumers LCD televisions in the market which represent the lowest possible price. From the perspective of Bowman’s (1995) strategic clock this could result in one of three possible strategies including a no frills, low price or hybrid strategy. Considering these options, it may be the low price strategy which is of most relevant with a low price coming to meet average product quality and perceived benefits on the behalf of the consumer (Johnson et al, 2008). However, if such a strategy is to be enacted successfully, then Phillips must become the cost leader within the segment.

Having identified an overall business level strategy in the form of cost leadership, the next question is what steps must be taken to implement the strategy on the behalf of Phillips. In the first case, classical perspectives on strategy such as those put forward by Chandler (1962) advocated the expansion of businesses and the increasing of the levels of vertical integration. In this case, from a strategic perspective, classical theorists argued that larger vertically integrated companies were able to benefit from larger economies of scale and economies of scope than there smaller counterparts (Johnson et al, 2008). For this reason, the first recommendation of the report is that from a strategic perspective, Phillips should consider expanding the business not through a program of market based expansions but through a process of backwards vertical integration. In this case, Phillips may choose to acquire key suppliers of related components such as LCD panel producers, alternatively the company may choose to expand in such a direction through a process of organic investment in such in house production. Such a strategy would also seem to be consistent with the desire to reduce the power of the buyer and increase barriers to entry within the industry, key parts of Porter’s (2004) five forces analysis, a model associated with the classical school of thought on strategic management. This would seem to be desirable for Phillips at the moment given the high level of reliance which the company has on key input material providers such as Samsung (Di Serio et al, 2011).

Other possible sources of a strategic competitive advantage for Phillips may be to consider further ways of increasing the volume of sales within the business thus helping to create further economies of scale and scope and in doing so aiding the sustainability of the low cost strategy (Johnson et al, 2008). One issue to consider is that of the product range to be offered by the firm, in general terms, larger volumes of production often result in the development of a lower cost base through economies of scale and a reduction in the allocation of fixed costs (Arnold, 2008). However, not all increases in volume based production may be seen as equally as beneficial. For example, in expanding the breadth of the range of products offered by Phillips, those product additions which share common parts and components are likely to reduce the overall cost base of the company on a volume basis. However, introducing new product lines with few common components is likely to add complexity and hence cost to the business model (Slack et al, 2009, 2010). As such, the report recommends that in the future, Phillips should follow a strategy of increasing the width of its product range through related diversifications with the aim of increasing the volume of existing parts and components bought or manufactured within the company.

In summary, this section has presented a view in line with the classical planed approach towards business strategy in which Phillips should apply a low cost prescribed business strategy in order to best align the core recourses of the business with the needs of the external environment. In this case a number of recommendations have been made in order to facilitate such an approach including an increased level of vertical integration and in increasing of the breadth of the product range. From theoretical perspective, both of these strategies should help Phillips to reduce its cost base through the generation of further economies of scale and scope, thus supporting the business level strategy.

At its most basic level, the decision to outsource production is often considered in terms of a short to term cost analysis exercise with a considerable motivation coming from the prospect of being able to reduce costs and thus pass on the benefits to the end user or consumer. However, as Di Serio et al (2011) article considers, while this is true, the application of a number theoretical frameworks including the resource based view of the firm and transaction cost analysis may provide a more comprehensive framework for analysis. In the first instance, the resource based view of the firm considers that firms generate a competitive advantage by taking advantage of sets of unique and internal resources to develop a superior offering from either the cost based or product based perspective. As such, the decision to outsource of in house production is a key one for firms given that this will often be linked to the available strategic resources of the organisation, hence the decision is strategic as well as operational in nature.

Transaction cost theory on the other hand considers that there are costs associated with conducting transactions in a market context, in other words there are additional costs of outsourcing production which are not included in the delivered price of a product (Di Serio et al, 2011). Such costs include the risks involved in buying from a market context as well as more practical costs such as those of monitoring suppliers and planning the process of material acquisition. In other words, the application of transaction cost theory may act as a rebuttal to the instant attraction of manufacturers to an outsourcing strategy, highlighting a plethora of problems and costs which may not have been considered otherwise.

One key issue which is raised in specific relation to the LCD market but may be seen as applicable to any outsourcing decision is the opportunity for suppliers to behave in an opportunistic fashion (Di Serio et al, 2011). Such opportunistic behaviour can include making demands for excessive price increases or failure to supply altogether. Such a situation is more likely in markets where there is a limited number of suppliers and hence the power of the supplier is relatively high. In the case of the LCD market, this context would seem to exist with Samsung being almost the sole supplier of key components of the product. Exacerbating the problem is the fact that Samsung is not only a supplier of the product but also a competitor of Phillips in the consumer electronics sector (Di Serio et al, 2011). As such, one key issue for Phillips to consider in the outsourcing decision is to understand the significant risks being taken with regard to security of supply.

Other issue which relate to the outsourcing model consider the issue of flexibility, in this case the total impact of the decision upon a company from a strategic perspective is somewhat debatable. On the one hand, the outsourcing of production should see that firms such as Phillips have a greater level of flexibility of production output based upon the fact that capacity is increased and decreased through a market based procurement decision. In times of low demand, this is beneficial for the company in question given that it does not have to bear the cost of maintaining the fix costs associated with in housed manufacturing operations. On the other hand, in times of high demand, in theory firms such as Phillips should be able to simply buy in the additional capacity needed. However, while this is true in theory, the Di Serio et al (2011) case would seem to suggest that there can be a struggle to gain supplies from an outsourced provider during peak periods in the business or product lifecycle. Such a risk was materialised for Phillips during the course of the Football World Cup when the company struggled to obtain sufficient suppliers from outsourced operations.

Other strategic considerations for outsourcing operations come from the perception of risk of investing in technologies associated with every shortening product lifecycles. As the Di Serio et al (2011) case indicates, many in the LCD sector including Sony, LG and Phillips chose to outsource operations or create joint ventures in relation to component production simply due to a belief that investment in in-housed production represented a significant risk due to the short term nature of products in the consumer electronics sector. As such, the outsourcing decision may be seen as a mechanism for transferring such risks from manufacturer to supplier.

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This work was produced by one of our professional writers as a learning aid to help you with your studies

Organisations are highly specialized systems and people working within the organisations are generally cynical to change in the work environment as they don’t want to get into uncharted territory. It is the natural tendency of human being to live in their comfort zone and no one likes to be comfortable being uncomfortable even for a short duration (during the change process).

But, for organisations to survive and succeed in the current environment change is no longer optional. Organisations have to learn to love change to stay ahead of competition.

An overview of change management

Definition – Change management is about moving from one state to another, specifically, from the problem state to the solved state (Jung, 2001).

But, the organisational terminology for change management can be varied and ‘change’ may be used under different terms. E.g. when a company talks about re-engineering, restructuring, promoting cultural transformation, or keeping pace with the industry, then it is talking about change. Lewin (1951) conceptualized that change can occur at three levels.

Change in the individuals who work in the organisation – that is their skills, values, attributes, and eventually behaviour. Leaders have to make sure that such individual behavioural change is always regarded as instrumental to organisational change.

Change in the organisational structures and systems – reward systems, reporting relationships, work design and so on.

A direct change in the organisation climate or interpersonal style – dealing with people relationships, conflict management and the process of decision making. (Leonard et al., 2003, cited in Mabey & Mayon-White (ed))

Change can be further classified as planned and emergent. When change is deliberate and is a product of conscious reasoning and actions is supposed to be planned. Emergent change is a direct contract to this and unfolds in an apparently spontaneous and unplanned way.

Drivers of change

Change is mostly driven by circumstances and always takes place with a particular goal in mind. Some of the common drivers of change are, to keep pace with the changing environment, to beat competition, technological changes to improve process efficiency etc.

No matter what the driver for change is, the goal of the whole process is to lead the organisation into a future state which is different from the current state under which the organisation operates. (Nicols, 2006) The scope and scale of change can vary. E.g. Change can be limited a particular department (operations, marketing etc.) or it might affect the whole organisation, it might relate to only a group of people or might affect every employee in the organisation.

Initiators of change

Irrespective of its nature, change has to be initiated, driven and implemented by someone. This is where leadership fits into the change management process. It has been found that organisations that have been successful in coping with change have strong leadership that guides the team through a series of initial steps that set the stage for success (Nadler, 2001). Leaders are responsible for bringing about change in a staged and planned manner.

Dirks (2000) points out that change has to be instigated and it is the leader who instigates the change by his vision and persuasion. Nadler, Thies and Nadler (2001) suggest that, for effective change to occur, and in particular cultural change, there is no substitute for the active engagement of the leadership and executive team.

Top leaders must assume the role of chief architect of the change process. Cartwright and Cooper (1993) take this one step further by suggesting that it is important that employees at all levels become involved in the change process. Jung (2001) also views managers as playing key roles in developing, transforming and institutionalizing organisational culture during the change process.

For managing an organisation wide change, the leadership has to possess an unusually broad and finely honed set of skills. It needs to have a clear sense of mission and delegate task effectively to build a whole team of ‘change agents’. The structure of the organisation needs to change to one with less internal bureaucracy.

Hatch (2000) suggests that the implementation of any change process often flounders because it is improperly framed by top management. The key to choosing the right approach to change is thus to keep in mind how organisations function. As social systems comprising work, people, formal and informal systems, organisations are inherently resistant to change and designed to neutralize the impact of attempts at change (Chemers, 2001). Leaders play a critical role in selecting and planning appropriate change

Reluctance to organisational change

Gofee and Jones (2001) point out that the reluctance to organisational change from employees and other staff is primarily due to the way change is implemented and the abilities of the leader in bringing about the change rather than the nature of change itself. Bridges (1991) believes that it isn’t the actual change that individuals resist, but rather the transition that must be made to accommodate the change.

Organisational change entails change in the work process, culture and the nature of an employee’s working conditions. Psychologists believe that resistance to change is because of people being afraid of the unknown. During times of change, it is important that the leaders of the organisation create an atmosphere of psychological safety for all individuals to engage in the new behaviours and test the waters of the new culture after the change has been implemented.

Approaches to change

Change can be classified in a number of ways. The categorization depends on the extent of the change and whether it is seen as organic (often characterized as bottom-up) or driven (top-down). Ackerman’s change classification segregates change into

Developmental change – may be either planned or emergent; it is first order, or incremental. It is change that enhances or corrects existing aspects of an organisation, often focusing on the improvement of a skill or process. (Ackermann, 1997)

Transitional change – seeks to achieve a known desired state that is different from the existing one. It is episodic, planned and second order, or radical. Transformational change is radical or second order in nature. It requires a shift in assumptions made by the organisation and its members. Transformation can result in an organisation that differs significantly in terms of structure, processes, culture and strategy. It may, therefore, result in the creation of an organisation that operates in developmental mode – one that continuously learns, adapts and improves. (Mabey & Mayon-White (ed), 2003)

Implementing change

It is widely believed that the way an organisation adapts to change is fundamental to its success. In an ever increasing competitive environment, change is ubiquitous and the way employees respond to change (resistance/acceptance) has been identified to play a vital role in the change management process. Managing organisational change requires more than reengineering and restructuring systems and processes. It requires managing the human responses that accompany any organisational change (Darwin et al., 2002).

For its smooth implementation, the change management process has to be carefully planned and the onus is on the leader to ensure a hassle free implementation through effective and sensible planning, confident and effective decision-making, and regular, complete and timely communication with the employees (Simon & Newell, 2006). Factors such as organisation culture, structure of the organisation, bureaucracy, employee attitudes, business model etc. also play their part in implementing change.

Skills needed for effective change implementation

Authors like Nadler and Thies (2001) have stressed on the importance of problem solving within the change management process and argue that change can only be effectively implemented by good problem solvers. Managing change is seen as a matter of moving from one state to another, specifically, from the problem state to the solved state therefore diagnosis of problems at each stage and coming out with a solution to those problems plays a big part in the change management process (Champy, 2005).

Implementation difficulties

Bringing about major change in a large and complex organisation is a difficult task. Policies, procedures and structures need to be altered. Individuals and groups have to be motivated to continue perform in the face of major turbulence. It is not surprising, therefore, that the process of effectively implementing organisational change has long been a topic that both managers and researchers have pondered (Nadler, cited in Mabey and Mayon-White, 2003).

Beer et al. (2003) believe that most change programs don’t work because they are guided by a theory of change that is fundamentally flawed. The problem with most company-wide change programs is that they address only one or two the crucial factors (coordination, teamwork, commitment, structure of the organisation, organisation culture)

Change Management Strategy

As a part of the strategy, a feasibility analysis needs to be done to assess whether the change the organisation is looking to bring about is feasible considering the present state of the organisation (Huy, 2002). Organisational configurations need to be assessed before deciding on the proper change management strategy.

