Revision ( Week 7 )

Revision !!! 

Management :

Four Main School -- Classical --> Human Relations --> System --> Contigency

 Classical 

Key contribution -- Taylor, Fayol, Ford, Weber

Taylor, Fayol and Ford -- " scientific management "

Weber -- " bureaucracy "

   

Scientific Management :

* People are in it for money

* The delivery of work instead of leaving it to the workman's         initiative to find it

* An analysis of operations into their constituent parts

* The planned, orderly and continuous progression of the commodity

• paying workers according to the quantity they produce
• employ fewer workers to increase the productivity ( workers worried about losing their job )
• clearly defined job roles
• standardised procedures
• a hierarchy of authority

Advantages :

• increase production
• reduce inaccuracy
• fast decision-making
• benefit on management and work

Disadvantages :

• costly ( planning )
• lack of flexibility
• monotonous
• non-democracy
• increase unemployment

Examples :

• Ford company ( car factory )
• Burger King
• McDonalds

Bureaucracy :

1. tasks are allocated as official duties
   
2. clear division of labour and high levels of specialisation
3. use of hierarchical authority
4. a fixed system of rules and regulations and a structure of authority
5. employment is based on technical qualifications

Criticisms :

1. too much emphasis on rules and regulations
2. emphasis on status and position within the organisation
3. lack of ability to be creative and grasp an opportunity
4. initiative taking is discouraged as everything is covered by rules and regulations

Highly production may bring down the quality. In this modern business environment, these management are demotivating people and they are see as exploitation.

Corporate Social Responsibility ( CSR )

* A form of corporate self-regulation integrated into a business model

CSR initiatives can be approached form multiple perspectives :

1. Environment -- focusing on ecological concerns from recycle to improving the organisation's entire carbon footprint
2. Community Based -- supporting  local community projects to improve lives of the people local to your organisation; finally or through volunteer programmes
3. Internationally -- focusing on issues such as fair trade, sustainability, working conditions, child labour and human rights
4. Workplace Based -- focusing on improving the rights and well-being of the staff; reviewing issues including remuneration, recruitment, induction, health and safety, whistle-blowing, working conditions, diversity and training

Advantages :

• cost reductions
  
• more productive employee
• enhanced reputation at less cost
• content communities
• happier, more loyal customers
• improved access to capital

* CSR helps to engage with the customers in new ways. Since the message is about something " good ", it can often be an easier way to talk to the customers. This is an underused tool for business-to-business company communication

Ansoff's Matrix

  


Ansoff's Matrix is one of the very good strategies for businesses and industries to use. Retraining and diversification are the highest risk strategies because both of them are new stuff for new markets. Oppositely, expert development and market penetration are the lowest risk as they are the existing things in the same market. However, they may not be so effective for innovation because businesses should try new things to attract customers.

Research

     Starbucks 

PESTLE :

1. Political

• Issues -- stability of political environment, law, taxes, policies on economy, trading agreements, government's view on culture and religion, terrorism
• e.g. Hong Kong, Thailand

2. Economical

• Issues -- stabilisation, unemployment rate ( people tend to spend less money )

3. Social

• Mission -- to inspire and nurture the human spirit, " one person, one cup and one neighborhood at a time "
• Goals -- continuous improvement of quality, ethical sourcing, promotion of Diversity & Respect, integrating into the community ( environment-orientated goals ) and success in business ( organisation-orientated goals ) 

4. Technology

• Phone apps ( buying and paying by phones )

5. Legal

• Issues -- employment law ( working time, age, minimum wage rate ), health and safety regulations ( e.g. Starbucks spend more on health insurance - $ 250 million surmount its coffee bill ) and consumer protection ( e.g. Starbucks pay $225,000 to settle Consumer Protection care for gift card violations )

6. Environment

• Issues -- recycling ( in stores, reusable cups, greener cups ), energy ( reducing energy consumption by 25 % by 2010 ) and water ( continue to include water-saving technology in the equipment specifications and going to reduce water consumption by 25% by 2015 )

SWOT :

Strengths --

1. sound financial records 
2. No. 1 brand in coffeehouse segment valued at $ 4 billion
3. Starbucks experiences 
4. largest coffeehouse chain in the world 
5. employee management

