‘To produce a HR focussed report outlining problems, impact of external environment and future issues that may occur, evaluation on management and leadership and proposing sustainable solutions within Stores ‘r’ us’ As you are aware, our business within the UK operations is in a very precarious position even though it has been established for ten years. We as a company have made key advances in our wholesale market, trading through 400 stores in countries such as USA, Canada, the UK, South America and South-East Asia.
In addition to breaking into international markets we are generating current revenues of over $40 billion as well as hiring a total of 105,000 people. Our overall business is doing very well however the UK operation has deceasing profits due to various reasons, and since we have a standard uniformity with all our current operations we have to consider the possibility of decreasing profits and consumers in all our stores. Our 19. 7 million members are the main reason why we can compete with our competitors on price so we have to find a way to recover our UK operations.
Various external and internal reasons for falling share prices and sales have been identified, often they relate back to personnel and management issues, on which this report will focus. A review of the company history and a SWOT analysis will assist the report to identify the most significant problems, when they occurred and how they may have evolved. The most significant issues that need incorporating into an action plan will be highlighted. Companies need to be in a position not only to respond to changing environmental factors but also to capitalise on them.
At the very least, management should be able to identify the environmental trends, where they are leading and how to react successfully to them. This will ensure that the circumstances don’t dictate the business. To analyse and foresee these changes, the macro-environment is generally broken down into the following sub-environments. (G. Lancaster and L. Massingham, 1988). Due to the change in politics is much easier to import from the overseas, creating a competitive advantage in the cheaper products, therefore other companies will be able to compete with us.
This is another external factor. The increasingly diversified supermarkets making them one-stop shops, this is by introducing higher range of products i. e. taking some market share away from us. This means more competition across the country, pushing use to return to our core business to concentrate on quality and price. As for the future Environments pressure is by imposing fee to enter the city centre, due to ever increasing traffic. This will force retailers to change there future planning for outlets.
In the future, our company will depend on the international market to compete with other companies. Due to the global economy moving closer together. I. e. they can produce in the third world countries trade it in the west. This area is highly profitable and this policy can be used to develop the company more and gain higher consumer perception of the companies’ image. The future technological and social factors are also playing a major role in companies moving into Internet e tailing, E-commerce mail order.
This is where our company should be heading at the moment. The market development entails the promotion of new uses of existing products to new customers or the marketing of existing products to new market segments. Market development through entering new segments could involve the search for overseas opportunities The Internet is a global web of over 50,000 computer networks, which permit instantaneous global communications. There are many advantages to the company: lower costs.
Relationship building, audience measurement, and fast changes to catalogues. In Stores ‘r’ us case they should consider putting all their stock on a online database an relate this to all their members therefore the members will know what stock they have and where to procure it from. Wal-Mart one of our considered competitors uses this facility. Johnson and Scholes (1999) believe the success of strategic change ultimately depends on the beliefs, assumptions and behaviour of people in their organisational lives.
The wholesaler scenario has illustrated that our managers do not address these factors, resulting in having a direct negative impact on staff’s behaviour. When considering the Ohio State study, below it shows the change in the management in the company, where it compares between the consideration and structure. It is clear that the company was in a high structure with low consideration, therefore in this leadership there is no staff consultation showing that the company adapted a role culture.
There is no consultation behaviour with staff, making the company falls into a bureaucratic system, In a bureaucratic organisation tasks are allocated as official duties among various positions, there is division of labour and high specialisation, a hierarchical authority applies, impersonal orientation from staff is expected from in their dealings with customers and other staff. Employment by the organisation is based on technical qualifications and constitutes of a life long career for the staff. (Blau. P, ; Scott. W, 1996. Mullins. L, 1999).
Yet it is not suitable for the complex and more fast-changing modern world, especially where interpersonal relationships and possible conflicts of interests are involved. (Bennett. R, 1994). There should be more involvement from staff to get better results, where they would be more enthusiastic if they share the vision. The term ‘bureaucracy’ has common connotations with criticisms of the red tape and rigidity, it’s also been criticised for ignoring the roles and influences of informal groups and has little to say about the influence of official leaders.
The non-consultative nature of the change has led to resistance and highlighted a very centralised management style along with a role culture. This is very familiar with family run organisations with their obvious paternal instincts being that of control and decision-making. Deming, (1986) talks of the appropriateness of quality circles in bringing together managers and staff along with increases in motivation, acceptance and loyalty. Trust and confidence is described in Mullins (2002) as being the key to getting the most desired responses out of staff.
Management have to initiate this trust and there are no signs of this being considered. Regular top/down appraisals would enable us to monitor quality, morale, skill levels and supply of management. Armstrong (1986) differentiates the fundamentals of traditional staff and management appraisals. However, the adoption of a more flexible approach, such as 360? appraisal, would be more suited to our customer focused business as appraisals would consider customers, valuable point of view and the views of manager’s subordinates (Mullins, 2002).
This more complex approach provides a broader picture of an individual’s relationship with an organisation, informing us of relationships, teamwork, leadership and quality of decision making, all very relevant to the issues this report has raised. The adoption of flexible working practices within Stores ‘r’ us, means appraisals could be extended to all staff as a tool to enhance staff/manager relationships and harmonise the working environment, thus reducing the boredom factor in the job.