Change management is a three pronged strategy: transform, reduce and apply. Before the change process is drafted, it is the responsibility of the change initiator / leader for assessing the difference between the current state of affairs and the state accomplished after the change process which Haslam & Platow (2001) terms as the transform state. This is an assessment stage which requires the leaders to assess the goals. After goal assessment, the strategy should be to try to determine ways to narrow the gap through the change process (reduce stage) and subsequently delegate responsibility to play operators (like divisional heads and other departmental leaders) to actually effect the elimination of these differences.

During the change implementation process, the leader should play a key role, firstly, in the identification of the changes necessary to produce the required outcomes and then to put an implementation process in place to bring about those changes.

Champy (2005) believes that the leader is the one responsible for the how, what and why of the change process. It is the leader who should be responsible for identifying how the changes can be effectively implemented with least resistance from employees by taking into consideration the organisation structure and culture. Communication should also form a part of the change management strategy. The change initiator and implementer have to play the role of an effective communicator to inform the employees of the reasons behind the changes.

It has to be remembered that organisations change is always brought about by team work and the change process requires frequent communication with all the members of the organisation. Leadership approach should be to address resistance through increased and sustained communications and education. As a part of the strategy, employees should be encouraged to express their ideas and concerns with regards to the change.

Change management should start with the change manager mobilizing commitment to change through joint diagnosis of business problems. A shared vision of how to organize and manage competitiveness needs to be developed. Consensus has to be fostered for the new vision. Once there is a consensus, leaders and change agents should have the competence to enact it and the cohesion to move it along. The change management process and the strategy have to revitalize all departments without pushing change from the top. As a part of the implementation strategy, the leader should monitor and adjust strategies in response to problems in the revitalization process.

Also, all too often change agents try to completely change the culture of the organisations within the change management process. The strategy should be to try to control the culture rather than influence it. Leaders don’t have to drive the change but supervise it. Change has to be implemented and driven by the people who get affected by the change. Mumford et al. (2002) point out that the reluctance to organisational change from employees and other staff is primarily due to the way change is implemented and the abilities of the leader in bringing about the change rather than the nature of change itself. Changing the culture of an organisation should be a gradual transformation process.

Change management strategy should ensure that much of the task is delegated to the departments and leadership is mainly concerned in coordinating between the departments. It has to be made sure that the departments understand the importance of change through their effective, timely and regular communication. Departmental heads should be made to realize the importance of establishing a sense of urgency and enthusiasm about the change. Change should never try to be rushed.

Communication between organisational members, at all levels, from management and among peers, should be a major priority in any change process. A feeling of ‘No Consultation’ occurs among employees is they are not properly communicated; therefore ‘consultative’ leadership should be followed during the change process. Transparency and trust also form a very important part of the change management process.

As a part of the change management strategy, leaders need to select carefully the method or approach to be used to manage the change process and develop a new culture following the change. They have to establish effective channels of communication which involve individuals at all levels of the organisation to inform individuals of the stages to be followed and to outline clearly outcomes for them.

Above all, they need to lead in a positive manner, recognizing that change is an emotive process and people need to be ‘changed’ with dignity by acknowledging contributions and justifying the reasons for them personally to move on.

Word of caution – Even though, bringing about a change is important for organisations to stay competitive in the global market environment, organisations have to bear in mind that they don’t thrust change on their employees. The infrastructure for implementation of change management has to be ready before the implementation. The change process has to be correctly configured and the need for change has to be clearly communicated to the employees who will be affected by it.

Conclusions

An organisation is a complex entity and bringing about a change is an equally complex ordeal. Orchestrating a companywide change process is a delicate balance which requires able leadership. Effective leader make the change process easy for themselves and the organisation. But, playing a leadership role within the change process is far from easy.

Not only do leaders have a responsibility to lead, but as an employee they have to deal with change themselves. Therefore, it is very important for leaders themselves to understand the benefits of the change process and how change is going to be implemented. They shouldn’t get wrapped up in bringing about the change just for the sake of changing.

Planned implementation of the change process is utmost important. Change should not be imposed on the employees without proper planning and consideration given to the organisation culture. Planning requires coordination and leaders need to coordinate between departments to successfully plan the change.

Organisations should not try to change too much too soon and need to take a staged approach to change. Change should be a well thought process and implemented in a planned and systematic manner.

Everyone in the organisation should be adequately informed and listened to before embarking on the cultural change process. Finkelstein & Hambrick (1996) point out that the task of change management is to bring order to a messy situation, not pretend that it’s already well organized and disciplined and leadership is hugely responsible for bringing that semblance of order.

Companies also need to have the right approach and mind step to deal with the change process. Successful organisations drive change rather than being driven by the change. Although, the strategic decision to change comes from the top management but the implementation should always be a bottom up process. HP’s didn’t get either of those decisions right; its decision to change came too late (when Dell had already gained ground and had the first over advantage) due to which it tried to impose the change from top down.

It is worth mentioning that change management strategy adopted is also reliant on the type of organisation. Different organisations may need to approach change differently and the type of change management approach adopted should be consistent with the objectives of the organisation and its situation. For example, an organisation whose future depended on improving customer service should, logically, adopt a change model focused on improving processes that have a direct bearing on that objective and removing obstacles that prevent its achievement. This is because; a disjunction between the objective and the mechanism would result in untoward or unwanted results.

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It has been stated that a business derives value from knowledge, know-how, intellectual assets and competencies rather than ‘things’ and that these capabilities are vested within people (Hamel, 2005). Consequently, in order to create an enduring competitive advantage, a company must therefore focus on the retention and development of its organisational expertise (skills set, tacit and explicit knowledge, capabilities and core competences) and how to engage staff in the process (Porter, 2004; French, Rayner, Rees & Rumbles, 2008).

Two contrasting learning philosophies appear to exist within organisations – a basic, predominantly instructional approach focussed on remedial action to correct errors or omissions; and a more comprehensive lifelong learning recognising the fundamental importance of employees to business therefore adopting a more developmental approach (viewing people as assets) (Beardwell & Thompson, 2014).

Training is a planned and systematic way of improving an individual’s knowledge, skills and attitudes so that they can perform their current role more competently, whereas development is the process of preparing a person to take on more onerous responsibilities or equip them to face higher level, future challenges within the organisation (Malone, 2003: 76). Learning is the process that brings about a persistent change in behaviour through the acquisition of increased competence to deal successfully with the operating environment through the acquisition of knowledge, skills and required attitudes (French et al, 2008: 123).

Whilst learning is focussed on the acquisition of the required skills and competences to perform effectively, this has to be linked to performance i.e. combining this essential learning with the motivation to engage in a manner that applies it in a way that delivers improved or enhanced results (Bratton & Gold, 2007). This learning (and its application) can take place at various levels within a company – such as on an individual or team/group basis – but the focus of this paper will be on organisational learning aspects (French et al, 2008).

Key Definitions and Concepts

Organisational learning can be viewed as the process by which a company can build a collective or shared knowledge base and the development of mechanisms to retrieve and disseminate this knowledge (Hora & Hunter, 2014). This is built upon the premise that as an organisation grows and adapts, it is able to generate/create a store of institutional knowledge that delivers a collective business benefit exceeding that which could be expected to be provided by employees operating individually (Hagen, 2010). As a company develops over time, the collective learning that takes place generates organisational knowledge – the shared intelligence specific to that company accumulated through both formal systems and the shared experiences of people in the organisation (Cole & Kelly, 2011; Johnson, Whittington & Scholes, 2011).

Organisational learning therefore requires an entity capable of continual regeneration through the application of knowledge, experience and skills by creating a culture that encourages challenge and review (Johnson et al, 2011). The traditional, rigid, hierarchical structures that ensure the command and control of individuals are no longer conducive to competing in more dynamic environments or for generating organisational learning (Henry, 2011). Organisational learning consequently refers to the capacity of a company to learn how to do what it does, where what it learns is possessed not by individual members but by the collective – when the group acquires the know-how associated with its ability to carry out its collective activities then organisational learning has taken place (Cohen & Sproull, 1996).

Organisational learning provides a mechanism to address the essential nature of knowledge (Thompson & McHugh, 2009), in that there are fundamental differences in terms of explicit knowledge (which can be expressed formally and communicated through language) and tacit knowledge (which is difficult to formalise or communicate as it is embodied, personal and rooted in action/context) (Nonaka, 1994). A company requires the effective application of tacit knowledge developed from a more intimate appreciation of their operations and environment, in order to build a sustainable competitive advantage (Henry, 2011; Porter, 2004). This tacit knowledge can be perceived as corporate wisdom and despite the challenges associated with its transmission and dissemination, organisational learning approaches can be used to capture it effectively to create, innovate and maintain the competitive advantage required (Mullins & Christie, 2013).

In terms of individual employee capabilities, a company requires skill in the person (rooted within the individual and can be developed through education, training and experience), skill in the job (meeting role requirements) and skill in the setting (an understanding and appreciation of the shared/collective interests of the company and the organisational culture) (Johnson et al, 2011). Effective organisational learning approaches should therefore seek to maximise the collective return from the application and sharing of tacit knowledge, and the skills that can be acquired and developed through the working environment and culture (Hatch & Cunliffe, 2006), as these possess real business utility as they cannot be easily replicated by competitors (Barney, 1986).

Organisational Learning Approaches

Senge (1990) argued that an effective organisational approach to learning required the application of five key disciplines:

Personal mastery – understanding individual aspirations and creating clear linkages to organisational goals;
Mental models – creating a culture of reflection and inquiry to develop a wider awareness of the organisations needs so that individual thinking begins to anticipate those needs;
Shared vision – creating a collective commitment to a common purpose with activities and targets clearly linked to that purpose;
Team learning – group development interactions (rather than individual skills programmes) to ensure that training reflects requirements generated by shared goals;
Systems thinking – taking a holistic view to understand and appreciate key interdependencies, using feedback to develop, refine (and ultimately simplify) often complex systems.

(Senge, 1990)

For such an integrated thinking approach to be effective, the leader(s) must be able to develop a shared vision of where the organisation wants to be, developing a creative tension by also clearly articulating the current position of the company (Henry, 2011). The organisation uses clear mission and vision statements, underpinned by shared goals and targets to create a collective framework, which in turn shape learning interventions (often utilising individual or group performance development agreements) (Schein, 2004; Clegg, Kornberger & Pitsis, 2011). In order to create collective commitment, flexibility and creativity from employees, learning opportunities/interventions must be relatively frequent, as this then creates an enduring capability for change and innovation (Huczynski & Buchanan, 2013).

Whilst this approach is reflected in many large organisations and has the capacity to foster a culture that could maximise the return from tacit knowledge held within the organisation (Knights & Willmott, 2012), the structural emphasis outlined has been criticised. Unless the articulated mission and vision are regularly reviewed to consider the wider business environment and the demands of competitive advantage (Porter, 2004), thinking and learning can become constrained. Consequently, challenge is not encouraged and process/activity is seen as a worthwhile end in itself – ultimately the focus on measureable achievement/innovation can be lost and a blame culture can develop (Seddon, 2008).

Using organisational learning to manage the development and sharing of knowledge (as articulated by Senge, 1990) has the potential to maintain the competitive advantage required (Newell, Robertson, Scarborough & Swan, 2009). However, to maximise the potential return, “know-why” (such as design rationale and reasoning – the capturing of best practice) must be combined with “know-who” (the mapping of relevant expertise and skills) as well as “know-how” (promoting a learning and development environment in a manner that encourages innovation) (Mullins & Christie, 2013). Efforts to capture the critical aspect of “know-how” has led to the creation of Communities of Practice as an organisational model of learning (Lave & Wenger, 1998).

Cross-functional communities of practice seek to utilise the informal, social interaction of the group (rather than rely on structured, mechanistic knowledge transfer mechanisms) to create an engaged learning approach focussed on what needs to be known by the group (Lave & Wenger, 1998). Such groups often have the ability to capture and share vital tacit knowledge which more formal information management systems are often unable to do (Newell et al, 2009). A community of practice recognises that in order to learn and innovate, it is necessary to participate on a more personal level and to create engaged participation, it is necessary for people to feel included in the decision-process, thus allowing a sense of ownership to develop (Easterby-Smith, Burgoyne & Araujo, 1999). In sharing a concern, a set of problems, or a passion about a topic, the group/community are proactive in developing their knowledge and expertise, interacting on a regular basis (Wenger, McDermott & Snyder, 2002).