Weaknesses --

1. the price of coffee beans ( influence profit )
2. product pricing ( expensive )
3. negative publicity ( greener company, tax evasions, treatment of some suppliers )

Opportunities --

1. extend supplier range
2. expansion to emerging economies
3. increase product offerings
4. expansion of retail operations

Threats --

1. rising prices of coffee beans and dairy products 
2. trademark infringements 
3. increased competition from local cafes and specialisation of other coffeehouse chain ( Nero and Costa ) 
4. saturated markets in the developed economies
5. supply disruptions

Porter's 5 Forces :


1. Barriers to Entry -- Medium ~ High

• low capital requirement
• little product differentiation
• major companies including McDonalds have already entered the " coffee war " and other major companies are considering to join this war

2. Threat of Substitutes -- High

• soda, fresh fruit juice, healthy juice for drink
• alcohol drink ( beer, whine, cocktail )

3. Buyer Power -- High

• even thought the price goes up, the buyers who like only Starbucks would still come
• buyers can buy over the nation, so as other major companies do

4. Supplier Power -- Medium

• Starbucks is a global coffee chain and I can imagine that many suppliers are eager to work with them

5. Industry Rivalry -- High

• many companies ( Coffee Bean, McDonalds, Dunkin Donuts )
• little product differentiation
• excess capacity
• people tend to look for more healthy and fresh juice

Porter's Generic Strageies :

To conclude, this is the last blog for this term, which calls " Revision ". Is the summary of all the topics that we had learnt in this term before the exam. In addition, I have also done the research about the case study of the exam. At last, I found that actually doing this  blog for business and management is very useful for me to reflect what I had learn.

Globalisation ( Week 6 )

Today's Topic Is GLOBALISATION !!!

Globalisation is when businesses operate in lots of counties all over the world. It means that companies can be based anywhere in the world and can buy from and sell to any countries in the world.


Firms can increase their market size by selling existing products to new countries. They can reduce costs by getting their raw materials form countries with the cheapest prices. Also, manufacture components in overseas countries where labour is cheaper, before putting the final product together.


International trade offers businesses lots of opportunities to make money by selling their products abroad in order to increase their turnover by increasing the size of their market and buying raw materials abroad or relocation production abroad can cut costs.



For Example :


McDonalds

The McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries. A McDonald's restaurant is operated by either a franchisee, an affiliate or the corporation itself.

McDonald's has become emblematic of globalization, sometimes referred to as the "McDonaldization" of society. We can find McDonalds very easily in all over the world.

Communication will be one of the biggest challenges for international businesses because the managers may have to share ideas to different store in different countries.

McDonald's has an  internal  communications team that deals with communications to all of our staff, and stakeholders. A number of different communication channels are used such as the intra net and weekly newsletters for staff to stay connected.

Externally  we run a number of different advertising campaigns throughout the year to ensure our customers are aware of the great products on offer as well as informing them about other areas of the business such as our training and education opportunities. We also have a media team who deal with all press enquirers.

Advantages :

• cheaper prices
• improvement in economic
• higher rates of growth
• increase customer choices
• greater employment opportunities

Disadvantages :

• culture in different countries ( e.g. China and Hong Kong )
• health problems ( e.g. SARS, flu )
• conflicts ( e.g. China and Japan )
• disparity

In conclusion, international businesses are the companies that operate anywhere in the world such as McDonalds. Communication is important for the international business as the stores will be in different countries and they must communicate with each other in order to get the ideas and the profitability that the store has got.

International Business ( Week 5 )

TODAY'S TOPIC IS INTERNATIONAL BUSINESS

International business is the creation of a Global Market.

Exporting products and services to an other counties.

It refers to all those business activities which involve cross border transactions of goods, services, resources between two or more nations. Transaction of economic resources include capital, skills and people. For international production of physical goods and services such as finance, banking, insurance and construction.

For example :

Coca - Cola  

Coca‑Cola  is sold in more than 200 countries throughout the world, so it's difficult to think of a country where it's not available. Since 1900, Coca-Cola have worked with local partners who bottle and sell Coca‑Cola products. By working with these partners, Coca‑Cola has been able to grow into a drink that's bottled locally but enjoyed around the world. There are 1.7 billion servings of Coca‑Cola sold every day in the world.