The perceived “added-value” of effective communities of practice has led to organisations attempting to manage the process by creating groups that cut across organisational boundaries in order to innovate, share knowledge and solve problems (Davenport and Hall, 2002).. However, the mere existence of a structure that brings people together does not ensure that this approach will be effective (Linstead, Fulop & Lilley 2009). Attempting to overly manage or even directly control any Community of Practice could introduce the very constraints that these informal peer-to-peer groups originally sought to work against/around and thus minimise their effectiveness (Eraut, 2002).

Issues and Caveats

Whilst it is possible to gain greater business utility and an enduring competitive advantage from organisational learning approaches, the following aspects need to be considered:

Superstitious learning. Where organisations learn the wrong things due to the connections between outcomes and actions being incorrectly specified e.g. rapidly or constantly adapting targets will be close to current performance levels (making being above or below the target an almost chance event) creating a misleading belief that organisational performance has improved.
Ambiguity of success. Where the indicators of success are constantly modified or targets continually change, it is difficult to measure what has actually been learned by the organisation even if meeting a goal is seen as a major achievement.
Competency Traps. Improving procedures or practices that do not deliver any real competitive advantage can create an illusion of organisational progress. In reality, they expose the company to competitors able to focus on improvements that deliver practical business benefits that meet customer requirements.

(Hatch & Cunliffe, 2006; Cohen & Sproull, 1996).

Essentially, organisational learning relies on knowledge management to capture and convert individual tacit knowledge into explicit knowledge that can be more easily shared with others in the company (Huczynski & Buchanan, 2013). In considering such knowledge management and intellectual capital capture processes in relation to a learning organisation, a number of issues can emerge:

Learning organisation ‘positives:
A rich, multi-dimensional concept affecting many aspects of organisational behaviour.
An innovative approach to learning, knowledge management and investment in intellectual capital.
Challenging concepts, focussed on the acquisition of individual and corporate knowledge.
An innovative approach to organisation, management and staff development.
Innovative application of technology to manage organisational knowledge (e.g. databases, internet and intranets).

Learning organisation negatives:

A complex/diffuse set of practices which can be difficult to implement systematically.
Attempts to use dated concepts (from change management and learning theory) re-packaged as management consultancy projects.
New approaches to encourage employee compliance with strict directives applied in the guise of ‘self-development’.
New/innovative approaches to strengthening management control over staff behaviours.
A technology-dependent approach which does not consider how people actually develop and use knowledge in the organisation.

(Adapted from Huczynski & Buchanan, 2013: 179).

Summary

A learning organisation is defined as an entity that encourages and facilitates the learning and development of people at all levels of the company, values that learning and which simultaneously transforms itself to maintain an enduring competitive advantage (Cole & Kelly, 2011: 487). The best learning organisations are skilled at creating, acquiring and transferring knowledge whilst also being able to modify their behaviour(s) to reflect new knowledge and insights (Garvin, 1993: 80). To do so effectively, requires skills in terms of systematic problem solving, experimentation with new approaches, learning from experience and past history, learning from the experiences and best practices of others and the ability to transfer knowledge quickly and efficiently throughout the organisation (Cole & Kelly, 2011). Unless the methods outlined (above) are able to create a collaborative environment where employees feel empowered to reflect on present practices and to provide improvement suggestions, then they will not provide any real added-value when compared to more traditional/individual learning interventions (Fineman, Gabriel & Sims, 2010).

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National culture is very diverse in the UK and affects management and organisation in a number ways. National culture includes the pervasive, shared beliefs, norms, values, and symbols that are occur in daily. National culture is normally transmitted by symbols and rituals and many often take these for granted and this includes management of organisations. Management today is bound by many rules and regulations and have to work in accordance with national cultures to ensure that their companies get mainstream attention whilst taking care of the norms displayed by the nation’s people. This paper will look at national culture at the organisational-unit state of multi-business firms and how it affects management and how organizing takes place

National culture is known to trigger changes in the corporate management control to benefit local business-unit circumstances. The role of management is more complex than many people contend. To put it simply, management adopt holistic responsibility for the outcomes of projects. If projects or organisational objectives are not satisfactorily achieved then the management takes full responsibility for this due to the fact that they set out the criteria for achieving such aims and oversaw the entire project. Managers have numerous roles which imply critical thinking on their behalf and the general rule of thumb is that management entails the effective planning, leading and control of resources in order to meet objectives as set out in the mission statement. Indeed the resources in question fluctuate on the basis of the type of industry the organisation trades in but from a general perspective such resources include personnel with their abilities and experience in addition to non-human elements i.e. machinery, raw materials IT and capital all of which play a pivotal part in contributing to the role of management. Work from Mead (1994 pg 55) shows that national culture at the multi-level data reveal small business-unit effects relative to corporate effects. The work from Mead suggests that in the presence of dominant national culture, management and the organisation work harder to uniformly implement control within their firms to reflect national culture conditions.

Estienne (1997) defines culture as – “Culture consists of patterns, explicit and implicit, of and for behaviour acquired and transmitted by symbols, constituting the distinctive achievement of human groups, including their embodiments in artefacts; the essential core of culture consists of traditional ideas and especially their attached values; culture systems may, on the one hand, be considered as products of action, on the other hand, as conditioning influences upon further action”

The graphs shows how national culture is divided out

Manifestation of Culture at Different Levels of Depth (Mead – 2005)

Culture in the narrowest sense also refers to knowledge of the arts. This includes music and sculpture. The concept of culture which is taken on by people through different ways of thinking and acting or other cultural issues in the wider sense all affect management. According to Jackson (2004 pg 23) there are 2 diagnostic models that help the manager. These are Hofstede’s Model of National Culture and the 7d Cultural Dimensions Model. According to the Hofstede Model of National Culture there are clear elements and concerns about equality and power distance. Power distance is the extent to which people accept inequality in power. In companies there is likely to be antagonism and conflict as employees may be unwilling to accept higher power e.g. some employees may dislike their manager because they are bossed around and this may affect morale and motivation in an adverse way. Furthermore, the concepts of the Hofstede’s Model of National Culture underlines the importance of management and organising when trying to manage individuals and the groups within society that attempt to balance out collectivism and individualism. Other components of the model which relate to national culture include gender roles i.e. masculinity and Confucian values.

In addition to establishing and deciphering tasks, management take account of this model and that consider aspects relation to –

Communication/ Linguistics – The geographical variance in organisational location involves a linguistic barrier where language is not easily comprehended in some parts of the world. Jargon and slang are regional and thus renders them inappropriate for other geographical locations. Management seeks to reduce the usage of jargon to minimise ambiguity amongst employees particularly in a multinational organisation.

Cultural values – Cultures are highly sensitive so the conformity to cultural imbalances highlights the role of management. Semiotic and verbal messages are interpreted differently by many cultures and the role of management dictates that they are privy to such sensitivities.

Many other roles include working as a co-coordinator in ensuring that staff is progressing with their work smoothly. Familiarity with teams’ abilities forms the basis of coordination and ensures that they can collaborate effectively without compromising the output. Should there be a discrepancy in working relations then the role of management dictates that they intervene and remedy the problem to ensure that disruption is kept to a minimum. The role of management entails time consciousness and facilitating as contended by Quinn (2002). It’s important to be proactive since time is money in business and adopting a somewhat relaxed approach can ultimately be catastrophic. The role of management implies that they need to show real conviction in their approach to motivating, encouraging and rewarding their personnel. Similarly, it’s imperative for management to be innovative and empower their staff so that they can learn from each other and share skills which will benefit the organisation production. However, in different cultures people are likely to interpret this type of information differently and, as a result, may take offence from this. The dissemination of knowledge provides a foundation upon which to base a learning culture within the organisation. Management have an obligation to coach employees and adopt a democratic stance where they seek to improve morale and confidence and suggest training regimes to improve confidence and working relations. Employees can find certain instructions as being vague and open to interpretation and coaching can eliminate this ambiguity by providing greater clarification. In many organisations managers are democratic meaning that they adopt a political role where they seek to negotiate with stakeholders to maintain a harmonised relationship and this is due to national culture and what the country expects. Being political also ensures the general web of contacts is widened giving organisations greater access to resources. Every management regime has a unique style and likewise their objectives are also unique and the management role needs to reflect the objectives set out. In general development is the key in achieving goals. Development provides growth and stability. Torrington (2001) cites case where cross cultural themes helped the manager to divide the components into smaller parts. The case was from Waitrose in France where the manager used the Hofstede model to simplify the components and relax the regulations concerning power and allowing workers to work freely with no conflict appearing. On the basis of the evidence cross cultural management helps managers in making easier the recruitment and selection process as well as creating organisational compatibility. However there are obstacles regarding culture and how various cultures respond differently when faced with different situations. In this context managers need to balance out their plans.

As cited by Hodgetts et al (2000 pg 54) the concepts of Hofstede’s individualism foundation is about the preference for a loosely knit social network. In this network individuals almost always look out for their own self interests. Collectivism in contrast is a tightly knit social network where individuals look after each other and companies protect their member’s interests. Through linking this concept to organisations, individualism is likely to lead to a network where there may be a range of opinions as workers only look to protect their own self-interests and may not be doing what in the best interest of the organisation as a whole. Through linking collectivism to organisations, if every worker looked out for each other good communication links are likely to result between them which is likely to lead to better input into tasks and objectives and so favourably affecting motivation levels in the organisations. As well as this there is common ground in that everyone would have similar beliefs since everybody is on the lookout for the self-interests of others. The work of Hofstede shows how individualism is closely linked to the wealth of nations e.g. from evidence from Lee (2008) we can see that the UK and USA are very individualist whereas countries like Pakistan and Columbia are very collectivist nations. The final dimension of national culture according to the work of Hofstede is masculinity and femininity. Masculinity is known by Hurn (2000 pg 12) to be a cultural preference where the aim is to strive towards achievement, heroism, assertiveness and material success. Femininity on the other hand is a cultural preference for cooperation, group decision making and quality of life. Through linking the concepts as provided by Hofstede to management and organisations there are some occupations that according to society only men are capable of doing e.g. a mechanic and there are some occupations that are more suitable for females such as an air hostess. However, today both of these occupations are widely taken on by both genders since people are looking to expand their learning horizons rather than worrying about what type of job it is. Evidence from Mead (2005 pg 34) cites the slogan “ if you want to do it then it shouldn’t matter about gender roles” This is exactly the slogan in cross cultural management that mangers have thought about and found that the female gender is more effective at doing certain jobs which according to society were more male orientated. (Mead, 2005)

Looking more into the dimensions of national culture and linking this to management, there is a clear bond between individualism and power distance e.g. the US has a high individualism rate and below an average rate of power distance. (Lucas et al, 2006 pg 28) This means that there is more focus on self-interest and so the reverse trend is that they do not accept inequality easily. With respect to collectivism and management take for example a third country like India where people who work in a group to boost communication and motivation means great loyalty. The management always takes the lead role as is expected and allows others to take part after he or she has spoken. This is known as high power distance which is common in third world countries. In a collectivist approach though there are likely to be ways in which subordinates can affect the management’s way of thinking e.g. taking the first step to complete a task before the management does. As a result of this evidence provided by Lucas (2006) it can be claimed that there is a link in the organisations to power distance and uncertainty avoidance. Some companies always look to avoid uncertainty and due to this the worker is aware where they stand e.g. working for the government. Hofstede’s research established that in different organisations and situations different nationalities were gaining different power distance, uncertainty avoidance relationships, e.g. in Germany laying down regulations and guidelines was found to be a method of equalling out this relationship whilst in the UK improving communication elements which existed between different departments with more training proving to be a help. (Demers, 2002) The theory associated with group dynamics is related to an interactive process that is primarily linked to altering patterns of tension with the ultimate aim of incorporating cohesion within a team of different culture. The way in which a team is impacted by dynamics assists in determining how leadership and dominant sub group patterns unravel. The effects of group dynamics would therefore influence players from a behavioural perspective and how their attitudes are affected over a certain period of time. Any changes can either be indelible or temporary. If the former theory is correlated to the sport of rugby, then the captain, vice-captain, the starting line-up and the substitutes would have an important role in team cohesion. The status of an individual player is a massive element with regards to their powers of influence but similarly the character of a player is similarly imperative. A player with a history of absence has no status and as a consequence can have a detrimental impact on the team though this would mainly depend on the player’s ability to impose their expertise and notions on the team.

The final element is motivation which according to theorists such as Blassingame (2002 pg 75) is closely related to individualism-collectivism. Research shows that the USA has the highest motivation factor due to individualism therefore employees are realising their needs. In a collectivist approach workers first of all realise their duties towards the group and so self-motivation would not be a primary aim according to such an approach. Motivation is culture bound. Maslow strongly emphasises that individualism has led to the expectancy and equity theories of motivation. These theories highlight rational and individual thinking as a basis of human behaviour. As a result the emphasis is placed on achievement. The theories don’t offer universal explanations of motivation but reflect the values system of different countries and their cultures.

Cultural Awareness and Extent of Global Involvement – source Stonehouse 2000

Today, it appears that there are a huge number of languages that are used in organisations for business reasons. For the management of organisations who want to expand their businesses into international markets according to Selmer (2008) will come across huge communication challenges and barriers. Such barriers will relate to communication which is likely to increase difficulty in communicating in those countries that do not share a common language with them. To put it simply, management are likely to find it a lot more difficult in communicating in a nation that does not share the same language as they do and so cross cultural management is likely to impede business success. International business is extremely dependable on good communication. Jackson (2004 pg 46) cites that language is the primary component behind this dependency as organisations more and more increasingly begin dealing with other companies many of whom communicate in a different language. Due to this it becomes more likely that there will be an increase in the number of problems that they are likely to come across. To challenge these difficulties managers need to blend in the cross cultural atmosphere with effective communication mechanisms that must run inherently throughout their organisation.

There are four levels of management within the management hierarchy all of which comprise of distinctive roles. The hierarchy consists of top management, middle management and first line management with the chief executive sitting at the top of the tree. The role of first line management implies arguably the most important tasks in an organisation. The role involves obtaining the trust and dedication of front line staff as well as adhering to customer requirements. The middle and senior management are simultaneously consulted in order to maximise success. The role mainly involves daily supervision of workers to maintain working cycles. The experience they gain from exposure to such an environment stands them in good stead in moving up the managerial hierarchy. However, there is still the issue of communication and misinterpretation and this presents a large problem when management organise work and try to motivate their workers.

There may indeed be difficulty in communicating and this may lead to larger problems, but in many cases there are ways in which organisations have tried to reduce problems and increase motivation by simplifying communication elements and which lead to better motivation amongst people. These include the use of simple and basic language with lingo and slang being cut out. Another way is to rely more on written forms of communication so that records and transcripts of what has been said can be kept for checking purposes. This cuts downs on misinterpretation. Due to this companies and management show greater level of formalisation than had previously existed. Another good example would be e-commerce. This is a cross cultural method where the website exists in difference languages to make all round interpretation easier. In a similar way there is ethics. Ethics will vary. Some will be ethical by choosing particular markets to target whilst other will just want to make money.

The essay has shown effects of national culture on management and organisations because as different cultures have different beliefs about how to do things, these beliefs converge and lead to divergence views which management must use in organising their organisations due to diverse cultures. Different countries have different ways in coping with their cultures and due to this there are different levels of power and uncertainty. National culture varies in each country and transnational companies who look to expand their markets need to take account of these cultures so that when they enter the country in question they know exactly what to expect when employees people from within that country. There are clear issues which relate to language, motivation etc. and these need to be fully understand before the management can go ahead with the expansion.

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Introduction

This paper aims to critically explore the key benefits and challenges of managing diversity within the workplace. It begins by examining the concept of diversity and the drivers for it, and then, drawing on examples from the current literature, reviews the different benefits and challenges of managing diversity in the workplace. The paper also identifies some of the different approaches organisations can take to effectively implement the management of diversity at work, and concludes by summarising the key learning points.

Understanding workplace diversity

In essence, the concept of diversity incorporates values and behaviours associated with acceptance and respect. It requires the understanding that each individual is unique, a recognition of individual differences, and goes beyond a simple tolerance of each other to a more embracing approach to the valuable dimensions of diversity contained within every individual (Patrick and Kumar, 2012).

The term ‘managing diversity’ itself first originated in the United States in the late 1980s and emerged as a result of anti-discrimination law and social equality issues (McDougall, 1996). It has since become to be viewed as a contemporary alternative to the more traditional equal opportunity approaches (Noon, 2007), and asserted to be proactive and results-focussed (CIPD, 2005).

The issue of workplace diversity has become increasingly debated in management circles due to expanding globalisation, changing demographics in the labour market and a greater awareness and acknowledgment more generally that there are differences between individuals (Hite and McDonald, 2010). This has meant that the issue of managing diversity has become one of importance and significance in both public and private sector organisations (Kirton and Greene, 2009; Farhad, 2007). According to Patrick and Kumar (2012), the biggest driver for high level management of diversity is the need to tap into the creative, cultural, and communicative skills of all employees and to use those skills to improve organisational policies, products, service, and customer experiences.

Other drivers for diversity include changes in legislation and societal awareness of it as an issue and this has meant that organisations are being forced to give a greater focus to the issue of managing and promoting diversity (Holbeche, 2009). In the UK, the Equality Act came into force in 2010 and consolidated all grounds of discrimination, and previous legislation, into a single statute. This Act placed new duties on employers around the management of diversity within their workforces and employment practices and requires organisations to visibly demonstrate what action they are taking to address it (Kumra and Manfredi, 2012).

Benefits of workplace diversity

There are numerous cited benefits for organisations that have a diverse workforce, such as it acting as a source of real competitive advantage (Herring, 2009) and being associated with increased profitability (Ng and Wyrick, 2011). It is claimed that diversity in the workforce can increase productivity and organisational effectiveness by harnessing the contribution of a wider range of perspectives (Choi and Rainey, 2010) and through the creation of stronger teams (Herring, 2009). In addition, it is argued that successfully managing diversity can result in more satisfied and committed employees delivering potentially enhanced financial performance for the organisation (Patrick and Kumar, 2012).

It has been suggested that organisations which are considered to be inclusive have a wider talent pool from which to recruit the most qualified and effective candidates thereby giving them competitive advantage over rivals (Edwards, Watkins, and Stevens, 2007). Similarly, it has been proposed that organisations that actively promote diversity in its workforce benefit from increased retention rates of existing employees (McKay et al., 2007).

In relation to innovation and creativity, it has been argued in the literature that a diverse workforce can enhance this. In particular, it has been found that racial and gender heterogeneity can result in more diverse types of information and ideas being shared within an organisation leading superior problem solving and decision-making (Richard, Kirby and Chadwick, 2013).

Furthermore, diversity in the workforce can deliver business advantage when dealing with diverse customer bases or international markets (Podsiadlowski et al, 2003), as organisations with diverse employees tend to have a better understanding of the requirements and obligations of the legal, political, social, economic, and cultural environments in which they operate (Patrick and Kumar, 2012). Diversity also helps in this respect by expanding an organisation’s perspective and its strategic tactics, the design of new operations, and the assessment of emerging trends within its sphere of business (Martin, 2014).

Challenges of workplace diversity

A number of challenges associated with diverse workforces and their management have also been identified. According to Ewoh (2013: 109), one of the main barriers that exist to managing diversity in the workplace relates to the language and terminology that is used to discuss it. He claims that many commentators on diversity claim that the problem stems from its definition and how the concept of diversity can be distinguished from those relating to positive action and equal opportunities. Foster and Harris (2005) claim that this ambiguity can make the implementation of diversity management problematic, and it has been claimed that the conceptual relationship between diversity and equal opportunities is blurred making it a complex issue to address for managers (Maxwell, 2004).

It has been argued that diversity has the potential to reduce group cohesiveness and increase conflict in teams and between employees and managers (Skerry, 2002). In particular, cultural diversity amongst employees has been found to be problematic. Culturally diverse employees have different opinions, beliefs, norms, customs, values and traditions and when such workers are placed in a group setting to achieve an organisational goal with mutual effort and collaboration, these differences of views and beliefs have the potential to hinder the development of unity (Martin, 2014). Some studies have also shown that this can also lead to reduced staff morale and productivity (Roberson and Kulik, 2007; Wrench, 2005).

Furthermore, approaches to managing diversity have been criticised for failing to sufficiently take into consideration the structural disadvantage that exists for many minority groups within the workforce (Wrench, 2005) and for not being able to adequately confront the dominant ideologies and power relations that exist (Noon, 2007).

Challenges also exist in relation to developing human resource policies and practices that meet the needs of a diverse workforce. According to Tung and Baumann (2009) people from different ethnic groups and cultural backgrounds hold different values when it comes to areas such as pay, reward and incentives and therefore organisations cannot assume that individuals from different ethnic groups will react in the same way to monetary based performance systems or financial schemes. Similarly, people from different cultural backgrounds may also hold different work ethics (Moran et al, 2014), and there may be variances in terms of acceptance of authority which has implications not only for policy development but also day to day management practice (YA±ldA±z, 2013).

As well as considering diversity in terms of the ‘protected characteristics’, organisations also have the challenge of embracing diversity in a wider sense. For example, Hunter and Ogungbure (2013) explore diversity in the workplace in relation to contemporary appearance such as hairstyles, tattoos and body piercings, and argue that they may impact on corporate culture and other organisational employment practices. In particular, they claim it can become particularly problematic for organisations when it is claimed that such outward body alterations are associated with religious beliefs. This is an area that is relatively unexplored but may also present practical challenges for organisations.

Implementation approaches for managers and leaders of diversity

According to Stevens, Plaut and Sanchez-Burks (2008), approaches to cultivating and managing diversity in organisations can be done in a number of ways. They claim that some organisations demonstrate their commitment to promoting diversity via a range of ‘diversity initiatives’ that are implemented into daily practice, whereas others choose instead to adopt a ‘colour blind’ approach to diversity.

The colour blind approach focuses on realigning workforce group identities with an overarching identity (Hogg and Terry, 2000), with the aim of decreasing the emphasis on individual differences. It stems from the notion of ‘treating everyone the same’ but has been criticised for being exclusionary and appealing only to nonminority groups (Markus et al, 2000). In contrast, the multi-cultural approach is based on the assumption that the differences between people are a source of strength for organisations and these differences need to be embraced and nurtured (Stevens, Plaut and Sanchez-Burks, 2008). With such an approach, a range of strategies are used to promote diversity including targeted networking and mentoring programmes aimed at specific minority groups, ‘diversity days’ where the cultural background of different groups of staff is celebrated, and the provision of targeted and generic diversity training (Paluck, 2006).

However, it has been claimed that with both of these approaches, organisations face real challenges in that neither approach will be welcomed by all staff. The multicultural approach can be seen by non-minority groups as posing a threat to their social identity (Verkuyten, 2005), and the colour blind approach is felt to take insufficient account of the structural disadvantages faced by minority groups (Noon, 2007). To overcome these limitations, Stevens, Plaut and Sanchez-Burks (2008) propose a new approach to managing diversity which they term ‘all-inclusive multi-culturalism’. They claim that this approach offers an alternative to the more traditional colour blind and multicultural ideologies by having a specific focus on employee inclusion, and the formation of high quality authentic relationships between employees that are resilient, transparent and which promote on-going learning. They claim that in order to implement such an approach, organisations need to create environments that are considered to be more inclusive by all members of the workforce with the implementation of policies and practices that are framed as benefiting everyone and the use of language and communication that does not label different groups or single them out.

Similarly, Richard, Kirby and Chadwick (2013) argue that in order for diversity management to be effectively implemented, and to avoid the common pitfalls, organisations must develop mechanisms whereby cooperation and collaboration across all roles is supported and create an inclusive environment that promotes belongingness.

According to Ewoh (2013: 114), in order to create such an environment that enables diversity to be managed, diversity leaders across an organisation must be identified and supported. In addition, clear objectives relating to diversity must be communicated alongside the provision of appropriate training to help managers and leaders deliver these. He further claims that support and commitment from ‘the top’ is essential along with recognition that ‘bottom-up’ input and engagement from diverse workers is needed to enhance the quality of decision making and the development of more innovative and sustainable policies. In agreement with this, Guillaume et al (2014), argue that effective leadership is essential to making any strategy for managing diversity in an organisation work. They identify leadership at the middle management level as being particularly crucial given that it is most likely that it is individuals at this level who will be tasked with implementing in practice an organisation’s diversity management policies and procedures, and be responsible for reinforcing the enactment of related diversity management practices in day to day work.

Conclusion

From the critical review presented above it is clear that there is increasing focus on the issue of diversity within the workplace as a result of increasing globalisation, changes in the labour market and external regulatory drivers.

There are many benefits identified from effectively managing workplace diversity including increased productivity, innovation and creativity, improved employee relations, and more effective working with diverse customer bases and international markets.

There are also, however, a number of challenges for organisations in implementing the management of diversity effectively and in avoiding some of the identified disadvantages which can result in negative outcomes such as increased team conflict and reduced team cohesion. In addition, the ambiguity around the term ‘managing diversity’ itself adds another level of complexity for organisations and individual managers in embracing this agenda effectively.