 Coca-Cola corporate many other companies in order to export the  products to different countries. The Coca-Cola Export   Corporation is responsible for the strategic marketing, brand   management, packaging strategy, consumer promotion,   advertising, public relations and market research. 

To sum up, international business means selling the products internationally to many different countries like Coca-Cola. It sells drink to other countries instead of just in America. There is no where that we can't find Coca-Cola and it is a very successful international business in exporting drinks to more than 200 countries by the export corporation.

Organisational Strategy ( Pestel ) and Stakeholers ( Week 4 )

Organisational Strategy ( Pestle ) and Stakeholders


Organizational strategy is the creation, implementation and evaluation of decisions within an organization that enables it to achieve its long-term objectives. ( e.g. Pestle )

Pestle could be defined by 6 different terms :

1.  Political

• Government Stability

2.  Economic

• GNP Growth
• Interest Rate Rise
• Rises in Indirect Taxation ( such as VAT )

3.  Social

• Geographical Mobility
• Social Mobility
• Lifestyle Changes
• Demographic Changes

4.  Technological

• R&D Related Development
• Obsolescence

5.  Legal

• Health & Safety Development
• EU Directives

6.  Environment

• Green Issue

"GLOBALISATION"

Stakeholders are that which can affect or be affected by the actions of the business as a whole.

Different stakeholders will have their own values, expectations and objectives which they want to achieve.

Organisations need to understand the power a stakeholder has and the influence the stakeholder may exert over business objectives, how it acts and behaves :

• can disrupt the business's plan
• causes uncertainty in the plans
• the business needs and relies on the stakeholder

Sources of power for INTERNAL STAKEHOLDERS :

1. position power within hierarchy
2. influence
3. control of key resources
4. specific knowledge or skills
5. knowledge of the environment in which the organisation operates

Sources of power for EXTERNAL STAKEHOLDERS :

1. resources dependence ( e.g. a supplier )
2. knowledge and skills critical to success of the organisation
3. ability to gain attention through local or national media
4. coalitions between stakeholders

Stakeholder Analysis :
The technique used to identify the key people who have to be won over.

Step 1 : identify the stakeholder
Step 2 : prioritise the stakeholder and map out the stakeholder
Step 3 : understand the key stakeholder -- how will they be             effected?


STAKEHOLDER MAPPING :

• high power, interested people -- people you must make sure you satisfy
• high power, less interest people -- put some effort in but not too much to put them off
• low power, interested people -- keep adequately informed ( these people can be helpful with detailed work )
• lower power, not interested people -- monitor but do not communicate with too closely

Internal Environment & Micro Environment ( Week 3 )

 

Today's topic is INTERNAL ENVIRONMENT & MICRO ENVIRONMENT

Internal Environment is the conditions, entities, events, and factors within an organization that influence its activities and choices, particularly the behavior of the employees. Factors that are frequently considered part of the internal environment include the structure, objectives, culture, leadership, finance, people and technology.

First of all, the structure of an organisation is the key issues fro internal environment :

1.  Lines of Communication -- the flatter of the communication, the faster responsible between the manager and the employees thus to increase the motivation in having quick reply from the manager.
2. Job Responsibilities -- it states clear that what are the duties, purpose, responsibilities and working conditions of a job and also make sure that the organisation knows what the employees are actually doing.
3. Departments -- more departments within an organisation could make jobs done more organisable as each department has the specific work force therefore can they can be more focusing, however, to many departments could affect the communications and the decision making because there will be too many ideas and each department has one manager so that its hard to be compromised.
4. Management and Hierarchy -- less layer of hierarchy in management will lead to faster and more effective decision making.
5. Centralisation & Decentralisation -- they are the two method of how an organisation is going to make their decisions, if the organisation is requiring centralisation, the decisions will make by the managers, on the other hand, the decisions will make by the employees and customers.

Secondly, the objectives that the organisation have will influence people act and the activities :

1. Corporate ~ Department -- corporate objectives are the aims that the whole organisation wanted to achieve, for each department, the objectives will be more specific and small as different departments have to achieve their own objectives to be able to achieve the corporate.
2. Divisional Objectives -- they are the objectives that set to achieve the corporate objectives.