A number of strategies and approaches have been identified for implementing the effective management of diversity and all focus on creating inclusive cultures within organisations which require strong leadership and reinforcement in practice. It is clear that with the ever increasing diversity in the labour market, this is an important issue that organisations need to continue to review and address both now and in the future.

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Introduction

Employee stress is becoming an increasing problem for many managers across the world to combat. It has escalated to such an extent that the World Health Organisation has declared “occupational stress as a worldwide epidemic” (Avey, et al., 2009, p. 677). Furthermore, it can hold a number of negative impacts on the performance and profitability of a company, so managers should be consistently attempting to reduce the levels of employee stress in the workforce.

This essay will define what exactly employee stress is and what the predominant factors are that are affecting its rise. Furthermore, an analysis will be conducted on the negative effects that employee stress can have on the workforce and company, and how managers should try and reduce the levels of employee stress in their workforce.

Employee Stress

tress can be defined as “the physiological and psychological reaction, either consciously or subconsciously, to a perceived threat or undesirable condition beyond one’s immediate capacity to cope” (Chaing, et al., 2010, p. 26). Employee stress can have a number of negative effects on employee performance, with problems in health, increased accidents and burnouts being common issues for stressed out employees (Bernard & Krupat, 1994).

A variety of researchers attribute different factors to causing stress. These factors are commonly referred to as ‘stressors’. Colligan & Higgins (2006) attributes technological change, global competitive pressures, toxic work environments and managerial bullying as the main components to an increase in employee stress.

Furthermore, a study by Dahl (2010) heavily pins organisational change to the main factor that can impact on employee stress. It is thought that the majority of companies do not pay heed to the psychological affects that organisational change can have on employees, as they often focus on how the company’s performance will be benefitted. Primarily, organisational change can result in firm failure (Haveman, 1992; Barnett & Freeman, 2001). However, other theorists suggest that “the emotional and psychological wellbeing of employees are potentially affected by organizational change” (Dahl, 2010, p. 2).

Although outdated, one of the most comprehensive frameworks that identify stressors is provided by Murphy (1995, p. 42). He lists thirteen key factors that attribute to an increase in employee stress, which include; physical environment, role conflict, role ambiguity, interpersonal conflict, job future ambiguity, job control, employment opportunities, work load, variance in work load, responsibilities, underutilisation, demands and shift work. Furthermore, he suggests that these factors can be affected by “non-work factors” such as domestic demands. However, these factors would generally be out of the control of management. Murphy concludes that all of these factors that cause employee stress can lead to job dissatisfaction, accidents, complaints, substance abuse or even more serious, illnesses.

Although it seems that employee stress can only hold negative outcomes for a company, it has been found that it can provide a number of positive benefits. This can include increased creativity (Le Fevre, et al., 2003) and enhanced performance (Marino, 1997). However, despite the possible benefits that employee stress can hold, it also provides a plethora of more serious and negative effects. It is because of this negativity that managers must closely watch, and actively attempt to reduce employee stress.

Reducing Employee Stress

There are a variety of studies which outline a number of different ways in which a company can reduce employee stress. A study by Murphy (1995) outlines two significant ways in which to combat employee stress. These are:

Employee Assistant Programmes (EAP): These programmes have existed in the workforce for over 70 years now, with their main focus to treat “troubled” employees in the workforce. However, as workplace stress got more and more attention, it became more about providing wellbeing and care for all employees in a workforce. The programmes have since been expanded to deal with more intense stress relating incidents, such as the loss of a fellow employee, with these called stressor-specific programmes. Although these programmes seem positive, they do have their downfalls. This is primarily the fact that it is hard for feedback to be related back to managers, and that the programmes do not analyse how the organisation may be affecting stress, but focus on employees’ personality or characteristics.
Human Resource Management (HRM): The responsibilities of HRM can vary across different companies, but usually include the following; personnel management issues, performance appraisal, discrimination, team building and labour relations. Although not specific to employee stress, all of these areas can be attributing factors to employee stress levels. Furthermore, they act as an opposite to EAPs, as they act in relation to the organisation and not in relation to an employee’s personal traits or characteristics.

The study goes on to conclude that the best way to manage employee stress is to combine both of these practices. This allows employee stress to be monitored from a personal level with the EAPs and an organisational level from HRM.

Furthermore, the study by Avey, et.al.(2009) outlines a more modern approach on how managers can reduce employee stress. They call this approach the ‘Emerging Positive Approach’. This approach basically aims to focus on the positive side of things, highlighting employee strengths instead of focusing on their weaknesses. This can be called ‘Positive Organisational Behaviour’ (POB), which is “the study and application of positively oriented human resource strengths and psychological capacities that can be measured, developed, and effectively managed for performance improvement” (Luthans, 2002, p. 59).

Although this approach doesn’t specifically address employee stress, the nature of it helps reduce or even avoid it. As it seeks to highlight the strengths, it should increase performance of employees and allow them to work in an environment that is enjoyable to them. Instead of waiting until an employee is unhappy or stressed, this approach will actively try to combat the thirteen factors that Murphy defines as key ‘stressors’.

The aforementioned approaches all rely on heavy involvement from internal or external forces. However, there are a number of smaller things that managers can do to try and maintain a happy workforce and reduce employee stress. These are outlined by (Hengst, 2015), and include:

Support management: Management should be supporting their employees on all levels of the company hierarchy. Employee stress is obviously important to deter, but managers can also get stressed in the workplace. Maintaining support through every level of the organisation helps ensure that stress is not passed on from a manager to their employees or team.
Little rewards: Giving little rewards to employees can help reduce employee stress significantly. This could be in the form of bonuses for reaching certain goals, or a quarterly trivial reward system that hands out achievements of certificates. This does not cost the organisation a lot of money, but will help reduce the levels of employee stress.
Encourage fun: Although the workplace must maintain a serious atmosphere, there is no harm for encouraging employees’ to have fun. This can be organised after work, or during particularly slow times of business. Holding parties or events to encourage fun also provides an opportunity to build upon team-working and iron out any interpersonal issues.
Healthy lifestyle: Employees should be trained to work in a safe manner, and to not be afraid to ask for support if needed. Looking after employee wellbeing is one of the most significant factors for reducing employee stress. Any workplace injuries will most likely cause stress to the individuals involved, but may also cause tension with other employees in the company.

All of these factors do not need rigid implementation, but can be done throughout the year to maintain a positive work environment and reduce employee stress levels. They are all reliant on a manager being involved with their employees, and taking a genuine interest in maintaining employee wellbeing.

Conclusion

It becomes quickly apparent that employee stress can cause many issues for a company and an individual. The negative effects heavily outweigh the limited number of positive effects that it can hold. Although there are a number of external forces that can effect employee stress, a lot of responsibility is placed on managers on how to reduce levels of employee stress.

One of the earliest methods was with the use of EAPs. However, this did not take into consideration how the organisation is affecting stress levels, and so a collaboration of EAPs and HRM is a more optimum method. Furthermore, as an EAP can be sourced externally, it reduces some of the responsibility on the manager to reduce employee stress levels, as they only need to monitor how HRM are handling any issues.

Furthermore, the more modern approach to reducing employee stress is to stop it, before it can begin. This is shown through the emerging positive approach, as it encourages companies to maintain a positive atmosphere in the workplace, and deter employee stress before it can begin.

Although there are a variety of approaches to managing or reducing employee stress, there is no quick fix. Managers should be constantly monitoring employee stress levels, and implementing consistent processes to help reduce it. Stress levels cannot be reduced by a one-time incentive, but must be slowly reduced over time by the help and support of the management team.

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Introduction

In recent years there has been an upsurge in the Internalization of markets as various organisations are extending their services to different countries of the world in a bid to either flow with the competition existing within its industry, reducing costs etc. Managers of multinational firms are now increasingly realizing the significance of people management practices in ensuring the profitability and viability of their business operations (Brewster, 2002).

This act of internationalization introduces the human resource manager to the intricacies and issues that come with the internationalization of a corporation. These issues and intricacies have led to the introduction of the International Human Resource management which according to Dowling and Welch (2004) is defined as ‘going beyond the spectrum of management of expatriates and extends to the worldwide management of people.’

Scullion (1995, cited in Scullion & Collings, 2006) defines as ‘the Human resource issues and problems arising from the internationalization of business, and the Human Resources management strategies, policies and practices which firms pursue in response to the internationalization process.’ These Human Resources Management Policies though from the Parent Country (PCN) cannot always be applied in the various subsidiaries. Thus the aim of this work is to find out the factors human resource managers must consider when preparing IHRM policies.

Recruitment and Selection

Recruitment and selection according to Price (2004) are major issues for human resource managers. Recruitment is often described together with selection, which in time follows immediately after or is often closely connected with recruitment.

Anderson (1994: cited in Beardwell & Claydon, 2007) states that these issues are concerned with identifying, attracting and choosing suitable people to meet organisations’ human resource requirements. Though these processes are at times used simultaneously an attempt to differentiate its meaning is pertinent.

Recruitment is an instrument of the company’s HR policy, concerning decisions to be taken in a company or another organisation. It is a HR practice to attract appropriate individuals or groups for an organisation. It is defined by Dowling and Schuler (1990, cited in Beardwell & Claydon, 2007) as “Searching for and obtaining potential job candidates in sufficient numbers and quality so that the organisation can select the most the appropriate people o fill its job needs’.

While Hackett (1991: cited in Beardwell & Claydon, 2007) defines Selection as being more concerned with

‘Predicting which candidates will make the most appropriate contribution to the organisation- now and in the future’

According to Edward and Rees (2006) it involves testing and evaluating the skills and attributes of these individuals to determine which are the best for the job at hand. Either way the importance of a good recruitment and selection process is very important and has now become quite obvious as managers of multinationals have become increasingly aware that in order to succeed in their international strategies and business their human resources have an important role to play in their success as an international organisation.

Approaches to Recruitment and selection

When an organisation becomes international another factor that affects its Recruitment and Selection Policies are the organisation’s corporate culture which according to Perlmutter (1969, cited in Harzing and Ruysseveldt, 2000) could be Ethnocentric, Polycentric, Regiocentric or Geocentric.

Briscoe and Schuler (2004) are of the view that these approaches to staffing is usually a progressive one as it changes over time as a firm develops greater international experience and sophistication. Some other scholars are of the view that these approaches also change due to the political stability and legislations of the various countries where these subsidiaries are situated etc.

Ethnocentric Approach

This approach reflects a focus on the home country values and ways of operating thus organisations who apply this approach are organisations that are primarily home-country oriented. Key positions in the headquarters (HQ) and subsidiaries are filled by parent country nationals or citizens of the country where the HQ is located. Perlmutter (1969) noted that in these organisations home based policy, practice and even employees are viewed as superior and foreigners can be viewed as, and feel like second class citizens.

Research though has shown that ethnocentric approach to the staffing of an international organisation is usually most appropriate during the early stages of internationalization when the need for control is greatest. Mayrhofer and Brewster (1996, cited in Harris et al, 2003) have however advised against a wholehearted rejection of an ethnocentric approach to international staffing.

Polycentric Approach

This approach is based primarily on the host country orientation. The foreign subsidiaries are primarily staffed by the host country nationals or managers from the subsidiary location. This staffing approach according to Perlmutter is likely to be evident where organisations serve heterogeneous product markets and where products and services must be adapted and marketed to suit specific national tastes.

Regiocentric Approach

This approach is based on recruiting on a regional basis and according to Scullion and Collings (2004) International transfers are restricted to regions as managers are selected based on ‘the best in the region’.

Geocentric Approach

This approach according to Scullion and Collings (2006) involves the filling of positions at both HQ and subsidiary level with the best persons for the job regardless of the nationality. According to Evans et al (2002 cited in Scullion and Collings; 2004) ‘The skill of the person is more important than the passport’. This approach though is usually used when the organisation is at a mature stage.

These approaches usually come to play when there is a need to staff the subsidiaries of a multinational corporation and also when it has to do with the staffing policies for key positions within the Multinational Corporation especially since lower levels are, according to Harzing (2004) inevitably filled by host country nationals and third country nationals.

And also these approaches are not fixed but tend to change as the need for control changes and according to Welch (1994) the staffing need of an organisation changes with the organisation’s stage of internalization. (See case study 2)

Factors Affecting Transfer of IHRM Policies (Recruitment and Selection)

According to Koen (2005 cited in Mullins, 2007) ‘

The methodology of recruitment and selection has never been uniform across the world. Moreover, whether a specific personnel selection practice should be adopted universally remains an unresolved issue. However, given the crucial role played by this personnel function, especially in managing a multinational workforce, understanding the similarities and dissimilarities of existing practices in different nations ought to be the first step taken by human resource managers and researchers.

From this definition it can deducted that various countries have various recruitment practices and according to Harris et al (2003) this is due to the fact that organisations are increasingly recruiting beyond their national borders and this trend is not just to staff International corporations but also for domestic purposes. Also recent research has revealed that companies in different countries differ with respect to their HRM practices and policies (Ferner, 1997) not just in their recruitment and selection processes.

It has also been noted that transferring HR policies and practices to different countries can be quite problematic (Bae et al., 1998; cited in Myloni et al, 2004). Some of the major obstacles for these difficulties in transferability of culture according to Myloni et al (2004) are closely related to the host country’s cultural and institutional environment.

But Hayden and Edwards (2001, cited in Edwards and Rees 2006) state that the ease with which an organisation can transfer its policies and practices to its subsidiaries is shaped partly by its dependence on ‘supportive and distinctive extra-firm structures’

This means that when HR managers are preparing their R&S policies that they can apply in their worldwide operations there are certain factors they have to take into account while at the same time ensuring that in line with all Human resource Policies and practices their recruitment and selection Policies must be linked to the overall strategy and objectives of the International organisation.

Various authors have various views as to what these factors that affect the transferability of HRM staffing policies might be. Vance and Paik (2006) are of the view that such factors include issues such as the firm’s business strategy, stage of international development, specific foreign market experience host government restrictions and incentives, host country sociocultural restrictions and plans for individual and organisation development.

Hayden and Edwards (2001) have also argued that the differences between national business systems also limit the transferability of employment practices as their introduction to other countries is subject to the ‘constraints’ posed by the recipient systems. There also can be situational factors such economic trends and conditions, the nature and duration of the international work itself, MNC resources available, and the availability of willing and able candidates.

Harris et al (2003) are of the view that the following are the factors that an International HR manager must take into account;

The type of labour legislation.( in the Host Country)

The type of labour market

Appropriate recruitment sources

Host-Country Factors (Macro-environment Factors)

While Gronbaug and Nordbaug (1992) are of the view that there are both Micro and Macro environmental factors that affect International Organisation’s Shen(2006) is of the view that here are also two factors that influence transferability and terms them as Host Factor and Firm specific factors.

The Micro factors according to Gronbaug and Nordbaug are divided into two -including primary issues such as a subsidiary’s relationship to other parts of the international organisation, and the secondary factors embracing external issues such as customers, competitors etc. While the Macro factors (which concerns this work) include –

Socio-economic Factors – This refers to the standard of living in terms of wages, and which also includes the field of economic compensation, differences in national education and training system which according to Beardwell and Claydon (2007) are likely to mean that the skill and competence profile of the workers available on the labour market will differ from country to country.

Political/Legal Factors – Legal requirements touch on every aspect of relationships between employers and employees according to Morrison (2006) and since what is legally and socially acceptable in a firm’s operations in one country may not acceptable in another (Beardwell & Claydon, 2007) political and legal factors may contribute to structuring recruitment and selection policies and as such host country legal regulations represent a strong environmental pressure on MNC subsidiaries (Schuler et al, 1993 cited in Myloni et al, 2004); and the legal environment in which the MNC subsidiary is embedded can constrain the transfer of HRM practices from its parent (Beechler and Yang, 1994).

Culture

Differences in management cultures may mean that some management styles are more appropriate in some national settings than others (Beardwell and Claydon, 2007)

Firm specific factors

International Strategy

International organisational culture

Organisational Culture

Stage or mode of Internalization

Type or niche of industry

Size of international Operation

Reliance on international markets

Top management’s perception of home HRM systems

Host Contextual factors

Political factors

Legal Factors

Economic Factors

Socio-cultural factors

International recruitment and selection policies and practices.

Other Factors

Trust

Personal Moral Merits

A model of factors that affect international recruitment and Selection (sourced from Shen, 2006 – an adaptation of Hamil 1987 and Welch, 1994

Firm Specific Factors

Type of Industry – The type of industry that the International organisation is into will also determine the ability of the PCN to impose its policies and practices on the subsidiary (Welch 1994). For example if it were a banking sector the transfer of human resource policies will be low especially where the country has a strong union like in Greece. (Myloni et al, 2004) Boyacigiller (1990) also argues that HCNs might have more important links or connections that might benefit the organisation more and will thus have a lower potential of having PCNs.

Stage of Internationalization – organisations go through a learning process as they move towards becoming international. This process might be gradual, it might take place in stages, or development might be in leaps (Hedlund, 1986), and research has shown that the older the International organisation gets the lower the level of HRM transfer in comparison to middle-aged ones. Thus according to Miliman et al (1991) there exists an association with an organisation’s international experience and its use of PCN

Taylor et al (1996) are also of the view that there exists a link between the Size of an international Operation and its reliance on international markets. It also seems to have a link with international experience as it affects senior management’s orientation or approach to staffing which will as the MNC gets older shift from Ethnocentric to Geocentric.

Organisational Culture – In managing people to achieve organisational goals, organisations prefer clarity, certainty and perfection according to Pascale and Athos(1981) Simply defined it is the way we do things here (Bowler, 1966) and MNCs will tend to merge their organisational culture with that of the host country so as to be able to maximize their operations within the subsidiary.

Conclusion

From this work it can be deducted that the ability of an International Organisation to transfer its policies and Practices depends on many factors and these factors also depend on the time factor. This is due to the fact that it is easier for an International Organisation to transfer its policies to the subsidiaries and also enforce these policies (or forms of control) when the subsidiary is just at its inception stage and usually at this point most governments of these Host countries in their bid to encourage foreign might consider waiving certain legislations for the International Organisation. But as time passes these policies will be eroded as the subsidiary gains experience.

SWEDCO

(Adapted from Edward and Rees,2006)

Swedco is a Swedish Organisation and is a highly internationalized firm that produces high-tech manufactured goods and it employs tens of thousands of employees, approximately half of whom are outside Sweden. From the case study it will be assumed that Swedco has subsidiaries both in the UK and also in Belgium.

Culture

Swedco had the tendency to spread a ‘ democratic’ approach in their management style , also they tended to boycott or bypass hierarchy in the sense that the organisational actors according to Hedlund (1981) did not feel constrained by formal authority relationships thus the employees do not think it to be anything to jump hierarchy in order to put forward their ideas( which according to Hayden and Edwards (2001) was a typical trait or characteristics of the Swedish in terms of culture) but in recent times the evidence shows that the country of origin effect is being eroded as senior management have now tended to draw on Anglo – Saxon styles of management.

From the case study it appears that the Swedco Subsidiary in UK does seem to have a hand in the making and establishment of these policies that affect the whole organisation. This goes to show that as the International organisation gains more experience there is a fusion of the cultures of both the Parent country cultures and that of the Host country.

International Experience – In recent times as shown by the case study there has been policies set out based on the development of a cadre of managers from across the company. Subsidiaries are being encouraged to submit suggestions for individuals who should be considered for promotion to positions elsewhere in the firm.

This makes it clear that the management are of the view that the Subsidiaries have gained enough experience and have the right cadre of managers to be able to run the subsidiary without the use of an expatriate as would have been the case where the country had just recently internationalized.

From the case study it is clear that though the country of origin did have some form of control over its subsidiaries either in its staffing options or in the way their carry out their jobs and functions, with the passage of time there has been a change in the way things are done as the various cultures are merging.

HSBC: The International Manager Program

HSBC is a major financial services organisation that employs about 170,000 people and operates in over 80n countries. The bank has colonial roots and was originally based in Hong Kong. It was managed by ‘international officers’ who were largely British expatriate. In the early 1990’s, Midland Bank was acquired. Major acquisitions in North America have also made HSBC the largest foreign bank in Canada and the USA. The corporate centre is now UK. The bank’s vigorous advertising campaign features the need to be sensitive to local culture and customs in order to succeed in business, proclaiming it to the world’s Local Bank’

The expanding geographical reach of HSBC and its growth through acquisitions have increased the need for international deployment of people. This currently outweighs the decreasing need for expatriates in some of HSBC’s earlier markets, where most highly skilled local people are now available. HSBC has retained a specific group of international managers’ (IMs). Individuals are recruited direct to the International Manager program either from higher education or internally. The career deal for IMs is clear. They can be sent anywhere at a short notice, and so give high commitment to the organisation. In return, the individual has a good employment package, a wide variety of challenging jobs and good career prospects leading to general management positions. – Harris et al (2003)

From this case study it can be seen that though HSBC started with an ethnocentric approach to its recruitment and selection process it later had to switch to geocentric in a bid to adapt to the various cultures where it has its subsidiaries.

References

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Case Study 1 Adapted from Harris, Hilary, Brewster, Chris and Sparrow, Paul (2003) International Human Resource Management, London: CIPD

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Throughout the 20th century, businesses thrived by making their production methods more and more efficient by improving production processes and developing better ways for making things. However, efficiency in production methods is no longer the only success factors in today’s business world. The excellence of 21st century lies in Information management i.e. having the right thing, on the right time, in the right quantity. Information is one of the most critical elements for the success of a business. Information has become one of the most significant assets for a business. The performance of a business depends on how it manages this asset like every other assets such as finance, humans, buildings, products, customers, etc. (Ward, 1995). The advancements of Information and Communication technology have provided various tools to effectively manage information. Using information and communication technologies, businesses and organizations nowadays rely largely on Information systems to store and manage and analyse data. Information system is a combination of various subsystems that coordinate with each other to collectively gather, store, manage, retrieve, distribute, and transfer information. Information systems help businesses to enhance their productivity by increasing the efficiency and value of business processes (Porter & Millar 1985).

Using information technology tools for managing information in conducting business is referred to as E-Business. E-business is a very wide concept comprising of different aspects of business transaction or transferring information by means of Internet. E-business can be classified into three categories. It can be within an organization which may include of various information systems such as Accounting Information System, Knowledge management system, Decision support system, Executive support system, etc. This type of communication technology is called Intranet. The standards used for Intranet are the same as for Internet communication. Accessibility to the Intranet is limited to organization-specific applications or web sites. These web sites and applications are protected against any unauthorized personal by firewalls and other security measures. The second category is involves business-to-business (B2B) communication conducted via Extranet. The Extranet integrates two Intranets which are inter-connected to each other via Internet, which facilitates two separate organizations to communicate and share confidential data. Thirdly category is the business-to-consumer (B2C) communication which occurs over the Internet. The business-to-consumers activity is the most prominent feature of e-business (Amor, 2001).

Purpose of Information Systems

The purpose of an information system is to empower its users. There is a wide difference in a simple database which stores data and return it to its users upon request. A database can be created in a way that manages and retrieves information in a sorted manner. This information can help make decision at various levels within an organization. Information system recognize that there are different levels of workers in an organization who have their specific duties and thus provides them information is different ways (Heinrich, 2002). Its purpose is to make sure that the users of the system are quickly able to access, comprehend, and react to the information provided to them. Wiseman (1985) mentions that the information system improves business functionality by automating some of the fundamental information procedures. He further mentions that the information system increases the effectiveness of the management by satisfying their information demands.
Information demands of businesses vary at different organizational levels. Various business functions at strategic, tactical and operational level have different types of subsystems of information system to serve their information demands. Some of the commonly used subsystems are as follows:

• Management Information Systems (MIS)
• Decision Support Systems (DSS)
• Knowledge Management Systems (KMS)
• Expert Systems (ES)
• Executive Information Systems (EIS)
• Transaction Processing Systems (TPS)
• Accounting Information Systems (AIS)

E-commerce

An important component of the information and communication technology and indeed one of its most momentous impacts is the provision and empowerment of electronic commerce. Electronic commerce is a process of buying and selling of products or services by means of electronic systems involving the Internet and e-mails (Graham 2008).
Commercial activities performed through e-commerce are either business-to-business (B2B) or business-to-consumers (B2C). E-commerce is a very cost-efficient mode of conducting business-to-consumers commercial activities (Graham 2008). E-commerce allows economic agents to reduce the transactional cost to a great extent (Porter 2001). Instead of internal hierarchies, it empowers the market itself to organize economic activities, which in turn increases the efficiency of the not just the business but across the entire commodity chain (Malone et al. 1987).

E-commerce creates a dimension of ‘spacelessness’ for economic activities which is one of its most distinctive features. Since the emergence of the Internet and increasing use of e-commerce, the imminent “death of distance” and creation of an ‘eight continent’ has been highlighted by researchers which is spurred by the increasing trade and commerce activities conducted electronically. They assert that constraints such as space and distance are becoming less significant for conducting economical activities (O’Brien 1992; Cairncross 1997). A large literature exits regarding various firms having used e-commerce to achieve competitive advantage by finding new and distant customers (for example see Daniel and Grimshaw 2002; Hamill and Gregory 1997; Kim and Mauborgne 1999; O’Keefe et al. 1998; Poon and Swatman 1999). Thus information systems also serve the purpose of communication with external business entities for trade and commerce activities.