The culture of an organisation is the way that things are and there are some factors that are going to affect the culture of the organisation :

1. Bureaucratic -- this will be an external influence for organisations to enter the markets.
2. Creative -- if the staff are creative, the culture of an organisation will tend to be more creative as many creative ideas will come along the production.
3. Power -- it depends on which type of structure will be used in an organisation, centralisaed or decentralised, that means who are going be more powerful in the organisation, the managers or the employees.
4. Fear -- what are the factors that the organisation is concerning about and therefore affecting its culture of what they should do to improve and what are the thing that they shouldn't do.
5. Hard working -- if the staff are hard working in the organisation, the way that things are will be different, may become more effective as an example, also the productivities and profitabilities will be high.

The leadership will influence the organisational culture according to the leader's behavior, to decide if the organisation is going to be more autocratic or democratic.

Then, the financial availability of an organisation is going to affect the activities within the organisation :

1. Investment Decisions -- they are going to decide which products will the organisation invest in and which one will be invested most money on.
2. Investment Return -- if the return is not great, the organisation may decide to stop investing in the project or production
3. Cash Flow -- it is the key factor of affecting the activities in the organisation because it is the money that flowing in and out within an organisation and the most financial problems are paid by the cash in the organisaiton, the cash is also used by paying the liabilities in the organisation so that without having enough cash, the activities in the organsation will be affected.

Also, the knowledge that people have will influence their behavior and how they will perform in their workforce, therefore :

1. Training -- is important to improve staff's skills thus to improve their performance.
2. Recruitment Methods -- is an organisation going to recruit people from external which will bring new ideas and new culture of people behavior or internal which promote the people within the organisation and will have well known of the organisational culture.

Finally, the development of technology influences the organisations :

1. Research & Development -- rapid development in technology helps the research and development department to do research of what the customer needs and what they like and also to help in creating more good and services.
2. Sales -- nowadays, organisations could sell their goods and services on the Internet, as a result of,  the sales will increase by selling products in different markets.
3. Support Services -- this helps the managers to manage the staff more easily and make the communication become faster.

Micro Environment affects the organisaton directly, for example cost of leadership, differentiation and focus. They are the generic strategies.
The 5 Forces :

• bargaining power of suppliers -- the power of suppliers to drive up the prices of your inputs
• bargaining power of buyers -- the power of your customers to drive down your prices
• potential threat of new entrants -- the strength of competition in the industry
• substitutes -- the extent to which different products and services can be used in place of your own
• competitive rivalry -- the ease with which new competitors can enter the market if they see that you are making good profits

To solve the problems, organisations can consider developing strategies which are the generic strategies and alternative directions ( Ansoff's Matrix ).
Also, organisations need to think of 4 factors :

1. Strengths ( internal influences )
2. Weaknesses ( internal influences )
3. Opportunities ( external influences )
4. Threats ( external influences )

In conclusion, there are many factors that influence the internal environment and the micro environment such as the objectives and the culture of the organisations. They should be aware of all the feature of the factors in order to find the solutions.

Organisational Design & Structure Functional Links ( Week 2 )

Today's Topic is " Organisational Design & Structure Functional Links ".

O rganisational design can define by a step-by-step methodology which identifies dysfunctional aspects of work flow, procedures, structures and systems, realigns them to fit current business realities or goals and then develops plans to implement the new changes.

O rganizational structure is a system used to define a hierarchy within an organization. It identifies each job, its function and where it reports to within the organization. This structure is developed to establish how an organization operates and assists an organization in obtaining its goals to allow for future growth.

1. Culture

Organizational culture is the behavior of humans who are part of an organization and the meanings that the people attach to their actions. Also the ways that the business do to manage its staff and productions.

Businesses should set up corporate objectives which are the general objectives that refer to the business as a whole. Before achieving the corporate object, the company needs to set functional objectives for each department. They are more detailed and specific than corporate objectives to each department therefore they will help businesses to achieve their corporate objectives. For example, if the corporate objective of a business is increase profits, the functional objectives will be minimise the costs and increase sales.

Then, the business needs strategies to achieve the objectives. Strategies can only be formed once a business has decided what its objectives are. Ansoff's Matrix is one of the ways that using for strategic Decisions. For instance, a company wants to increase its sales, it goes for new product development to create a new product which is new product going to an existing market. However, there are risks to have new products develop to an exist market as the managers may not know if the products be acceptable for the existing customers, also, the new products may not be suitable for the market because of the changes of customers favorite. Here's is an unsuccessful business example, Oticon. It's a company that sells earphone, as it fail to follow the rapid grow of the technology and want to customer wants, it cause to a decline of its market share.

2. Structure

Each Business has its own ORGANISATIONAL STRUCTURE. The structure is the way in which positions within the business are arranged. It defines the workforce roles of employees and their job titles; the route through which decisions are made; who is accountable to whom and for what activities; the relationship between positions in a business and how employees communicate which each other and how information is passed on. 

Formal Organisation Charts :

Centralised Structures keep authority for decisions at the top. They make decision-making a lot easier and provide good motivations to the managers as they enjoy greater control over the organisation.
Advantages :

• easier to implement common policies and practices for the business as a whole

• prevents other parts of the business from becoming too independent
• easier to coordinate and control from the centre - e.g. with budgets

Disadvantages :

• more bureaucratic - often extra layers in the hierarchy
• local or junior managers are likely to much closer to customer needs
• lack of authority down the hierarchy nay reduce manager motivation

Real businesses examples, fast food restaurants like Pizza Hut, Burger King and Mcdonalds. They use a predominantly centralised structure to ensure that control is maintained over their many thousands of outlets.


Decentralised Structures share out the authority to make decision. They listen to the others ideas and the decision making is a form of empowerment. It can increase motivation and therefore staff outputs increase.
Advantages :

• decisions are made closer to the customer
• better able to respond to local circumstances
• improved level of customer service

Disadvantages :

• decision making is not necessarily " strategic "
• more difficult to ensure consistent practices and policies ( customers might prefer consistency from location to location )
• who provides strong leadership when needed?

Real businesses examples, supermarkets like Morrison and Tesco. Each supermarkets has a store manager who can make certain decisions concerning areas like staffing, sales promotions. 

Centralisation and Decentralisation

Chains of Command

Chain of Command is a group of people dedicated to carrying out orders "from the top", that is, of authority. It is part of a power structure: usually seen as the most vulnerable and also the most powerful part of it. Tall structures have a long chain of command. It is the path of communication and authority up and down the hierarchy. If the structure is too tall, it affects communication.

Spans of Control

Span of Control
means the number of subordinates that can be managed efficiently and effectively by a superior in an organization. It suggests how the relations are designed between a superior and a subordinate in an organization.
Span of control is of two types: 

1. Narrow span of control : Narrow Span of control means a single manager or supervisor oversees few subordinates. This gives rise to a tall organizational structure.  
2. Wide span of control : Wide span of control means a single manager or supervisor oversees a large number of subordinates. This gives rise to a flat organizational structure.
   

Businesses can also use delayering to reduce the size of an organisation hierarchy, especially in terms of a reduction in management. This creates a flatter ( less layered ) organisational structure. As a result of that, it makes the communication a lot easier and faster. It also motivates staff in having team work and fast responsibilities.

3. Human Resource Management

The Role of Human Resource Management ( HRM ) is to ensure that a business achieves the maximum benefit from its employees a the minimum cost. HRM objectives are influenced by the objectives of the business as a whole. For example, if the business is going to expand into a new market, the HR department might need to recruit new staff to suit the business needs.

There are two different types of HRM strategies. They are HARD HRM  and SOFT HRM.
Hard HRM means employees are ween as a resource like any other and they are hired on a short term basis. Managers believe that employees are mainly motivated by money. The managers of hard HRM tend to be Theory X managers, they think that staff will do as little work as possible. All the trainings are only done to meet production needs.
Soft HRM means employees are the most important resource and they are managed on a long term basis. Managers motivate employees through empowerment and development. They tend to be Theory Y managers because they think that working is natural for employees. All the trainings are mainly done to meet development needs.

Managers should also create a reward system or promotion to motivate the employees in providing high productivities such as bonus and trainings. Just take scientific management as an example, F.W. Taylor was the person who decided scientific management and he believed workers are almost entirely by pay and rewards given according to quality and quantity of output.

In conclusion, organisational design is the way of identifying its culture and workforce plan. Also show the clear structure about the organisation in what the actions are and the behavior of the staff and its objectives. Businesses should also select the most suitable structure and the type of human resource management because it's very important that organisations are using the right method in achieving their objectives.