Analysis of the problems of gathering data and analysing information

Information systems are a vital tool in achieving competitive advantage for a business by properly managing and analysing the information. However there are many security concerns that have being in the corporate agenda since its early usage. Today organizations are challenged by various and complex information security matters for handling distributed computer networks. Large amount of e-commerce activities, increased usage of internet, and ever changing technologies means new threats and risks and vulnerabilities for businesses as more and more business functions and procedures are becoming paperless. For this purpose, right controls are required within an organization to reduce the risks and ensure effective functioning of the information systems (Sushil & Leon, 2004).
Information Systems requires certain controls to be implemented for its smooth and effective functionality (Boczko, 2007). Information security managers can put these controls in place to ensure the system is secure against threats, exposure, and risks. (Gertz, 2003).

• A threat can be any possible unwanted occurrence or event that could harm the Accounting Information System or the business.
• The exposure is the possible loss of money that would occur as a result of the threat becoming a reality.
• The risk is the chance that the threat will become reality.
The controls that secure information systems against unfavourable outcomes are as follows:
• Preventive Controls
• Input Controls; Input controls checks upon the information that is being entered into the system.
• Processing Controls; Processing controls checks whether the data is processed properly after it is entered in to the system.
• Output Controls; The output controls ensure the completeness, validity, and accuracy of the data in various output mediums.
• Storage Controls; The storage controls ensures that the data in stored in such a manner that it cannot be tampered with.
• Files Controls; Files controls reduce the errors that occur due the improper storage of files.
• Hardware Security; Hardware security control is very important as any damage or harm to the hardware would mean that the failure of the system therefore the hardware for the information system must be kept in a secure place and with only reliable and relevant personal having access to it. Proper protection against high temperature or power failures and incidents should be made along with backup support.
• Standardization; Standardization controls involves usage of already laid down standards by the developers and operators for the methodology of the system development and operation respectively.
(Basset, 1993)
• Detective controls
• Testing; Testing is required to detect any problems occurring in the system and is thus performed before it is made operational. Testing can shows problems that can occur in the processing and any other errors. It is recommended that testing should be performed on a routine basis or after any new developments.
• Training; the training of the data processing staff ensures proper functioning of the system. The awareness of the staff also helps in pointing any defects in the system which could then be resolved.
• Operation Controls; Operation controls in Dean Plc are controls which record what computer systems and the employees have been doing. The operational controls can include tasks such as rotation of shifts, duty logs, manual of operating instructions, attendance controls and computer logs, etc. which can referred to whenever a problem is reported.
(Basset, 1993)
• Corrective controls
• When any problem in the system is detected, the management along with the help of Business Analysts and Expert can take relevant steps to correct the problems in the system.
• Certain procedure can be set for reoccurrence of the problems.
Apart from security concerns, there are several other challenges and issues associated with managing information systems. These are:
• Increase costs of a technological solution (developing, implementing and maintaining of the information technologies and systems)
• Reliability for certain processes (information systems require thorough testing before they could be used and are difficult prone to errors leading to potential losses)
• Software tools are not fixed but constantly evolving (information communication technology tools require timely upgrades to meet prevailing standards)
• Integrating digital and non-digital sales and production information (for e-commerce activities)
• Customer fear of personal information being used wrongly (privacy issues)
• Customer have high expectations regarding efficiency and real time responses
• Vulnerability to fraud and other crimes
• Higher employee training required to effectively using the information technology.

Another technological concern regarding information technology is the high volume of data generated from its use and its management. Organizations are required to create robust middleware application that are capable of handling the high amount of data and route it to the appropriate information systems in a timely manner (Ngain and Gunasekaran 2009).

Major sources of relevant data used for management information systems

As mentioned previously, businesses and organizations have a variety of information requirements. Executives at strategic level require information to help them with their planning and strategic decision making. They require a summarized form of information that can give an overview of the business. Middle management requires more detailed information in order to oversee and control business activities. Operational level employees need basic routine information to carry out their day to day duties. Therefore, businesses have several information systems working altogether at the same time. Different information systems have different sources of gathering data according their purpose. The following presents a list of most commonly used information system and their likely sources of data and users.

Executive Support Systems

Executive Support System helps the senior management of an organization in making strategic decisions. Executive Support Systems shows the status of all key business activities and involves large data analysis to help strategic decision making. Therefore, it is likely to have information from all the internal and external sources which is gathered, analysed and summarized for strategic decision making. Internal sources include information collected from other information systems. External information system can include external data gathered by e-commerce activities, external market analysis and etc.

Management Information Systems

Management information system is concerned with the summarized data of the business transactions that helps middle management to monitor business activities. Therefore it is likely to have information from all the internal sources such as transaction processing systems. It summarizes information into management reports.

Decision-Support Systems

Decision Support Systems are designed to assist middle and top level management in making decisions at uncertain conditions. It informs the user about the possible consequences of their decisions. It gathers internal information to analyse the available options and alternatives. It has a predefined set of logic which is part of its design. It uses complex tools spreadsheets, and databases for creating ‘what if’ models.

Knowledge Management Systems

Knowledge Management Systems are created to help organizations and businesses create and share information. The source of such information systems is typically the employees who create new knowledge through their own expertise and then share it along with others within an organization. This share pool of information is created to search new commercial opportunities. Examples of such information systems are web-portals and Intranet portals created by professional lawyers, management consultants and etc. these information systems categorize and distribute information efficiently among users. Information could be contained in any form and formats such as word processed documents, presentations, web pages and etc.

Transaction Processing Systems

Transaction Processing Systems are created to process daily repetitive activities and transaction in an automated efficient manner. The automation increases the accuracy of the information. A business usually involves several reoccurring transactions. Therefore, there are several Transaction Processing Systems such as Billing systems, Payroll systems, Inventory management systems, etc. The sources of these information systems are the employees at the operational level or the organization. Sometimes automated identifications are also used to input data to these systems such as Radio Frequency Identification.

Office Automation Systems

Office Automation Systems are tools that help improve the productivity of employees processing data. Such systems usually work as standalone programs and do not link data to other information systems. Examples of such systems include Microsoft Office Tools, and Computer Operating Systems.

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1.0 Critical Recent Development

As this is being written Carphone Warehouse is part of

The Carphone Warehouse Group PLC

which consists of the Carphone Warehouse, a retail and distribution business and Europe’s leading independent retailer of mobile phones and services with over 2,400 stores in 9 countries and TalkTalk Group a fixed line telecommunications business that is currently one of the UK’s largest broadband provider with more than 4.1m broadband customers and 1.1m voice-only and narrowband customers. The two operations are being split into separate companies and it is planned that TalkTalk will begin trading as separate companies as of 29 March 2010. This obviously has had a major impact on the management and organizational culture as they preparations for the separation of the two elements of the company prepared to operate as individual entities. Each would by definition have their own managements, board of directors, and will develop a unique and individual corporate culture. It is also likely that there will be considerable shifts in management emphasis in the operation of the retail business.

2.0 The Management and Leadership of Carphone Warehouse

Carphone warehouse is in actuality a subsidiary of the US corporation Best Buy Co Inc as the result of a purchase and sale agreement with The Carphone Warehouse Group PLC consummated on 30 June 2008. Based on the Press release of 19 January 2010 Best Buy continues to operate The Carphone Warehouse in most respects as a separate and stand-alone business, but Best Buy controls it. In a dynamic situation such as the acquisition of CPW by Best Buy there is an obvious problem with the maintenance of management continuity even if there is not a turnover in personnel. The Best Buy relationship is unusual in that the company is still publicly traded in Europe, but is effectively controlled by Best Buy. There is also a close relationship with Best Buy’s European operations and it is difficult to actually separate them in terms of reporting and as entities. Combined with the sale of TalkTalk the internal situation must be very dynamic at this time. To understand the management dynamics of the company it is necessary to understand that it is involved in a very challenging period in its development with the sale of the TalkTalk group and its interest in Best Buy Europe that is basically a big box store operation compared to the historically physically small stores that comprised Carphone Warehouse operations.
The problem with the use of Carphone Warehouse relative to the questions of effective management and leadership development is that the company is going though a dramatic change in its operational format. Historically, the small stores involved close employee client interface. Essentially people came to Carphone Warehouse as much to get advice and help in choosing a handset and a service provider and provider plan as in simply buying a portable telephone handset. The stores were small, relatively easily managed and the relationships within the stores between “The Management” and the commission compensated employees were close and personal. The stores were usually staffed with a general manager and three or four sales associates. The stores typically comprise about 600 square feet and are open 60 to 80 hours per week and 7 days a week.

In contrast the Best Buy Big Box store in the US and Canada have 30,000 plus square feet, approximately 100-150 salaried employees and “grab and go” merchandise. It is clear that the required interface between the customer and the organization employee is far different in the two types of operation.

3.0 Leadership and Management

There is a huge body of research on the topics of leadership and management and the relationship between the two. Krishnan and Park however point out that, “researchers have confined their studies to exploring the impact of observable upper echelon characteristics, namely the demographic traits on corporate strategies and performance. The question is what characteristics are important in developing effective management in Carphone Warehouse. In a retail environment an effective management and leadership development programme is based on duplication. The basic Carphone structure is the small store with a single manager and few subordinates all of whom have the same responsibilities. These store manager reports to area managers who report to district managers in a classic pyramid structure. The question here is not creativity or innovation, but following a successful formula in terms of operation and presentation of product to the customer. It is interesting that the duplication is if anything more important in the “big box” environment of the Best Buy store where there is minimal customer interface. Here the focus is on stocking the shelves, and creating displays according to predetermined plans and collecting and getting paid for the merchandise purchased. The management structure is more complex because of the larger number of individuals involved, but the duplication concept is identical. Tesco is a master of this, and all Tesco supermarkets look virtually identical inside in terms of layout and display. The underlying function of the management is to see employees do what they are told in the manner prescribed. The HRM model is almost martial. There are doubtless at headquarter and senior levels room for creativity, but for most of the employees duplication is the key to their responsibilities. The need for more knowledgeable salespeople is pointed out below in opportunities. This will however require extensive training in complex technology, which will be a challenge to management under the duplication approach to HRM.

4.0 SWOT Analysis

The

strengths

of the Carphone Warehouse operation are mass purchasing power as the largest vendor of portable phones in Europe, a well-recognised brand name with a good image, and pervasive presence in the nature of vast numbers of retail outlets is desirable locations. The other key strength is the increase pervasiveness of portable information access devices. This same element will be used below as a weakness of the business model.

The

weakness

the Carphone Warehouse business model is embodied in the word phone in its name. It grew to its present size and prominence as a vendor of telephones, devices people talked to each other over. The modern “smartphone” like the iPhone is a far more sophisticated and complex device. It can obviously be used as a telephone, but it is effectively a personal communications device. It is rapidly becoming a pocket computer that provides navigation, games, Internet access and more new uses almost daily. As of the time this is being written there are 154,726 applications available for the iPhone, and almost 9,000 new applications are being added per month. This is a far cry from the simple original business model of Carphone Warehouse.

The growing importance of portable computing communications devices is also a huge

opportunity

for the operation. Most people already have at least a conventional mobile phone in Europe. According to “netimperative”, in October of 2008 there were 592 million mobile phone subscribers in Europe of 119% market penetration. As the consumer demands more sophisticated devices they will replace their existing phones with more expensive and complex devices and will require the assistance of knowledgeable sales people to guide them. It will also imply larger stores handling larger numbers of products with more personnel and higher skill and knowledge levels among the salespeople. If Carphone Warehouse can meet the challenge of recruiting and training the requisite human resources it will have a considerable competitive advantage relative to most outlets for mobile phones.

The increasing complexity of the technology is also a

threat

. With the development of net books, iPads, and a host of other devices that are not phones but offer many of the same capabilities the industry environment is and will continue to change dramatically. Carphone Warehouse is responding with a new “midsized’ Store format that will permit it to carry and display a far larger variety of devices the current relatively small stores can accommodate. The question is the existence of more than 2,400 existing small format stores that will not remain competitive in the new environment that is developing. These must be replaced or expanded to remain viable. This can involve a considerable capital outlay and considerable time. These existing stores may become uncompetitive before they can be replaced.

5.0 PEST Analysis
Political

considerations are minor in the Carphone Warehouse operation. Communications regulation could have an impact, but it probably would not have significant business implications for the operation. The

economy

is obviously a consideration in any retail operation and sales and profits will respond to the economic environment. Inventory levels and new store openings will doubtless reflect economic conditions to some extent, but the tech market has been relatively resistant to the current economic softness. The

social

impact of tech developments such as social networking will obviously spur conversion of existing phones to more sophisticated handsets.

Technology

is having an impact on society as great as mass production and the auto did in the 20th century. This can do nothing but help a company dedicated to the sale of products utilizing the rapidly developing technology. The elements of

social and technological

are key to the development and future of the company.

6.0 Developing an effective leadership and management programme

The key consideration in the development of Human Relations Management for a company such as Carphone Warehouse is the training of the salespeople to deal with the increased complexity of the products they are selling to what is, in large part, customers with limited knowledge and understanding of their products. In a retail operation there obviously is a cadre of trained and sophisticated managers and strategic planners at the apex of the pyramid, but for the bulk of the workforce the key is duplication. In the case of Carphone Warehouse the level of complexity of the training to produce this duplication will have to be far higher than that of a McDonalds, but is fundamentally similar. The use of commission compensation provides a strong element of incentive to learn and perform on the part of the staff, and should facilitate the effectiveness of the training program.

At the higher management levels the control of Carphone Warehouse by Best Buy implies that the development of management and leadership must originate with what is now effectively the parent company. The question devolves to the management and leadership of Best Buy.

References

148Apps.Biz. (2010). App Store Metrics. Retrieved from http://148apps.biz/app-store-metrics/
Best Buy Form 10-K filed April 29, 2009 for the period ending February 28, 2009 p.7
Krishnan, H., & Park, D. (1998). The Influence of Top Management Team Leadership on Corporate Refocusing: A Theoretical Framework. Journal of Leadership Studies, 5(2), 50.
Netimperative. (2009, September 17). Mobile phone market penetration across Europe. Retrieved February 12, 2010, from http://www.netimperative.com/news/2009/september/mobile-phone-market-penetration-across-europe/view
The Carphone Warehouse Group PLC. (2009). Annual Report 2009 [Brochure]. London: http://media.corporate-ir.net/media_files/irol/12/123964/AR09/CPW_AR09.pdf
The Carphone Warehouse. (2010, January 29). Press Release Circular and TalkTalk and New CPW Prospectuses. Retrieved February 11, 2010, from http://www.cpwplc.com/phoenix.zhtml?c=123964&p=irol-home

Appendix

The concept of duplication in training in large organizations is not discussed in any academic reference found. It is however a widely accepted principal in military training, franchising and multi-level marketing training. It simply is the concept that the trainee performs the same action in response to a given stimulus exactly the same way each time. The training is repeated until the desired response is produced each time the stimulus is applied. Military close order drill is a classic example. Troops are trained so that on the command “column left” every soldier in the group automatically turns left in the same way at the same point.

In an environment like Carphone Warehouse the training might include greeting each customer with the appropriate “good morning sir” or “good afternoon madam” as opposed to “can I help you?” It would also include extensive training on the qualities and features of each model of handset sold. The concept is that every customer in every store is greeted exactly the same way and provided with exactly the same information in the same way. This has been determined by the sales training department and disseminated throughout the operation. This does not preclude rewarding or recognising outstanding performance. Even the military gives medals for performance above and beyond the call of duty. What it does is standardize the product presentation so it is done in the most effective manner. With 2,400 stores, it is imperative that performance and procedure be standardized.

This work was produced by one of our professional writers as a learning aid to help you with your studies

Over recent years, a small number of key concepts have become very significant to Operations Managers.

Four of these concepts are:

Customer Care

Kaizen

Just-in-Time

Total Quality Management

Your task is to compare and contrast each of these four concepts, clearly describing each. Your work should help the reader to understand how each interrelates to the others and how, if properly applied, they will help any organisation to be a success.

In order to understand the four concepts of customer care, kaizen, just-in-time and total quality management, there is a need to understand operations management and what this entails in the relationship between the four concepts and operations management. It is vital to the task to understand the meaning of each of the concepts in relation to operations management as well as to the business in which it is situated.

Operations management is the area of business practice which is associated with the production of goods and services. It involves the responsibility of ensuring that business operations are efficient through the use of as little resources as possible and also that the customer requirements are met in and effective and efficient manner. According to Bartol et al (1998: p. 53), operations management ‘Is the function, or field of expertise, that is primarily responsible for managing the production and delivery of an organisation’s products and services.’

The main use of operations management is the management of the process that converts inputs into outputs. Every organisation has an operational function, because every organisation produces a good or service for its consumers. According to Slack (1999: p. 122), operations managers are ‘the staff of the organisation who have particular responsibility for managing some, or all of the resources which comprise the operations function.’

The main aim of operations management is to increase the organisation’s value added activities within any given process. This organisational aim is helped along by the four concepts mentioned earlier – customer care, Kaizan, Just-in-Time and Total Quality Management (TQM). Each of these concepts are integral to the productivity of the organisation and to its overall success within the business environment.

Customer service is often referred to as customer support operations and this provides the activities which support the customer in the use of the organisation’s products as well as providing the means by which the equipment is serviced. Customer care is the after sales service which is often regarded as the need to satisfy warranty requirements. According to Slack (1999: p. 30) many organisations mistakenly believe that this is relevant after a sale has been made, ‘However, customer service and support is influenced by, and should influence, earlier stages in the contact with customers and the design and production of products. This philosophy is one of a consistency of service for customers by means of a designed and built-in serviceability of products.’

The role of customer care should be an integral part of the organisation’s service strategy. Customer care is driven by three factors:

It’s initial purchase price

The cost of failure to customers, and

Its reliability index.

Customer care is important to any organisation and in order to gain customer approval, the organisation must concentrate on not only the quality of the product or service but also on the customer service both while the customer is in the process of buying the product but also in the aftercare period of the product.

Kaizen is the Japanese word for improvement and refers to the philosophy that focuses on continuous improvement in manufacturing and business activities. The concept of Kaizan was implemented first in Japan during the post-war economic miracle and has spread through the global business environment. Kaizan refers to the continual improvement of all the business functions of the organisation, from the manufacturing of the product to the management of the organisation, from senior management to assembly line workers. Kaizan’s aim is to eliminate waste through the improvement of standardised business activities and processes. The process of Kaizan when completed correctly ensures that the workplace is humanised and sees the elimination of overly hard work, and through this process increases productivity. In order for the concept of Kaizan to work, there is the need for the participation of all of the organisation’s employees from senior management to the assembly line. The key elements which are crucial to the process of Kaizan are

Quality

Effort

Involvement of all employees

Willingness to change

Communication.

It is important to the concept of Kaizan that the theories of teamwork are established as well personal discipline and an improved morale from the employees as well as the establishment of quality circles and suggestions for improvement.

Just-in-Time is the modern day Western approach which has been developed from Japanese companies in the 1950’s and 1960’s. The primary objective of Just-in-Time is to make the time between the order of the customer and the payment of cash. Just-in-Time is the process which is the integration of philosophy and techniques which are used to improved performance. According to Slack (1999: p. 85) ‘only the customer is free to place demand when he or she wants: after that the JIT system should take over to assure the rapid and co-ordinated movement of parts throughout the system to meet that demand.’

The key philosophy behind Just-in-Time is to squeeze out waste at every junction. Waste, by definition in this context is defined by any activity which does not add value. Just-in-Time can be defined as a quest for superior performance manufacturing. Just-in-Time operations are done as and when they are needed. According to Waters (2002 p. 454) ‘In essence, just-in-time or JIT organises all operations so the occur at exactly the time they are needed. They are not done too early (which would leave products and materials hanging around until they were actually needed) and they are not done too late (which would give poor customer service).

The management philosophy of Total Quality Management (TQM), according to Slack (1999 p.224) embraces ‘all activities through which the needs and expectations of the customer and the and the community, and the objectives of the organisation are satisfied in the most efficient and cost effective way by maximising the potential of all employees in a continuing drive for improvement.’

Total Quality Management places emphasis on the planning and organisation features which are integral to the quality improvement process. There is a need for a long term approach for Total Quality Management which needs to be integrated with the other strategies such as information technology, operations and human resources, organisational business plans etc, in order for the business to compete within the environment. For the Total Quality Management process to be successful, effective use of the quality systems and procedures are imperative to the running of the system. Total Quality Management has become a particularly important development and the effects of this process are likely to remain in good organisations. This concept is the realisation that poor quality can cost the organisation in terms of cash and loss of the future market share, whereas excellent quality can offer the organisation a definite competitive advantage.

These four key concepts of operations management are essential to operations managers in determining the future of the business and are important in significance to the nature of success of the business and how it is run. All four concepts of customer care, Kaizan, Just-in-Time and Total Quality Management are all interrelated to each other through their respective processes and if these concepts are properly applied they can guarantee the success of the organisation. The concepts are all essential to the workings of the organisation and these concepts are overseen by the operations manager. The concept of customer care is seen by the operations manager as essential to the overall success in the organisation through the value which the product or service has added as well the aftercare service which is provided whether this is by technical support or through a warranty which the organisation has provided. According to Bartol et al (1998: p. 588) on the subject of managing customer contact
‘Experts argue that the degree to which a service can be efficient is directly related to the extent of the customer contact.’ This can be related to the other concepts especially with regards to wastage. The more time the employ has to manage contact with the customer, the more time they are neglecting other aspects of the operation. Contact with the customer can lead to a greater prospect of requests from the customer, changes in the instructions which had been finalised or the desire for the customer to chat can be seen as wastage. The role of the operations manager is to control this contact in a manageable and reasonable fashion so that there is no major loss to the company.

This in turn can be linked to the Just-in-Time system which controls the inventory as described by Bartol et al (1998: p. 565) ‘an approach to inventory control that emphasises having materials arrive just as they are needed in the production process.’
It is important in supply and demand as well as the value chain when adding value to the service, the product and the company that this inventory system is vital to the successful running of the organisation. This inventory system is also overseen by the operations manager and like customer care it is necessary to allow little wastage in order for the implementation of successful future planning. With the Just-in-Time system high quality is a vital necessity as the production is reliant on the materials being provided by the supplier in a timely manner. It is up to the operations manager to monitor and stay on top of this operation to allow production to be continuous.

In relation to the concept of Kaizan, it is up to the operations manager to guide their employees through the process. There is no set group through which Kaizan can be initiated, it can be through the individual, a small group or a large group. Through this concept of Kaizan, the process can generate in organisations Total Quality Management and helps free up the efforts through improvements in productivity through the organisation’s employees. Total Quality Management as part of the operations management process is important in conjunction with the other three concepts. Bartol et al (1998: p. 544) defines the process as ‘A management system that is an integral part of an organisation’s strategy and is aimed at continually improving product and service quality so as to achieve high levels of customer satisfaction and build strong customer loyalty.’

All four of these concepts are interrelated and cannot be separated from each other in a successful organisation.

It is important that the operations manager understand the needs for these concepts and how they affect the overall success of the business and how both customer loyalty and employee morale are important to the direction of the organisation for future planning. It is important to the role of the operations manager for these concepts to be installed in the organisational ethos and so that they are not separated and can be worked in conjunction with each of the concepts. The role of the operations manager within the organisation is to oversee the production side of the organisation and with the four concepts implemented successfully, this can place both a greater emphasis on future planning and success of the organisation as well as building customer loyalty and employee morale, therefore allowing the organisation, the customer and the employee to have an element of satisfaction.

Bibliography

Bartol, K.M., & Martin, D.C., (1998) Management, McGraw Hill
Bettley, A., Mayle, D., & Tantoush, T., (2005) Operations Management: A Strategic Approach, Sage Publications/ The Open University
Bicheno, J., & Elliott, B.B.R., (2002) Operations Management: An Active Learning Approach, Blackwell Publishers Ltd
Brown, S., Blackmon, K., Cousins, P., & Maylor, H., (2001) Operations Management: Policy, Practice and Performance Management, Butterworth-Heinemann
Greasley, A., (2008) Operations Management, Sage Publications
Lewis, M., & Slack, N., (2003) Operations Management: Critical Perspectives on Business and Management, Routledge
Lowson, R.H., (2002) Strategic Operations Management: The New Competitive Advantage, Routledge
Needham, D., Dransfield, R., Harris, R., & Coles, M., (1995) Business for Higher Awards, Heinemann
Shim, J.K., & Siegel, J.G., (1999) Operations Management, Barron Educational Series
Slack, N., (1999) The Blackwell Encyclopedic Dictionary of Operations Management, Blackwell Publishers Ltd
Waters, D., (2002) Operations Management: Producing Goods and Services, FT/ Prentice Hall